STRAIGHT TALK NEEDED ON CSME

STRAIGHT TALK NEEDED ON CSME

(By: John K. F. Delaney – 31 May 2005)

Email: jdelaney@higgsjohnson.com

Nassau, Bahamas

 

 

THE QUESTION of whether The Bahamas joins the CSME has profound implications for the economic way of life of every Bahamian.  With the Government having decided last December to sign the Revised Treaty of Chaguaramas that would commit The Bahamas, it is troubling that there is a persistent lack of clarity or forthrightness by the Government as to the Revised Treaty’s ramifications.

 

The Government (by Minister of Foreign Affairs, Hon. Fred Mitchell) has stated that the Bahamas will enter reservations in four regards (“the four reservations”), which they claim would prevent the economic side of the Revised Treaty from applying to The Bahamas and keep unchanged the present position of The Bahamas in relation to Caricom.  The four reservations are stated as follows:

1.               Against the free movement of persons (Articles 45 & 46);

2.               Against monetary union;

3.               Against a common external tariff; and

4.               Against the Caribbean Court of Justice on its Appellate side.

 

Critical questions arising from the Government’s position are:

a)               Do the four reservations constitute the entirety of the so-called “economic side” of the Revised Treaty?

 

b)               What is the legal effect of a reservation under the Revised Treaty?

 

 

The Economic Scope

The most cursory reading of the Revised Treaty would reveal that the economic scope of the Revised Treaty extends far beyond the four reservations.  Barbados Prime Minister Owen Arthur described the comprehensive economic scope of the Revised Treaty as “the respective economies of the Caribbean should be reconstituted through the removal of existing barriers, as a Single Market space in which not only goods, but services, capital, technology, and skilled persons should freely circulate, and Caribbean citizens should enjoy new and unfettered rights of establishment of enterprise anywhere in the region. 

 

The four reservations relate only to part of the economic effects of the Revised Treaty.  For example, the Revised Treaty requirements for the free movement of capital and goods within the Single Market are not affected by the four reservations.  And the four reservations only partially affect the free movement of persons by relating only to the free movement of workers/employees while not touching or concerning the free movement of self-employed persons.

 

The Free Movement of Self-employed Persons

Whereas a reservation is proposed against the free movement of workers (Articles 45 & 46), no reservation is proposed against the free movement of self-employed persons (Articles 32, 33, 34, 37 & 44) under the so-called right of establishment.

 

The Government, by Minister Mitchell, has stated that the right of free movement of self-employed persons is “principally in areas that earn foreign exchange such as hotels, which are already open to foreign investors”.  But that is not what the Revised Treaty states.  The Revised Treaty does not in anyway limit the free movement of self-employed persons.  Indeed, the Government’s own Information Paper (dated October 2004 prepared by His Excellency A. Leonard Archer) contradicts the Honourable Minister in stating as follows:

 

“The Right of Establishment is a fundamental pillar of the CSME.  This Right permits the National of any Member State of the CSME to establish a business in any other Member State of the CSME on the same basis as would a national born in that Member State.  In other words, a Barbadian Businessman would have the right to establish a business in Jamaica in the same manner that a Jamaican Businessman would establish a business in his native Jamaica.  Similarly, the Jamaican would have the right to establish businesses in Grenada or Trinidad and Tobago in the same manner that nationals of Grenada or Trinidad and Tobago would have” (see pages 20 & 21).

 

Further, in answer to a question posed in the Information Paper “How will joining the CSME affect those areas of the Bahamian economy reserved for Bahamians?” the Information Paper further states:

 

“On joining the CSME, unless The Bahamas obtains reservations on some aspects of Article 33 ‘Removal of Restrictions on the Right of Establishment’, The Bahamas would be expected to allow Single Market firms to enter every part of its domestic market.  Under Article 33, Member States are expected to remove any ‘restriction on the setting up of agencies, branches or subsidiaries by nationals of a Member State in the territory of another Member State’” (see page 38).

 

The Bahamian public is entitled to plain and direct words from the Government that, by its decision to join the CSME, the Government intends to allow Caricom nationals to operate any business in The Bahamas as self-employed persons on the same basis as any Bahamian.  And, that included are those business areas presently reserved under the National Investment Policy exclusively for Bahamians, namely:

i)                  Taxi business,

ii)                Beauty salon or barber shops,

iii)             Auto repair service,

iv)             Fishing,

v)               Retail shops of any kind,

vi)             Wholesale shops of any kind,

vii)          Real estate sales & rental agencies,

viii)        Restaurants (non-specialty), and

ix)             Security service.

 

The Government should disclose in plain language to the public that CSME would impose an obligation upon The Bahamas to ensure that Caribbean nationals, on the same basis as Bahamians, have access to land, buildings and other property in The Bahamas for their establishment of businesses in The Bahamas (see Article 37).

 

 

The Reservations

There is much confusion about the duration of any of the four reservations to parts of the CSME:

·       Article 237 of the Revised Treaty allows reservations to be entered if other Caricom countries that sign the Revised Treaty would agree.  However, the Revised Treaty does not define the word “reservation” or speak to its duration or legal effect. 

 

·       Minister Mitchell has stated that the reservations would have no time limit unless The Bahamas decides to remove them. 

 

·       The Bahamas Information Paper states that “these reservations could last for twenty years or more” (page 47). 

 

·       A Barbados based CSME specialist has reportedly stated that the proposed reservations would be limited to 5 years and that any extension would require the agreement of Caricom members. 

 

However, even if one agrees with the position of Minister Mitchell on a question of duration, more fundamental is that, as a matter of international law, no state may form a reservation to a treaty if the reservation is incompatible with the object and purpose of the Revised Treaty (Vienna Convention on The Law of Treaties, Article 19).  In this regard, it appears that some if not all of the four reservations directly conflict with the object and purpose of the CSME.  As such, at some point after The Bahamas would have signed to join the CSME in reliance upon four reservations of uncertain effect, The Bahamas may find itself subject to a dispute brought by other Caricom states challenging the reservations.  Therefore, whatever position one takes on the duration of reservations, if they are incompatible with the object and purpose of the Revised Treaty, they may only last until the Caribbean Court of Justice sets them aside.  The CCJ alone shall have jurisdiction to determine the matter.  In this connection it should be clearly understood that the proposed reservation against the CCJ would not and could not prevent the CCJ from having exclusive jurisdiction over CSME disputes concerning The Bahamas.

 

There is no compelling economic or political case for The Bahamas to join the CSME in its present form.  The four reservations are insufficient and too uncertain to protect the legitimate interests of the people of The Bahamas.  The Bahamas should reject the Revised Treaty and, instead, pursue a bilateral treaty between The Bahamas, on the one hand, and Caricom, on the other, covering such aspects of economic and/or political cooperation as the Bahamian people would find acceptable.

 

 

Conclusion

The Bahamian public deserves a clear understanding of how the CSME will impact their way of life.  That understanding requires informed discussion, widely held - in our churches, unions, schools and families, and time for mature consideration.  It is unfortunate that the Government did not choose to invigorate its campaign for the CSME sufficiently in advance of the impending CSME deadline of 31 December 2005.  But Bahamians ought not to be rushed into a bad deal.  An issue so profound as whether to join the CSME could not with moral authority be decided by the Government without it first being put to the people in a referendum or general elections.

 

 

 

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