Caribbean Community and Common Market (CARICOM)

What Is the Caribbean Community and Common Market (CARICOM)?

The Caribbean Community and Common Market (CARICOM) is a group of twenty developing countries in the Caribbean that have come together to form an economic and political community that works together to shape policies for the region and encourages economic growth and trade.

Understanding the Caribbean Community and Common Market (CARICOM)

The CARICOM consists of twenty countries. Fifteen of these countries are full-fledged members of the community, while five of them only retain associate member status. The fifteen full-time countries are as follows:

The associate members are Anguilla, Bermuda, British Virgin Islands, Cayman Islands, and Turks and Caicos. Associate members retain part-time privileges.

The CARICOM was formed in 1973 after the founders had enacted the Treaty of Chaguaramas. It was established to replace the Caribbean Free Trade Area, which had failed in its mission to develop policies in the region pertaining to labor and capital.

A Caribbean Free Trade Area

A free trade area is a collection of multiple countries that have established a free trade market between their nations. These markets will have very little, if any, tariffs on imports and exports. There will be no price controls enacted, either.

The benefit of free trade areas is that they allow countries to cease competing with one another for market shares on certain products and instead allow them to focus on the products that they are most qualified to produce, or resources that they alone possess. This also presents an advantage to consumers as they receive higher quality products at a lower price.

In 2002, steps were taken to eventually allow the CARICOM to integrate all of its member-states into a single economic unit. The Caribbean Single Market and Economy (CSME) would result in the elimination of all tariff barriers within the region. It is hoped that such an economic unification would resolve a number of issues faced by small developing CARICOM economies that find it difficult to compete with larger international competitors on a global market.

When fully completed, the CSME will succeed CARICOM and will allow for free intra-regional movement of capital and labor among member-states. Additionally, member-states will share monetary and fiscal policies, and businesses operating in the economic union will have access to a larger market.