Caribbean Free Trade Association

The origins of CARIFTA lay in a meeting on July 4, 1965, between the Prime Ministers of Barbados and British Guiana (Errol Barrow and Forbes Burnham respectively) to discuss the possibility of establishing a free trade area between the two territories, which at the time were moving towards independence from the United Kingdom. The discussions revolved around establish a free trade area between only those two countries initially and then extending it to the rest of the Caribbean when the other countries in the Commonwealth Caribbean were ready to join.[4]

These bilateral discussions between Barrow and Burnham were later expanded to include V. C. Bird of Antigua and the three leaders ultimately signed the initial CARIFTA Agreement (the Agreement of Dickenson Bay in Antigua) on December 15, 1965.[3][5] The original date envisioned for the Caribbean Free Trade Area to come into existence, according to the Dickenson Bay Agreement, was May 15, 1967. However, as a result of shuttle diplomacy engaged by Dr. Eric Williams, Prime Minister of Trinidad and Tobago, (through one of his ministers, Kamaluddin Mohammed) this was postponed as in order to allow Trinidad and Tobago to be included in the agreement and to generally make the agreement region-wide from the beginning.[5][4] Dr. Williams had for years been advocating the establishment of a Caribbean Economic Community and was now fearful that Barbados, Antigua and Guyana were planning to form a free trade area between themselves to the exclusion of Trinidad and Tobago.[5] The push to make the free trade area a region-initiative was successful and the issue was discussed at the fourth Conference of the Heads of Government of Commonwealth Caribbean Countries in Bridgetown, Barbados in October 1967. There it was resolved to introduce the free trade area by May 1, 1968 with the delegations of Montserrat and British Honduras (Belize) entering reservations to the conclusions of the resolution due to the constitutional status of their governments at the time.[6] As a result of this a supplementary agreement to the original Carifta Agreement was signed in Georgetown, Guyana on March 15, 1968, and in St John’s, Antigua on March 18, 1968, with Carifta Day set for May 1, 1968.[5]

The new CARIFTA agreement came into effect on May 1, 1968, with the participation of Antigua, Barbados, Trinidad and Tobago and Guyana. The original idea to permit all territories in the region to participate in the Association was achieved a few months later with the entry of Dominica, Grenada, St. Kitts/Nevis/Anguilla, Saint Lucia and St. Vincent in July and of Jamaica and Montserrat on August 1, 1968. British Honduras (Belize) became a member in May 1971 [7] following its government's agreement to become a member of the Association (and had promised to take the necessary steps to become so) in February 1969 at a Commonwealth Caribbean Heads of Government Conference in Port-of-Spain, Trinidad and Tobago.[8]

The Caribbean Free Trade Association was created to improve relations between the various Caribbean islands. One of the reasons of the formation of the CARIFTA was to increase the quota and variety of goods able to be sold. Specifically, CARIFTA was intended to encourage balanced development of the Region by the following:

• increasing trade - buying and selling more goods among the Member States
• diversifying trade - expanding the variety of goods and services available for trade
• liberalising trade - removing tariffs and quotas on goods produced and traded within the area
• ensuring fair competition - setting up rules for all members to follow to protect the smaller enterprises

In addition to providing for free trade, the Agreement sought the following:

• ensure that the benefits of free trade were equitably distributed
• promote industrial development in the Less Developed Countries (LDCs)
• promote the development of the coconut industry (through an Oils and Fats Agreement) which was significant in many of the LDCs
• rationalise agricultural production but in the interim, facilitate the marketing of selected agricultural products of particular interest to the LDCs (through the Agricultural Marketing Protocol); and
• provide a longer period to phase out customs duty on certain products which were more important for the revenue of the LDCs[3]

Although CARIFTA itself was limited to trade in goods, it freed approximately 90% of intra-regional trade in manufactured goods and instituted managed intra-regional trade in some agricultural products.[9] Between 1968 and 1973 the absolute trade, diversity of traded goods and the significance of intra-CARIFTA trade relative to external markets all increased notably. Intra-CARIFTA imports rose from EC$95 million in 1968 to EC$300 million in 1973. Whilst foodstuff and petroleum products accounted for the bulk of this trade, a range of new manufactured items (particularly from Jamaica and Trinidad & Tobago) began to be supplied for the first time. Diversification not only occurred in the types of goods sold but in the matrix of trade relationships with Jamaica's trade expanding away from the traditional markets of Belize and the northern Caribbean towards the southern and eastern Caribbean while Trinidad & Tobago's trade concurrently expanded from the traditional markets of Guyana and the Eastern Caribbean towards Jamaica, Belize and the northern Caribbean.[10] Additionally the LDCs, particularly Saint Lucia, Dominica and St. Vincent & the Grenadines benefitted from increase exports to the More Developed Countries (MDCs - Barbados, Guyana, Jamaica, and Trinidad & Tobago) of ground provisions (like sweet potatoes), copra and raw oils (such as coconut oil) under the Agricultural Marketing Protocol and the Oil and Fats Agreement (which was initially an Agreement among some regional states that pre-dated CARIFTA but was incorporated into CARIFTA as a Protocol and extended to all CARIFTA members in 1970) respectively.[11][12]

Overall for CARIFTA members intra-CARIFTA trade went from accounting for around 6% of total domestic exports in 1967 to constituting 9% of domestic exports in 1970 (total domestic imports from intra-CARIFTA trade remained general stable at around 5%), even as the share trade with more traditional markets fluctuated and generally declined:

Broken down by the MDC and LDC designations, the MDC territories experienced 77% growth of intra-CARIFTA exports over four years[11] (with Jamaica's export trade expanding the most, growing by 46% in exports and 24% in imports for the period 1967-1969)[12] and the LDC territories saw 35% growth in intra-CARIFTA exports over the same period.[11]

By the time CARIFTA was officially wound up in mid-1974 both intra-CARIFTA imports and exports had risen more than four-fold compared to 1966, with intra-CARIFTA imports increasing from EC$89 million to EC$473 million (433% increase) and intra-CARIFTA exports increasing from EC$82 million in 1966 to EC$455 million in 1974 (a 457% increase). The equivalent statistics for total trade with all partners by contrast showed a three-fold increase with imports increasing from EC$1.862 billion in 1966 to EC$7.141 billion in 1974 (a 284% increase) and exports increasing from EC$1.4 billion to EC$6.3 billion (a 350% increase) over the same period. This indicates that CARIFTA was successful in creating trade rather than merely diverting trade with the Free Trade Area.[13]

In 1965, on December 15, the CARIFTA was founded by 3 countries:[7]

•  Antigua and Barbuda (1965)
•  Barbados (1965)
•  Guyana (1965)

The following countries joined the agreement:[7][3]

•  Trinidad and Tobago (May 1, 1968)
• Dominica (July 1, 1968)
• Grenada (July 1, 1968)
• Saint Kitts and Nevis (July 1, 1968)
• Saint Lucia (July 1, 1968)
• Saint Vincent and the Grenadines (July 1, 1968)
•  Jamaica (August 1, 1968)
•  Montserrat (August 1, 1968)
• British Honduras (Belize) (May 1, 1971)

In the 1970s, around the time CARIFTA was being transformed into CARICOM the following countries were granted Liaison Status/Observer Status in the Association:[11][14]

•  Suriname (March 1973)
• Netherlands Antilles (July 1973)[15]

While the original 1965 CARIFTA Agreement was mostly modelled on the 1960 European Free Trade Association Agreement, and the subsequent 1967 Agreement was suitably modified to reflect membership encompassing most of the Commonwealth Caribbean,[25] the Association itself was governed more like the European Economic Community (EEC) with a mix of formal institutions set up by the Agreement and informal institutions outside the scope of the Agreement although like EFTA, the formal institutions prescribed in the CARIFTA Agreement were simple and flexible.[25]

In 1973, CARIFTA became superseded by the Caribbean Community (CARICOM) following a decision, at the Seventh Heads of Government Conference in October 1972, to transform CARIFTA into a Common Market and establish the Caribbean Community of which the Common Market would be an integral part.[7] At the Eighth Heads of Government Conference in April 1973, the Georgetown Accord was adopted, which set out the details of how CARIFTA was to be replaced by CARICOM.[26] The Treaty of Chaguaramas declared that CARIFTA would cease to exist on 1 May 1974 when the remaining CARIFTA members all acceded to CARICOM. In fact, there was essentially a transitional period between 1 August 1973 when the More Developed Countries (MDCs) of Barbados, Guyana, Jamaica, and Trinidad & Tobago acceded to CARICOM and 26 July 1974 when Saint Kitts & Nevis acceded to CARICOM, during which both CARIFTA and CARICOM were legally in existence and operative and thus CARIFTA wasn't fully superseded until 26 July 1974.[27] In conjunction with their accession to CARICOM, the various CARIFTA states gave notices of withdrawal from CARIFTA which brought about the legal termination of CARIFTA's provisions within their jurisdictions and ultimately the complete legal dissolution of CARIFTA itself.[28] Thus the dates of withdrawal from CARIFTA are as follows:

• 30 April 1974 - Barbados, Guyana, Jamaica, and Trinidad & Tobago
• October 1974 - Belize, Dominica, Grenada, Saint Kitts-Nevis-Anguilla, Saint Lucia, and Saint Vincent & the Grenadines
• January 1975 - Montserrat[29][27]
• July 1975 - Antigua & Barbuda[27]

The regional co-operation under the CARIFTA agreement also led to the foundation of several common institutions. The Commonwealth Caribbean Regional Secretariat was set up in Georgetown (Guyana) and the Caribbean Development Bank was established in Bridgetown, Barbados.[30]

One of the legacies of CARIFTA is an international youth athletics event for junior athletes from the member states started in 1972 by the association and inaugurated (and thought up) by Austin Sealy (then president of the Amateur Athletic Association of Barbados) to mark the transition from CARIFTA to CARICOM called the CARIFTA Games. In 1985, a similar set of games, The CARIFTA Aquatics Championships, started.

• CARIFTA Games
• CARIFTA Swimming Championships
• Latin American economy

• Dunker, Jörg (2002). Regionale Integration im System des liberalisierten Welthandels. EG und NAFTA im Vergleich. Frankfurt/Main: Peter Lang. ISBN 3-631-37941-2. P. 57.
• Caricom Community Secretariat
• Caribbean trade articles from Agritrade