An American abolitionist once said that, “The greatest praise [a] government can win is that its citizens know their rights and dare to maintain them.” While the rights of individuals have greatly evolved since the 19th century, the crux of the statement remains relevant to this day. Since then, not only have states established constitutions which enshrine fundamental human rights and freedoms, but states have also signed on to numerous international treaties with other states which can create parallel rights in the international sphere for individuals.
The Revised Treaty of Chaguaramas (the ‘RTC’) is an example of one such treaty that not only creates rights which enure directly to nationals of Member States who are parties to the treaty, but it represents the Caribbean region’s most successful attempt to integrate and transform it to create a Caribbean common market and Community.
The RTC regime enshrines numerous rights and benefits but is categorised by four (4) pillars upon which the framework rests, namely:
- The freedom of establishment;
- The free movement of capital;
- The free movement of persons; and
- The free movement of goods and services.
The freedom of establishment allows CARICOM nationals to engage in, in another CARICOM Member State, any activities undertaken by self-employed persons of a commercial industrial, agricultural or artisanal nature, and to create and manage economic enterprises including organizations for the production of or trade in goods of the provision of services which are owned or controlled by a CARICOM national. In order to give proper effect to this right, Member States are both (i) prohibited from introducing any new restrictions on the right of establishment of CARICOM nationals, and (ii) required to remove restrictions on the said right. The requirement to remove restrictions also extends to restrictions on setting up agencies, branches or subsidiaries by CARICOM nationals, in the territory of another Member State.
For the purposes of this right, there are quite stringent limitations on who can be classified as a CARICOM national, which extends to CARICOM citizens, persons who have established a close connection to a Member State, or companies that are substantially owned or controlled by a CARICOM national.
The right to the free movement of capital is similarly circumstanced in the sense that it requires Member States to (i) remove restrictions on the movement of capital payments and on current payments including payments for goods, services and other current transfers including in relation to equity and portfolio investments, short-term bank and credit transactions, payments of interest on loans and amortization, dividends and other income on investment after taxes, repatriation of proceeds from the sale of assets, and other transfers and payments relating to investment flows, and (ii) are prohibited from introducing any new restrictions on such movement of capital and payments.
This right is limited however, in the event of external financial difficulties or such a threat. However, to the extent that the right is limited, Member States still cannot impose restrictions which discriminate among Member States or against Member States, must at all times seek to minimise damage to the commercial, economic or financial interests of other Member States, and shall not exceed what is necessary to deal with the external financial difficulties or threat.
The right to the free movement of persons as enshrined in the RTC has been supplemented by Community law to grant nationals of Member States with the right to hassle free travel to a Member State with definite entry and a stay of up to six months on arrival, subject to certain exceptions or restrictions which must be narrowly and strictly construed. The exceptions and restrictions which limit the right include where a CARICOM national poses, or can reasonably be expected to pose, a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society, or if it is determined that they will be a charge on public funds.
This right of entry and stay extended to CARICOM nationals does not necessarily imply the right to seek employment in another Member State without a work permit. Rather, CARICOM nationals who are allowed to seek employment in another Member State without the need for a work permit relate only to skilled nationals such as (i) University graduates, (ii) media workers, (iii) sportspersons, (iv) artistes, and (v) musicians.
While the RTC provides for the substantive right to move within Member States or to seek employment in the case of skilled nationals, persons seeking to invoke these rights are nonetheless required to comply with procedural requirements such as providing sufficient proof that they are CARICOM nationals, are skilled persons within the meaning of the freedom, and to obtain and provide documentation, such as a CARICOM Skills Certificate, where necessary.
The right to the free movement of goods and services are clumped together for the purposes of the right, but substantively are subject to differing concepts and obligations.
In the case of the free movement of services, Member States are prohibited from introducing any new restrictions on the provision of services by CARICOM nationals and required to abolish any discriminatory restrictions on the provision of such services including those on banking, insurance and other financial services.
What is defined as services for the purposes of this right is quite extensive and is intended to cover services provided for remuneration other than wages in an approved sector (i) from the territory of one Member State into the territory of another Member State, (ii) in the territory of one Member State to a service consumer of another Member State, (iii) by a service supplier of one Member State through a commercial presence in the territory of another Member State, and (iv) by a service supplier of one Member State through the presence of natural persons of a Member Sate in the territory of another Member State.
As it relates to the free movement of goods, this right is one of the most critical pillars of CARICOM and the RTC framework, which is representative of one of the trade policies of CARICOM. When interpreting this right, the goal of the trade policy of CARICOM, which is the sustained growth of intra-Community and international trade and mutually beneficial exchange of goods and services among the Member States and between the Community and third States, must be considered. In order to achieve this goal, Member States are also required to be cognisant of the objectives of CARICOM which is (i) the full integration of the national markets of all Member States into a single unified and open market area, (ii) the widening of the market area of CARICOM, and (iii) the active promotion of export of internationally competitive goods and services operating within CARICOM. The trade policy of Trinidad and Tobago, as a Member State of the RTC and CARICOM, is formulated on these objectives to attain the goal of CARICOM’s trade policy, which implies that decisions are required to be taken in harmony with considerations at the regional level.
The right to the free movement of goods requires that Member States refrain from imposing import and export duties on goods that are considered to be of Community origin. The rules which explain what is meant by goods of Community origin is contained within the RTC and include goods which have been wholly produced within CARICOM, or have been produced within CARICOM wholly or partly from materials that have been imported from outside CARICOM which have undergone a substantial transformation. Similar to the other rights, Member States are also required to refrain from certain acts, such as trade policies and practices, the object or effect of which is to distort competition, frustrate the free movement of goods and services, or otherwise nullify or impair benefits to which other Member States are entitled under the RTC.
In order to ensure the functioning of the trade liberalisation in the form of the free movement of goods, Member States are required to establish and maintain a common external tariff (‘CET’) in respect of all goods which do not qualify for CARICOM treatment. The crux of the CET regime is that it allows Community origin goods to circulate within Member States without the imposition of any customs duties, while on the other hand, goods that are imported from non-CARICOM Member States, referred to as “third States,” are subject to the imposition of customs duties. The underlying rationale behind this and for any union, is to promote goods that are manufactured and/or produced within the region in order to strengthen its sectors towards making exports more competitive internationally, consistent with the objectives of CARICOM’s trade policies.
Member States are therefore required to maintain the CET to be levied on goods from third States, unless permission is granted by one of the organs of CARICOM, the Council for Trade and Economic Development (‘COTED’), to alter or suspend the CET on the good. The RTC provides for a procedure that Member States are required to adhere to in order for the CET to be altered or suspended at a given time. In particular, where a product is not being produced within CARICOM, the quantity being produced does not satisfy the demand of the region, or the quality of the product being produced is below the region’s standard, COTED may authorise a reduction or suspension of the CET in respect of imports of the product.
The requirement to impose a CET on goods from third States is of potential benefit to all legal and natural persons who carry on business within the region. Such a benefit is correlative and enures directly to CARICOM national private individuals or entities who trade in the good which subject to the CET. If a Member State fails to impose the CET on goods from third States in circumstances where COTED has not granted an alteration or suspension, the Member States will be determined to be in breach of the rights of the private individuals or entities.
It is critical to note that the scope of persons entitled to benefit from the free movement of goods and the CET is wider than those entitled to benefit under the freedom of establishment. In this regard, while the RTC has stringent rules regarding who are considered to be “CARICOM nationals” for the purposes of the freedom of establishment, which requires the application of a substantial ownership and control test, the simple act of incorporation within a Member State creates an entitlement to benefit from the free movement of goods.
In order for the rights and benefits under the RTC to be properly respected however, it requires the support of the rule of law to be applied regionally and uniformly – to be enforce by a Caribbean court to interpret the treaty, resolve disputes arising under it, and declaring and enforcing the Community law.
To this end, the Caribbean Court of Justice (‘CCJ’) was created to be the custodian and guardian of the RTC, and to ensure that the rights created by the RTC is translated into a sustainable commercial reality. The CCJ is bestowed with the compulsory and exclusive jurisdiction to hear and determine disputes concerning the interpretation and application of the RTC including disputes between the Member States parties to the RTC, disputes between the Member States parties to the RTC and the Community, referrals from national courts of the Member States parties to the RTC, and applications by private entities including natural and legal persons. The CCJ has adjudicated on a plethora of issues involving the RTC including the common external tariff, free movement of persons, human rights, administrative procedures and judicial review, and the classification of goods, and is well placed to continue upholding the rights enshrined by the RTC.
The rights and benefits created by the RTC are fundamental to the continued development of the Caribbean region and is of even more critical importance. Since the turn of the century, the gradual removal of preferential trade arrangements with developed countries such as the US, UK and Europe has catastrophically affected the Caribbean region’s exports as countries aimed to ensure compliance with international trade rules under the World Trade Organisation and the General Agreement on Tariffs and Trade. Furthermore, with disruptions in supply chains and the provision of raw materials in a COVID-19 world which is anticipated to continue post-COVID-19, increasing shifts to renewable and sustainable energy, and as countries come to terms with continuous developments from the Organisation for Economic Co-Operation and Developments to effectively deconstruct the offshore sector, there is a need for continued focus on CARICOM economic integration to continue to grow our Caribbean region.
Disclaimer: This Document Provides General Guidance Only And Nothing In This Document Constitutes Legal Advice. Should You Require Specific Assistance, Please Contact Your Attorney-At-Law.
This blog post was authored by Miguel Vasquez, associate in the Firm’s Taxation and Dispute and Risk Management groups. For more information, contact Miguel at MiguelV@trinidadlaw.com.
