Definition of Services in the CSME
The use of terms of the Revised Treaty provide that services mean “…services provided against remuneration other than wages in an approved sector…”.
Typical services include, financial services, , transportation and communications ,tourism, education , health care , business services , production related services and environmental services . All of these types of services are included in the CSME agreement on free movement of services.
The services sector in the CSME dominates the regional economies. As a share of GDP at factor cost in 1995 services were estimated to contribute 74 per cent which has remained fairly stable over the period 1995 – 2006. The sectors with the largest contribution are the financial services, wholesale & retail trade and Government services.
In trade, services are significant contributing over 80 per cent, of exports of goods and nonfactor services. In the share of export services in CARICOM, trade has to with the dominance of tourism and financial services. In imports however, services account for around one third of the value of imports of goods and non-factor services reflecting the importance of merchandise trade in consumption and investment.
Data on intra-regional trade is not widely available however, but from the list of services for which there is information, it is apparent that intra-regional trade though significant is not dominant.
The Meaning of the Right to Provide Services in the CSME
The CSME legislative framework which includes the Revised Treaty provide in Article 30 for CARICOM nationals to supply services to each other whether across borders or within the territory of a Member State as a matter of right. The Treaty is now the domestic law of Twelve Member States.
Further these Member States have enacted the Movement of Factors Act which contain specific sections expressing how within a Member State the law concerning the exercise of the right to provide services by nationals of another Member State will apply. In addition many specific laws have been changed in order to guarantee market access by the nationals of one member state into the services markets of another Member State.
Modes of Supply of Services
Chapter Three of the Revised Treaty provide under Article 36 paragraph 4 , for services in the CSME to be supplied by any of the following four modes ;
Mode 1 : from the territory of one Member State into the territory of another member state
Mode 2 in the territory of one member state to the service consumer of another member state
Mode 3 : by a service supplier of one Member State through the Commercial presence in the territory of another Member State
Mode 4 : by a service supplier of one Member State through the presence of natural persons of a Member State in the territory of another Member State
When the term free movement of services is used it requires that nationals supplying services from any one Member State “(the first state )” is entitled to supply services to a consumer in or from another member state( the second state ) without ,
- Limitations on entry of firms
- Foreign equity limitations
- Quotas on output
- Requirements regarding the legal form of establishment
- Licensing or certification requirements
where no such restrictions are placed on the nationals supplying the same services who are in competition with the supplier from “ (the first state)”.
Market Access, Market Entry and Market Participation
Guaranteed access to the benefits of Chapter III – Services within the CSME is achieved first by the application of Article 7 of the Revised Treaty which require that each member state accord national treatment to the services and services suppliers of any other member, in respect of all measures affecting the provision of services.
Further any treatment given to one member state must be granted to all other member states and any extended by one CARICOM Member State to a non-CARICOM State would require no less favorable than that which it accords its own like services and services suppliers. In practice these rules require an act of liberalization by each Member State in accordance with Articles 36 and 37 of the Revised Treaty under which and by the law of each CARICOM State the authorities must not introduce any new restrictions and remove all existing restrictions on the free movement of services by the four modes of supply.
Implementation of the Chapter Three Provisions of Services
The Conference of Heads of Government of the Caribbean Community expressed how market access, entry and participation would be achieved when they approved “ The Programme For the Removal of Restrictions Under Chapter Three of the Revised Treaty”, at their Thirteenth Inter-Sessional Meeting which was held in Belize City on 3-5 February 2002.The schedule for the programme for the CARICOM Member States is provided in Attachment 1.This programme was originally intended to be implemented between February 2002 and December 2005. A majority of the implementation was actually achieved by July 2006.