1. FOUR QUESTIONS FOR REGIONAL INTEGRATION Norman Girvan In Honour of Professor Alfred Francis Mona, September 30, 2007

2. Limitations Reliance on market mechanisms Emphasis on economic aspect Inter-governmental mode Response to external pressure

3. Intra-regional exports

4. Importance of Caricom to member states XG Exports of goods, 2001-2003 XGS exports of goods & services, 2002 (estimated) Source: based on INTAL Caricom Report No. 2, Tables 2,3 & 5

5. Jessen et al (IDB CARICOM Report No. 2) found that intra-regional trade growth in the 1990s was highest in products enjoying little protection from the CET; and lowest in products enjoying high protection. Morrira and Mendoza (IDB 2006) on the basis of descriptive statistics, empirical growth model and gravity model; concluded that the traditional, trade- related gains from regional integration have been and are bound to be, limited because of (i) high openness (ii) limited size of regional market and (iii) similar factor endowments. Gains in the sharing of social and physical infrastructure, due to economies of scale that cannot been mitigated by trade and openness, can be substantial

6. Pop.GDP.Ratio to CSME (M) $B PPP PopGDP CARICOM1548 CSME63911 Cuba11441.81.1 Dom. Republic9671.51.7 Venezuela271744.5 MERCOSUR235225139.257.7 NAFTA4411539373.5394.7 EU4591081776.5277.4 (1) Billions of current Euros 2005

7. Economic drivers - Criteria Sustained growth of exports to international markets, or Growth in intra-regional exports, or Significant growth in supplies, at low real cost, of a key input that is important to the achievement of international competitiveness in other activities (e.g. energy)

8. Economic drivers Energy Agriculture Sustainable Tourism and Agro-tourism Manufacturing New export services

9. DEVELOPMENT VISION  Economic  Social  Governance  Environmental ECONOMIC INTEGRATION  Single Market  Single Economy FUNCTIONAL COOPERATION  Social  Environmental FOREIGN POLICY COORDINATION NATIONAL POLICIES & PROGRAMMES

10. Legal & Institutional Infrastructure83.9 Single Market61.6 - - Free Movements of Goods80.0 - Free Movement of Services79.2 - Free Movement of Persons56.4 - Free Movement of Capital55.6 - Right of Establishment50.0 Single Economy8.9 - Common External Policy52.8 - Harmonisation of Laws1.0 - Sectoral Programmes & Enabling Environment0 - Common Support Measures8.3 TOTAL50.3 CSME Implementation Deficit Percent of required actions completed, Aug 05