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CARICOM Investment Code

CARICOM Investment Code . Dr Maurice Odle Economic Intelligence and Policy Unit CARICOM Secretariat eipu@caricom.org. CARICOM Investment Code .

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CARICOM Investment Code

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  1. CARICOM Investment Code Dr Maurice Odle Economic Intelligence and Policy Unit CARICOM Secretariat eipu@caricom.org M. Odle

  2. CARICOM Investment Code Market access for non –national investor is an integral part of any integration process whether bilateral , regional or multilateral. Accordingly , this presentation on the evolving investment regime in CARICOM will be structured as follows :- • Strategic Approach and Basic Principles underpinning the CIC • Structure and Coverage of the CIC • Expected Benefits from the CIC M. Odle

  3. Mandate for the CIC: Revised Treaty of Chaguaramas • Article 68 on Community Investment Policy: “COTED in collaboration with COFAP and COHSOD shall establish a Community Investment Policy which shall include :- • sound national macroeconomic policies • a harmonised system of investment incentives • stable industrial relations • appropriate financial institutions and arrangements • supportive legal and social infrastructure and • modernisation of the role of public authorities” M. Odle

  4. Mandate for the Cont’d Article 69 on Harmonization of Investment Incentives calls for the following : • harmonization of national incentives to investment in the industrial , agricultural and services sectors • Consideration to be given to : • sustainable export –led industrial and service-oriented development • Investment facilitation through the removal of bureaucratic impediments and • Non–discrimination in the granting of incentives among Community nationals M. Odle

  5. Mandate for the CIC Cont’d Articles 32 to 43 on Regulatory Standstill and Relaxation of Existing Measures Article 32 Prohibition of new restrictions on the Right of Establishment Article 33 Removal of Restrictions on the Right of Establishment Article 36 Prohibition on new Restrictions on the Provision of Services Article 38 Removal of Restrictions on Provision of Services M. Odle

  6. Mandate for the CIC Cont’d Article 39 Prohibition of New Restrictions on Movement of Capital and Current Transactions Article 40 Removal of Restrictions on Movement of Capital and Current Transactions Article 41 Authorisation to Facilitate Movement of Capital Article 43 Restrictions to safeguard Balance of-Payments M. Odle

  7. Mandate for the CIC Cont’d Other Supporting and Related Measures Article 65: Environment Protection Article 66: Protection of Intellectual Property Articles 168-186 : Competition Policy and Consumer Protection Article 187-224: Dispute Settlement M. Odle

  8. Decision of the Second Meeting of the Council for Finance and Planning • The Second Meeting of the Council for Finance and Planning which was held in Jamaica on 17-18 September 1999 “agreed that a Special Technical Team of officials spearheaded by Dr Maurice Odle, be established to formulate recommendations on a harmonised investment framework including an appropriate system of incentives , which could be the basis for an investment code , for the Community , while taking into account the differential levels of development of Member States” M. Odle

  9. Strategic Approach and Basic Principles • Holistic form: CIC relates to investment from both Intra-CARICOM and Extra- CARICOM Sources • Built in Preferences of intra vs extra CARICOM Sourced Investment • Intra-CARICOM provisions are intended to be WTO, FTAA, EPA etc “Plus” ( i.e. single economy oriented) • Provisions relating to investment from Third Party States are less favourable • “Negative List” Approach • Coverage of Both Goods and Services • Omission of Financial Services • Regime Vis –a –Vis Third Party States subject to principle of “progressive liberalisation” M. Odle

  10. Selected Critical Articles of the CIC • Article 1: Definitions • Article 2: Scope • Article 6: National Treatment • Article 7: Most Favoured Nation Treatment • Article 10:Key Personnel • Article 13:Compensation for Losses • Article 14 : Sectoral Reservations • Article 22 : Corporate Social Responsibility • Article 26 : Investor-State Disputes M. Odle

  11. Sectoral Reservations • A CARICOM State may reserve the right to restrict entry to an extra regional investor in very small scale and low technology services and manufacturing activities in the following areas :- • Small hotel construction • Travel agency / tour operator/tour guide • Cultural activities • Car rental, taxi and bus transport • Road repairs • Personal and household services such as hair dressing and beauty care and cleaning and dyeing • Manufacturing , including handicraft, furniture , beverages and creole food operations • Small scale primary activity including, agriculture , fishing and quarrying • Retail operations • Printed media M. Odle

  12. Expected Benefits • Increased Market Access( Market Seeking , Resource Seeking , Efficiency Seeking; and Technology seeking) • Investment Creation and Diversion • Lower Transaction Costs • Greater Certainty and Predictability • Synergy of a Single Intra-Regional Regime (One jurisdiction instead of 14) • Emergence of Cross-Border Investment by SMEs • Greater Intra-CARICOM Flows by TCCs • Greater Inflows from Extra-CARICOM Sources M. Odle

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