Editorial | CARICOM and ASEAN

The Caribbean Community (CARICOM) should take note.

Even as some members engage in bilateral discussions with the United States on Donald Trump’s tariffs, and the group moved to expand partnerships with other blocs, including China, the overarching theme of this week’s summit of leaders of the Association of the Southeast Asian Nations (ASEAN) was the acceleration, and deepening, of economic integration.

Not only did they commit to enhance trade (US$0.8 trillion in 2024) between themselves, but signed off on a strategic vision for the next two decades (building on the previous 2015-2025 plan) in which they pledged to, among other things, “ redouble our efforts to further enhance ASEAN connectivity, including to advance the ASEAN power grid, energy interconnection and multilateral power trade, and narrow development gaps through inclusive, participatory, and equitable access to economic and socio-cultural opportunities”.

“If we are open and candid with ourselves, we know that while we have achieved much, there is still so much more that needs to be done,” Singapore’s Prime Minister Lawrence Wong said at the summit in Kuala Lumpur.

While ASEAN, with a combined market of 600 million people, accounts for around five per cent of global manufacturing and eight per cent (US$3.63 trillion in 2023) of world trade, it is not invulnerable to actions like the trade war unleashed by President Trump in April. ASEAN members were hit with tariffs ranging from 10 per cent (Singapore) to 49 per cent (Cambodia).

The Malaysian prime minister, Anwar Ibrahim, ASEAN’s chairman, has written to Mr Trump requesting a meeting for the group to discuss the tariffs, notwithstanding bilateral talks some individual members may be having with the Americans.

At the time, Mr Ibrahim’s foreign minister, Mohamad Hassan, noting the impact that global trade disruptions could have on ASEAN, urged unity in the bloc.

He told an ASEAN foreign minister’s conference: “ASEAN nations are among those most heavily affected by the US-imposed tariffs. The US-China trade war is dramatically disrupting production and trade patterns. Global economic slowdown is likely to happen.

“We must seize this moment to deepen regional economic integration, so that we can better shield our region from economic shocks.”

IMPLEMENTATION DEFICIT

The scale with respect to trade is, of course, different. CARICOM accounts for a minuscule portion of global manufacturing production and exports. However, a slowdown in the global economy is potentially no less dire for small, open regional economies, which are heavily dependent on the US market for their exports, and, critically, tourists.

The prescription offered by Foreign Minister Hassan, and in the ASEAN 45 forward-looking document, is no less relevant to CARICOM as it is to that community. Indeed, it is the premise on which the Caribbean integration movement was founded, including the community’s proposed transition to a single market and economy.

However, if he were to apply his assessment of ASEAN’s progress to Caribbean economic integration, regional citizens would most likely strongly disagree with Singapore’s Prime Minister Wong’s conclusion of ‘achieving much’.

Indeed, over half a century CARICOM, has advanced many of the ideas and concepts on which ASEAN has made significant progress and which it plans to significantly deepen over the next two decades. However, this region’s notorious implementation deficit often leaves declarations as merely that – declarations.

For example, free movement of labour, a key element of the creation of the genuine single market, has meandered for decades, with piecemeal implementation. It ought, finally, to have been in place more than a year ago, but was delayed.

Some countries have said they are willing to implement it by June. However, that, according to the communiqué of the heads of government conference in February, is dependent on others of their colleagues ratifying the protocols of “enhanced cooperation”, allowing the community to operate on a dual-speed basis. Members who wish to go ahead on an initiative would be able to do so once a minimum number agreed. Those protocols were agreed to three years ago.

SITUATION IS URGENT

Intra-CARICOM trade accounts for only 10 per cent of the community’s trade, despite the region’s single market, tariff-free designation. Partners often accuse each other of maintaining non-tariff barriers. Discussions on removing these obstacles have been ongoing for decades.

At the February summit, the leaders announced a group that would work towards the “harmonisation of customs and phytosanitary regulations for the movement of goods across the region to facilitate the movement of people and goods throughout the region by way of maritime transport”. The group is to also address “mutual recognition of driver’s licences;[and the] development of insurance products to cover vehicles in multiple countries”.

Like ASEAN, CARICOM leaders have talked about the creation of the single digital communications space. But action on this front has also been slow. In February, they again placed the matter at the forefront of their agenda.

Hopefully, talk, in this environment, will translate to real action. Intellectually, CARICOM fully understands the imperatives of collective action, especially at this time when, as Mr Ibrahim, the Malaysian prime minister, reminded, “a transition in the geopolitical order is under way, and the global trading system is under further strain”.

Even together, CARICOM’s capacity for action is limited. But together there is some insulation, when separately there is none. The situation, therefore, is urgent.