This is the full text of Government's discussion paper on the benefits of becoming an associate member of the Caribbean Community.Introduction1.1 In the 2001 Speech from the Throne, the Government promised to produce a paper setting out its views on Associate Membership status in the Caribbean Community (Caricom) for debate in the House of Assembly.

This paper meets that commitment. The following pages include information on the Caribbean Community, Associate Membership, functional cooperation and the results of the public consultation exercise carried out by the Caricom Committee. This paper puts the case for enhancing Bermuda's current Observer status to Associate Membership and provides the basis for an informed debate.What is Caricom? 1.2 Caricom is an organisation of 15 states and territories committed to working together for the common good. Its founding Treaty is the 1973 Treaty of Chaguaramas.The mission of Caricom is to provide dynamic leadership and service in partnership with community institutions and groups,working towards the attainment of a viable, internationally competitive and sustainable community with improved quality of life for all.

1.3 Caricom is not a political union and its member states retain their national identity and sovereignty.

1.4 Caricom's beginnings date back almost 50 years.In 1958, the Commonwealth countries of the Caribbean tried to establish a unit of integration similar to the European Economic Community (now EU) by creating the West Indies Federation. This Federation was drawn from ten member islands, formed under the auspices of the British and supported by the Canadians. Common services for the region, like the University of the West Indies and Regional Shipping Services,were established. However, nationalistic tendencies hampered integration efforts and as a result, four years later, in 1962, the West Indies Federation came to an end.

1.5 In mid-1962, Caribbean nations again came together to decide on the management of the common services that had been established and determine the best way to strengthen those areas of cooperation that existed. In the years that followed, Caribbean Heads of Government continued to meet to forge some form of regional integration.

In 1965, the Caribbean Free Trade Association (Carifta) was established.

1.6 In the early 1970s, two factors gave the Caribbean countries renewed impetus for regional integration. Firstly, the prospect of Britain's joining the European Economic Community reminded the islands of their vulnerability to any disruption of their preferential trading ties with Britain. Secondly, economists at the University of the West Indies advised that the creation of a Free Trade Area alone would not secure the full benefits of regional integration.

1.7 Consequently, in 1973 Carifta members signed the Treaty of Chaguaramas to establish the Caribbean Community (Caricom). The Treaty of Chaguaramas, revised many times over the years, still governs the operations of Caricom.

1.8 Caricom has three essential activities:(1) Economic integration based on a regional Single Market and Economy.

(2) Coordination of foreign and defence policies.

(3) Functional cooperation in culture, education, health, labour relations, tourism, drug control and security, transportation and youth and sports.1.9 There are three levels of Caricom association —(i) Full Membership;

(ii) Associate Membership; and

(iii) Observer status.

Presently, there are fifteen (15) countries with Full Membership in Caricom: Antigua and Barbuda, Barbados,The Bahamas, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

Four (4) UK Overseas Territories enjoy AssociFour UK Overseas Territories enjoy Associate Membership: Anguilla, British Virgin Islands, Turks and Caicos Islands, and Cayman Islands.

A dozen other countries (primarily South American and non-Commonwealth Caribbean states) and organisations have Observer status.1.10 Associate Membership — Article 231 of the Treaty of Chaguaramas allows the Conference to grant Associate Membership in the community, on such terms and conditions as are agreed, to any state or territory.

1.11 Associate Members cannot vote, but may attend and speak at Caricom meetings.

Because Bermuda is joining under the terms of functional co-operation [1.8(3)], the organ with which most interaction will occur is the Council for Human and Social Development; and to a lesser degree, the Heads of Government and Conference of Ministers.

1.12 Associate Membership is negotiated with the Conference by each applicant state on terms that are mutually beneficial. Associate Membership on the terms proposed by the Bermuda Government involves participation only in the area of functional co-operation.

1.13 Functional Cooperation — Caricom countries coordinate efforts in many non-economic areas, so that members benefit from joint activities. This saves each country from "reinventing the wheel" or needlessly duplicating services provided elsewhere in the region.

Under the Caricom structure, such cooperation takes place in many areas, including meteorological services and hurricane preparedness; health and nutrition services; education and job training; law enforcement; cultural programmes; labour, and industrial relations; science and technology; and harmonizing laws and legal systems.

This cooperation has been successful in improving services to the members (especially the smaller ones) and in lowering the costs of activities through joint ventures.

The University of the West Indies is an example of successful functional cooperation with campuses in several different Caribbean countries.

1.14 It is in this area of functional co-operation that the Bermuda Government sees most scope for benefit to be derived.Caricom Committee1.15 In August 2001, the Premier established a Caricom Committee under the chairmanship of the Honourable Nelson Bascome, JP, MP, to investigate Associate Membership status and to provide information to the public.

Committee members include: Dr. the Hon. Ewart Brown,JP,MP, (Deputy Chairman),the Hon.Derrick Burgess, MP, the Hon. Dale Butler, JP, MP, the Hon Ottiwell Simmons, JP,MP,Mr.Glen Blakeney, Mr Delroy O'Brien, and Mr. Gary Phillips.

1.16 This Committee has worked diligently to investigate the benefits and costs of Associate Membership.

They gathered a great deal of information on the background, mission, structure, goals and objectives of Caricom, and, more importantly, they held Town Hall Meetings in the Eastern,Western and Central Parishes to provide this information to the public.The Committee also met with various stakeholders in the private sector, to both disseminate information and listen to the issues and concerns that organisations and businesses had regarding proposed Associate Membership in Caricom.

1.17 To get an insider's view of Caricom, the Committee consulted with current Associate Members to learn about their experience.

1.18 As a result of their research, the Committee developed a clear understanding of what Caricom is and what it is not, what it can offer and which of its offerings could benefit Bermuda.

1.19 The Committee has concluded that Associate Membership in Caricom under the terms of functional cooperation will be beneficial to Bermuda.

1.20 The Government wishes to express its gratitude to the members of the Caricom Committee for their hard work, for the consultative process which they followed and for the information gained from their research - which forms the basis of this discussion document.Alliances in an Interdependent World2.1 When the idea of Associate Membership in Caricom was first raised commentators and members of the public asked two important questions: "Why does Bermuda need more alliances?" and "Why an alliance with Caricom?" This chapter addresses these questions and argues that the status quo is not the best option for Bermuda in an increasingly interdependent world.Why We Need

An Alliance 2.2 It's fine to brag that Bermuda is the second most isolated island in the world - but the reality is that no country can afford to remain isolated. Like most other jurisdictions, Bermuda has become ever more tightly bound to other countries through the process of globalisation, i.e. the development of economic and social interdependence between nations. Indeed, much of Bermuda's recent economic success has been made possible through the integration of world markets and the ability of businesses to trade across borders. In a world that is ever more closely bound, it is important that jurisdictions work together, learn from each other's experience, and share good practice for their mutual benefit.

This is particularly the case for a small, isolated island jurisdiction like Bermuda.

2.3 As a result of this growing interdependence, countries' economic and political strategies have generally changed from bilateral relations to multi-lateral relations.

The Western Hemisphere alone has 26 multi-lateral agreements including the North American Free Trade Agreement and the European Union.Thirty-four leaders have agreed to the formation of a Free Trade Area in the Americas by 2005. Similarly, in the East, there is the Association of South East Asian Nations (ASEAN).

2.4 While Bermuda's economic links with the larger world are well established and reflect the equality of Bermuda's position with the UK, the US, Europe and Asia; the same is not true in the area of human and social development. Outside of economic relationships, Bermuda has no links with any other countries.

2.5 In order to continue to prosper and not be left behind, Bermuda needs to consider its regional links and embrace the positive aspects of globalisation. Small jurisdictions, in particular, must forge effective alliances in order to ensure that their voices are heard on the world stage.Why Caricom? 2.6 Strengthening links with the Caribbean makes sense for Bermuda because the Island shares many historical and informal links with the region. We also share many similarities and through our Observer status we have sampled the benefits available in Caricom.

2.7 Bermuda's links to the Caribbean extend deep into our society. Within Caricom, Bermuda has enjoyed membership in Caribbean organisations as varied as the Caribbean Tourism Organisation and the Caribbean Football Union. Through links such as these, Bermuda has learned the value of regional cooperation and benefited from the exchange of information and ideas.

2.8 Similarities in size and in the issues and problems faced by Bermuda and Caribbean island countries mean that Bermudian policy-makers could learn from the experiences of their Caribbean counterparts; learning what policies work, and, more importantly, which ones do not. The Caribbean Community have graciously allowed Bermuda, in spite of our Observer stada, in spite of our observer status, to establish many unofficial links; as a result, the people of Bermuda have benefited in the fields of health, culture, security, labour and safety.

These links include:

|0x95| The Pan American Health Organization and the World Health Organisation, both organs of the United Nations.

|0x95| Most global organisations place Bermuda in the Caribbean region, therefore, the Health Department and the Ministry of Health and Family Services already work closely (but unofficially) with the Caribbean Epidemiology Centre. This organisation develops protocols for various diseases like HIV and Smallpox and provides surveillance reports.

|0x95| Bermuda's Emergency Measures Organisation also liaises with The Caribbean Disaster Emergency Response Agency (CDERA). Another partnership which allows Bermuda to benefit from the experience of our Caribbean neighbours.

|0x95| The Commonwealth Parliamentary Association, like the UK Government, also places Bermuda in the Caribbean region.

|0x95| The Departments of Culture and Community Affairs have participated in CARIFESTA, the Caribbean Festival of Creative Arts, for the past several years.

|0x95| Bermuda's Commissioner of Police is a member of the Association of Caribbean Commissioners of Police.

|0x95| The Department of Labour participates in regional labour conferences as a member of the International Labour Organisation; which body also places Bermuda in the Caribbean Region.

Other Caribbean connections include links to the: |0x95| Caribbean Congress of Labour; |0x95| Caribbean Employers' Council; |0x95| Caribbean Public Services Association; |0x95| Caribbean Hotel Association; |0x95| Caribbean Tourism Organisation; |0x95| Caribbean Cyclist Association; |0x95| Caribbean Equestrian Federation; |0x95| Caribbean Dart Association; |0x95| Caribbean Netball Association; |0x95| Caribbean Football Union; |0x95| Central American & Caribbean Swimming Federation; |0x95| Pan American Softball Association; |0x95| Pan American Hockey Association; |0x95| Pan American Union of Karate Associations; and |0x95| West Indies Cricket Board of Control.A Common History 2.9 Partnerships with the Caribbean island countries are beneficial because of the common history that Bermuda, as a British Overseas Territory, shares with the English-speaking nations of the region. As is the case with many Caribbean countries, Bermuda's laws, customs and government have their roots in the English legal system and the Westminster model of government.

2.10 There are many other similarities—between the educational systems of Caribbean island countries and Bermuda. Over the years, the Caribbean has provided Bermuda with many of the educators who have had a major impact on shaping the lives of Bermudian students for many generations and, therefore, the direction of the community.

2.11 In addition to these functional links, our many similarities and common history, Bermuda also carries links to the Caribbean in the ancestral roots of our people. Ancestors of the majority of Bermudians came from the Caribbean, including the Turks and Caicos Islands, Barbados, St. Kitts and Nevis, Jamaica, and Antigua. This migration of people was in both directions, with Bermudians also colonising several islands including The Bahamas,St. Lucia, and Turks and Caicos.Business Links 2.12 Bermuda's trading connections with the Caribbean began centuries ago with Bermudian sailors journeying there to trade goods. It grew even stronger during the period of salt trade in the Turks and Caicos. Nowadays, many Bermudian firms have a presence in the Caribbean region, or partnerships with Caribbean businesses.

2.13 The complex network of connections between Bermuda and the Caribbean demonstrate Bermuda's cultural, historical, social and economic links to the region.

2.14 Bermuda Business Connections include the following: |0x95| the Bermuda Employers' Council is a member of the Caribbean Employers'Association; |0x95| the Bermuda Hotel Association is a member of the Caribbean Hotel Association; |0x95| Astwood Dickinson were until recently the Bermuda agents for Columbian Emeralds, a Caribbeanbased company; |0x95| the Bank of Butterfield has offices in the Cayman Islands; |0x95| until recently, the Bank of Bermuda also had offices in the Cayman Islands; |0x95| Colonial Insurance operates in the Bahamas; |0x95| Gibbons Company also has long-established business interests in the Bahamas; |0x95| Island Press has a subsidiary, Global Directories, which publishes directories in 12 Caribbean islands, including Cayman Islands, Anguilla and Antigua and Barbuda; |0x95| Bermuda Electric Light Company is a member of the Caribbean Electric Utility Services Corporation (CARILEC); and |0x95| Law firms Appleby, Spurling and Kempe and Conyers, Dill and Pearman both have offices, or affiliates, in the Caribbean region.

2.15 Bermuda already benefits from strong links with the United Kingdom, the United States, and Canada. Formalising a link to the Caribbean region would complement these predominantly Northern links and introduce a broader geographical and cultural perspective, thereby providing greater balance to Bermuda's international relationships.

2.16 The need and potential for a strong regional bond is so compelling that all but the most isolationist (or anti- Caribbean) Bermudian will recognise the benefit of strengthening this strategically important relationship.Public Consultation

Town Hall Meetings

3.1 In an effort both to give information to the public about Caricom and to listen to the views and concerns of Bermuda's citizens, the Bermuda Caricom Committee held three Town Hall Meetings. One each in St.

George's for the Eastern Parishes, Hamilton for the Central Parishes, and Sandy's for the Western Parishes.Attendees at the Town Hall Meetings were encouraged to freely express their views.There was also a public forum at the Bermuda College, jointly sponsored by the Bermuda College and the West Indian Association.

At the Town Hall Meetings, four main areas were addressed:

|0x95| Bermuda's Reality;

|0x95| Bermuda/Caribbean Connections;

|0x95| Caricom; and

|0x95| Associate Membership in Caricom.

3.2 Meetings were also offered to three groups of specific stakeholders — business representatives, the unions, and sporting associations. Stakeholder meetings were attended by the Bermuda Employers' Council, Bermuda International Business Association, Bermuda Chamber of Commerce, Bermuda Union of Teachers, and Bermuda Public Services Union. A stakeholder meeting was also held with the following sporting associations: Bermuda Softball Association, Bermuda Football Association, Bermuda Squash Association, Bermuda Boxing Association, Bermuda Netball Association, and Bermuda Track and Field Association. In addition, the views of the public who called in to the radio talk shows were noted.

3.3 Concerns raised fell into a relatively small number of categories. These are set out below with the Government's response.

Membership will be costly and attendance at meetings will require a big increase in international travel.

Bermuda's annual joining fee has been determined as one percent of the Caricom Secretariat's annual budget. That figure is currently Eastern Caribbean $26,771,000. Bermuda's contribution would therefore be Eastern Caribbean $267,710 or about US$99,000. The Government believes this is a very modest contribution and represents good value for the benefits that will flow from Associate Membership.

The costs associated with travel to conferences and other meetings will not differ substantially from current costs, as Bermuda already attends many of the meetings as an Observer. Each Government Ministry has a budgetary allocation for attendance at overseas conferences and meetings and it is not anticipated that there will be any significant additional expense.

Government's decision to join was a "done deal", so why bother consulting?

Although the Government's desire to build stronger links to the Caribbean has been well known for some time, there was no "done deal" with regard to Caricom. The Premier consistently made it clear that Bermuda would only join if the terms and conditions were acceptable and the costs were not excessive.

In order for the Government to open talks with Caricom regarding the terms and conditions of Associate Membership, the process required that Government first seek UK approval and then make a provisional application. This provisional application was accepted by the Caricom Conference at its February 2002 meeting.

While the Government believes that Associate Membership in Caricom is the right way forward, the decision will be made after the issue is debated and voted on in the House of Assembly.

Government should focus on local issues first before worrying about Caricom.

Not only has the Government focused on local issues first, but the benefits derived from Associate Membership will help the Government to further address local issues. Rather than "neglecting local issues" Bermuda will benefit from exposure to best practice and the experience of island countries facing similar issues.

Caricom has been criticised for being slow and ineffective.

Without a specific example as the basis for this criticism, Government can only note that international organisations sometimes do work slowly, but this does not mean that they are ineffective. The European Union and the United Nations are two such organisations that take time to reach consensual decisions. No one would deny that these organisations serve a useful purpose for their members.

Caricom interferes in local politics.

Caricom is not a political union and its member states retain their national identity and sovereignty.

Caricom does not interfere in local politics. The record is clear that politics. The record is clear that incidents of alleged interference concerned cases where Caricom was invited in to countries to ensure that the democratic process was adhered to in the electoral proceedings.

Bermuda is not in the Caribbean region.

Whilst it is true that Bermuda is geographically located in the middle of the Atlantic, we have a great deal in common with the English-speaking Caribbean islands. They are the nearest jurisdictions which share similarities in terms of size, economy, culture and history. In addition, Bermuda is already linked with the Caribbean region by most global organisations.

Bermuda's reputation will be damaged by closer association with Caribbean countries.

This view presupposes that the Caribbean countries (as a region) have a bad world reputation. This view is countered by the associations listed in paragraph 2.14. Surely, the local businesses listed would not be doing business in the Caribbean if concerns about its reputation are correct.

Bermuda will be subject to large numbers of immigrant workers competing for local jobs.

Bermuda has not agreed to any provisions for the free flow of labour. The immigration and work permit policies introduced by Government to protect Bermudians in the job market will remain in force. Associate Membership on the terms agreed by Government will be on the basis of functional cooperation only.

The Caricom countries will benefit more from Bermuda's Associate Membership than Bermuda.

Both Caricom countries and Bermuda will benefit. Government is proud to be able to share its experience, best practice and success stories where applicable. It is right for Bermuda to help where we can whilst also benefiting. Bermuda should seize the additional business opportunities which a closer relationship with the Caribbean countries will offer.

Bermuda can have all the benefits without paying; we already get most of them from Observer status.

This is not true. It is only through Associate Membership that Bermuda will be able to take part in functional cooperation programmes that it cannot currently join. Through AssociThrough Associate Membership, Bermuda will also be able to participate in programmes that receive assistance from international donors.

It is true that Bermuda has been able to attend and learn from conferences and other Caricom meetings through its Observer status for a number of years without making any financial contribution to Caricom. The Government believes that it is right for Bermuda, as a relatively wealthy jurisdiction, to pay its way and participate officially.

Comments from Caricom Associate Members

3.4 The Caricom Committee also contacted senior officials in two current Associate Member states, (i.e. the Governments of Anguilla and the Turks and Caicos Islands), and their statements were as follows:

Anguilla - The Permanent Secretary in the Chief Minister's Office stated that Associate Membership of Caricom represented good value for money.

Anguilla has found it is easier to get technical assistance, to share in regional programmes, and experienced increased international influence.

Turks and Caicos (TCI) - The Permanent Secretary in the Chief Minister's Office said that as a British Overseas Territory the Turks and Caicos Islands were not involved in the Single Market and Economy.The TCI Government felt that the cost of joining was small in relation to the benefits and TCI enjoyed participation in political discussion, trade debates, health and education as a result of their associate membership.

The Cayman Islands - in addition, the Cayman Islands Government was contacted, because it has recently completed negotiating terms and conditions similar to those of Bermuda's proposed Associate Membership. The Cayman Legislature debated and approved a motion to support acceptance of the offer of Associate Membership within Caricom.

The motion included the statement, "Whereas the Cayman Islands' participation in the regional sub-grouping of Caricom will provide the greater benefit of deepening cooperation thereby strengthening the collective ability of the region to influence the international approaches taken to resolve such global issues as international taxation and money laundering which directly affect Cayman's economic viability."

The Case for Associate

Membership

4.1 The Government, through the invaluable work of the Caricom Committee, has completed the fact-finding task. It has analysed the data and considered the options related to Associate Membership in Caricom.

4.2 Bermuda currently has Observer Status in Caricom, and as an Observer cannot formally participate in Caricom programmes. For a number of years Government Ministries and Departments, as well as private organisations have been attending Caricom conferences and meetings. Associate Membership on the basis of functional cooperation in Caricom would allow Bermuda to participate fully in activities it has been monitoring for years.

4.3 Consider:

(i) shared programmes and resources on issues of common concern; (ii) joint efforts to find solutions to shared problems; (iii) enhancement and underscoring of the historical and cultural ties between Bermuda and the Caribbean; (iv) new opportunities for Bermudians and Bermuda-based companies; (v) enhanced links to South America, the United Kingdom and the United States; (vi) broader and more balanced international relationships; (vii) a voice in regional matters and, therefore, greater leverage; and (viii) excellent value for money with the benefit of shared services.

4.5 Benefits to Bermuda include working with the Council for Human and Social Development (COHSOD) in the areas of: |0x95| meteorological services; |0x95| health; |0x95| education; |0x95| law enforcement; |0x95| culture; |0x95| sports; |0x95| labour; |0x95| science and technology; |0x95| legal systems; and |0x95| maritime issues.

4.6 The cost of Associate Membership represents excellent value for money at $99,000 annually. This amount (which is the same for the Cayman Islands, the other Overseas Territory that joined this year) represents one percent of the Caricom Secretariat's annual budget.

4.7 The Bermuda Caricom Committee could identify no obvious downsides to Associate Membership in Caricom on the basis proposed by Government. Concerns raised in public meetings and elsewhere related to areas outside of the terms of Bermuda's intended participation.

4.8 Associate Membership on the basis of functional co-operation does NOT involve Bermuda in:

|0x95| the Single Market and Economy; |0x95| the free movement of labour. [Bermuda's new work permit policies remain in place to protect Bermudians and suitably qualified persons from the Caribbean, like suitably qualified persons from other countries, are welcome in accordance with these policies]; |0x95| the Caribbean Court of Justice. [Bermuda is proud of its links to the Judicial Committee of the Privy Council]; |0x95| the area of foreign relations. [The United Kingdom is responsible for Bermuda's foreign relations.

What does this mean in practice?

4.9 |0x95| Drug interdiction is a regional problem requiring cooperation and support from all countries affected.

|0x95| Protecting our reefs and waters are also shared issues. Similarly, pollution generated in one country can affect the waters of others. Developing common standards and protocols is in everyone's best interest.

|0x95| Access to technical assistance from donor states and international donor organisations. For example, the United Nation's Economic Council for Latin America and the Caribbean supports and funds a project related to the collection and use of social statistics.Bermuda could benefit from participation in such a project.

|0x95| Associate Membership would also enable Bermuda, when warranted, to benefit from other Caricom activities. For example, Bermuda will have input when Caricom is negotiating air links to the region.

|0x95| As an Associate Member,Bermuda will have greater leverage in negotiations with Caribbean universities and technical colleges in seeking preferential fees for Bermudians wishing to study in these establishments.

|0x95| Sporting and cultural opportunities will increase. For example, opportunities are being created for Caricom students to engage in cultural exchanges with Mexico and Venezuela. Bermuda students could also benefit from this arrangement.

In addition, Bermuda could benefit from funding provided for the development of young sports persons.

4.10 There are also potential economic benefits as Associate Membership may be a stimulus to economic activity in those areas in which Bermuda excels, potentially creating business opportunities for local companies. There might also be expansion opportunities for local businesses and for the Bermuda Stock Exchange.

Conclusion

4.11 The Government proposes, with the approval of the House of Assembly, that the Premier formally finalise arrangements for Bermuda's adoption into Associate Membership of the Caribbean Community (Caricom) on the basis of functional cooperation as approved in the UK Letter of Entrustment.