Trade relations

The vulnerability of Caribbean States to negative external shocks and natural disasters underscores the need for strength in unity. In seeking to build international partnerships, Caribbean countries have recognized the need to first look to each other. In this region, the Caribbean Community (CARICOM) Single Market Economy is acknowledged as an ambitious effort to form an integrated economy and, despite many challenges, important progress has been observed.

Since the global economic crisis, the Organization of Eastern Caribbean States (OECS) has taken steps to further accelerate its integration efforts. The 2010 Revised Treaty of Basseterre includes proposals to centralize decision making and to create a single Eastern Caribbean economy. These efforts are steps in the right direction and may well give just the right impetus to the wider integration movement.

For both the OECS and the broader CARICOM, however, it is essential that efforts at further economic integration be advanced. Specific undertakings should include removing barriers to the free movement of Caribbean people, as well as those which diminish trade with countries outside the region.

While further strengthening regional ties is necessary, countries of the Caribbean should also explore synergies through South-South and other forms of cooperation. Indeed, such arrangements should take advantage of regional and global value chain networks which now dominate production.

Bilateral and multilateral trade agreements are welcome. Several of these have been concluded in recent years, including those with the United States and Canada. Latin America is, of course, the unquestioned regional space within which CARICOM should broaden its trade network. To deepen trade ties with Latin America, Caribbean nations will need to develop bilateral agreements which better account for the goods and services in which they have a comparative advantage.

Opportunities exist for Caribbean nations to take advantage of the Economic Partnership Agreement (EPA) signed with the European Union in 2008. Since then, trade complementarities with CARICOM have grown little and, in some cases, declined. The markets of the European Union represent a huge opportunity to increase exports, diversify imports and deepen economic connections beyond the Caribbean region. The time is right for CARICOM nations to develop mechanisms to monitor the implementation of EPAs, and to take advantage of this trade framework.

As the world moves closer to developing a sustainable development agenda, trade will be an important vehicle in this process. The Caribbean should not delay in seizing every opportunity to take advantage of trade agreements that will increase its competitive capacity and foster production, cooperation and integration.