Trade between Caribbean Community (CARICOM) and Central American Common Market (CACM) countries: the role to play for ports and shipping services

Abstract Trade between the Central American Common Market (CACM) and the Caribbean Community (CARICOM) is very low. Only 0.2% of the two groups' trade is between them. A possible explanation for this might be a supposed lack of adequate transport services. This report analyzes if there exists a potential to promote inter-subregional trade by improving transport services. It is found that in fact there does not exist a lack of direct services. 17% of services that call in one of the subregions also call in the other. In addition, due to the increase in transshipment services, almost all countries in the Wider Caribbean have different options to trade with each other. The main explanation of low trade levels is to be found in production patterns, history and language barriers. Transport services between the two groups are, however, more costly and far less frequent than those from and to North America. This difference should become less relevant as transshipment within the Caribbean Basin, in countries such as the Dominican Republic, Jamaica, and Panama gains market share vis-à-vis transshpment in Miami. Such changes, as well as improvements in port productivity and information dissemination about available transport options, as well as non-transport-related initiatives could potentially help to increase trade between CACM and CARICOM.