Experience has shown that developing countries that liberalise their import regimes and integrate with the world economy, backed by policy measures that promote international competitiveness and export diversification, achieve higher rates of economic growth.

An important part of recalibrating a country’s place in the international division of labour and notching up the value chain of international production is negotiating and implementing international trade agreements.

Caricom has negotiated several trade pacts with Cuba, the Dominican Republic and the European Union, among others. We also have preferential trade deals with Canada and the United States. However, the regional bloc has consistently failed to fully capitalise on the export opportunities provided by these agreements.

The failure of Caricom to increase exports is mistakenly attributed to these trade agreements being not sufficiently preferential. Worse, this self-inflicted failure is being used to delay the implementation of the Economic Partnership Agreement (EPA) with the EU and to beg for concessions which will prevent the completion of the trade agreement which is being negotiated with Canada.

Our governments do not want any further trade liberalisation within the World Trade Organisation (WTO) or in the form of new trade agreements with Canada and the United States. Ironically, this is in stark contrast to other small developing countries in the wider Caribbean.

The Central American countries and the Dominican Republic concluded in 2004 the DR-CAFTA with the US. The Dominican Republic was so anxious to have the EPA that if CARIFORUM (Caricom and the DR) had not concluded the EPA they would have sought a bi-lateral trade agreement with the EU. Panama has negotiated a free trade agreement with the US and Costa Rica is negotiating with China for some type of trade agreement.

On March 22, 2011, the EU and Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) initialled a comprehensive Association Agreement. The pact, which includes a comprehensive trade component, was the result of more than three years of negotiations which were concluded in May 2010. Both sides are moving apace with the process towards early ratification.

Part of the rationale for an agreement with the EU was the concern in Central America that Caricom had a significant advantage in the EU market conferred by the EPA. They moved with alacrity to secure export markets for their producers and with a recognition that it is not possible to be insulated from competition in the global marketplace and in their domestic markets.

Caricom, with the exception of Trinidad, has a pronounced proclivity to seek preferential trade agreements without realising that no country is willing to open their markets without some measure of reciprocity. In addition, Caricom has not sufficiently appreciated that cheaper imports lower the cost of living and contribute to increased international competitiveness of industries like tourism which have a high import content.

The Central American countries, like those of Caricom, are small and have similar structural characteristics yet they see deeper participation in the global economy as a development promoting opportunity, while Caricom sees it as development retarding.

The difference between these two groups of small developing countries lies in the vision and attitude.