As global trade becomes more fragmented and protectionist pressures rise, local business leaders are warning that regional integration is no longer a strategic aspiration but an economic necessity, particularly for small, open economies exposed to external shocks.

Speaking at the Jamaica Stock Exchange’s Regional Investments and Capital Markets Conference, Jerome Smalling, chief executive of JMMB Bank, said geopolitical tensions and shifting trade policies risk pulling the Caribbean in different directions unless there is a deliberate effort to coordinate regionally.

“We must remain focused on mitigating the negative effects of a potentially divided Caribbean,” Smalling said. “A unified Caribbean approach, with the free flow of capital, talent and services, is vital to the region’s growth and development.”

Smalling said regional fragmentation would weaken the Caribbean’s ability to attract investment and manage shocks at a time when global capital is becoming more selective.

That warning is sharpened by changes in the global trade environment, where higher tariffs, remittance taxes and policy uncertainty are increasing the cost of cross-border transactions.

Frank James, group chief executive of GraceKennedy, said companies operating across multiple markets are already feeling the impact of rising trade friction.

“We are seeing the introduction of new tariffs and remittance taxes, creating friction in trade and transactions and increasing the cost of trade,” James said.

James said these pressures, combined with climate-related disruptions and geopolitical shocks, are forcing Caribbean firms to rethink how they structure supply chains and access markets.

For GraceKennedy, those pressures have reinforced the need to diversify markets and supply chains across the region, rather than rely too heavily on any single country.

James said recent crises had shown how quickly disruptions can shift from one market to another.

“These events can hit one country today and another country tomorrow,” he said, underscoring the importance of building flexibility into regional operations.

That approach, he said, has led GraceKennedy to invest in more resilient regional supply chains and faster routes to market across the Caribbean.

Smalling argued that regional integration must extend beyond merchandise trade to include capital markets, financial services and export-oriented businesses, particularly small and medium-sized enterprises.

He said financial institutions have a role to play in supporting cross-border investment and helping businesses operate regionally rather than market by market.

“A strong, inclusive and well-functioning capital market is essential to development,” Smalling said.

He added that demand for cross-border financial solutions is rising as businesses and households seek to manage risk and access opportunities across the region.

Both executives said the Caribbean’s response to global uncertainty will shape its economic resilience over the next decade.

James said businesses and policymakers must distinguish between global forces they cannot control and regional systems they can strengthen.

“We gain optimism by understanding the things we cannot change, and then focusing on the things we can change,” he said.

For Smalling, the choice is ultimately about coordination.

“When businesses and households thrive, the economy thrives,” he said, arguing that cooperation across borders is critical to sustaining growth.

As global trade turns inward, Caribbean leaders say the region’s best defence lies in deeper integration — across capital, services and markets — rather than retreating into fragmented national responses.