A Canada-CARICOM "Trade-not-Aid" Strategy: Important and Achievable

Canada’s trade with countries of the Caribbean Community (CARICOM) is small. Yet because the region is one in which Canada has significant interests – including major Canadian investments in the region – and where it can make a difference, Canada’s approach to the current trade negotiations with CARICOM assumes a broader importance in its trade negotiating and international development strategies. Trade negotiations with CARICOM have progressed at an uneven pace since their launch in 2007, in part due to severe stresses in the region in the wake of the global recession of 2008/2009. This paper proposes a practical strategy to spur the talks to a successful conclusion. The strategy involves finding agreements on a few key practical issues first, upon which the more general framework for open trade can be built.The Commentary proposes that Canada work with CARICOM to address concerns about the ability of firms in the Caribbean to benefit from more open trade with Canada. This would include launching a process to address regulatory barriers to trade in rum, and re-focusing Canada’s current monetary assistance to the region on Caribbean trade-related development priorities, in the context of implementing a bilateral deal. With much of the potential for bilateral trade growth concentrated in services, Canada could also accept the Caribbean’s more limited “positive list” approach to services liberalization, while engaging with the region on broader long-term services liberalization efforts. Cultural trade – important to the Caribbean but a sensitive issue for Canada – could be promoted through cultural exchanges and co-productions. Canada could evoke the need to enhance the region’s economic stability and innovative capacity in securing wider protection for investment and intellectual property. Canada and CARICOM should also address practical impediments to two-way mobility of skilled labor, a topic which will gain in importance in future trade negotiations generally. Finally, Canada should adopt a less high-handed approach with respect to the commitment it seeks from CARICOM on labor and environmental standards, as these are unlikely to become issues in practice.