Caricom Agriculture Trade Performance Relative To Canada - Ex Post And Ex Ante

Preferential agreements are often signed to improve relations of signatories through improved trade of products, services and the movement of citizens. These are accomplished through the removal of trade barriers, such as tariffs, through the facilitation of consultancy services and improvement in policy to encourage Foreign Direct Investment. Further, with the recent signing of the EU/ CARJFORUM Economic Partnership Agreement, the Region's policy makers are now questioning the benefits of trade agreements and are looking at areas where greater focus should be placed. It has been approximately 26 years since the CARIBCAN agreement has been signed. Given the promised benefits of preferential agreements, there should have been better performance in many product sectors which would allow for greater economic growth in the signatory countries. This paper analyzed the economic impact of the CARIBCAN Agreement between Canada and selected CARICOM member states. The industries of Meats, Grains, Fruits and Vegetables were analyzed to assess the agreement's impact on trade. The study used four trade indicators: (i) Revealed Comparative Advantage; (ii) Regional Orientation; (iii) Trade Intensity; and (iv) Trade Complementarity for the analysis. The results include the performance trends during the period 2001 to 2010, showing changes to trade and identified gains and losses to partners. Recommendations of the study can be used to inform future trade agreement negotiations and provide amendments to those currently engaged to ensure greater benefits. The study found: (i) CARICOM Comparative advantage increased for HS 0306 Crustaceans for the period 2001/10. (ii) Regional bias was found to be the highest in the trade of HS0302 Fish, fresh or chilled, to Canada. (iii)Trade Intensity from CARICOM to Canada was highest in the product groups of HS 0714 Manioc, arrowroots and salems (yams) and HS 2208 Spirits liquors. (iv)Potential for the export of HS 0302 Fish, fresh or chilled, and HS 0306 Crustaceans remained high during the years 2001/10, indicating that CARICOM did not take advantage of this market's demand.