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New report from CARICOM: Integration a boost for regional trade

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A new report from the CARICOM Secretariat shows that intra-regional trade has increased over the decades of the integration movement and despite a dip in 2009, the increase in trade in 2011 was approximately 30 times the amount of US$0.1B in 1973. T&T has been the region’s dominant exporter. 

The story of trade in CARICOM was told when the Regional Statistics Programme, in collaboration with the Guyana Bureau of Statistics, held a seminar on grouping’s trade performance. The seminar was one of the activities to mark International Year of Statistics. 

The expansion of intra-regional trade and trade with third states is one of the objectives of CARICOM, which this year celebrates its 40th anniversary. CARICOM recorded mixed fortunes in trade with upswings that were manifestations of effective regional policies and downturns that were generally reflective of external shocks and the state of the global economy.

Changes in the global environment that occurred during the past 40 years impacted on the performance of the integration movement including in trade performance. Some of those changes included the removal of the preferential arrangements for the region’s sugar and bananas exports with the European Union (EU); the advent of the Organisation of Petroleum Exporting Countries (OPEC) and its impact on the setting of the prices of oil and related minerals; the debt crisis of the 1980s, and more recently, the global financial and economic crisis, and specifically, its impact in the EU and the United States of America (USA), two of the region’s largest trading partners. Since 1973, trade among CARICOM member states tallied 17.2 per cent of total exports. The USA has been CARICOM’s most significant market for exports, accounting for 44.2 per cent of total exports. 

The USA is also the main source of CARICOM’s imports accounting on average for 40.5 per cent of the region’s total extra-regional imports from 1973 to now, and for 37 per cent since the CSM. The region’s imports from the USA stood at US$0.4 billion in 1973, US$5.8 billion in 2006 and US$7.3 billion in 2011. Exports to the EU accounted for 15.1 per cent of total export, with the EU being the second major source of imports with 15.1 per cent. 

At the seminar, participants learnt that growth in trade was significant in the early years of the integration movement. Between 1973, when CARICOM was birthed, to 1981, there as a significant increase of intra-regional exports which expanded at an average annual growth rate of 22.8 per cent. The proportion of intra-regional exports to total exports averaged nine per cent. The impact of the debt crisis of the 1980s was felt heavily in the region. The period 2002 to 2008 also saw phenomenal increase in intra-regional trade with an average annual rate of growth of 24.8 per cent.

Fundamentally, the region sought to deepen its integration process through the agreement to establish the CARICOM Single Market and Economy (CSME) as a mechanism for the small countries of the group to stimulate growth and development amidst external and internal challenges. With the establishment of the CARICOM Single Market (CSM) in 2006, total exports expanded from US$17.8 billion in 2006 to US$18.8B in 2011 at an average growth rate of one per cent. That growth rate, however, declined in the wake of the most recent global economic and financial crisis. Total imports also increased with the launch of the CSM, from US$18.0 billion in 2006 to US$ 24.3 billion in 2011 at an average annual growth rate of 6.2 per cent. The period 1973 to 2005 saw an annual average growth rate in imports of 7.9 per cent.

Similarly, the effect of the global financial and economic crisis was reflected in an average annual growth rate for imports from 2008 to 2009 of negative 25.9 per cent. European Union Plenipotentiary Representative to CARICOM, Robert Kopecky, representatives of the Inter-American Development Bank (IDB), the United Nations Children’s Fund (UNICEF), the CARICOM Secretariat, and the Statistics Bureau of Guyana, as well as members of the media, participated in the interactive event that was led by Dr Philomen Harrison, Project Director, Regional Statistics, Nigel Lewis and Deoram Persaud of the Regional Statistics Programme.