Raphael John-Lall

While T&T must con­tin­ue to trade with the Unit­ed States, it is al­so im­por­tant for the pri­vate sec­tor to de­vel­op new prod­ucts that can en­ter new mar­kets out­side of the Unit­ed States.

For­mer Cen­tral Bank Gov­er­nor and econ­o­mist Win­ston Dook­er­an shared this view with the Busi­ness Guardian and a study he au­thored with two oth­er re­gion­al econ­o­mists on trade be­tween Cari­com and the US.

He said the study was just pub­lished last Oc­to­ber by the Uni­ver­si­ty of Mal­ta, a lead­ing in­sti­tu­tion for the study of small states and it would be of use to pol­i­cy­mak­ers on US and Caribbean trade re­la­tions.

The oth­er au­thors of the study are chief of the Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (ECLAC) for the Wash­ing­ton Of­fice and for­mer Min­is­ter of For­eign Trade of Cos­ta Ri­ca, An­dres Va­len­ciano and econ­o­mist, ECLAC Wash­ing­ton Of­fice, Daniel Per­rot­ti.

The pa­per ex­am­ined re­cent trends in Unit­ed States-Caribbean trade re­la­tions for the pe­ri­od 2021 to 2024, high­light­ing per­sis­tent struc­tur­al asym­me­tries and lim­it­ed di­ver­si­fi­ca­tion.

In light of US Pres­i­dent Don­ald Trump’s use of tar­iffs as an eco­nom­ic tool but al­so as a geopo­lit­i­cal one against US en­e­mies, crit­ics have raised ques­tions about where the Caribbean’s com­mer­cial re­la­tions with the US lie.

When asked if T&T’s com­pa­nies need to look be­yond the US mar­ket to ex­port their prod­ucts, Dook­er­an agreed but qual­i­fied it by say­ing that trade with the US can­not be aban­doned ei­ther.

“Yes, a mul­ti-aligned trade and in­vest­ment pol­i­cy was dis­cussed in the com­pan­ion study which was al­so pub­lished at the same time. This work sug­gests the need for a ro­bust pri­vate sec­tor with a high dig­i­tal tech­nol­o­gy ca­pa­bil­i­ty. In the tox­ic geopo­lit­i­cal sit­u­a­tion, there is the need to di­ver­si­fy trade and in­vest­ment, while an­chor­ing the US ax­is. The study al­so points to ‘re­gion­al­ism’ where the pri­vate sec­tor is a strong en­gine of growth. The shift in strat­e­gy re­quires an in­sti­tu­tion­al set­ting that de­parts from the old or­tho­doxy,” he said.

The study shows that goods ex­changes be­tween the US and Cari­com re­main con­cen­trat­ed in en­er­gy, trans­porta­tion, and food, while ser­vices are dom­i­nat­ed by tourism, leav­ing the re­gion vul­ner­a­ble to ex­ter­nal shocks.

The study al­so con­firms high de­pen­dence on a nar­row range of prod­ucts and part­ners. While iden­ti­fy­ing that emerg­ing op­por­tu­ni­ties ex­ist in dig­i­tal ser­vices, re­new­able en­er­gy, and the blue econ­o­my, it un­der­scores the need for com­pre­hen­sive strate­gies to fos­ter re­silience.

The study says the Caribbean has long held a strate­gic po­si­tion in glob­al trade, his­tor­i­cal­ly serv­ing as a cross­roads for eco­nom­ic and po­lit­i­cal in­ter­ac­tions be­tween the Amer­i­c­as, Eu­rope, and emerg­ing glob­al pow­ers and while re­gion­al trade frame­works such as the Cari­com and the As­so­ci­a­ton of Caribbean States (ACS) pro­vide mech­a­nisms for eco­nom­ic co­op­er­a­tion, the re­gion’s trade land­scape is shaped by a com­plex in­ter­play of his­tor­i­cal ties, pref­er­en­tial trade agree­ments and geopo­lit­i­cal dy­nam­ics.

“In an evolv­ing glob­al or­der, small Caribbean economies face chal­lenges nav­i­gat­ing shift­ing trade poli­cies, sup­ply chain re­align­ments and eco­nom­ic lib­er­al­i­sa­tion ef­forts that in­flu­ence their trade re­la­tions with ma­jor economies such as the US,” Dook­er­an said, cit­ing an­oth­er pa­per on the Caribbean econ­o­my he pub­lished in 2023.

The study al­so not­ed that de­spite its strate­gic lo­ca­tion, to­tal trade be­tween the Unit­ed States and the Caribbean re­mains a neg­li­gi­ble share of over­all US trade, con­sis­tent­ly be­low one per cent in re­cent years.

Its share fluc­tu­at­ed be­tween 0.71 per cent in 2021 and 0.84 per cent in 2023, high­light­ing the re­gion’s mar­gin­al role with­in the US trade net­work. On av­er­age, goods ac­count­ed for ap­prox­i­mate­ly 0.44 per cent of to­tal US trade, while ser­vices av­er­aged around 0.39 per cent.

“This trade has been deeply in­flu­enced by his­tor­i­cal and in­sti­tu­tion­al arrange­ments, par­tic­u­lar­ly the Caribbean Basin Ini­tia­tive and bi­lat­er­al agree­ments. These pro­grammes have pro­vid­ed pref­er­en­tial ac­cess to the US mar­ket, fos­ter­ing eco­nom­ic ties,” the study said.

How­ev­er, de­spite these ad­van­tages, the study shows that Caribbean economies re­main heav­i­ly de­pen­dent on a lim­it­ed range of ex­ports, pri­mar­i­ly in en­er­gy, ap­par­el, and tourism-re­lat­ed ser­vices.

“This high de­gree of trade con­cen­tra­tion has left the re­gion vul­ner­a­ble to ex­ter­nal shocks, as seen dur­ing the COVID-19 pan­dem­ic, which dis­rupt­ed sup­ply chains, re­duced de­mand for tourism ser­vices and ex­posed struc­tur­al weak­ness­es in Caribbean economies,” the study stat­ed.

Chal­leng­ing US mar­ket

Ac­cord­ing to the study, de­spite their close ties with the US, Caribbean na­tions face per­sis­tent chal­lenges in main­tain­ing and ex­pand­ing their share of the US mar­ket.

The study re­ferred to a 2023 ECLAC pa­per and said the in­creas­ing com­pet­i­tive­ness of oth­er emerg­ing economies and shift­ing glob­al trade pat­terns have lim­it­ed the re­gion’s abil­i­ty to cap­i­talise on pref­er­en­tial trade arrange­ments.

“Non-tar­iff bar­ri­ers, reg­u­la­to­ry chal­lenges and sup­ply-side con­straints have re­strict­ed the full util­i­sa­tion of these ben­e­fits. Ad­dress­ing these struc­tur­al lim­i­ta­tions re­quires strate­gic trade poli­cies fo­cused on mod­ernising in­fra­struc­ture, re­duc­ing lo­gis­ti­cal bot­tle­necks and strength­en­ing in­tra-re­gion­al trade to en­hance com­pet­i­tive­ness.”

The study fur­ther stat­ed that the re­liance on a nar­row set of in­dus­tries al­so ex­tends to the ser­vices trade and that the ex­pan­sion of dig­i­tal ser­vices, fi­nan­cial in­dus­tries and cre­ative sec­tors presents an op­por­tu­ni­ty for Caribbean economies to di­ver­si­fy be­yond tra­di­tion­al goods ex­ports.

“How­ev­er, reg­u­la­to­ry hur­dles, and un­der­de­vel­oped trade lo­gis­tics con­tin­ue to lim­it the re­gion’s abil­i­ty to ful­ly ex­ploit these emerg­ing sec­tors. Ad­di­tion­al­ly, the role of eco­nom­ic diplo­ma­cy has be­come in­creas­ing­ly rel­e­vant as Caribbean na­tions en­gage with ma­jor part­ners, in­clud­ing the US, Chi­na, and the EU, to ne­go­ti­ate favourable trade terms and ex­pand mar­ket ac­cess.”

While trade be­tween the US and the Caribbean re­mains a vi­tal pil­lar of the re­gion’s eco­nom­ic frame­work, sig­nif­i­cant chal­lenges per­sist and the study not­ed that is­sues such as trade con­cen­tra­tion, reg­u­la­to­ry bar­ri­ers, and ex­ter­nal vul­ner­a­bil­i­ties con­tin­ue to shape the trade land­scape, re­quir­ing strate­gic pol­i­cy in­ter­ven­tions.

T&T’S li­on share

T&T emerges as the largest trad­ing part­ner, ac­count­ing for 25.5 per cent of to­tal trade, pri­mar­i­ly dri­ven by its strong en­er­gy ex­ports to the US. The Ba­hamas fol­lows close­ly (23.3 per cent), ben­e­fit­ting from its strate­gic lo­ca­tion and role as a hub for fi­nan­cial ser­vices and re-ex­ports. Guyana (17.1 per cent) has rapid­ly ex­pand­ed its trade ties with the US in re­cent years, main­ly due to its boom­ing en­er­gy sec­tor, which has po­si­tioned the coun­try as a key re­gion­al play­er.

Ja­maica (10.5 per cent) and Haiti (8.1 per cent) oc­cu­py mid-tier po­si­tions, re­flect­ing their di­verse ex­port bases, which in­clude agri­cul­tur­al goods, min­er­als and tex­tiles. Haiti’s share is par­tic­u­lar­ly no­table due to its con­cen­tra­tion in tex­tile ex­ports to the US, which has ben­e­fit­ted from pref­er­en­tial trade agree­ments. While the top five na­tions ac­count for most of the trade, the re­main­ing Caribbean coun­tries con­tribute sig­nif­i­cant­ly small­er shares.

Ac­cord­ing to the study, the high trade con­cen­tra­tion with­in a few key economies un­der­scores struc­tur­al dif­fer­ences in ex­port ca­pac­i­ty, eco­nom­ic di­ver­si­fi­ca­tion, and re­gion­al in­dus­tri­al de­vel­op­ment with­in Caribbean na­tions. While en­er­gy-rich na­tions like Trinidad and To­ba­go and Guyana dom­i­nate ex­ports, small­er economies re­ly on niche in­dus­tries or ser­vice-based trade.

Be­tween 2021 and 2024, to­tal trade in goods be­tween the US and the Caribbean grew con­sid­er­ably, from US$22.02 bil­lion in 2021 to US$29.41 bil­lion in 2024, with a no­table peak of $30,332 mil­lion in 2022.

US ex­ports climbed sharply by 42.1 per cent from US$13.14 bil­lion in 2021 to US$18.67 bil­lion in 2022, reached their high­est point that year, then con­tract­ed by 8.1 per cent to US$17.15 bil­lion in 2023 be­fore re­cov­er­ing mod­est­ly with a 2.8 per cent in­crease to US$17.64 bil­lion in 2024.

Im­ports fol­lowed a sim­i­lar pat­tern, in­creas­ing from US$8.88 bil­lion in 2021 to US$11.65 bil­lion in 2022, dip­ping by 17.0 per cent to US$9,70 bil­lion in 2023, and then re­bound­ing ro­bust­ly by 21.2 per­cent to US$11.76 bil­lion in 2024.

Ex­ports by sec­tor

Based on the study, US ex­ports of goods to the Caribbean be­tween 2021 and 2024 re­mained high­ly con­cen­trat­ed in a few key in­dus­tries, with en­er­gy, trans­porta­tion, and food prod­ucts com­pris­ing the bulk of trade.

The min­er­als sec­tor clear­ly dom­i­nates, dri­ven by fu­el ex­ports, which col­lec­tive­ly rep­re­sent the largest share of to­tal trade val­ue. How­ev­er, ve­hi­cles, food, chem­i­cals, and in­dus­tri­al goods al­so play crit­i­cal roles in sus­tain­ing re­gion­al eco­nom­ic ac­tiv­i­ty. The strong pres­ence of avi­a­tion and mar­itime ex­ports re­flects a deep en­gage­ment in the trans­porta­tion sec­tor, while grains and poul­try high­light the US’ con­tri­bu­tion to re­gion­al food se­cu­ri­ty.

In sum­ma­ry, the ex­port da­ta in­di­cate that US-Caribbean trade re­mains high­ly con­cen­trat­ed in a few strate­gic in­dus­tries, with en­er­gy, trans­porta­tion, and food be­ing the most sig­nif­i­cant. Fu­el prod­ucts dom­i­nate to­tal trade val­ue, while ve­hi­cles and in­dus­tri­al goods sus­tain eco­nom­ic ac­tiv­i­ty in key sec­tors.