Re­cent years have seen a seis­mic shift in global pol­i­tics. The elec­tion of US Pres­i­dent Don­ald Trump, Brexit, and on­go­ing po­lit­i­cal tur­moil in the Euro­pean Union (EU) that’s seen im­bal­ance be­tween pros­per­ous na­tions like Ger­many and em­bat­tled na­tions like Greece, has shaken the foun­da­tions of po­lit­i­cal con­sen­sus on glob­al­iza­tion that ex­isted for decades pre­vi­ously.

This in tan­dem with China’s growth. Bei­jing’s grow­ing global in­flu­ence has seen many na­tions look­ing in­wards and to pro­tec­tion­ism, seek­ing to de­fend against the Chi­nese gov­ern­ment’s cur­rency ma­nip­u­la­tion, and other eco­nomic ma­noeu­vres by the Chi­nese Com­mu­nist Party (CCP) that have re­sulted in an un­even play­ing field in global trade for many na­tions.

Within this global dy­namic sits the Caribbean, and it is clear that in­ac­tion in this area will not suf­fice. Other na­tions and re­gions of the world may be con­tent and able to turn in­wards; as a mar­itime re­gion in­tent on greater growth and devel­op­ment, the Caribbean must grow trade.

Yet, what is the path to grow re­gional trade? Is a free trade agree­ment (FTA) pos­si­ble in the era of Trump, es­pe­cially fol­low­ing the Trump ad­min­is­tra­tion’s high pro­file with­drawal of the Trans Pa­cific Part­ner­ship (TPP) free trade deal in Asia? A brief re­cap of the Asia re­gion to find the path for­ward for this one is es­sen­tial.


US Pres­i­dent Don­ald Trump’s great­est fans and big­gest de­trac­tors would agree on one thing, he is a po­lit­i­cal phe­nom­e­non. Cam­paign­ing and win­ning of­fice on the prom­ise to ‘Make Amer­ica Great Again’, Trump has been a lead­ing voice in the cri­tique of global free trade.

While his ob­ser­va­tions sur­round­ing the CCP’s cur­rency ma­nip­u­la­tion and its im­pact on global trade won ac­claim - with even The New York Times af­firm­ing his view - Trump’s cri­tique of the North Amer­i­can Free Trade Agree­ment (NAFTA) has raised the ire of Amer­ica’s trad­ing part­ners in Canada and Mex­ico. As The Economist de­tailed ear­lier this month, the idea of a re­vised agree­ment on the Trump Ad­min­is­tra­tion’s terms is highly un­likely to win sup­port in Ot­tawa or Mex­ico City.

Yet, notwith­stand­ing Trump’s cri­tique of agree­ments in place, the de­ci­sion to with­draw Amer­ica from the TPP may ul­ti­mately come to be the land­mark mo­ment in his eco­nomic legacy. Though the TPP would’ve seen the US build on al­ready strong trade links it held with re­gional al­lies like Aus­tralia and Ja­pan, it also promised to serve as a guard against Bei­jing’s eco­nomic dom­i­nance of the Asian re­gion.

Like Brexit may do for the UK in Europe, the US with­drawal from the TPP - to put ‘Amer­ica First’ as Pres­i­dent Trump as­pires - has ul­ti­mately di­min­ished Amer­i­can eco­nomic lead­er­ship (in tan­dem with diplo­macy and de­fence) in­flu­ence in the re­gion. Though the TPP is ul­ti­mately a trade mat­ter for Asia, it’s il­lus­tra­tive of the dy­nam­ics in which the Caribbean may grow its trade.

Just as the TPP has con­tin­ued with its 11 other mem­bers (in­clud­ing Chile, Mex­ico, Peru and Canada), the ab­sence of the US’s eco­nomic power and access to its mar­ket will be felt, and greatly di­min­ish the power of the TPP as an FTA. This is a vi­tal con­sid­er­a­tion for any Caribbean FTA in fu­ture: Wash­ing­ton’s par­tic­i­pa­tion would be a key tar­get. With this in mind, what are the prospects for a re­gional agree­ment as it ex­ists to­day?


At present the US has free trade agree­ments with the fol­low­ing Latin Amer­i­can na­tions: Chile, Colom­bia, Costa Rica, Do­mini­can Repub­lic, El Sal­vador, Gu­atemala, Hon­duras, Nicaragua, Panamá, and Perú. FTAs with 10 na­tions in the re­gion is not in­signif­i­cant but, even when adding in Amer­i­can ter­ri­to­ries like the US Vir­gin Is­lands and Puerto Rico, it still doesn’t equate to a ma­jor­ity of coun­tries in the re­gion.

Much less a shared con­sen­sus in a re­gion with over 30 na­tions when in­clud­ing Be­lize, Ber­muda and Mex­ico. These num­bers, in tan­dem with the po­lit­i­cal cli­mate in Wash­ing­ton, mean any prospect of a re­gional FTA with Wash­ing­ton’s par­tic­i­pa­tion is small.

This re­al­ity in­di­cates not only the out­look of the Trump Ad­min­is­tra­tion, but the wider world. As Ben Power de­tailed in Acu­ity Mag­a­zine all the way back in De­cem­ber 2014, FTAs have in­creas­ingly lost their lus­tre as a ve­hi­cle of global trade.

This is not only to the sheer num­ber of FTAs now in ex­is­tence, but the emer­gence of bor­der­less tech­nolo­gies and busi­nesses like cryp­tocur­rency and blockchain. That was ap­par­ent back then in 2014, and it’s only be­come more ap­par­ent now, in 2017.


While the Brexit de­ci­sion will be re­mem­bered as a land­mark mo­ment in Bri­tish pol­i­tics, the eco­nomic re­al­ity of an EU exit for the UK has seen many Bri­tons who voted ‘leave’ now think­ing twice. The same is true of the Bri­tish gov­ern­ment ne­go­tia­tors, as grow­ing re­ports sug­gest a ‘Brexit-lite’ is de­sired by Lon­don that’ll see the UK re­main in the com­mon mar­ket. This in tan­dem with the re­cent elec­tion of Em­manuel Macron in France who seeks to cham­pion a re­newed Euro­pean Union.

The ex­pe­ri­ence of the UK and France is il­lus­tra­tive of a guid­ing star for a Caribbean FTA. Be­yond the head­lines and po­lit­i­cal tur­bu­lence, the EU re­mains de­sir­able as a free trade re­gion.

While re­cent years have shown some of the short­com­ings of the EU as an eco­nomic model, there still re­mains the ca­pac­ity for the Caribbean to learn from mis­takes made in Europe.

Ul­ti­mately, be­yond eco­nomics, the EU has un­doubt­edly achieved its found­ing aim: to pre­vent a re­peat of a break­down of re­la­tions and a break­out of con­ti­nen­tal war as seen in World War II. Given the po­lit­i­cal di­ver­sity of the Caribbean there is no prospect of such po­lit­i­cal unity, but also not the same risk that led to the EU’s found­ing. It’s in eco­nomics that the Caribbean can build upon the EU ex­pe­ri­ence.


Re­cent times have shown vividly that there are no cer­tain­ties about global trade and geopol­i­tics. This notwith­stand­ing, it is never safe to bet upon any ex­pec­ta­tion of dras­tic change. Un­less Pres­i­dent Trump re­signs or is re­moved, his ad­min­is­tra­tion shall lead Amer­i­can trade for at least an­other three years, and po­ten­tially more if he serves a sec­ond term. The same dy­namic ap­plies to China. Bar­ring un­fore­seen up­heaval, it will con­tinue its growth, and global trad­ing prac­tices.

Ac­cord­ingly, any ne­go­ti­a­tion of a free trade agree­ment in the Caribbean must be done with an ac­cep­tance of these chal­lenges, ir­re­spec­tive of how dif­fi­cult they may be. Rather than look­ing be­yond the Caribbean and await­ing a change in global opin­ion, there is in­stead an av­enue for re­gional lead­er­ship that could im­pact on a global scale. Ul­ti­mately, if the era of the FTA is held to be at the end, it is clear that the po­ten­tial for greater re­gional growth in­creases.

This has been seen with the TPP in Asia as coun­tries have con­tin­ued on de­spite the US with­draw­ing. This is ap­par­ent in Mex­ico where though a pref­er­ence to re­main in NAFTA may ex­ist, there are prepa­ra­tions un­der­way in the event Wash­ing­ton does exit.

Till now, there have long been talks held and plans made for a greater in­te­gra­tion of re­gional economies. As far back as 1989 the Grand Anse Dec­la­ra­tion paved the way for a com­mon mar­ket in the Caribbean un­der the um­brella of the Caribbean Com­mu­nity (CARICOM). The po­lit­i­cal cli­mate would sug­gest it is time to re­visit that Dec­la­ra­tion, and be­gin anew on its work.

The cre­ation of global value chains boosted trade during the last two decades, but may have run its course in re­cent years (IMF, 2016)

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