Should CARICOM Conclude a New Trade Agreement with Canada: A Case Analysis of Barbados-Canada Trade Negotiations

Historically, trade relations between the Caribbean Community (CARICOM) and Canada have been governed by a preferential agreement known as CARIBCAN, which gave CARICOM goods duty free access to the Canadian market. In order to bring their non-reciprocal agreements into compliance with World Trade Organization (WTO) regulations, Canada and CARICOM launched negotiations for an enhanced trade agreement to replace CARIBCAN. Despite repeated granting of extensions to the original CARIBCAN agreement while negotiations took place, Barbados, along with the rest of CARICOM members, remains unprepared to offer greater reciprocity to Canada and therefore face the possibility of losing their share of the Canadian market. Failure to conclude a reciprocal agreement will seriously curtail the export of goods to Canada, as they will face high duties, become uncompetitive, and erode the trade surplus currently enjoyed. Faced with the possibility of being de-listed from the beneficiaries list by 2015, the lost in export options and reduced advantages in others, Barbados must ultimately seek to reach a speedy conclusion to the current negotiations, while maintaining its trade in investment advantage (through achieving parallel operation of the BIT), securing continued duty free access for its goods and maintaining policy space for the services sector.