CARICOM's sugar in the new liberal trade order.

Abstract

This chapter first examines the Caribbean Community and Common Market's (CARICOM) reliance on trade preferences. Sugar exports from CARICOM are intimately affected by three special trade agreements: trade with the EU under the Lomé Convention; trade with the USA under the Caribbean Basin Initiative; and trade with Canada under the Caribbean-Canadian agreement (CABRICAN). Next, the implicit transfers that occur in CARICOM through preferential trade agreements (PTAs) are examined. After developing the implications of preferential trade in CARICOM, the factors affecting sugar production there are examined. Based on this examination, the implications of changes in the existing PTAs for the sugar industry in the Caribbean are discussed. The chapter concludes by considering the significance of sugar within CARICOM's economy and the general implications of the future of its sugar production.

Agricultural Trade Reform: Policy Implications for CARICOM

“…Examination of the relative costs of production of the chief agricultural exports -sugar and bananas -is instructive. The cost of sugar production in the region averages USD 0.31 per pound which is significantly higher than the world price (Northover & Thomas, 1999). The guaranteed sugar prices under the sugar protocol of the Lomé Convention that have traditionally tended to exceed world market prices, have therefore made it possible for the region to continue to produce a product in which it has no comparative advantage.…”