Question

Why have Caribbean countries gained limited benefits from preferential trade agreements?

Answer 1

Caribbean Community and Common Market (CARICOM) tried to integrate the plan to enhance and coordinate the economic and social development in a collective manner. There are several challenges faced by the Caribbean economy regarding this. There is a tighten external tariff policies and intra regional policies make the tighten integration of the labour and capital marketing. There is also a high difficulties faced related to the preferential trade agreements which enhance the international competitiveness of the economy. The rising intra regional conflicts among the Caribbean economies reduce the international trade and the foreign relation between the rests of the world. The major reasons for the limited benefits of Caribbean countries are;
Clear separation of the regional leads to high cost and risk among the economy. This retards the stability of the economic growth and also affects the future development of the economy. There is an unlimited resource which is not efficiently used by the authority.
Lacks of cyclical fiscal policy which cause the high volatility of the trade distract the stability of economic growth.
Weak financial sector hinders the economic development through trade agreements. Lack of efficiency attained through this and it hinder the economic growth.