CARIFORUM and UK EPA Study

The data shows that most of the region’s trade in goods takes place in line with the principle of Comparative Advantage, as estimated by the RCA. This study argues that rather than seeing this trend as a disadvantage, one should go back to first principles, particularly in light of the existing capacity constraints and the time required to overcome these in the short-term. That is, as the Economist David Ricardo indicates, specialise! This specialisation, particularly in Agro-foods production, which involves a significant degree of value added services ties into a strategy of building value chains from the regional to the global level. Studies have shown that the inclusion of services in this mix to address both “how” products are manufactured as well as delivered to export markets, would be one way to diversify the region’s output, as well as add value. Studies have also shown that this approach has been a significant part of the Agro-food processing trade and can potentially deliver significant gains. This is also the same in relation to light manufactures. 2. Regional to Global value Chains Studies posit the significant advantages of integrating into Global Value Chains. This study argues that, while the data is not available, the trade structure and characteristics of CF economies suggest that Regional Value Chains could be used as a stepping stone to Global Value Chains. This will require a concerted effort at a regional level to push for these linkages (integration) to spread the benefits. The CF-UK EPA, with its diagonal cumulation provisions, provides better opportunities to facilitate this, and may in fact create longer value chains than would otherwise be possible under other PTAs. This comports with the available evidence that shows that there are significant investment opportunities for both forward and backward integration into CF and UK value chains, which will lead to greater penetration of GVCs via the UK, as well as through the development of regional value chains within CF. 3. Standards The study further argues that, given the market access concessions made by the UK, the proactive CF states and entities may have to seek to gain “first mover” advantages within the preferential margins that have been made available, by seeking to build the capacity to meet the higher or

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