CARIFORUM and UK EPA Study

4. TRADE IN GOODS

The United Kingdom (UK) has traditionally been a significant trading partner for CARIFORUM (CF) countries. The UK was often seen as a gateway to the rest of Europe, and this was considered a significant advantage for access to the UK market under the CF-EU Economic Partnership Agreement during the course of negotiations, and an opportunity to access the rest of Europe, thereby diversifying the export destinations. In the literature this is referred to as Trade Partner Diversification (TPD) and like export diversification, in terms of products exported, this is also shown to have a positive effect on growth and development. In this section, we will assess the trends in bilateral trade between the UK and the CF countries. This study also assesses product diversification (DI) and product concentration (CI) of CF exports. 6 The level of diversification of a country’s exports reveals the extent to which it is able to compete in global markets. The concentration of a country’s exports in specific products reveals the extent to which it may be susceptible to price and supply shocks. The knowledge of its existing level of concentration, diversification, and import (market) penetration can, therefore, assist policymakers in tailoring relevant policy interventions and related trade facilitation measures, as it indicates specific obstacles and so gives an indication of the specific ways in which in which the CF-UK EPA can assist CF in achieving more sustainable outcomes.

4.1 Merchandise Trade

The CF-UK EPA continued the terms of the CF-EU EPA in respect of market access for goods. The total value of trade in goods between the CF and the UK at the time of signing the Agreement in 2008 was approximately 0.6 billion pounds sterling. 7 This declined over the period to 0.4 billion pounds sterling in 2020. Data for the 8 months of 2021 shows a value of trade of 0.2 billon pounds

6 Appendix IV sets out the comprehensive definition of variables relied upon. 7 Having regard to only the current parties to the CF-UK EPA, that is excluding Haiti.

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