Caribbean Region: Review of Economic Growth and ... - USITC

exports fluctuated within a range over 2000–2005, rose 8.8 percent in 2006, and then fell byalmost one-half in 2007. While ATC expiration may have had a negative effect, these datasuggest that pressures to rationalize sourcing may have already been well underway.Nonapparel Preferences Under Original CBERA and CBTPAWhen considering nonapparel preferences, Dean and Wainio find a similar pattern in theutilization rates of original CBERA and CBTPA countries. Because CBTPA added a limitednumber of nonapparel products, this result is not unexpected. 40 Table 3.1 shows that in 2003nonapparel tariff preferences ranged from 2.1 to 4.5 percent for original CBERA countries,while among CBTPA countries, nonapparel preferences ranged from 3.2 to 5.2 percent.While the CBTPA program offers modest advantages in nonapparel products over theoriginal CBERA program, these advantages are of a much smaller magnitude than thoseoffered in apparel. In comparison to the GSP program, most, though not all, countries havehigher average nonapparel tariff preferences under original CBERA or CBTPA.Examples of Caribbean success stories that fall within this category are few. One examplethat stands out is the citrus juice industry in Belize (box 3.1). By taking advantage ofCBERA preferences equivalent to 25–40 percent, the country’s producers expanded throughparticipation in the U.S. market and extended their exports to other countries, such as the EUand Japan.Promoting Caribbean Development: Challenges andOpportunitiesThe current development situation in the Caribbean region and development policies thathave been proven or identified in the literature as most effective in the region are discussedin this section. Also described are major impediments to further economic development inthe region, as well as policies discussed in the literature that address these impediments andimprove the competitiveness of firms in the region. Three broad policy areas are covered:development challenges for small countries and the small firms within them; other keychallenges for Caribbean development, including policies related to infrastructure, humancapital, and FDI; and Caribbean trade and trade-specific policies.This review further summarizes macroeconomic, infrastructure, and trade policies that havebeen applied in the region, and conclusions about the effectiveness of these policies. Thediscussions of the size of Caribbean countries and firms, export diversification,infrastructure, human capital, FDI, and trade policies are informative as to policies that couldpromote industries in Caribbean countries that bring widespread benefits, are globallycompetitive, or show promise for output, job, and export creation. Because of the widevariation in natural resource endowments and level of current development in Caribbeancountries, however, industries with potential for growth and competitiveness differconsiderably by country. Thus, the literature does not identify any single industry that is40Certain footwear, canned tuna, petroleum and petroleum derivatives, and certain watches and parts werealso ineligible under original CBERA but eligible under CBTPA.3-10