Trade Policy and Innovation Governance: An Analysis of Trade Challenges in the Pacific and Caribbean Economies
The aim of this chapter is to assess how small island developing states (SIDS) can enhance productive capacity, export diversification and global competitiveness by moving up the global value chains and employing proactive trade policies and innovative go
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Trade Policy and Innovation Governance: An Analysis of Trade Challenges in the Pacific and Caribbean Economies Keith Nurse and Jeanelle Clarke
4.1 Introduction Small island developing states (SIDS) have common economic and trade challenges and are faced with weak infrastructure, transportation and trade logistics, and slow-moving public administration and governance structures. From a trade standpoint, these countries are impacted by trade policy approaches that engender commodity and low value-added traps. As such, the issue of how SIDS can enhance productive capacity, export diversification, and global competitiveness by moving up global value chains and employing trade policy and innovative governance mechanisms needs to be studied. In this regard, this chapter examines the experience of the Pacific and Caribbean regions in terms of integration into the contemporary global political economy and the extent of the challenges and opportunities. There are growing concerns that the regions’ trade and
K. Nurse (*) Sir Arthur Lewis Community College, Castries, Saint Lucia J. Clarke UNCTAD, Geneva, Switzerland © The Author(s) 2021 J. L. Roberts et al. (eds.), Shaping the Future of Small Islands, https://doi.org/10.1007/978-981-15-4883-3_4
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economic performance are eroding in multiple spheres at a rapid rate. Urgent attention and action are required to address, if not reverse, the current trajectories and the expected outcomes. Trade performance is at the top of the list of concerns for the regions given their high dependence on trade and the significant developmental impact trade has on the wider economy and society. This chapter aims to examine the growth and trade performance of the Caribbean and Pacific regions and evaluates the trade policy framework and its scope for economic transformation.
4.2 Trade and Development in Perspective The last global economic downturn together with the intersecting problems of global finance, climate change, and the food and energy crises had a very significant impact on SIDS in terms of export losses and increased indebtedness. For example, the Caribbean region experienced a major dip in economic performance. For the period from 2007 to 2011, most countries in the region experienced a significant drop in output and loss of fiscal revenues (Fig. 4.1). The countries that experienced the lowest degree of impact 5.
3.8
2.5
1.3
0. Bahamas
Barbados
Guyana
Cumulative Loss of Output
Jamaica
Suriname Trinidad and Tobago
Cumulative Loss of Fiscal Revenue
Fig. 4.1 Loss of output and fiscal revenue, 2007–2011 (% GDP). (Source: Mercer-Blackman and Melgarejo 2013)
4 TRADE POLICY AND INNOVATION GOVERNANCE: AN ANALYSIS…
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were Guyana and Suriname, the two main commodity exporters of the region, which were buoyed by increased demand for raw materials from China, Brazil, and other large exporting economies. The biggest impacts were seen on tourism-exporting economies such as Barbados, The Bahamas and Jamaica. Trinidad and Tobago, a hydrocarbo
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