Influence from the Food and Agriculture Organization (FAO) have liberalised trade in the region.
Partnerships exist with:
- The EU – CARIFORUM's second largest trading partner
- The USA (through the CBI trade program) – CARIFORUM's largest trading partner
The countries in the CARIFORUM region have a history of trade relationships primarily with North America and Europe. Major trading sectors have been tourism, sugar, rum, bananas, and oil and gas. Economic growth through the tourism industry has significant potential, but trade in sugar and bananas has declined significantly after the loss of preferential trade agreements. The rum trade is holding steady, but revenue contribution from oil and gas has slumped with the drop in global oil and gas prices. There is an on-going attempt to diversify the product mix of the trading system with a focus on enterprise development, renewable energy and the creative industries. A special focus is being placed on non-sugar and non-banana commodities to resuscitate agricultural land lying in fallow and in bush.
Favourable climate for investment
- Established trade relationships
- Active efforts from governments to promote agriculture
- Large financial institution presence
- Commonly spoken languages
- Experience with sweet potato
The investment climate is very sophisticated for established sectors and businesses in the economies of the region. There is a wide range of financial services provided by commercial banks, government financial institutions, microfinance institutions, private institutions, credit unions, cooperatives, youth business trusts, and foreign direct investors (FDIs) (Springer, 2015).
Policies of commercial integration
CARIFORUM governments have a positive e-commerce policy. Governments and the private sector have made great strides in creating an e-commerce-friendly enabling environment.
Economic partnership agreements (EPA) already exist between the EU and some of the countries in the region aimed at promoting trade with the EU to ultimately contribute, through trade and investment, to sustainable development and poverty reduction goals (EC, 2016a). The EU is the main destination for agricultural and transformed goods from the CARIFORUM region. The EU is CARIFORUM's second-largest trading partner, after the USA. In 2011, trade between the two regions amounted to over €8 billion (EC, 2016b).
There are other opportunities in the field of agriculture and beyond which have been given policy priority by governments in the region. In this context, these sectors may also contribute to a dynamic investment climate.
The challenges include the creation of an environment to enable a new wave of entrepreneurs, addressing the management of business systems, reducing the rate of failure among start-up enterprises, and the sourcing of innovative financial capital that meets the needs of these fledgling enterprises.
The sweet potato sector and the value proposition
In the tropics, including the CARIFORUM region, sweet potatoes can be grown perennially, while in temperate regions it is only grown as an annual crop. Sweet potatoes require a soil pH of 5.6 – 6.6. High-quality tubers are best produced on fertile, well-drained, sandy loams (Titus, 2008). This creates an opportunity for select CARIFORUM countries to trade competitively with their traditional trading partners for most of the year.