ON THE RIGHT: Trade relations will be impacted

Will the Caribbean have to reset its trade relations with Britain in light of Brexit?

The decision by the United Kingdom (UK) to leave the European Union (EU) raises multidimensional implications most of whose impacts cannot as yet be easily measured. To begin with, in leaving the EU, the UK will have to dismantle its existing arrangements with the rest of the European economy and put a new relationship in place.

That new regime can considerably affect its growth prospects and hence those of other economies such as the Caribbean, whose performance is closely linked to that of the UK through exports, direct investment and remittances.

In addition, in so far as the UK’s trade regime with other countries is part of the EU’s arrangements, UK, after leaving the EU, will effectively be no longer part of the EU’s trade regimes and will have to devise new trade arrangements with over 50 countries including the Caribbean.

The resetting of its trade relations with non-EU countries to bring them in line with international trade law will be a massive undertaking, extending over a considerable period and with no certainty of conclusive or happy endings for some.

Deriving from these broad implications, a number of specific issues arise.

First, it can easily be established that the UK has derived quite considerable benefits from its membership of the EU.

The question that arises is whether it will be able to negotiate a new relationship with the EU that put at its disposal arrangements and instruments that are conducive to growth and which match or exceed those it now currently enjoys with Europe.

This matters for the Caribbean because we are well aware that a strong growing UK economy favours growth and development in our region.

Secondly, once the UK exits the EU, the CARICOM relationship with the rest of the EU under the [Economic Partnership Agreement], which has been negotiated to be of indefinite duration, will remain intact with the rest of the EU, but the UK will have to negotiate a new trade regime with CARICOM, a process that can take various forms and can take years to arrange.

The Caribbean’s vested interest here is to ensure that the character of the new trade regime between the Caribbean and UK is one that does not cause a loss of viability of the Caribbean, and hence lead to a situation where a decline in its fortunes is the collateral damage from the UK’s decision to exit the EU.

The Brexit surely must set in train efforts to revamp and to reset CARICOM’s trade diplomacy with the global economic community in a way that can have major beneficial impacts on the structure and the peformances of the economies within the region.

Brexit raises significant implications for the governance of our own regional integration movement.

The real challenge that confronts the Caribbean will be derived from the structure of the new trading regime that the UK manages to put in place with Europe and the issue as to whether that new regime has the capacity to support stronger growth in the UK and hence spur greater activity between our countries and Britain.

Former Prime Minister Owen Arthur made these remarks at a University of the West Indies symposium, held at the Cave Hill Campus last week.