BARBADOS MIGHT HAVE maximised its trading potential with some traditional partners and should therefore look to pursue opportunities with a number of untapped markets.
That’s the finding of a new study entitled Barbados’ International Trade Potential: Evidence From A Gravity Model Analysis. It was conducted by Cherise Trotman of the Sir Shridath Ramphal Centre and Dr Troy Lorde of the Department of Economics, both at the University of the West Indies, Cave Hill Campus.
Based on the method of their research, the authors concluded that Barbados might have maximised its trading potential with long-standing partners including the United Kingdom (UK), United States of America (US) and Canada.
However, Trotman and Lorde said their results found that Barbados had “trade potential” with 51 countries, although they said “this does not mean that Barbados should pursue all of these”.
“The European region possesses the most potential, while the Asia, Pacific and African regions are both tied for the least potential. However, for these two regions there is room for trade expansion where there was previously little trade activity,” the researchers found.
“Overall the results exclude quite a few major economies which might have been anticipated to have trade potential with Barbados. Further, Barbados noticeably exhibits trade potential with countries from every grouping except the traditional partners.”
The study said this “is a clear indication that trade potential may have been maximised with these markets, which supports the trends shown”.
It added: “While maximum trade potential with the UK may have been reached, 24 European countries show trade potential with Barbados. Only one of these, Iceland, is not a member of the [European Union]. This is very encouraging for Barbados, which has yet to see the benefits of the [Economic Partnership Agreement] materialise after signing in 2008 and ratifying in 2011.”
Trotman and Lorde also said that “the finding that trade potential with Canada and the USA has been maximised is contrary to conventional expectations. It would also present concern to policymakers within the context of new reciprocal trading agreements with these countries”.