Caribbean's Involvement In Globalization And International Trade example essay topic

Emerging Markets and Regions - Caribbean Shelly King International Business MGT/448 Ignacio Arrobas [FAC] July 9, 2003 Introduction The Eastern Caribbean is made up 0 f 600-mile long sweep of islands known as the Lesser Antilles. Collectively, they " re a mixture of African, European and East Indian influences and it's possible to island hop between the cultural extremes. It's a mecca for diving, tropical hikes, and epic waterfalls rich in colonial history. The area is home to many thriving and vibrant cities.

It has been shaped by centuries of history and is the birthplace of numerous powerful and distinct cultures, languages and music. The economic fortunes of small island economies are largely dependent on the ability to anticipate opportunities and threats resultant from exogenous trends in the world economy. The recent changes in the EU import preference regime and the increased competition have made economic diversification increasingly important in the Caribbean. The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries. Regional Integration One of the most notable trends in the global economy in recent years has been the quickened movement toward regional economic integration (Hill, 2000, p. 232).

The Caribbean is comprised of 28 nation states, dependent territories with limited self-government (Anguilla, The British Virgin Islands, the Turks and Ca cios Island and Montserrat), full dependencies (Bermuda and the Cayman Islands), departments of France, (Guadeloupe and Martinique). Combined, these states contain population of approximately 36 million people (Caribbean Network). The Caribbean's involvement in globalization and international trade was a mid-point for the Atlantic slave trade, producers of rum and sugar cane. With the end of Colonialism and slavery, that role did not substantially change. However, since the 1960's there has been an increasing shift in trade patterns, at least for the English speaking to North America. This has led to a 30+-year quest by these nations for comprehensive duty free entry of Caribbean exports into the North America - primarily the United States market.

In 1982, the US established a preferential trade relationship with the region through the Caribbean Basin Initiative (CBI). Almost all countries of the Caribbean and Central America (known as the Caribbean Basin countries) have been beneficiaries since the inception of (CBI), a unilateral U.S. trade preference program that provides free access to the U.S. market for most Caribbean Basin exports. The Caribbean Basin Trade Partnership Act (CBTPA), enacted in May as part of the Trade and Development Act of 2000, provides major new trade benefits to the countries of the Caribbean Basin. The main benefit of the CBTPA is duty-free and quota-free entry for U.S. imports of apparel sewn and assembled by CBI countries from U.S. cloth and yarn.

By strengthening the economies of our neighbors, this legislation also benefits the United States. Increasing prosperity in the Caribbean Basin will improve the prospects for U.S. exports to that region, reinforce its democratic institutions, and strengthen cooperation in such critical areas as immigration and narcotics control. The CBTPA enhances the CBI by reducing or eliminating U.S. duties (also known as tariffs) on those products not previously covered by the CBI. The law is intended to reflect the changing dynamics of regional trade, which followed NAFTA (the North American Free Trade Agreement of 1994 among Canada, Mexico and the United States).

It is also anticipated that full participation of Caribbean Basin countries will encourage efforts to promote regional economic integration, including negotiations for a Free Trade Area of the Americas (Caribbean Basin Initiative). Economic Development Stages The political, economic, and legal systems of a country can have a profound impact on the level of economic development and consequently on the attractiveness of a country as a possible emerging market (Hill, 2000, p. 46). According to the International Development Network (IDN), "Progress, poverty and exclusion reveals patterns of inequity and reason for hope for the Caribbean, in the 21st century (International Development Network). An Oxford University economist, Rosemary Thorp, has written a book entitled, "Progress, Poverty and Exclusion, a comprehensive economic history of Latin America and the Caribbean in the 20th century". This book takes the approach that the gains and setbacks of the century should be viewed as benchmarks in achieving the best path for the redevelopment of the Caribbean. There are notable areas of improved success for this region.

Increased income per capita, enhanced health for superior longevity and education top the list for this region. Average per capita income in the Caribbean will have quintupled by the century's end. Life expectancy now averages 70 years, up from 40 years in 1900. Education is a dominant factor for economic development - seven out of eight Latin American adults will be able to read and write in 2000, up from one in four in 1900 (International Development Network). Development has ramifications beyond the boundaries of its realization. Therefore, development must be viewed as part of a global process.

Globalization affects all forms of present and future development. World trade has grown 10 times over the last two decades. Most economists agree that international trade, integration of the world's capital markets, and increased foreign direct investment does increase the world's output of goods and services. However, it is obvious that the distribution of the benefits from this increased integration of the world's economy is not equal. Because of structural and institutional deficiencies, less developed countries contained within the Caribbean do not benefit from the wave of globalization.

Some, in fact, fall victim to the globalization process. Major Drivers of Globalization There are two major drivers to globalization decline of barriers to trade and technological change. Preliminary evidence suggests that trade liberalization has brought significant net benefits for the Caribbean region. Major steps in the integration process included removal of trade barriers in the 1970's. Reductions in the Common External Tariff (CET) were expected to lead mainly to increased imports from countries outside the region and, as trade liberalization led to a more efficient allocation of resources, increased exports. The Caribbean countries are also aiming to establish a single market, a European Union-style economy under the Caribbean Community (CARICOM) in the next few years (Voice of America).

Technological changes is accepted as a rapid and continuous feature of the twenty-first century: its impact is felt globally. Labor intensive technologies are on the decline; scientific knowledge and technological principles are considered key to increase productivity and wealth. Over the past two decades, industrialized countries have engaged in a process of education reform. The twenty-member countries of the Caribbean share the common goals of reforming their education systems to better serve Caribbean people for productivity, wealth creation, and social and personal development. Conclusion Regional cooperation is deemed essential for the achievement of economic competitiveness.

There are various mechanisms already in place for the success of the Caribbean. However, not all mechanisms employed to strengthen regional competitiveness operate effectively. The promotion of the knowledge, skills, and attitudes appropriate for regional integration must, therefore be a major goal for the prosperity of the Caribbean region.

Bibliography

Hill, C.W.L., (2000) International Business.
Irwin McGraw-Hill. Boston, MA. Caribbean Network (August 2001).
Retrieved from [On-line] web Caribbean Basin Initiative. Retrieved from [On-line] web International Development Network (September, 1998).
Retrieved from [On-line] web Voice of America (July 2003).