Caribbean countries stand to lose up to €10 million from falling rum revenues by the end of this decade as a result of a shake-up of EU trade rules. New ODI research produced for the Commonwealth Secretariat reveals that Barbados and Guyana are particularly exposed to the potential trade shock with Jamaica, Trindad and Tobagao and Dominican Republic also vulnerable to a pan-Caribbean fall of 3% in rum exports to Europe.
Dirk Willem te Velde, Head of the International Economic Development Group at ODI said:
“Caribbean countries have historically benefitted from trade preferences in the EU but these preferences are set to be extended to a wider number of Latin American and other countries following actual or planned free trade agreements with the EU. There is a critical role to be played by so called ‘Aid for Trade’ which can help the Caribbean to diversify and upgrade the range and quality of existing rum exporters and adapt to increased competition whilst safeguarding major income generators in what are still relatively vulnerable countries.”
Mohammad Razzaque of the Commonwealth Secretariat said:
“Many small and vulnerable economies, relying more on trade for growth and livelihoods than any other country-groups, have already become marginalised in global trade, and further preference erosion would make their situation precarious. There is an urgent need for a comprehensive and coherent international support regime for helping these countries with trade-related adjustment shocks.”