Deeper CARICOM integration key to navigating fractured global trade order – Amb. Wayne McCook

A senior Caribbean Community (CARICOM) official has positioned deeper regional integration as a strategic response to an increasingly fragmented and uncertain global trade environment, as global rules-based systems weaken and economic nationalism intensifies.

Ambassador Wayne McCook, Assistant Secretary-General, CARICOM Single Market and Trade, was a panelist discussing Prospects for International Trade in 2026 in the Context of the Changing Global Geopolitical and Economic Landscape – Impact on Trade and the Challenges and Opportunities for the Caribbean and Latin America. The discussion was held on Wednesday, 28 January, at the World Trade Centre in Georgetown, Guyana.

Contextualising the Region’s position, Amb. McCook said: “For our Region, the scars of the immediate past are visible. The devastating passage of Hurricane Melissa encapsulated the dual challenge we face: the existential threat of climate change and the inherent economic vulnerabilities of our CARICOM Member States. Simultaneously, we have navigated dramatic shifts in global trade, driven largely by an intensified “America First” trade policy that has significantly impacted our exports, value chains and supply chains through a suite of unprecedented tariff measures.”

Against the background of what he described as “a truly tumultuous 2025” for international and regional trade, Amb. McCook highlighted CARICOM’s “oneness” and its resilience to navigate the “choppy waters” of the 21st century.

Amb. McCook warned that the erosion of multilateral trade norms is no longer theoretical, but already affecting investment, supply chains, and growth prospects worldwide.

According to UN Trade and Development (UNCTAD), global foreign direct investment fell by 11 per cent in 2024, marking a second consecutive year of decline, with further weakness expected in 2026. Global trade growth has slowed dramatically, falling below one per cent in 2025, even as uncertainty and geopolitical rivalry reshape supply chains.

Despite these headwinds, CARICOM’s trade performance has shown resilience. Between 2023 and 2024, CARICOM exports grew by 32 per cent to US$34.7B, with exports to the United States increasing by 86 per cent. However, recent data reveals uneven impacts across Member States.

The Assistant Secretary-General pointed to the recent steps toward full free movement of people by Barbados, Belize, Dominica, and St. Vincent and the Grenadines as tangible progress toward a more integrated Community.

“Fundamentally, CARICOM integration should be seen as a strategic response to a shifting global order,” he emphasised

Addressing prospects for international trade in 2026, he advanced a multi-pronged strategy focused on strengthening intra-regional trade, strengthening existing relationships while diversifying global partnerships beyond traditional allies, and deepening economic integration. Central to this approach is the CARICOM Industrial Policy and Strategy (CIPS), and the 25×25+5 food security agenda aimed at reducing food import dependence and boosting regional production.

Please read his presentation below.

Distinguished guests, colleagues, ladies and gentlemen,

I am honoured to join you today to discuss a topic that is crucial for each and every one of us – “trade and its prospects 2026”.

Someone has likened trade to “oxygen – without which economies and societies cannot function”.

We have learned, sometimes painfully, that trade cannot be taken for granted. “No society has all that it needs or needs all that it has”. Trade (exchange) is fundamental to human society.

From ancient bartering to the explosion in digital networks in the 21^st century – trade has defined and determined progress, growth and prosperity.

So, our reflection on the prospects for international trade in 2026 is not abstract or tangential-it is critical. Moreso because 2026 comes on the heels of a tumultuous year in regional and global trade.

Context

For our Region, the challenges of 2025 can be encapsulated in:

• The impact of the devastating passage of Hurricane Melissa which drove home the reality of the existential threat of climate change and the inherent economic vulnerabilities of our CARICOM Member States. and
• the impact of dramatic shifts in global trade policies driven by the world’s largest economy’s “America First” trade policy with its suite of extraordinary tariff measures and trade actions unprecedented in scale and scope.

These challenges tested our Region of open trade dependent economies as never before.

In 2025, across the global trade landscape, we saw – extraordinary linkages and leverage of markets, critical inputs and supply chains. Tariffs and export restrictions redefined markets and business prospects. Reshoring, friendshoring, nearshoring became buzzwords.

In looking at these challenges CARICOM Heads of Government have stressed the importance of enhancing our intraregional trade, safeguarding the Region’s trade relations with its major trading partner the United States, and deepening and diversifying our bilateral trade relations.

2025 saw the suspension of preferences under the Caribbean Basin Initiative (CBI), in place since 1984. Of note, in a scenario where for US market access 10% is the new 0%, most CARICOM Member States have been placed in the lowest tier of tariff bands at 10%, and Guyana and Trinidad and Tobago face tariffs up to 15% which is the minimum for “surplus countries”. Fortunately, many of the region’s export such as some agricultural exports, are benefitting from exemptions that have been made to various tariff measures. Critically also, the potentially devastating port fees that would have been levied under the “China shipping measures” considered by the USTR were not implemented as feared. This was due in part to strong public and private sector advocacy for which key stakeholders such as the CPSO must be commended.

Unfortunately, the Hemispheric Opportunity through Partnership and Encouragement (HOPE) Act, eliminating duties on Haitian apparel exports to the United States, and the Haiti Economic Lift Program (HELP) Act, expanding duty-free status to for Haitians exports, lapsed in September 2025. CARICOM continues to support Haiti’s advocacy for the urgent renewal of these programs and the US House of Representatives, with strong bi-partisan support, has since passed a bill to extend them. The legislation now awaits approval at the US Senate.

The World Has Changed

Looking at the seismic shocks of 2025 – we must come to terms with the fact that 2026 will not be a simple reset! We are unlikely to see a restoration of the status quo ante!

Last week, at the World Economic Forum in Davos, Switzerland, Canadian Prime Minister, Mark Carney, characterized the changes in global order as “a rupture, not a transition.” Earlier, the Prime Minister of Singapore said of the emerging changes we are “in a period of transition – uncertain, unsettled and increasingly unstable.” Stressing that “We are entering a new phase in global affairs – one that is more arbitrary, protectionist and dangerous” . Whichever paradigm we chose – rupture or dangerous transition, the fact is that the rules-based international system that underpinned decades of global economic growth is undergoing more than a stress test. Trade tensions, supply chain disruptions and a surge in economic nationalism and protectionist policies are driving global fragmentation and creating uncertainty for governments and businesses alike.

The impact is showing up in the data -According to UN Trade and Development (UNCTAD), global foreign direct investment (FDI) flows are falling – global foreign direct investment (FDI) fell by 11% to $1.5 trillion in 2024, marking the second straight year of decline.

UNCTAD estimates that there will be a sharp downward revision of most FDI prospects. In other words, weaker global GDP growth, weaker capital formation, declining trade flows, financial market instability and lack of investor confidence could be a drag on FDI prospects in 2026.

In terms of trade growth, gone are the days when global trade growth averaged 4%. In 2025, global trade growth is expected to turn out at anywhere between 0.9%-1%. But trade is resilient. Notwithstanding these shocks,in dollar terms, global trade increased by more than USD 500 billion in the first six months of 2025, with sustained momentum in the Third Quarter. In particular, South-South Trade was a major driver of global trade growth in the Second Quarter of 2025.

CARICOM TRADE PERFORMANCE

Here in CARICOM – trade continues to be a key driver in our economies – Between 2023 and 2024, Global CARICOM exports demonstrated remarkable vigor, growing by 32% to reach $34.7 billion. This growth occurred even as total imports declined slightly by 2.8%.

Our relationship with our largest trading partner, the United States, has seen volatility but also growth. While our imports from the US fell by 2.4%, CARICOM exports to the US surged by 86% between 2023 and 2024. Early reports suggest that exports to the US in the aftermath of the new tariff measures has been mixed. Our Expert Working Group mandated by the Heads of Government Conference has been assessing the impacts of the tariff measures and policy shifts and we expect to have a deeper assessment as soon as more data is available.

The Shifting Geopolitical Architecture

At the systemic level – the credibility of the rules-based multilateral trading system, with the WTO at its core, is under severe threat. The multilateral agenda, which was far from robust in recent times, is withering on the vine and we are seeing shifts from more “holistic” trade relationships to a transactional reliance on surplus as a trigger for policy in bilateral arrangements. .

The Most Favored Nation (MFN) principle has been undermined by the push for reciprocity without regard to the principle. As a result we are seeing a “spaghetti bowl” of complex bilateral arrangements with unusual features – new models of trade agreements that intensify points of leverage, including purchase and investment commitments, and an expansion of national security predicates for implementing trade barriers and restrictions.

At the same time and perhaps in direct response to these bilateral asymmetric arrangements that characterized the 2025 reciprocal trade push led by the US, we are seeing new networks emerging and agreements such as EU/Mercosur and EU India as well as moves to expand CTPPP underpin a valiant and not inconsequential effort to advance rules-based trade arrangements despite the significant shocks to the system.

These developments affirm the importance of trade networks and integration arrangements as havens of some stability and predictability amidst the turbulence and the rupture!

Our Strategic Response: Diversification and Defense

In this context – how do we respond in 2026 and what strategies should we pursue?

Our response must also be multi-pronged:

1. Reinforcing Internal Markets: We must diversify our supply chains and strengthen intra-regional trade.
2. Global Diversification: We are exploring new circles of trade and economic integration, looking beyond traditional alliances to Brazil, India, and the African Union Members.
3. Strengthen Existing Relationships: We have existing trade arranges partners including the United Kingdom, the European Union, Canada, Colombia, Costa Rica, and Cuba Individual Members have partial scope agreements with partners including Chile, El Salvador and Brazil to name a few. We must turn these market access opportunities into real and effective market presence. This will demand serious work on our supply side and a determined push for innovation, productivity and competitiveness.
4. Address competiveness and supply side challenges by addressing NTBs and accelerating our regional and national agriculture and industrial policy initiatives in close partnership with the private sector.

Strengthening Regionalism as a Strategic Response

I am happy to say that the push for expanded production and competitiveness in agricultural and industrial products is being supported by serious policy efforts – a CARICOM Industrial Policy and Strategy (CIPS)— developed with funding support and input from the CARICOM Development Fund (CDF) and Caribbean Export is being advanced. The plan which will complement the 25 by 25 plus 5 agriculture policy. The Industrial Policy will seek to prioritise several industrial ecosystems (from agriculture & fisheries and construction to digitalization, health, tourism, MSMEs, and RDI). This agenda will advance the production integration goals and trade and economic objectives of the Revised Treaty of Chaguaramas.

We must at the same time continue to strengthen our intra-regional trade arrangements. This will include completing the updating of our CET and ROO and aligning the industrial and agriculture policies with our trade policy in intentional ways. Additionally, work on regional services policies, removal of NTBs, addressing transport and logistics and advancing the digital agenda will help us build resilience and navigate the shocks ahead in 2026.

On the bilateral front, starting with the US our major trading partner, we will anticipate discussions on the framework for our future trade relationship bearing in mind the fact that the CBI remains in place despite the suspension of the tariff benefits at this time. We are prepared for constructive dialogue at the technical and political levels and value our consultations with the USTR on the ongoing trade relationship. We will continue to take deliberate steps to invigorate our bilateral trade agenda both with respect to existing BTAs and outreach to other key partners such as Brazil, India and Africa, beginning with the completion of our negotiations with Colombia for an updated Trade and Economic Cooperation Agreement.

While working on the bilateral front will be important, 2026 requires us to address the bigger picture that is the Multilateral Trading System and the WTO. Without an MTS anchored in the WTO, the rules-based order will collapse. To build or rebuild an alternative framework is not an option. The WTO faces a crisis of effectiveness and impact in the face of dramatic measures that ignore its rules and undermine its function. Ministers will meet this March to attempt a reform agenda, addressing governance and dispute settlement, among other areas. The WTO, notwithstanding its imperfections, has provided a vital and democratic forum in which many small states acting in their coalitions have been able to address the vagaries of power dynamics and “might is right” in the realm of international trade. It is of systemic importance to our region to have a credible, predictable, open and accessible WTO and this will be reflected in the region’s approach to the upcoming Ministerial and beyond.

Notwithstanding the difficult path ahead, this region is resilient -We have navigated choppy waters before, and there is every confidence that in 2026 with solid partnerships and strong private sector engagement we will weather the storms and build stronger and more resilient region contributing to a stronger and more resilient hemisphere and an effective Multilateral Trading System.

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