The research investigated the impact of the North America Free Trade Agreement (NAFTA) on the independent Caribbean economies spanning two decades post NAFTA’s implementation. Descriptive statistics were employed to demonstrate that in the preceding years and in the immediate aftermath of NAFTA, the Caribbean sustained market share losses in the NAFTA market. The effects of NAFTA on the Caribbean initiated a process of export and import partner diversification away from traditional markets to China, Brazil and other countries in Asia and Latin America. The research also found that import partner diversification was most pronounced in the second decade starting in 2004. With regards trade diversion, the research found that in the textile and garment sectors Jamaica and Barbados suffered significant displacement of exports in these sectors. However, in general there were not diversionary effect at the aggregate level of NAFTA-Caribbean trade.
Keywords: CARICOM, Export and import orientation, NAFTA parity, Trade diversion
