Caribbean Agrifood Business Session N°16

Opportunities in cross-border value chains for Caribbean entrepreneurs

In recent years, the global economy has increasingly shifted towards interconnected markets and regional integration, making cross-border value chains a pivotal aspect of international trade and business growth. The Caribbean region, made up of small island developing states (SIDS), has historically faced several barriers to economic growth, including limited market size, geographic fragmentation, and vulnerability to external shocks. However, as global trade patterns evolve, Caribbean countries are presented with new opportunities to integrate into larger regional and international value chains and  tap into cross-border value chains that foster economic growth, enhance business competitiveness, and facilitate sustainable development.

Cross-border value chains involve the production of goods or services, information, and capital across  multiple countries, where various stages of the product’s creation take place across borders. Crossborder supply chains involve a network of activities and processes among various parties, including manufacturers, suppliers, distributors, retailers, and consumers in different countries. By participating in these chains, Caribbean entrepreneurs can enhance their access to global markets, diversify their products, and increase their competitiveness. Depending on a single supplier or region can increase vulnerability to disruptions such as natural disasters, political disturbances, or logistical issues. By having multiple sources of supply, companies can significantly reduce these risks.

However, cross-border value chains are often more complex and complicated than with mostly domestic value chains, and it involves complying with each country’s different trade regulations, customs, and product standards. This means that entrepreneurs might have to deal with multiple sets of trade rules and multiple risks and challenges, such as language barriers, cultural differences, regulatory requirements, and political instability. Cross-border supply chains begin with procuring raw materials and components from different parts of the world. These materials are then transformed into finished products in one country before being shipped to various locations worldwide.

Cross-border value chains offer significant opportunities for Caribbean entrepreneurs to grow their businesses, access new markets, and drive economic development across the region. By capitalizing on regional integration efforts, leveraging trade agreements, and focusing on innovation and capacity building, Caribbean entrepreneurs can unlock the potential of global markets and foster long-term sustainable growth. With the right support from both governments and private sector players, the Caribbean region can establish itself as a strong player in global value chains. To move forward, various actions are needed such as: (i) strengthening collaboration between Caribbean governments, private enterprises, and regional institutions to enhance regional value chains; (ii) creating incentives for entrepreneurs to participate in cross-border trade, including tax relief, financial support, and access to international business networks; (iii) fostering innovation in key sectors such as agriculture, tourism, manufacturing, and technology, and (iv)  ensuring that local entrepreneurs are equipped to compete in international markets and understand the business culture in foreign markets; (v) understanding how to comply with market access            requirements (i.e, packaging, labelling, food safety and quality) and cross-border trade transactions.