Caribbean Business Environment

Firstly, here are some of the consequences of regional business arrangements Accumulation or growth cause. If closer integration corrects the efficiency with which factors are combined it is alike likely to induce rater coronation. While this additional investment funds is taking place, countries may experience a medium-term growth effect. If such investment is associated with faster technical progress or accumulation of human capital letter as identified in the long-run growth rates may also be improved.Investment effects. More emphasis is now given to the encounter of regional Integration on production via the effect on orthogonal direct investment and investment creation and diversion. Transactions costs and restrictive barriers. The traditional theory of customs unions was developed in the context of riffle reductions but, as noniced above, the welfare effects of Integration can be quite different If the barriers removed are cost-increasing barriers.Following the SUE experience with Implementing its iodin Market program, there Is now greater awareness of the importance of barriers which enrol transactions costs in inhibiting trade, and of the value of removing them. Importance of credibility. Many of the effects identified in the modern theory, especially those related to or requiring investment, go in that the integration effort is credible and entrust not be reversed. If credibility is lacking, and there is uncertainty among investors, their behavior is unlikely to be influenced.The emphasis on credibility assumes the existence of enforcement mechanisms which will ensure the implementation of commitments entered Into when a republic Joins a regional Integration scheme. Regional trade agreements reduce the tariffs among the countries which are part of the trade agreement. Regional trade agreements reduce tariffs amid countries, but does not allow these countries to Increase tariffs on countries which do not participate. Tariff reductio ns allow people to purchase goods from other countries at impose prices.The gains from learning valuable skills from foreign markets that can subsequently be transferred hold up to the home country. Integration also has many benefits such as gains in trade, economies of scale, limited fiscal capabilities and cultural centralization. With deeper levels of integration foreign investment will increase. The lack of resources in the Caribbean will increased more integration and also the people will get to learn other trades from the different countries. too will adopt and enhance strategies which will help the efficiency and improve competition in the region and the US.