Belize's Regional Integration Options

Jul 2013
In order to thrive, small economies like Belize tend to depend heavily on the external sector to compensate for their limited domestic market. With a population of less than 350,000, Belize is too small to provide a profitable domestic market for producers of goods and services. Considering this reality, successive Belizean governments have recognized that international trade is critical to ensure a sustainable economic development. While trade remains a top priority for Belize, preferential treatment of its exports to main markets - the US and the European Union - is progressively eroding. One way for Belize to mitigate the impact of diminishing preferences to traditional markets is to participate effectively in integration schemes with its neighbors in Latin America and the Caribbean in order to maximize benefits from economic integration and functional cooperation. The objective of this study is to re-evaluate the potential of integration into the three regions to which Belize belongs: the Caribbean, Central America and Mexico. The paper suggests that Belize is not fully integrated into any of the three regions despite forty years of membership in CARICOM and close geographical proximity to Central America and Mexico. The study presents an analysis of the reasons, both economic and political, for the limitations of close integration with the three regions. It concludes by recommending a strategic policy mix of integration initiatives that would provide the greatest economic and social benefits for Belize.