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The author wishes to thank Tom Dorsey, Hans Peter Lankes, Wendell Samuel, Alejandro Guerson, and Yi Wu for helpful comments and suggestions.
The United States signed its first bilateral trade agreement with Israel in 1985, which in 1989 was followed by the Canada-USA Free Trade Agreement (CUSFTA), expanded later to NAFTA.
NAFTA is arguably the most studied agreement mainly because it spurred controversy for being the first trading arrangement that included both developed and developing countries and partly due to availability of detailed data.
CARICOM comprises Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and Grenadines, Suriname, Trinidad and Tobago.
Moreover, finding that there is more trade creation than trade diversion does not necessarily entail welfare improvement.
Actual tariff rates imposed on third country imports vary as some members have implemented tariff reductions with delays.
While throughout the paper I refer to the CET as a tariff schedule common to CARICOM members, the description of tariffs in this section shows that tariffs were not fully harmonized within the union. A close line by line comparison reveals differences, particularly in early 1990s, but shows that these were eliminated by 2002.
Non-CARICOM imports more than doubled over this period.