Despite the contentious success of the trade agreements, the island countries have still been vehemently negotiating further trade deals. This study explores the element which enhances trade flows for selected Commonwealth countries in the Caribbean and Pacific regions. The results suggest that income (gross domestic product) growth as significant support for trade flows, regional trade integrations of the Pacific and Caribbean are explained in its quiet dynamism, worth strengthening and further reforming. This study, by means of a comparative investigation of selected countries from within the Pacific and the Caribbean regions, proposes that the strategy for enhancing trade integration is creating demand for diversification in the region through greater regional integration. The estimates demonstrate that the level of diversification positively impacted the regions’ bilateral export, having the Pacific region influenced almost twice as much like the Caribbean. Moreover, whilst understanding that the geographical location of the Caribbean already lets its states thrive through lower trading costs as compared to the Pacific, analysis in the study shows that the distance, remoteness and logistics difficulties inflate the price (or trade costs) limiting the success of regional trade agreements. JEL Classification: F13, F15

The contemporary turn of events post-Brexit and the election of Donald Trump hints at a return of protectionism. However, for years now, the World Trade Organization (WTO) has been advocating and continues to advocate that regional arrangements and closer economic integration would benefit all countries. Arguments regarding trade integration clearly have been contentious. Nonetheless, in regards to small island countries (SICs), it is quite evident that they perform better together than alone. The route to regionalism has been a long and painful journey for both the Caribbean Basin and the Pacific Rim. Many simply dismiss the sluggish growth of the Pacific Island Countries (PICs) in comparison with the Caribbean Island Nations (CINs) by simply declaring that regionalism is working better for the latter. This study presents a detailed account of efforts at nurturing regionalism on the part of these two seemingly similar, yet distinguishable groups of islands. Through such scrutiny, this paper documents a stark contrast in the development of trade arrangements that clearly influence the growth of the regions.

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