Cabotage as an external non-tariff measure on the competitiveness on SIDS's agribusinesses: The case of Puerto Rico

Abstract

This paper explores the multidimensional effects of an external non-tariff measure (NTM) on maritime transportation between the United States (US) and Puerto Rico (PR) trades. In particular, this research addresses the vulnerability level of PR’s agrifood sector in relation to sustainability as a Small Island Developing State (SIDS) highly influenced by a larger economy. Due to the high potential of climate changes in the Caribbean, this study reviewed the effects of a maritime cabotage policy on a SIDS agribusinesses’ logistic. Could a NTM affect the supply chain capabilities and the food security of a SIDS? What challenges and opportunities does the US Cabotage policy present for PR’s agricultural sector’s competitiveness? Based on mixing empirical analysis in an exploratory convergent design, the research categorizes the cabotage policy in relation to the effects on PR’s agrifood supply chain, its port infrastructure, and its native agribusinesses’ competitiveness. Results show the maritime cabotage itself is a constraint. However, the interactions with others NTMs, indirectly related to the cabotage but inherent to the political status and business relationship between PR and the US, add other limits. In addition, it revealed that internal factors have an impact on the efficiency and competitiveness of PR’s agro-industrial sector.