The Economic Partnership Agreement (EPA) signed in 2008 signalled a new era of trade relations between the European Union (EU) and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM). Up to then, Caribbean exporters had greater duty-free access to the EU market than European exporters enjoyed in the Caribbean, along with quotas that enabled them to avoid price competition from outside the Lomé ACP (Africa, Caribbean and Pacific) bloc. With the advent of the World Trade Organization (WTO) in 1995, the EU and the Caribbean were forced to negotiate new terms of engagement. The result was the EPA, a more liberal trading regime with fewer trade privileges for the Caribbean and greater reciprocity, which generated concern over possible negative impacts on the economy. This research shows that the aggregate negative impact of the EPA on Caribbean states should be modest. In particular, the EPA will have a greater negative impact on Caribbean states if the Caribbean Single Market Economy (CSME) is not implemented and operated effectively.