The Minister of Foreign Affairs Fred Mitchell communicated that to his parliamentary colleagues in the House of Assembly this week as he gave an update on the talks that CARICOM foreign ministers held with the U.S. Trade Representative in Washington D.C.
The Caribbean Basin Initiative and the Caribbean Economic Recovery Act provide for the duty free import of certain goods into the U.S. from the Caribbean region. The U.S. has sought a special waiver under the World Trade Organization rules to allow for the continuation of the preferences in favour of Caribbean goods. Countries in the region want the waiver to continue at least until 2008.
The Bahamas is one of 24 countries that benefit from the special arrangement. In 2004, the last year for which figures are available, this country exported $92 million worth of products to the U.S., predominantly crawfish. The fishing industry employs around 20,000 people, the size of the public sector.
“The ramifications [of the waiver being eliminated] would be the goods would be subject to a tariff that is prohibitively high making it impossible for [us] at an economic rate to export the goods into the U.S. and that means fisheries would be adversely affected,” Minister Mitchell explained.
The minister stressed that the Bahamas Government believes the waiver is important. The last one, he said, expired at the end of 2005 and at the moment the legislation is in non-compliance with the WTO rules.
“This has not affected the ability to export to the U.S. for the time being but is a matter that cannot be allowed to stand without being addressed,” he said. ” Ultimately, an objection will arise if the matter is not settled that may lead to the early end of the preferences.”
In its last report to Congress on the Caribbean Basin Recovery Act last December, the Office of the U.S. Trade Representative said the Caribbean Basin Initiative (CBI), continues to generate important benefits for the beneficiary countries and represents an important affirmation of the ongoing U.S. commitment to economic development in the Caribbean Basin, by expanding duty-free access to the U.S. market for CBI goods.
At the inception of the CBI in 1983, traditional and primary products such as coffee, bananas, and mineral fuels accounted for a majority of U.S. imports from the region. In 2004, manufactured products such as apparel and electrical machinery accounted for more than 60 percent of U.S. imports receiving preferential treatment under CBI.
Under the programme, the total value of CBI exports to the United States in 2004, at $27.8 billion, was approximately 3 times greater than in 1984. The CBI’s share of total U.S. imports was 1.9 percent in 2004, approximately the same as its share in each of the three preceding years, according to U.S. statistics.
Minister Mitchell said ultimately The Bahamas has to decide how and to what extent it would wish to integrate its economy into the world economy.
“The waiver if granted will only allow the preferences to continue until September 2008,” Minister Mitchell said. “The question is what will replace that regime. We will have to continue our discussions with our CARICOM partners and the United States on the way forward.”
In the meantime, the Foreign Affairs Minister is arranging for talks to be held with the foreign minister in Paraguay on the matter of its objection to the waiver proceeding. China has also raised an objection.
The Bahama Journal
