Diplomat eyes US/CARICOM trade pact
The Bahamas Journal | 8th May 2006
Diplomat Eyes U.S./CARICOM Trade Pact
By Tameka Lundy
A Bahamas diplomat has pointed to a special trade agreement with the United States as the inevitable move for CARICOM nations which are hoping for permission from the World Trade Organization to extend the period for which their goods could be imported into the U.S. duty free.
The Bahamas Minister of Foreign Affairs Fred Mitchell just recently disclosed that the U.S. Government has given an assurance that it is working to achieve the waiver.
The matter was discussed last month at a meeting in the U.S. capital about the Caribbean Basin Initiative and the fate of the Caribbean Basin Recovery Act which provides for duty free access for certain goods coming from the Caribbean region.
The Bahamas High Commissioner to CARICOM A. Leonard Archer was a part of the delegation involved in those discussions with the U.S. Trade Representative.
Now that the waiver has expired, countries in the region are hoping for a further extension, but Mr. Archer said ultimately CARICOM will have to make a new arrangement with the U.S.
"It means that we The Bahamas along with CARICOM will have to negotiate some sort of arrangement with the United States," he said. "The arrangement, of course, would have to be reciprocal in keeping with the WTO principles and there is some discussion at CARICOM level of a possible free trade agreement with the United States.
"If the [Free Trade Area of the Americas] had kept on course and if there was an agreement for the entire Americans then this question would not have arisen."
In 2004, the last year for which official statistics are available, The Bahamas exported some $92 million worth of goods into the U.S. market, most of which was crawfish. Government officials classified that as significant considering that the fishing industry employs approximately 20,000 Bahamians.
A country must seek special permission from the WTO in order to grant another country trade advantages that are not afforded to others, which is the case under the U.S. Caribbean Basin Economic Recovery Act.
The U.S. is considered the most convenient export market for The Bahamas, with the primary exports being seafood and vegetables.
"The U.S. is not the only market, but the most convenient, so if you have a convenient market you don’t want to lose it," said Mr. Archer. "The US because it’s so near its convenient and the shipping cost would be less than say sending tons of lobster to Europe."
The Minister Mitchell stressed that the Bahamas Government believes the waiver is important.
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.
