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Issues covered by the WTO’s committees and agreements

TRADE POLICY REVIEWS: FIRST PRESS RELEASE, SECRETARIAT AND GOVERNMENT SUMMARIES

PRESS RELEASE
PRESS/TPRB/194
11 July 2002
Barbados: July 2002

The WTO Secretariat report, along with the policy statement by the Government of Barbados, will serve as a basis for the first Trade Policy Review (TPR) of Barbados by the Trade Policy Review Body of the WTO on 9 and 11 July 2002.

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See also:

Second press release
Chairperson’s concluding remarks


Trade and foreign investment instrumental in Barbados attaining and sustaining high living standards  back to top

Barbados has used foreign trade and investment opportunities deftly to maintain living standards well above those of most developing countries. Its trade and investment policies have fostered world-class suppliers in a few areas, particularly tourism and financial services, which have become the mainstay of the economy and the main source of foreign exchange, according to a WTO Secretariat report on the trade policies and practices of Barbados.

The report says that sound monetary policy, underpinned by a fixed exchange rate, has ensured investor confidence and provided a framework of low inflation. Exchange controls on capital movements are designed to reduce the economy’s vulnerability to speculative attacks against its currency. However, rather large fiscal deficits limit the room for counter-cyclical policies.

Barbados’s trade policy formulation takes place within a stable overall policy environment, based on extensive consultation among social and economic partners. The Government considers that trade openness (with the exception of a small range of agricultural and service activities that are heavily protected) is crucial in order to overcome any constraints arising from the small size of the economy, its restricted capacity to diversify risk, and limited institutional capacity.

The services sector is the cornerstone of the economy, with tourism and financial services playing a particularly important role. Buttressed by a low tax environment, financial services now contribute to a significant share of GDP. The Government encourages investment in the tourism industry through tax incentives; there are generally no restrictions on market access for foreign companies. On the other hand, barriers to food imports may have weighed on the international competitiveness of tourist catering activities by restricting access to the best and most competitively priced inputs.

Since the mid 1960s, legislation has been in place to encourage the development of “international” companies, which have enjoyed fiscal advantages not generally available to other firms. Such advantages have resulted in the establishment of offshore banks, exempt insurance companies, and offices of multinational companies. The different legislation that is applied to firms depending on whether they are supplying residents or overseas customers was the subject of frictions with certain OECD partners. In this context, the Government has campaigned for the right to fiscal sovereignty.

Foreign firms provide both air and maritime transport services, notably passenger and cargo traffic. Telecommunications are under a private, foreign-owned monopoly, but full competition is to be established by November 2002 in cellular telephone services, and in the provision of telephone sets and equipment; by August 2003, competition should be extended to fixed telephone services. Domestic insurance services and legal services are protected from foreign competition by local purchase obligations and qualification requirements, respectively.

The report says that Barbados has made important efforts in recent years to liberalize and simplify its import regime, which is all the more important given that most of domestic consumption is imported. In the context a CARICOM tariff reduction programme, tariffs were reduced between 1993 and 1999, as was reliance on quantitative import restrictions. A surtax of 100% on locally produced goods, introduced in 1994, was progressively lowered and abolished in April 2000. A VAT was introduced in 1997 to replace multiple taxes and levies. The Customs Act was amended in 1999 to implement the WTO Agreement on Customs Valuation. As a result of these reforms, Barbados’s import procedures are now relatively simple and transparent.

The average MFN applied tariff is 16.5%. Border protection is high for activities where there is domestic production, based on tariffs of 60% or more and import licensing. Domestic producers import most of their inputs duty free, under an array of waivers and exemptions, which adds to effective protection.

Barbados is a high-cost location for production of goods, and except for some niche products, is not competitive vis-à-vis foreign producers. Without stringent protection from import competition, most of the few existing activities in manufacturing and agriculture would likely contract strongly.

Border protection appears to be highest in the agri-food sector, notably for meat, dairy, and vegetables. As tariffs ranging to 240% have not been effective in deterring imports, the authorities reintroduced non-automatic import licensing on the most import-sensitive products in 2001, initially for three months. Special safeguards legislation was being drafted in early 2002 to support such measures. Imports of all poultry products are under government monopoly. A number of tariff quotas were bound in the Uruguay Round but were not being applied in early 2002. Barbados maintains a positive list of a few source countries for fresh meat; adding new countries would require a change of law.

Note to Editors

Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals. Significant developments which may have an impact on the global trading system are also monitored. For each review, two documents are prepared: a policy statement by the government of the member under review, and a detailed report written independently by the WTO Secretariat. These two documents are then discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). These documents and the proceedings of the TPRB’s meetings are published shortly afterwards. Since 1995, when the WTO came into force, services and trade-related aspects of intellectual property rights have also been covered.

For this review, the WTO’s Secretariat report, together with a policy statement prepared by the Government of Barbados, will be discussed by the Trade Policy Review Body on 9 and 11 July 2002. The Secretariat report covers the development of all aspects of Barbados’ trade policies, including domestic laws and regulations, the institutional framework, trade policies and practices by measure, and developments in selected sectors.

Attached to this press release are the Summary Observations of the Secretariat report and parts of the government policy statement. The Secretariat and the government reports are available under the country name in the full list of trade policy reviews. These two documents and the minutes of the TPRB’s discussion and the Chairman’s summing up, will be published in hardback in due course and will be available from the Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: 
Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Barbados (2002), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Brunei Darussalam (2001), Burkina Faso (1998), Cameroon (1995 and 2001), Canada (1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995 and 2001), Côte d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996 and 2001), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Gabon (2001), Ghana (1992 and 2001), Guatemala (2002), Guinea (1999), Haiti (2002), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993, 1998 and 2002), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2001), Lesotho (1998), Macao (1994 and 2001), Madagascar (2001), Malaysia (1993, 1997 and 2001), Malawi (2002), Mali (1998), Mauritius (1995 and 2001), Mexico (1993, 1997 and 2002), Morocco (1989 and 1996), Mozambique (2001), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), OECS (2001), Pakistan (1995 and 2002), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993 and 1999), Poland (1993 and 2000), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995 and 2001), Slovenia (2002), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein)), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996, 1999 and 2001), Uganda (1995 and 2001), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

  
  
The Secretariat’s report: summary  back to top

TRADE POLICY REVIEW BODY: BARBADOS
Report by the Secretariat — Summary Observations

Barbados has used foreign trade and investment opportunities deftly to maintain living standards well above those of most developing countries. Its trade and investment policies have fostered world-class suppliers in a few areas, particularly tourism and financial services. Based on Barbados's natural endowments and on niche activities created by government policy, these services have become the mainstay of the economy and the main source of foreign exchange. Of necessity, however, specialization and the small size of the economy have resulted in a narrow production base that makes Barbados vulnerable to external shocks.

Trade policy has also sought to protect a small number of domestic activities, mostly food production, from foreign competition, while recognizing that most domestic needs are best met by imports. This protection, and limited competition in certain domestic sectors have weighed on the competitiveness of the leading service activities by restricting their access to inputs at the lowest cost. Barbados's historically stable policy environment and wealth of human capital bode well for its ability to address this issue, adjust to new challenges and, thus, attain and sustain further welfare improvements.

Barbados ranks 31st in terms of the United Nations' Human Development Index; life expectancy at birth is 77 years, the adult literacy rate is 97%, and GDP per capita was US$9,700 in 2000. Since the 1950s, the economy has become increasingly reliant on income from tourism. Buttressed by a low tax environment, financial services now contribute to a significant share of GDP. Simultaneously, there has been a falling share of agriculture, especially sugar, in GDP.

The Barbados economy performed well between 1993 and 2000, driven by domestic consumption. However, the economy remains vulnerable to external shocks, as witnessed by the depth and duration of the recessions experienced when worldwide economic decelerations have occurred, notably during the early 1990s and again in 2001. Real value added in tourism declined by an estimated 6% in 2001, and the economy contracted by 2.8% in real terms.

Sound monetary policy, underpinned by a fixed exchange rate, has ensured investor confidence and provided a framework of low inflation. Exchange controls on capital movements are designed to reduce the economy's vulnerability to speculative attacks against its currency. However, rather large fiscal deficits limit the room for counter-cyclical policies. Current account transactions have shown a persistent large deficit, as the surplus of the services account has not offset the merchandise trade deficit. The current account deficit has generally been compensated by public and private capital inflows.

Revenues from exports of merchandise have remained relatively small, at about one fifth of total exports of goods and services, and 11% of GDP. Merchandise exports consist mostly of sugar, rum, and crude petroleum and are not, apart from niche products, internationally competitive without government support or preferential access to foreign markets. The main export destinations are the CARICOM countries, the European Union, and the United States. Exports of services consist mostly of tourism and financial services. Imports of goods are diversified, with a relatively strong reliance on imported food. Fastest import growth has originated in the United States, which supplies 40% of imports, on an MFN basis. This concerns merchandise trade. The next largest suppliers are the CARICOM countries and the European Union. Imports of services consist mostly of transportation, insurance, and travel.

Barbados's trade policy formulation takes place within a stable overall policy environment, based on extensive consultation among social and economic partners. The Government considers that trade openness (with the exception of a small range of agri-food and service activities that are heavily protected) is crucial in order to overcome any constraints arising from the small size of the economy, its restricted capacity to diversify risk, and limited institutional capacity.

Barbados is an original Member of the WTO, and participates actively in its work. It grants at least MFN treatment to all its trading partners. Barbados has never been involved in multilateral dispute settlement procedures, either as a defendant or complainant. However, it reserved its rights to participate as third party in the dispute relating to U.S. provisions on Foreign Sales Corporations, as many such corporations are established under Barbados law.

In the Uruguay Round negotiations, Barbados bound all of its tariffs except on fish and fish products, albeit at ceiling rates. Agricultural products are bound at least at 100%, with some specific items bound at rates ranging to over 220%; manufactured goods are bound at rates of at least 70%, with certain items at considerably higher rates. Barbados also made specific commitments under the GATS in a few subsectors. Barbados undertook specific commitments in the WTO negotiations on basic telecommunications, but did not make new multilateral commitments on financial services within the context of the Fifth Protocol to the GATS.

Barbados's exports benefit from unilateral trade preferences granted by a number of trading partners; Barbados seeks to have these maintained. Its trade policy has been deeply influenced by its participation in the Caribbean Community and Common Market (CARICOM), where it is urging a rapid implementation of a single market. The commitment to protect CARICOM industries partly explains Barbados's relatively high tariffs on goods not produced domestically.

Barbados has made important efforts in recent years to liberalize and simplify its import regime, which is all the more important given that most of domestic consumption is imported. In the context of the Common External Tariff (CET) reduction programme, tariffs were reduced between 1993 and 1999, as was reliance on quantitative import restrictions. A surtax of 100% on locally produced goods, introduced in 1994, was progressively reduced and abolished in April 2000. A VAT was introduced in 1997 to replace multiple taxes and levies. The Customs Act was amended in 1999 to implement the WTO Agreement on Customs Valuation. As a result of these reforms, Barbados's import procedures are now relatively simple and transparent.

The average MFN applied tariff is 16.5% and fulfils mainly a revenue generating function. Border protection for activities where there is domestic production is high, based on tariffs of 60% or more and import licensing. Domestic producers import most of their inputs duty free, under an array of waivers and exemptions, which adds to effective protection. Taken together, all taxes levied on imports amount to 22% of total tax revenue.

Import licences cover about 60 mainly food products. They have been used to monitor imports and to protect domestic production; licences can be made automatic or non-automatic by administrative decision. Information is not publicly available regarding applications for licences or the allocation of quotas.

Resort to anti-dumping and countervailing duties consists of a single measure. The Agreement on Article 6 of the GATT and the Agreement on Subsidies and Countervailing Duties have yet to be incorporated into Barbados law on these matters. Barbados does not have safeguard legislation.

 

Exports are not, in practice, taxed or restricted, and take place mostly under trade preferences. Exports are also promoted via various duty and tax concessions and financial assistance measures, several of which have been notified to the WTO as export subsidies. In general, most domestic production of goods and services benefits from tax breaks or other assistance, reflecting the Government's commitment to actively support businesses. There are no available estimates of the overall budgetary cost of this support.

Competition policy legislation was being put in place in early 2002 as part of the establishment of a comprehensive competition policy regime. Legislation was expected to eventually include provisions on fair competition, consumer guarantees, and consumer protection. The need for a comprehensive competition policy framework stems from the observed high levels of concentration and prices in the domestic market. Meanwhile, to limit the abuse of market power, price controls are in place on a number of goods and services.

The Government has shareholdings in a number of commercial entities in such sectors as utility services, transport services, hotels, and agri-food production. It is government policy not to be involved in new ventures, except when there is a lack of private-sector interest in an activity the Government wishes to promote. State trading is limited to poultry imports. Certain companies are de facto sole traders: one company is the sole exporter of crude petroleum and the sole importer of diesel, gasoline, and fuel oil. Public procurement, which represents approximately 10% of GDP, relies mostly on foreign goods and services given the small size of the economy. Small contracts may be allocated without inviting tenders.

Barbados has recently taken steps to help ensure the protection of intellectual property rights, and its legislation covers all major areas referred to in the TRIPS Agreement. Barbados's IPR-related legislation was reviewed by the WTO TRIPS Council in November 2001.

Barbados is a high-cost location for production of goods, and except for some niche products, is not competitive vis-à-vis foreign producers. Without stringent protection from import competition, most of the few existing activities in manufacturing and agriculture would likely contract strongly.

Border protection appears to be highest in the agri-food sector, notably for meat, dairy, and vegetables. As tariffs ranging to 240% have not been effective in deterring imports, the authorities reintroduced non-automatic import licensing on the most import-sensitive products in 2001, initially for three months. Special safeguards legislation was being drafted in early 2002 to support such measures. Imports of all poultry products are under government monopoly. A number of tariff quotas were bound in the Uruguay Round but were not being applied in early 2002. Barbados maintains a positive list of a few source countries for fresh meat; adding new countries would require a change of law.

Preferential access to the EU market has not prevented the decline of the sugar industry, which has suffered from high costs that in most years exceed guaranteed export prices well above world levels.

The services sector is the cornerstone of the economy, with tourism and financial services playing a particularly important role. Tourism services are provided mainly by private operators. The Government encourages production and investment in the tourism industry mainly through tax incentives and concessionary loans. There are generally no restrictions on market access for foreign companies. On the other hand, barriers to food imports may have weighed on the international competitiveness of tourist catering and other service activities by restricting access to the best and most competitively priced inputs.

Since the mid 1960s, legislation has been in place to encourage the development of “international” companies, which have enjoyed fiscal advantages not generally available to other firms. Such advantages have resulted in the establishment of offshore banks, exempt insurance companies, and subsidiaries of multinational companies. The different legislation that is applied to firms depending on whether they are supplying residents or overseas customers was the subject of frictions with certain OECD partners. In this context, the Government has campaigned for the right to fiscal sovereignty.

Foreign firms provide both air and maritime transport services, notably passenger and cargo traffic. Telecommunications are under a private, foreign-owned monopoly, but full competition is to be established by November 2002 in cellular telephone services, and in the provision of telephone sets and equipment; by August 2003, competition should be extended to fixed telephone services. Domestic insurance services and legal services are protected from foreign competition by local purchase obligations and qualification requirements, respectively.

  
  
Government report back to top

TRADE POLICY REVIEW BODY: BARBADOS
Report by the Government — Part IV

Trade and trade-related policies

Barbados, given its narrow resource base, limited production structure, and the openness of the economy, has to participate actively in world trade in order to maintain and enhance its standard of living. This requires that it must produce goods and services which can be traded competitively in foreign markets. The heavy reliance on trade makes it necessary to develop policies which are responsive to the changing international environment. Since the early 1990s, Barbados' trade policy has become more open as a result of its own liberalisation programme, and in response to regional and international developments.

Traditionally, Barbados’ trade policy focused on trade in goods, and emphasis was placed on an import substitution strategy for promoting economic development. That strategy was implemented through a system of tariff and non-tariff barriers designed to protect producers in the manufacturing and agricultural sectors until they were internationally competitive. A licensing system restricted the importation of competing imports.

In 1994, prior to the creation of the WTO, Government embarked on a liberalisation programme. To give legal effect to that programme the Miscellaneous Controls (General Open Import License) Regulation, the Importation and Exportation of Goods (Prohibition) Amendment Regulations and the Customs Tariff (Amendment) Order, were passed. Licenses imposed on imports of most competing manufactured goods were removed and a surtax was applied on those imports for a 5 year period. During 1996 Government commenced the phase out of the surtax, and it was removed in April 2000.

In April 2000 also, Government removed restrictions by way of license on all imports except those which are in place for health or safety reasons or to protect public morals. Most products involved in this exercise were agricultural items. For all items on which restrictions were removed, Government applied the WTO bound rates. Barbados will shortly be implementing the special safeguard provision for agricultural products.

Prior to the introduction of the Value Added Tax (VAT) in January 1997, “other charges and duties” levied on imports included: Consumption Tax, Stamp Duty, Surcharge, Excise Tax and an Environmental Levy. When a 15% VAT was introduced it replaced all these taxes with the exception of the Environmental Levy, and the Excise Tax which were levied on certain products. The net effect of this action was a marked reduction in the price of imported goods.

Government is aware that in order for Barbados to be internationally competitive, producers of goods and services must meet internationally recognised standards. Equally, it recognises the need to ensure that imports are of the highest quality and that the health and safety of all Barbadians are not compromised by the importation and use of inferior goods. It also has a duty to adequately protect the environment. Accordingly, Government, since the establishment of the Barbados National Standards Institution in 1973, has been seeking to ensure that both local and imported products adhere to international standards. There are currently over 200 domestic standards all of which are internationally compatible.

Sanitary and phytosanitary (SPS) systems and measures in Barbados are, to a large extent, compatible with internationally accepted standards and practices. There is a need, however, for technical assistance in the area of legislation drafting, as well as in the strengthening of the surveillance systems and risk analysis to conform to international regulations.

The country already has equivalence agreements with some of its trading partners.

Barbados is implementing the provisions of the WTO SPS Agreement with the assistance of a number of international agencies.

Under the Uruguay Round of trade negotiations, Barbados committed six areas of services activity for liberalisation. In 1996 it further committed itself to liberalise some aspects of basic telecommunication services. In keeping with its policy to encourage foreign investment, cross-border trade in virtually all areas of services activity including tourism, distribution, business and professional services, as well as financial services, is allowed. In the area of telecommunications services, Government has recently signed a Memorandum of Understanding with the sole service provider which legally held a monopoly in this area for many years. This Understanding will allow for the liberalisation of this sector.

Legislation governing intellectual property rights has existed in Barbados for much of the twentieth century. The Patents Act of 1903 and the Patents and Design Act 1907 of the United Kingdom, for example, were the earliest pieces of legislation governing the grant of patents in Barbados. Since joining the World Intellectual Property Organization in 1979, Barbados has embarked on a conscious policy of modernizing its intellectual property rights system in order to bring its legislative framework in line with international standards. Barbados is compliant with WTO requirements under the TRIPS Agreement. Barbados underwent a review of its intellectual property legislation and its implementation of the TRIPS Agreement in November 2001.

Barbados’ trade policies have been informed by the provisions of the Treaty of Chaguaramas that established the Caribbean Common Market (CARICOM) in 1973. The main focus of this integration movement was initially trade in goods. The main instruments through which trade within the region was facilitated were the Common External Tariff (CET) and the Rules of Origin. Periodically these instruments have been revised with the view not only of ensuring the deepening of the integration process, but also ensuring that firms achieve international competitiveness.

In 1992 the CARICOM Conference of Heads of Government of the region took a decision to reduce the CET on manufactured goods to a range of 0-20% by 1998. Barbados fully complied with that decision. Also in keeping with the Heads of Government decision, Barbados applies a maximum rate of 40% on agricultural products.

During the 1990s, CARICOM Member States signed a number of non-reciprocal and reciprocal trade agreements with some Caribbean and Latin American countries; namely, Venezuela, Colombia, the Dominican Republic and Cuba. The reciprocal agreements with Colombia and the Dominican Republic are in force, while the agreement with Cuba will be implemented shortly. Negotiations to convert the agreement with Venezuela to a reciprocal one will soon be undertaken. Barbados actively participates in these arrangements.

In 1989 the CARICOM Conference of Heads of Government agreed to establish the Caribbean Single and Economy (CSME). The Treaty of Chaguaramas was accordingly amended, by way of Protocols, to give legal effect to the creation of the CSME.

 

The nine Protocols covered the following areas:

  • The management of the integration process (Protocol I); dispute settlement (Protocol IX); and any disadvantage confronting sectors, regions and member states as a result of implementation of the CSME (Protocol VII).
  • The movement of goods (Protocol IV) and services and factors of production (Protocol II).
  • The conduct of relations in transport (Protocol VI); agriculture (Protocol V) and industry (Protocol III).
  • The behaviour of businesses – competition policy, consumer protection, and dumping and subsidies (Protocol VIII).

Barbados has lead responsibility for ensuring the implementation of the CSME. It has signed all of the Protocols, a number of which is being provisionally applied in the Community. Barbados considers that the CSME is highly relevant, given liberalisation and globalisation. Indeed, Government sees the CSME as critical to the development of the region, especially as it seeks to integrate into the new global economy. Barbados will therefore work assiduously with its fellow CARICOM states to ensure that the CSME becomes a reality.

Barbados is a founding member of the WTO, having joined that Organization from its inception on 1 January 1995. As a member, it has been diligently seeking to discharge its obligations, within the limits of its human, financial and technical resources, while being fully cognisant of the need to minimise transitional costs and maintain economic stability. As previously noted, Barbados, even prior to 1995, has permitted greater market access for goods and services. In addition, Barbados has enacted the necessary legislation to protect both local and foreign intellectual property rights. Given the importance which Barbados attaches to the WTO, it has, at considerable cost, established a Mission in Geneva, principally to deal with matters pertaining to the work of the WTO.

As a small developing country, Barbados fully supports the decision taken at the Fourth WTO Ministerial Conference in Doha to continue to address the implementation concerns of the developing countries. Barbados considers that there are genuine and real concerns which must be effectively addressed. Barbados also accords high importance to the establishment of a Work Programme on Small Economies, to the establishment of Working Groups on Trade, Debt and Finance and on Trade and Transfer of Technology and to the priority given in the Ministerial Declaration to special and differential treatment and technical assistance for developing countries.

Barbados is currently engaged in trade negotiations in a number of international fora. It is one of the 34 countries seeking to create the Free Trade Area of the Americas (FTAA) by 2005. As part of the African, Caribbean and Pacific Group of countries (ACP), Barbados will participate in negotiations between the ACP and the EU for the establishment of a new trade and economic relationship with Europe to be effective from 1 January 2008. Formal negotiations will commence in September 2002. In addition, Barbados is involved in negotiations within the context of the WTO.

The conclusion of all of these negotiations will have a significant impact on Barbados’ trading relations, particularly in two areas. Firstly, the new trade arrangements will increase competition for the relatively small firms which provide goods and services in the domestic market. Secondly, the arrangements, while promising greater export opportunities for Barbados, will erode the preferential access now enjoyed by Barbados under the CBI, CARIBCAN, Cotonou and GSP arrangements. This will undoubtedly increase competition in those markets. More fundamentally, the advantages which Barbados currently enjoys as a member of CARICOM will also be eroded as a result of the new negotiated arrangements.

If in negotiating these new arrangements, sufficient consideration is not given to small economies like Barbados, the economic outlook for these countries will be grim. From experience, Barbados is acutely aware of the possible speed and depth of economic decline, and the rapid effect which economic instability, especially by way of rising unemployment and rapid depletion of foreign reserves, can have on its social and political stability.

Given this possibility, Barbados has, in all negotiating fora, joined other small developing economies in requesting special and differential treatment for small economies. In this regard, the Doha Ministerial decision to establish a Work Programme on the treatment of the small economies within the multilateral trade context is especially propitious. The effective participation of these countries in the multilateral trading system should be a priority concern of the WTO.

The special and differential treatment which should be granted to small developing economies should includes the following:

The provision of technical assistance as well as financial resources to enable these countries and generally all developing countries to overcome some of the basic market constraints confronting them.

  • The granting of adequate transitional periods for the commencement of the liberalisation process, and for the implementation of complex arrangements.
  • Allowing Government flexibility to assist businesses and sectors, especially those considered to be strategically important to the development of their economies and which are facing difficulties as a result of trade liberalisation.
  • Reducing the burden on these countries of having to cope with various non-tariff barriers imposed by developed countries. These include: onerous sanitary and phyto-sanitary measures and technical standards.
  • Allowing for adequate thresholds that must be reached before action can be taken against the products of the small suppliers in these countries.