Free Trade Agreements
Barbados is not party to any trade agreement in its own right. It has signed a number of trade agreements under the aegis of CARICOM with other countries in this hemisphere and farther afield. Barbados has signed and ratified the following trade agreements.
The CARICOM-Venezuela Trade and Investment Agreement
The CARICOM Venezuela Trade and Investment Agreement is the first of the bilateral trade agreements CARICOM signed with the Bolivarian Republic of Venezuela in October 1992 and ratified in June 2006.
This Agreement is currently a non-reciprocal preferential Agreement in favour of CARICOM and allows selected products which have been agreed to by the Parties to enter the Venezuelan market free of duty from all CARICOM countries. From Barbados’ perspective, given that CARICOM is not required to reciprocate this preferential access, it therefore follows that Barbados must grant Venezuela Most Favoured Nation (MFN) treatment in respect of all goods imported from that country. MFN treatment refers to the tariff applied to goods at the border of a particular WTO Member when exported from another WTO Member.
The CARICOM-Colombia Trade, Economic and Technical Cooperation Agreement
The Agreement on Trade, Economic and Technical Cooperation between CARICOM and Colombia was signed in July 1994 and ratified in June 2006. This Agreement began as a non-reciprocal agreement providing for the one way preferential access of certain products from CARICOM to the Colombian market. The Parties, however, agreed for a level of reciprocity to ensue on a select list of goods four (4) years after entry into force of the non-reciprocal agreement. A protocol amending the Agreement to allow for this reciprocity was signed in May 1998.
The Protocol to the Agreement outlines a list of items subject to duty free trade as well as a list of items eligible for phased reduction of duty between the CARICOM MDCs of Barbados, Guyana, Jamaica and Trinidad and Tobago and Colombia. The Lesser Developed Members of CARICOM are not required to grant preferential access to Colombia. It should be noted that the phasing process for goods under this list has been completed.
The CARICOM-Dominican Republic Free Trade Agreement
The third Agreement signed by CARICOM, in which Barbados is a Party, is the CARICOM Dominican Republic Free Trade Agreement. This Agreement was signed in August 1998, ratified in June 2006 and is a reciprocal trade Agreement between the five CARICOM MDCs of Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago and the Dominican Republic (DR). The trade relation between the DR and the LDCs of CARICOM is based on non-reciprocity with the understanding that this arrangement would have been reviewed in 2005. This review has not yet been conducted.
The Agreement addresses major areas such as Trade in Goods, Trade in Services, Economic Cooperation and Government Procurement inter alia.
The Trade in Goods component of the Agreement consists of an exclusion list and a phased reduction of duty list both of which comprise a small number of goods. Hence, the list of goods liberalised is considerably extensive. It should be noted that the phasing process for goods under this list has been completed.
The CARICOM-Cuba Trade and Economic Cooperation Agreement
The fourth bilateral agreement signed by CARICOM and to which Barbados is a Party, is the CARICOM Cuba Trade and Economic Cooperation Agreement. This Agreement was signed between the Parties in July 2000 and seeks to strengthen their commercial and economic ties. The Agreement allows for the reciprocal preferential trade in goods between the CARICOM MDCs of Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago and Cuba. The Least Developed Countries of CARICOM are not required to engage in the liberalisation effort.
At a Joint Commission Meeting in 2007, at the initiative of Cuba, both Parties commenced negotiations for preferential access for additional products into each other’s market.
Discussions at future Joint Commission Meetings between the two parties led to the formation of the Second (2nd) Additional Protocol of the Trade and Economic Cooperation Agreement between the Caribbean Community (CARICOM) and the Government of the Republic of Cuba. The Second (2nd) Additional Protocol to the Trade and Economic Cooperation Agreement was signed by CARICOM and Cuba on 10 November 2017 in the margins of the Forty-Fifth (45th) Meeting of the Council for Trade and Development (COTED) in Georgetown, Guyana.
The CARICOM-Costa Rica Free Trade Agreement
The most recently concluded bilateral agreement between CARICOM and the Spanish speaking countries of the hemisphere is the CARICOM-Costa Rica Free Trade Agreement which was signed on March 9, 2004 and ratified in June 2006. As part of this Agreement, the CARICOM MDCs of Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago and Costa Rica agreed to reciprocal preferential market access for a select range of products (goods).
The Agreement provides for preferential access for a wide range of products. Some sensitive products have been excluded from free trade and a special list of products have been granted differentiated market access between Costa Rica and each of the CARICOM MDCs. There is also a list of products on a phased reduction of duty list. This phased reduction of duty list is no longer relevant given that the time period for liberalisation of the goods has ran its course.
The first Joint Council Meeting between the Parties took place on 17 June 2015 and concluded on 18 June 2015.
Major issues discussed at the Joint Council Meeting include non-tariff barriers, treatment for selected agricultural products, contact points, services and transportation.
The CARIFORUM EU Economic Partnership Agreement
The Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU) was signed in Barbados on 15 October 2008. It was ratified on the 27 July 2015. The Agreement seeks to liberalise trade and investment between fifteen (15) CARIFORUM States and the twenty-seven (27) European Union (EU) countries on a reciprocal, but asymmetric basis.
The Agreement is a comprehensive free trade and economic agreement. The EPA covers the areas of (i) Market Access for both Industrial and Agricultural products; (ii) Services and Investment; (iii) Trade-related issues – competition policy, the environment, transparency in government procurement, innovation and intellectual property, social aspects and personal data protection – and (iv) Legal & Institutional Issues.
The Agreement essentially provides for free trade between the two sides in both goods and services with the Caribbean being allowed a period of up to twenty-five (25) years to liberalise its import trade in goods from the EU. The Agreement also emphasises and provides for, development cooperation and financial and technical assistance, CARIFORUM countries being the beneficiaries. Emphasis is also placed on regional integration.
The EPA enables CARIFORUM States and the EU to satisfy their obligations under the WTO, by liberalizing “substantially all trade” between them under a comprehensive Trade Agreement.
The EPA was created through an intense negotiating process, which was undertaken within four (4) stages over a period of three years. Phase IV of the negotiating process or the finalization process, which led to the conclusion of the EPA negotiation in December 2007, was preceded by the critical Phase III of the negotiation process. Launched in September 2005, Phase III of the EPA negotiations underwent a qualitative shift in focus and specificity. Building on Phase I and Phase II discussions that focused on regional integration content, processes and ambition within CARIFORUM, Phase III constituted the structuring and consolidation of negotiations, so that the points of common understanding could be channeled into elements of the EPA Agreement. This Phase continued until the later part of 2006. What follows takes stock of the background of EPA negotiations and the importance of the EPA to CARIFORUM.
The EPA concerns not only trade in goods, livestock and agriculture and fisheries, but also trade in services, facilitation of the investment in products and trade issues between the countries. Furthermore, the European Union decided to provide specific development assistance to improve CARIFORUM structures, enhance competition and create regional economic operators’ capacity to exploit the market access opportunities provided under this Agreement.
The EPA is an important arrangement for CARIFORUM, given its role in advancing regional integration. The EPA is unique amongst other arrangements involving the Caribbean, in that it is the first and only bi-regional agreement encompassing the CARIFORUM configuration. It provides the framework to support and provide impetus for regional integration amongst CARIFORUM.
Underpinned by a development dimension, the Agreement takes into account the differences in levels of size and development, thereby creating a bi-regional agreement with wider scope than just a traditional Free Trade Agreement.
The ‘development package’ is critical to the provision of the development financing necessary to build the export capacity and infrastructure of the Caribbean’s private sector, so as to take advantage of market access opportunities presented. Allied to this, the package constitutes technical and financial assistance which will be used be used to put in place an enabling environment in Caribbean countries for foreign investors.
Importantly, the EPA arrangement provides for the establishment of a stable and secure trading environment for goods from the Caribbean. It also facilitated the negotiation of a Services and Investment framework between CARIFORUM and the EU, for the first time. The EPA is expected to open the door to an improved trade and investment relationship with Europe. In recent years, trade and investment flows from Europe to the Caribbean (with the exception of the Dominican Republic) have been growing at a slower pace. The EPA is intended to be an enabling mechanism for the revitalization of these flows. It is intended to stimulate greater investment between Europe and the Caribbean, through mutual removal of barriers to investment, as well as the enhancement of the attractiveness of the Caribbean economic space in respect of foreign investment opportunities. The Agreement is also intended to stimulate Caribbean exports of non-traditional products and services, encouraging and supporting diversification in these economies.
Therefore, from the Caribbean perspective, the partnership with Europe is expected to position the Region to take advantage of a more dynamic trade and investment relationship.
Key Date in Caribbean-EU Relations
- 28th February 1975
First ACP-EEC Convention signed in Lome, Togo and the Caribbean’s “Special Relationship” with the EU began. Barbados was one of six CARICOM States to join other developing countries from Africa and the Pacific to form the ACP Group.
- November 1992
The Caribbean Forum (CARIFORUM) of the African, Caribbean and Pacific Group of States was established following the accession of the Dominican Republic to the Lomé IV ACP-EC Convention.
- 23rd June 2000
ACP-EU Partnership Agreement signed in Cotonou, Benin.
- 14th November 2001
ACP & EU secured a WTO waiver to allow the Cotonou Agreement’s non-reciprocal market access arrangements to remain in force until 31 December 2007.
- 27th September 2002
Economic Partnership Agreement (EPA) negotiations began at all-ACP level in Brussels, Belgium.
- 16th April 2004
CARIFORUM-EU regional EPA negotiations launched in Kingston, Jamaica.
- 16th December 2007
EPA negotiations completed and text initialled by the two Chief Negotiators in Bridgetown, Barbados.
- 1st January 2008
Guaranteed duty free access into EU market for CARIFORUM goods instituted.
- 15th October 2008
EPA signed in Bridgetown, Barbados.
- 29th December 2008
Provisional application of EPA commenced.
- 27 July 2015
Barbados ratified the CARIFORUM-EU Economic partnership Agreement should be added.
Implementing the Free Trade Agreements
Barbados attaches great importance to these bilateral trade and economic agreements, which have the potential to enable the country to develop and enhance its trade and economic position within the hemisphere.
The Barbados Investment & Development Corporation (BIDC) certifies Barbadian goods as qualifying for entry into these countries under these Agreements. However the Customs and Excise Department certifies goods under the Economic Partnership Agreement.
If any problems are being experienced in exporting to these countries under these Agreements, contact the Foreign Trade Division of the Ministry of Foreign Affairs and Foreign Trade at email@example.com