WORLD TRADE  
ORGANIZATION  WT/TPR/M/203 
19 November 2008 
 (08-5630) 
Trade Policy Review Body 
17 and 19 September 2008  
 
 
 
TRADE POLICY REVIEW 
 
BARBADOS 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF BARBADOS 4 III. STATEMENT BY THE DISCUSSANT 6 
IV. STATEMENTS BY MEMBERS 10 
V. REPLIES BY THE REPRESENTATIVE OF BARBADOS AND ADDITIONAL 
COMMENTS  19 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 22 
 
 
 
Note: Advance written questions by WTO Member s and the replies provided by Barbados are 
reproduced in document WT/TPR/M/203/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.   WT/TPR/M/203 
 Page 3 
 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second Trade Policy Review of Barbados was held on 17 and 19 September 2008.  The 
Chairperson, H.E. Mr. Yonov Frederick Agah (Nig eria), welcomed the de legation of Barbados, 
headed by the Hon. Minister Christopher Sinckl er, as well as the discussant, H.E. Ambassador 
Claudia Hernández of the Dominican Republic.  He  noted that Ambassador Hernández had made 
available in document WT/TPR/D/178 the main  issues that she intended to raise. 
2. The Chairperson recalled the purpose of the Tr ade Policy Review Mechanism as well as the 
main elements of the procedures for the meeting and timeframes for Barbados to respond to written 
and oral questions.  The Report by Barbados was contained in document WT/TPR/G/203 and that of 
the Secretariat in WT/TPR/S/203.  Questions fro m the following delegations  had been submitted in 
writing at least two weeks in advance of the meetin g:  China;  Brazil;  Mexico;  Canada;  Japan;  
Argentina;  the United States;  Hong Kong, China;   and the European Communities.  The delegation 
of Colombia had submitted written ques tions after the two-week deadline. 
3. The Chairperson noted that both reports prep ared for the meeting highlighted the great 
importance of international trade in both goods an d services to the economy of Barbados.  A general 
openness to trade and investment had helped Barba dos to post solid economic growth since its last 
Review in 2002.  However, the Prime Minister had reported in his July Budgetary Proposals, a slow-down in growth in the Barbadian economy during the first six months of 2008, an increase in 
domestic inflation, and a widening of the current  account deficit.  He said Members would be 
interested to know more about the measures the au thorities might take to improve the prospects for 
the Barbadian economy in the short run, and the extent  to which those measures might be restricted by 
Barbados' national debt and fiscal deficit. 
4. The Chairperson took note of Barbados' co mmitment to the multilateral trading system, 
witnessed by its active participation in the DDA, as well as the importance it attached to participating 
in CARICOM and other preferential initiatives.  He s uggested it would be helpful for Members to be 
updated on the outcome of the recent meeting of  CARICOM Heads of Government to discuss its 
Economic Partnership Agreement with the EC. WT/TPR/M/203 
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II. OPENING STATEMENT BY THE RE PRESENTATIVE OF BARBADOS 
5. The representative of Barbados
 welcomed the opportunity the Trade Policy Review presented 
to enlighten Members of Barbados' efforts to inte grate into the global trading system, whilst at the 
same time following a path of sustainable development. 
6. Barbados' economy had registered an average a nnual growth rate of 3.1% during the period 
under review.  In 2007, Barbados had recorded its  sixth consecutive year of growth, expanding by 
4.3% over the previous year.  Most of this growth had been in the construction and tourism sectors.  
Improvements in the balance of payments and expans ion in the net international reserves were also 
recorded.  This performance, however, had come at  the cost of a marked increase in the country’s 
national debt (68.9% of GDP at e nd 2007).  This was an important challenge to be faced.  A slow-
down in the economy as a consequence of internat ional economic developmen ts was projected for 
2008. 
7. The representative of Barbados emphasized Barbados' support for the multilateral trading 
system and that it had sought always to faithfully discharge its WTO obligations.  Barbados, however, 
faced a number of development constraints agains t which it had to fashion its trade and economic 
policies.  These constraints included its small si ze, limited resources, susceptibility to external 
economic and financial shocks, and vulnerability to na tural disasters, all of which made it difficult for 
Barbados to diversify its export base, attract ne cessary and adequate investment flows and earn 
foreign exchange.  He was concerned that the occasion could arise when WTO commitments might 
exacerbate these challenges, and believed that in su ch cases the onus was on the WTO to provide the 
flexibility to ensure that small, vulnerable econom ies like Barbados were not unduly disadvantaged.  
8. Barbados' trade policy was uncomplex and transpar ent and its basic tenets were:  to promote 
and facilitate the development of Ba rbados' international trade, particularly its export trade, and to 
strategically position Barbados to operate in, and derive the maximum trade benefits from, a new 
liberalized global economy;  to secure for Barbados  a strategic and viable place in the new global 
economy, on the basis of sustainable expansion in the production of interna tionally competitive goods 
and services, and the successful negotiation of benefi cial international trade/economic agreements;  to 
assist in establishing a framework, and to assist in developing a culture, in which goods and services 
were produced on an internationally competitiv e basis;  to promote economic growth and 
development based on the stimulation of all productive sectors, including agriculture, manufacturing, construction and services;  to allow imports of good s and services in a manner that would enhance 
Barbados' standard of living, while not precipitati ng economic difficulties;  and to complement other 
government initiatives aimed at promoti ng economic growth and development. 
9. Barbados was cognisant of the forces of lib eralization and globalization.  These forces 
restricted policy space and limited options, making it more difficult for governments to design 
policies to assist vulnerable sectors of the economy.  Barb ados had been trying to adjust in the light of 
these realities.  It had played an active role in  the WTO, including in the current negotiations.  
Barbados had also engaged in he mispheric, regional, and bilatera l trade and economic negotiations.  
The main objective of all of these engagements wa s to liberalize Barbados' trade, thus seeking to 
further integrate it's economy with its trading partners. 
10. The challenges Barbados faced were both trad e and non-trade related.  Barbados faced the 
loss of preferential access to the markets of the most develope d countries for its goods exports, such 
as sugar and rum.  In the European market, the WTO waiver for the ACP tr ade preferences under the 
ACP-EC Cotonou Partnership Agreem ent ended on 31 December 2007.  Barbados, together with the 
other members of CARIFORUM i.e. CARICOM and the Dominican Republic, had negotiated a 
comprehensive Economic Partners hip Agreement (EPA) with its European partners, the trade 
provisions of which were to be WTO-compatible.  This agreement called for the phased liberalization 
of goods, thus removing most of the protection a fforded Barbados' small fledging industries.   WT/TPR/M/203 
 Page 5 
 
 
He highlighted that this was the first time CARICOM was liberalizing its trade vis-à-vis  a group of 
developed countries, previously trade liberali zation had concentrated on neighbouring developing 
countries.  The EPA also had a regime for trade in  services with the EC.  Barbados had committed to 
the liberalization of 75% of its sectors within this  arrangement and in the ar ea of goods, the Caribbean 
as a whole had agreed to liberalize close to 90% of its trade with the EC.  In liberalizing its trade 
regime, Barbados was conscious of the adverse im pact it could have on its economy, as it sought to 
foster and develop its productive sectors.  Barbad os was also mindful of the implications of 
liberalization for its efforts at assuring food security. 
11. As a small open economy, Barbados was affect ed by a number of decisions taken in 
developed countries.  For example, the substan tial reduction in the guaranteed price for sugar 
exported to the EC market had already begun to have  deleterious effects.  Barbados stood to lose over 
BDS$46 million annually in export earnings;  suga r constituted a critical component of Barbados' 
foreign exchange earnings.  The reduction in the price of sugar had forced Barbados to restructure the 
industry, relying less on the export of raw sugar and developing commercially viable sugar-related 
products, such as branded sugars and ethanol.  The cost of restructuring was estimated at over 
US$200 million.  
12. The representative noted that while some woul d posit that Barbados should undertake further 
reforms, it still needed to provi de a certain level of support to its fledging industries and sectors in 
order for the country to integrate into, and surv ive in, the new global economic system.  He was 
concerned that small countries were being require d to liberalize their trade regime within a 
considerably shorter period of time, compared with the decades large developed countries were 
afforded.  In spite of low average tariffs, develope d economies still maintained high tariffs in respect 
of goods they considered needed protection.  A number had substituted high tariffs with large-scale 
domestic supports and e xport subsidies.  He hoped the D oha Development Round would produce 
effective reductions in trade-distorting support. 
13. While Barbados had a relatively high per cap ita GDP, this "prosperity" was fragile.  The 
tourism sector, Barbados' main foreign exchange earner was highly susceptible to airline decisions, 
international security issues, and the changing tastes of tourists.  The  international business sector 
was largely dependent on decisions taken by, and the mood of, major developed countries.  
Competition among sectors for land was driving up land prices beyond the reach of the average citizen, however, price controls were frowned upon by  international financial institutions.  Because of 
the need to attract foreign investment flows into the country, Barbados was constrained in its land use 
policy.  Prior to Barbados' first Trade Policy Revi ew, the Government had been forced to introduce a 
National Emergency Econom ic and Financial Programme (NEEFP)  precipitated by the fallout from 
the 9/11 terrorist attack, which had produced negativ e external economic factors over which Barbados 
had no control.  Similarly in 2007, CARICOM Heads of Government had to me et in order to address 
the spiralling cost of living caused by rising oil prices.  Barbados' agricultural and manufacturing 
sectors were being hard hit by the series of price increases of raw materials and inputs.  These factors 
might constrain Barbados' ability to fait hfully discharge its WTO obligations. 
14. Barbados had been an active pa rticipant in the Doha negotiati ons.  Through its coordination 
of the Small, Vulnerable Economies (SVEs) Group, and its membership in CARICOM, the ACP, and 
other groupings, Barbados woul d continue to work with WTO Members towards a positive outcome 
in the Doha Development Round;  this was in its interest.  Barbados was committed to discharging its 
WTO obligations, and would continue to work with in the social partnership it had established to 
achieve its development objectives;  however, it ask ed WTO Members to recognize the difficulties it 
was facing and the efforts it was making.  Barbados  would continue to work with WTO Members to 
ensure the attainment of common goals. WT/TPR/M/203 
Page 6  
 
III. STATEMENT BY THE DISCUSSANT 
15. The discussant
 congratulated Barbados for its high level of human development indices:  it 
had been ranked 31st in the world, and 3rd in the Americas, after the United States and Canada.  She 
believed that many of Barbados' po licies could serve as an example to many developing countries that 
had similar characteristics but had not been able to ob tain the same standard of living for their people.  
(1) ECONOMIC ENVIRONMENT  
16. Barbados' economy was based on services, notably on financial services and on tourism, 
which was the mainstay of the economy and its larg est source of foreign exchange.  The Secretariat 
Report had noted that despite an economic recessi on in 2001-02, real GDP in Barbados had grown 
consistently at an average annual rate of 3.9% be tween 2002 and 2007.  This growth had been fuelled 
mainly by consumption spending, and from 2005 by the increase in construction activity.  In 2007, 
Barbados' GDP per capita had reached just over US$12,400.  The Report had also emphasized that 
changes in the rate of GDP growth tended to be cl osely linked to fluctuations in tourist arrivals.  
Barbados' economy was also very vulnerable to ex ternal shocks, as evidenced by the significant 
downturns during periods of slow global econo mic growth.  The Barbadian authorities had 
acknowledged in their report that the last six years had been difficult due to various circumstances, 
including a lack of global security, severe natural disa sters, increases in oil and food prices, as well as 
projections of a global recession.  She was interested to hear, from the delegation of Barbados, what measures had been envisaged to address these challenges and, to prevent the current state of the global 
economy, from negatively affecti ng Barbados' economic growth a nd development expectations.  
17. The Secretariat Report had also indicated a significant increase in inflation, from 0.2% in 
2002 to 7.3% in 2006, which seemed to have been fallen to 4.1% in 2007.  As in most countries that 
had had similar experiences, this increase had been due partly to the hike in oil and food prices, but 
had also been influenced by the increase in taxes on imports.  On th is point, she asked what steps the 
Barbadian authorities had taken or intended to take to continue re ducing or controlling the rate of 
inflation. 
18. The Government had made efforts to keep the fiscal deficit below 2.5% of GDP in recent 
years, although during the period under review there had been moments where it had reached 5.4% of 
GDP, like in 2002-03.  In addition, public debt re mained high, accounting for 71.1% of GDP in 2006.  
She was interested in hearing whether the Barbad os authorities were considering taking steps to 
improve this situation.  Moneta ry policy was conducted within the framework of a fixed exchange 
rate system, with the exchange ra te fixed at BB$2 per U.S. dollar. 
(2) T
RADE AND INVESTMENT REGIME  
19. International trade played an important role in  the economy of Barbados, with total trade in 
goods and services accounting for approximately 133% of  GDP.  Trade policy was an important tool 
for achieving its development goals ;  this policy was applied mainly in the context of Barbados' 
participation in the Caribbean Community and Common Market (CARICOM).  Through the 
CARICOM, Barbados had concluded free-trade ag reements with Colombia, Cuba, the Dominican 
Republic, Costa Rica, and Venezuela;   this was a way to prepare its  economy for trade liberalization 
on a global scale.  Also, in the context of CARIFORUM (CARICOM and the Dominican Republic), Barbados had finalized negotiations towards an Ec onomic Partnership Agreement with the European 
Communities.  In this regard, she enquired whethe r the Barbados authorities were planning to start 
negotiations on free-trade agreements with other coun tries, besides those already mentioned, as a way 
to continue strengthening Ba rbados' commercial opening.  
20. Barbados was an active participant in the WT O, acting as coordinator of the Group of Small 
and Vulnerable Economies, and voicing the challe nges and concerns of the group in its process of  WT/TPR/M/203 
 Page 7 
 
 
integration into the multilateral trading system.  Under the coordination of Barbados, the group had 
submitted several proposals in negotiating areas  such as agriculture , market access for non-
agricultural products, and fisheries subsidies, ai med at recognizing the vulnerability of these 
economies and at granting them the proper treatment to  facilitate their integra tion in the multilateral 
trading system.  Barbados had made several notifications to the WTO, although some were 
outstanding, in the field of agriculture, and only one notification had been made under the Agreement 
on Sanitary and Phytosanitary Measures.  The Barbadian authorities had acknowledged a general 
decline in notifications to the WTO, which had not been for lack of commitment, but due to lack of 
capacity in the ministries and a busy negotiations sch edule.  She believed this situation to be very 
common among developing countries;  it would be appropriate at some point, for the WTO to 
consider a specific programme of technical assistan ce to help developing countries in submitting their 
notifications.  She urged Barbados to request the technical assistance necessary to fulfill its 
notification obligations.  
21. Barbados had no specific legislation on forei gn investment, although the authorities attached 
great importance to investment, and in 2007 the G overnment had created "Invest Barbados", an 
agency responsible for attracting and sustaining i nvestment in the country.  The Secretariat Report 
indicated that, in general, foreign investors received the same treatment as domestic investors, and that the laws of Barbados did not contain specific re strictions on foreign investment, but neither did it 
explicitly guaranteed market access or national treat ment to foreign investors, except to CARICOM 
nationals and companies.  She asked the delegati on whether Barbados had fo reseen the possibility of 
developing a specific law on foreign investment to provide greater legal certainty to investors.  
22. During the period under review, Barbados had not made major reforms or changes to its trade 
policy.  The average applied tariff had been 16.2% in 2007, slightly lower than in 2002.  The Secretariat Report noted that tariff protection had been strengthened in practice through a series of 
tariff exemptions granted to local producers, and that in the period under review tariffs had been 
increased to 60% on a number of manufacturing products for which there was domestic production.  
An additional tax, applied only to  imports, had been introduced in 2005;  it had increased import 
duties by almost 6 percentage points.  Barbados al so maintained an environmental tax applied only on 
imports.  She noted with satisfaction the Governme nt of Barbados' indication that tariffs on some 
manufactured products had been reduced from 60% to the Common External Tariff level, and that the 
import surcharge had been abolished in 2007.  Howe ver, the environmental tax was still in place, and 
it did not apply to domestic production.  She asked th e Barbados delegation to elaborate on the goal of 
such a levy, and why it was not applied also to do mestic production if its goal was to enhance and 
preserve the environment.  
23. Import procedures in Barbados were simple, a nd Barbados generally applied the valuation 
methods specified in the WTO Agreement on Custom s Valuation.  The use of minimum prices was 
prohibited.  Barbados did not ban imports from any country in particul ar and there were no 
quantitative restrictions.  With regard to the impor t licensing scheme, licences were granted relatively 
quickly (10 days) and were not perceived to represent cumbersome administrative burdens.  
24. Barbados, like other developing countries, had availed itself of the extension provided under 
paragraph 4 of Article 27 of the Agreement on S ubsidies and Countervailing Measures (SCM), of the 
provisions of document G/SCM/39, and of the furt her extension until 2015 granted by the General 
Council for the elimination of export subsidies.  Barbados implemented several tax incentives 
programmes for export industries and for i ndustries supplying the domestic market.  
25.
 She was pleased to note that during the review  period, Barbados ha d managed to introduce 
comprehensive competition policy legislation.  The Secretariat Report indicated the this issue was of particular interest to the authorities of Barba dos, due to the persistence of a high degree of 
concentration in the country's economy, given its small size.  Also, the Report acknowledged that the 
degree of competition had increased due to the more comprehensive legislation, enhanced regulatory WT/TPR/M/203 
Page 8  
 
power, and greater openness in some sectors.  Sh e also acknowledged Barbados' progress in the area 
of trade-related intellectual property rights.  In th is regard, the Secretariat Report indicated that the 
laws of Barbados included all the important areas me ntioned in the TRIPS Agre ement.  In addition, 
during the period under review, further legislation ha d been introduced to allow for better regulation 
of intellectual property rights and to ensure complia nce with various aspects of the TRIPS Agreement.  
(3) T
RADE POLICY BY SECTOR  
26. Barbados had a service-based economy, and services were the main source of foreign 
exchange.  Agriculture and manufacturing made sm all contributions to GDP ;  representing only 2.7% 
and 5.5% respectively.  With regard to agricultu re, the main export product was sugar.  The sugar 
industry, which used to be a fundamental activity in the country, had declined considerably, and had 
also been affected by the EC reform programme, as the EC was the main destination for Barbados' 
sugar exports.  Therefore, the Gove rnment of Barbados had introduced a restructuring project to move 
away from low value-added sugar production to hi gher value added products, such as marketing 
"Sugar Barbados" as a branded product, a nd electricity and ethanol production.  
27. The Government of Barbados had stated in its report that it had made efforts to achieve a 
higher level of food security to ensure that its c itizens had uninterrupted acces s to food.  This made 
sense particularly for a small and vulnerable economy th at was a net importer of food.  In this respect, 
the Government had identified 16 products for sel f-sufficiency, among which fresh milk, and poultry.  
The Government had implemented a series of incentives for producers for the production of fresh milk, which had had positive results since 2006;  th e goal was to meet 75% of the national demand for 
milk through local production.  She understood an d supported the concerns of the Government of 
Barbados, to maintain and support its agriculture sec tor despite its small size and even though it did 
not account for a significant share of its economy, not only because of the legitimate concerns of food 
safety but also as a means to ensure the livelihood of people with scarce resources.  
28. The manufacturing sector was also small.  The Secretariat Report indicated that due to high 
costs of producing goods, the sector probably woul d have already disappeared without protection 
from import competition, an undesirable outcome for an y country.  As a consequence, she understood 
and supported the incentives programmes granted by th e Government of Barbados to manufacturing 
industries.  In this regard, the Report indicated that  the Government had encouraged diversification of 
this sector, as well as greater competitiveness and job creation, and had tried to help companies in the 
sector identify niche markets and produce goods with hi gher value added;  this seemed like the right 
strategy.  
29. The Secretariat Report noted that, despite th e importance of the services sector and the 
de facto  openness of the foreign investment re gime, Barbados had only been made WTO 
commitments in 4 of the 12 services sectors and 21 of the 160 subsectors, and these excluded the tourism sector, which represented the largest service export sector.  The second most important sector in terms of services exports was financial services,  in which Barbados had not submitted an offer in 
the WTO 1998 negotiations.  She urged the authoriti es in Barbados to reflect on the possibility of 
binding their open services regime in the WTO, with the aim of providing greater security and 
stability to domestic and foreign investors.  Tr avel receipts had shown a steady increase during the 
period under review, from approximately US$700 m illion in 2001 to US$1.2 billion in 2007.  The 
Government of Barbados offered several tax incentiv es to the tourism sector, covered in the Tourism 
Development Act, and the Special Development Areas Act.  
30. The financial sector in Barbados was well devel oped, with many foreign institutions carrying 
out transactions on the domestic market;  all commerc ial banks operating in the country had majority 
foreign ownership.  Barbados' offs hore regime had been subject to careful review by the OECD, but 
had not been included in the Financial Action Task Force's blacklist of non-cooperative countries.  In  WT/TPR/M/203 
 Page 9 
 
 
this regard, she acknowledged and encouraged the effo rts of the Government of Barbados to prevent 
money laundering practices.  
31. During the period under review, Barbados had liberalized its telecommunications sector by 
removing Cable and Wireless's monopoly ahead of sch edule, in 2005 instead of 2011.  A new law had 
been passed and competition had been strengthened.  Barbados had made specific commitments in the 
WTO negotiations on Basic Telecommunications and had adopted the Referen ce Paper.  Barbados' 
WTO Schedule reflected its commitment to lib eralize the services of voice telephony, data 
transmission and private leased circuit to the genera l public, which was also very positive.  In this 
regard, she invited the authorities of Barbados to re flect on the possibility of taking the same level of 
commitments, at least in the two service sectors that were more developed, namely tourism and 
financial services. 
32. Referring to Barbados's prospects, in her view  the key to success and the basis for Barbados' 
development was the Government's commitment to further develop human resources with the aim of 
improving the quality of life for its citizens and gain valuable foreign exchange through the 
exportation of services.  She congratulated Barbados  for this;  it was an example for other developing 
countries. WT/TPR/M/203 
Page 10  
 
IV. STATEMENTS BY MEMBERS 
33. A number of delegations a pplauded Barbados' successful economic performance and 
observed that close integration into the global econo my had helped Barbados maintain some of the 
highest per capita incomes and human development indicators among developing countries.  A number of Members also expressed th eir sensitivity to the challenges facing Barbados given its small 
size and vulnerability to external shocks.  They al so commended Barbados for its active participation 
in the multilateral trading system and the DDA, most notably through Ambassador Clarke's 
coordination of the SVE group. 
34. The delegation of China
 reported that China and Barbados were very close trading partners 
and bilateral trade relations had developed smoothly.  Bilateral trade amounted to US$35.86 million 
in 2007, and exports from Ba rbados to China had risen rapidly in recent years.  By placing services at 
the centre of its economy Barbados had chosen a successful development strategy based on its unique 
national circumstances;  countries like China had a lot to learn from the Barbados' economic success.  
Its CARICOM membership had also helped it to overcome economic constraints.  China was willing 
to work constructively with Barbados and other Me mbers to achieve real and speedy progress in the 
Doha negotiations.  
35. The representative of Brazil  recognized that over the review  period domestic challenges had 
had to be faced in order to improve or at least stabilize Barbados' macroeconomic indicators, and was 
pleased to note that some indicators had improved.   Barbados was commited to fiscal consolidation 
and to reducing governmental debt.  It had had some success in changing patterns of consumption, 
since there had been a reduction in the share of food imports in total imports, and new competition 
legislation and "Invest Barbados", should draw in investment flows.  Brazil noted positive trends in 
bilateral relations with Barbados, and the poten tial for further expansion.  These developments 
included the conclusion of an air services agreemen t in April 2005, and the current negotiation of a 
double taxation agreement.  Cooperation in ag riculture and agri-business was being discussed, 
including in the area of sugar production.  Brazil hop ed that it would benefit from Barbados' possible 
expansion of its embassies abroad. 
36. The representative of Mexico  noted that, after the 2001-02 recession, Barbados' real GDP had 
grown at an average annual rate of 4% during 2002-07.  Sensible macroeconomic policies had 
allowed unemployment to decline significantly, though it remained high, at 7.4% in 2007.  It was also of concern that domestic demand pressures and risi ng international prices of raw materials and food 
had led to a substantial increase in inflation from 0. 2% in 2002 to 7.3% in 2006 .  However, thanks to 
corrective measures, inflation had fallen to 4.1%  in 2007.  Mexico hoped that anti-inflationary 
policies would continue to be a pplied consistently and enquired about any planned measures, and 
whether they included trade measures.  It was also worrying that the current account deficit had been 
kept at about 10% of GDP on average over the review  period.  The surplus in services had failed to 
offset the deficit in merchandise trade.   
37. Barbados had limited capacity to adopt anti-cyc lical policies due to its fixed exchange rate 
regime and the restrictive measures in place to re duce its fiscal deficit.  Without doubt, a flexible 
exchange rate regime and a substantial increase in  tax revenue would help Barbados to reduce its 
heavy reliance on the international economy and on border taxes.  
38. There had been no substantial changes in Barbados' trade policy, since its first review in 2002.  
The Barbadian authorities considered of utmost im portance Barbados' participation in the WTO and 
in CARICOM, as well as bilateral and regional agre ements with countries in Latin America and with 
the EC.  Barbados was an active WTO Member, as w itnessed by its participation in the Doha Round;  
despite its small population, its highly qualifie d representatives defended Barbados' business interests 
well.  WT/TPR/M/203 
 Page 11 
 
 
39. Agriculture accounted for only 2.7% of GDP, but  the average tariff on agricultural products 
remained very high, at 33.7% in 2007.  Mexico  recommended lowering these high rates, especially 
considering the current high international food pric es and the effect these prices had had on Barbados' 
rate of inflation in the past.  Like agriculture , manufacturing accounted for a small share of GDP, at 
5.5% in 2006.  The average tariff for non-agricultu ral products applied by Barbados was 12.8% in 
2007, but rates had ranged between 0 and 145%.  Me xico considered it advisable to reduce tariff 
dispersion to make the manufacturing sector more efficient.  Services were Barbados' main source of activity, employment, and foreign exchange.  However, despite the de facto  openness of the sector, 
Barbados' specific commitments in the Uruguay rou nd were modest:  commitments had been taken in 
4 out of 12 sectors and 21 out of a 160 subsectors.  In  addition, Barbados had not participated in the 
negotiations on financial services, notwithstanding the importance of this sector for its economy.  It 
had submitted an initial conditional offer on services but  not a revised offer.  On the other hand, 
significant progress had been made in liberalizing th e telecommunications sector, in the adoption of 
competition policy legislation, and the creation of  institutions to enforce it and promote economic 
competition.  Mexico hoped that Barbados' final offer in the current services negotiations would 
reflect the progress in liberalizing the telecommunicati ons and financial sectors, as well as in other 
activities.  This would bolster investor confidence in a country with a great competitive advantage not 
only in tourism and fina ncial services, but in many other sectors, including information and 
professional services.  
40. The representative of Canada
 mentioned Canada's long-standing and successful trade and 
investment relationship with Barbados.  Bilatera l merchandise trade had expanded during the review 
period to US$65.4 billion in 2007, and Barbados w as the third-largest destination for Canadian 
investment, which reached a cumulative total of US$36.1 billion at the end of 2007.  Barbados benefited from the CARIBCAN prefer ential trade agreement, which allowed 97% of its exports to 
enter Canada duty free, and in December 2006, th e WTO waiver for this preference was extended 
until 2011. 
41. Canada noted Barbados' open fo reign investment regime, its transparent tax and regulatory 
systems, and its effective information exchange  mechanism. Canada a nd Barbados had signed a 
Foreign Investment Protection Agreemen t and a Double Taxation Agreement. 
42. Canada commended Barbados for introducing co mprehensive competition policy legislation, 
liberalizing its telecommunications sector, and amendi ng its intellectual propert y rights legislation to 
make it more TRIPS compatible.  It encouraged the Barbadian Government to continue taking 
important steps towards increased competition and liberalization, to help stimulate continued 
economic growth. 
43. Canada appreciated Barbados’ commitment to re gional integration.  Through the Canadian 
International Development Agency’s new Trade and Competitiveness Program, Canada had recently 
provided $2.2 million to support the activities of th e Caribbean Regional Negotiating Machinery, and 
was hopeful this support would strengthen its capacity  to move forward with negotiations towards a 
Canada-CARICOM trade agreement, launched in 2007. 
44. The representative of Japan
 commended Barbados for its economic policies but was of the 
view that the fiscal deficit needed to be addressed continuously.  He asked Barbados to elaborate on 
its target to reduce government debt to less than  60% of GDP by 2012.  The services sector was the 
backbone of Barbados' economy and was, de facto  open to foreign investment.  The tourism sector 
was one of the most significant industries, and promot ed further investment in related industries, such 
as construction and transport services.  Japan was inte rested in hearing how Barbados coped with the 
vulnerability of the tourism sector to external s hocks including natural disast ers, the high price of 
crude oil, and the slowdown of the U.S. economy. WT/TPR/M/203 
Page 12  
 
45. The representative of Argentina
 highlighted Barbados' economic growth in recent years, 
based primarily on services, mainly financial services, wholesale trade and retail, and tourism.  This had enabled Barbados to achieve a high level of human development.  Barbados, an original WTO 
Member, had played a very active role in key areas of the Doha Round negotiations, promoting an 
intensification of special and differential treatment .  However, although Barbados had bound almost 
all its tariff lines, tariff protection was well above  average for agricultural products.  Argentina 
stressed its strong interest in deepening trade w ith Barbados, both bilaterally and through their 
respective regional integration agreements. 
46. The representative of the United States
 stated that Barbados was a valued hemispheric partner 
of the United States.  Since 2001, the United Stat es and CARICOM members had worked together on 
a Third Border Initiative, which provided a framewo rk for their engagement on a broad spectrum of 
matters.  The United States was Barbados’ main tr ading partner and their commercial relationship was 
vibrant and growing.  Total two-way goods trade during 2007 was nearly one  half billion dollars.  
Approximately 95% of total imports from Ba rbados entered the United States duty free. 
47. Since independence Barbados had transforme d itself from a low-income economy dependent 
upon sugar production into an upper-middle-income services-based economy, with tourism as one of 
its most services important activities.  Manufacturing was growing but the economic importance of agriculture and manufacturing was relatively low compared with the services sector, where 
diversification had taken root.  Th e magnitude of this transformati on in Barbados was striking, and 
potential for future success lay within its highly educated population. 
48. The United States congratulated Barbados for its  achievements in reaping the benefits of 
international specialization and adju sting to changing circumstances over the review period.  It urged 
Barbados to continue to foster the conditions n eeded to reduce unemployment, encourage investment 
and, particularly, to privatize remaining state-owned enterprises. 
49. Barbados continued to face challenges, including from external forces.  There were, however, 
policies over which Barbados had control that the United States urged it to consider in order to 
mitigate perceived vulnerabilities, the key being prom oting market efficiency.  According to the WEF 
2007-2008  Global Competitiveness Report,  to ensure the best environment for the exchange of goods, 
impediments to business activity through government  intervention should be minimized.  Barbados, 
however, continued to rely on border measure s to secure revenue and on WTO-questionable 
incentives to compensate for rising input costs.  The United States asked about steps taken by 
Barbados, since the 2007 extension of the deadline for the elimination of certain export subsidies, to 
prepare its investors for the elimination of its export subsidy programmes. 
50. The Secretariat had observed that:  Barbados ' applied MFN tariff was relatively high and 
suggested that this created an anti-export bias by restricting access to the most competitively priced 
inputs, partially offset by incen tive programmes;  and that the 2007-2008  Global Competitiveness 
Report  had identified Barbados' trade-weighted tariff rate as a notable competitive disadvantage.  The 
United States agreed with the Secretariat’s conclusi on that continuing steps to enhance competition in 
the domestic market would shore up the position of  Barbados' mainstay sectors like tourism and 
financial services.  The WEF's Report had cited vari ous additional areas in which Barbados' business 
environment and entrepreneurial activity needed improvement, and addressed the impact of market 
size on competitiveness.  The United States noted th e Forum’s conclusion that "the relationship 
between openness and growth was likely to be pos itive and robust", and asked Barbados about its 
plans to address these types of issues. 
51. The representative of Hong Kong, China
 noted the good trade relations between Hong Kong, 
China and Barbados:  bilateral trade had increased  by 39% from 2006 to 2007.  The services sector 
was the backbone of Barbados' economy and its main  source of foreign exchange, thus a continued 
effort to liberalize trade in services would be cruc ial for its further economic growth and sustainable  WT/TPR/M/203 
 Page 13 
 
 
development.  Hong Kong, China commended Barbados' initiatives to liberalize its 
telecommunications sector, and was pleased to note that Barbados had taken steps to operate its maritime infrastructure on a more commercial basis.  It encouraged Barbados to extend its liberalizing 
efforts to other sectors, such as financial services, transportation, and logistics, which would enhance 
the legal certainty and predictability of its liberal  regime as well as the competitive environment for 
trade in services, and in turn increase the overall competitiveness of Barbados' economy.  Tourism 
was Barbados' most important services sector and a major foreign exchange-earning sector, and Hong Kong, China encouraged Barbados to reflect its liberal regime in its next services offer. 
52. Hong Kong, China appreciated that Barbados ha d bound 97.3% of its tariff lines.  However, 
individual non-agricultural products, such as fish a nd textiles and clothing products, were subject to 
high tariffs of up to 145% and 117% respectively.  It  encouraged Barbados to consider narrowing the 
gap between bound and applied rates in line with its development needs, so as to further enhance the 
predictability of its tariff regime.  
53. Hong Kong, China was pleased Ba rbados had undertaken reforms to accelerate customs 
clearance and encouraged it to continue efforts in this regard.  It also encouraged Barbados to 
continue to improve its notifications to the WTO. 
54. The representative of Colombia
 stated that Barbados was a successful example of a small 
economy that had managed to reap the benefits of tr ade liberalization to achieve significant levels of 
economic and social development, thanks to the op ening of its trade regime, and based on stable 
policies and strong human capital.  Those elements  and the strengthening of economic activity, had 
allowed it to achieve real GDP growth of 3.9% and an inflation rate of at 4.7% in 2007, overcoming 
the difficulties encountered in previous years.  
55. The efforts made by the Barbadian authoriti es on various fronts of the economy had shown 
good results, as reflected in the WEF's internationa l rankings for 2007-08.  For example, Barbados 
was ranked 50th among 131 countries in the Global Competitiveness Index;  29th in the Tourism 
Competitiveness Index;  and 38th in technology development.  But,  most importantly, Barbados had 
been classified as a country with High Huma n Development by the UNDP, ranking 31st out of 
177 countries.  Colombia congratulat ed Barbados on these achievements. 
56. In services, Barbados could assume leadership in the region to achieve greater openness, with 
a view to seeking higher economic growth and stre ngthening the conditions for attracting foreign 
investment.  Colombia encouraged Barbados to re move its restrictions on activities such as ground 
transportation and food retail trade services, and the commercial presence of travel agents, which 
were reserved for companies domiciled in the country. 
57. The representative of Honduras  noted that international trade ha d played a decisive role in the 
development of the Barbados economy, with tr ade in goods and services accounting for 133% of 
GDP.  Barbados' high level of integration into the global economy meant that it maintained one of the 
highest levels in per capita income and human de velopment indicators among developing countries.  
Barbados' economic and social de velopment continued to be based on factors such as a stable 
government, democratic freedoms, the promotion of hum an rights, an independent and fair judiciary, 
an educated workforce, and good economic management  
58. Barbados' economy was based mainly on servi ces, particularly financial and business 
services, wholesale and retail trade, and tourism.  Its trade policy was based on adherence to the 
multilateral trading system and participation in the Caribbean Community and Common Market (CARICOM).  The investment regime was ope n to foreign investors, guaranteeing CARICOM 
citizens and businesses the same treatment granted to domestic investors, but with restrictions in some sectors.  WT/TPR/M/203 
Page 14  
 
59. The average applied MFN tariff was 16.2%.  Th e average rate for agricultural products was 
33.7%, while the rate for non-agricultural products  was 12.8%.  Tariffs on a number of manufactured 
products with domestic production had increased to 60% during the period under review, while tariffs 
on certain agricultural products had been lowered.  Barbados had bound all its tariffs except those 
applied to fish and fish products.  It continued to promote exports through various tax incentives 
programmes, having notified to the WTO five progr ammes as containing export subsidies.  These 
benefits were provided in the form of tax holiday s.  Producers of goods and services could also obtain 
tax benefits.  
60. During the period under review period, Barba dos had liberalized its telecommunications 
sector, new legislation had entered into force and new institutions to promote competition had been 
created.  Honduras emphasized Barbados full participation in the DDA.  
61. The representative of El Salvador
, referring to economic developm ents in Barbados since its 
last Trade Policy Review, highlighted Barbados ' rapid economic recovery following the 2001-02 
downturn.  The pace of growth had increased in recent  years, reaching 4.3% in 2004-06.  Fiscal policy 
had been geared at trying to keep the fiscal de ficit below 2.5% of GDP during the period under 
review;  more recently the target had been lowered to 1.5%. 
62. International trade had played a decisive role  in the development of the Barbados economy, 
with total trade in goods and services accounting fo r some 133% of GDP.  Trade in goods had risen 
by an average of 14.3% a year during 2002-06, wi th a sharp increase in both exports and imports.  
The Secretariat Report had noted that the genera l openness of Barbados' trade regime, a stable 
framework of policies and strong human capital had he lped Barbados reap the benefits of industrial 
specialization and adapt to changing circumst ances since its previous Review in 2002. 
63. Services remained the backbone of the economy , with the main activities being tourism, 
finance and business services, and wholesale and retail  trade.  Tourism remained the main support of 
Barbados' economy and was the main  earner of foreign exchange;  earnings linked to the travel 
industry had increased from US$700 million in 20 01 to nearly US$967 million in 2006.  
64. Trade between Barbados and El Salvador, mostly  industrial products, was limited, but there 
were prospects to enhance it in the future.  El Sa lvador and Barbados shared common interests with 
respect to the multilateral trading system, among which their advocacy to bind and strengthen special and differential treatment for de veloping countries, including the recognition of the Small Economies 
status and the promotion of solutions to the specifi c needs of these WTO Members.  In this regard, 
she noted Barbados' work and effort as general coordinator of the Small and Vulnerable Economies 
Group.  El Salvador had worked in conjuncti on with Barbados and other proponents, submitting 
proposals in crucial areas of the DDA, such as agri culture, NAMA, services, and fisheries subsidies, 
among others.  These proposals called for special flexibilities for small economies, to promote their integration in world trade.  The small economies ha d been participating actively in the negotiations, 
and had worked constructively in the search for con sensus solutions.  Both Ba rbados and El Salvador 
had requested and obtained the extensions envisaged in paragraph 4 of Article 27 of the Agreement on 
Subsidies and Countervailing Measures, for programmes th at granted benefits primarily in the form of 
tax holidays.  El Salvador believed that the DDA ne gotiations could make a significant contribution to 
development, based on results contributing to improving living standards and employment levels through increased trade.  
65. The representative of the Dominican Republic
 stated that trade ties between the Dominican 
Republic and Barbados were very solid, as witn essed by the Free Trade Agreement signed between 
the Dominican Republic and the CARICOM count ries in 1999, as members of the Group of ACP 
States, through the Cotonou Agreement, and throu gh the participation in CARIFORUM to negotiate 
the Economic Partnership Agreement with the EC.   WT/TPR/M/203 
 Page 15 
 
 
66. This Review was very important, since it allowed Members to better appreciate the problems 
and concerns of small and vulnerable economies, in  trying to adapt to a multilateral trading system 
with ever greater challenges and rules to meet .  The Dominican Republic welcomed the general 
opening of Barbados' trade regime, and supported some of the exceptional measures adopted for the 
protection of sensitive domestic sectors, in order to  maintain economic and social development.  It 
admired Barbados' achievements in the services sect or, particularly touris m and financial services, 
which constituted its main source of income and th e basis of its economy.  These achievements were 
an example for most developing countries, as Barb ados was a small and vulnerable economy.  The 
Dominican Republic congratulated Barbados for its achievements in the past six years, which were 
the result of sound macroeconomic policies a nd trade strategies aimed at development.  
67. The representative of the Customs Territory  of Taiwan, Penghu, Kinmen and Matsu  
(Chinese Taipei) noted the Barbados Government's commitment to trade and investment liberalization 
as a key part of the long-standing recovery pr ogramme.  Barbados' trade policy was aimed at 
enhancing competition in the domestic market in order to further the position of Barbados in mainstay 
sectors like tourism and financial services.  Chinese  Taipei commended Barbados for its efforts to 
improve resource allocation and consumer welfare, and to provide greater flexibility for the use of 
counter-cyclical policies.  Bilateral trade betw een Chinese Taipei and Barbados was US$6.5 million 
in 2007, suggesting significant future growth potential. 
68. The representative of Dominica , speaking on behalf of OECS Member States, stressed the 
constraints small island developing countries en countered in achieving sustainable growth and 
development, and applauded Barbados for its e ndeavours at overcoming those challenges and in 
meeting its multilateral obligations.  OECS Member  States and Barbados cooperated closely within 
the CARICOM Single Market and Economy. 
69. Dominica highlighted the critical role of inte rnational trade in the development of the 
Barbados economy.  With tourism and financ ial services dominating the economy the current 
financial crisis would certainly have an impact on th e country’s prospects.  Barbados was also facing 
rising food and energy costs as well as a shift in the pattern of international trade, from preference-
guaranteed markets towards more open trading system s.  Barbados' report dem onstrated a modern and 
dynamic trade policy, and at a time of approximate world recession, it had implemented innovative policies in delivering food security while simu ltaneously averting further difficulties.  
70. Dominica drew attention to the importance of the manufacturing sector as Barbados tried to 
shift production from traditional agricultural expo rts towards non-agricultural exports, and the 
importance of services to countries in the region. 
71. The representative of the European Communities
 welcomed Barbados' pursuit of an outward 
looking trade policy.  The EC noted Barbados' ec onomic growth, and the step s it had taken to move 
away from an agriculture-based economy to a services-oriented one. Good public administration had been a key factor in this success and the EC ap plauded Barbados for ge tting it right.  The EC 
encouraged the continuation of sound economic re form, underpinned by a fiscal policy aimed at 
promoting economic growth.  The effective impl ementation of comprehensive competition policy 
legislation was an important step to further the s ound functioning of Barbados' markets, in particular 
given its small size and the high concentration of the domestic market.  It was also important to 
continue to make progress in consolidating Caribbean  regional integration, in order for Barbados to 
overcome difficulties stemming from its sm all size and narrow economic base. 
72. The EC applauded Barbados's leading role in fo stering Caribbean integration both within the 
CARICOM, and through the region-to-region Europ ean Partnership Agreement (EPA) between the 
EC and the CARIFORUM States, expected to be signe d in October.  The regional orientation of the 
EPA and accompanying developmen t aid would help the Caribbean regional integration process, WT/TPR/M/203 
Page 16  
 
economic prosperity, and sustainable development, and help make Barbados an attractive place for 
traders and investors.  
73. In some areas, further improvements to Barbados ' policies and practices could be to its own 
benefit and that of other WTO Members.  The EC asked Barbados to explain how it saw, and 
implemented in its national strategy, the link betw een trade and sustainable development.  It was 
encouraged to make efforts to notify outstanding notifications to the WTO.  The EC also asked 
Barbados to indicate whether it envisaged measures to  foster investment in areas where there were 
investment restrictions, in particular in the tourism sector. 
74. The representative of Nigeria
 observed that Barbados remained aware that its size and lack of 
natural resources could be a constraint to sustainabl e growth and development, and that the nature and 
direction of its trade policy regime remained critica lly important in determining the performance of its 
economy.  Barbados' economy had performed well in spite of several extern al challenges since its 
previous Review.  Nigeria, however, noted with concern the increase in Barbados' visible trade 
deficit.  Nigeria urged Barbados to pay more attention to developments on the trade sector, and asked 
how the Government intended to address arising challenges, both in the short and long term.  
Enforcement of the few existing technical regulations by strengthening the country's monitoring and 
enforcement capacity was an important issue.  Barbados also needed to improve on its GATS 
commitments. 
75. The establishment of the CARICOM Single Mark et and the movement towards the creation 
of the CARICOM Single Market and Economy (CSME)  would help Barbados to consolidate its 
progress made, and prepare it for trade liberalization at the global level.  An Economic Partnership 
Agreement between CARIFORUM countries and the EC was to be signed.  The promotion of greater 
use of technology to ensure efficiency and producti vity within the agriculture sector was proactive;  
new techniques were necessary for the sector's future. 
76. The representative of India  noted the important contribut ion of services to Barbados' 
economy.  It was concerned about Barbados' external  current account deficit, which put a strain on its 
economic performance. 
77. India had had long and historic relations with Caribbean countri es, and India had formalized 
diplomatic relations on the date  Barbados had become independent.  The two countries shared many 
similar values and traditions and the presence and contribution of the Indian community in Barbados 
was another link.  India-Barbados trade relations however had been limited, but there were various 
potential areas of cooperation.  India hoped the b ilateral double taxation avoi dance agreement under 
negotiation would soon be finalized, providing a fresh incentive to further explore commercial and 
economical ties. 
78. The representative of Guatemala  noted that Guatemala and Barbados had a number of 
structural problems in common:  their populations were small and, conse quently, so were their 
markets;  their resource base was limited, fragile, and prone to disruptions caused by natural disasters.  
Both countries were also highly sensitive to chang es in world market conditions.  Given that they 
shared these conditions and that both faced challe nges to integrate fully into the trading system, 
Guatemala had worked with Barbados to identify specific characteristics and problems of small and 
vulnerable economies. 
79. Since its last Review, Barbados had attained  important achievements.  In particular, 
Guatemala commended the initiatives to promote co mpetition, streamline the customs system, and 
foster a closer link between agriculture and touris m.  Guatemala hoped that Barbados would face the 
challenges before it with respect to agricultural reform and the adoption of a national system of 
standards with the same acuity.  Barbados was fa ced with specific problems in its participation in 
world trade, such as high transport costs for its exports, limited possibilities to diversify its local  WT/TPR/M/203 
 Page 17 
 
 
production, and a high degree of vulnerability to na tural disasters.  Guatemala urged Barbados to 
continue to develop and implement its trade polic y within the framework of the multilateral trading 
system, and reiterated its willingness to continue to  work with Barbados in favour of small and 
vulnerable economies. 
80. The representative of Mauritius  highlighted the shared political history of Mauritius and 
Barbados as Commonwealth Members despite thei r geographical distance.  As small island 
developing states and net food importing developing countries, they also shared common experiences 
and challenges.  Mauritius was undergoing similar ad justments in the context of EPA arrangements 
with the EC, and the two countries were pursuing similar objectives at the WTO as members of the 
group of SVEs. 
81. Mauritius noted Barbados' successf ul diversification into light industry, tourism, and the 
services sector, and the Prime Minister's recent bol d measures aimed at restructuring the economy and 
promoting sustainable growth. 
82. Mauritius commended Barbados for the further lib eralization of its trade and investment 
regimes since its first Trade Policy Review in 2002.  It had maintained a transparent and open trade 
policy regime and a suitable framewo rk for the protection and promotion of foreign direct investment 
through double taxation agreements  and bilateral investment trea ties.  Barbados had introducted 
comprehensive competition policy legislation and TRIPS -related legislation to promote fair trade.  In 
spite of its achievements, however, Barbados still fa ced numerous challenges to fully and effectively 
integrate into the multilateral trading system, aris ing from the vulnerability of small economies in the 
process of global trade liberalization.  In addition, as  had been highlighted by the discussant, the sugar 
sector, which had traditionally been the mainstay for the Barbadian economy, had been negatively 
affected particularly by the erosion of its prefer ential access to the EC market, as a result of the EC's 
sugar regime reforms.  This would undoubtedly be a setback to the reform and restructuring process 
of the Barbadian sugar industry. 
83. Small island developing states like Barbados needed appropriate flexibility and rules to 
protect their fragility and to cushion the effects of global trade liberalization.  The pace of 
liberalization should be modulated to allow them to integrate gradually and effectively into the 
multilateral trading system.  They needed appropria te special and differential treatment and longer 
transition periods to implement their WTO commitme nts.  Support was needed from the international 
community under the WTO Aid for Trade initiative to  enable them to build productive capacities and 
restructure their economies to face global competition. 
84. The representative of Jamaica  congratulated Barbados on its trade and economic 
performance, which had been greatly assisted by the positive performance of the services sector and 
macro-economic policies.  In spite of this the Ba rbadian economy had to cope with some of the 
constraints and characteristics of small size.  It faced numerous challenges including natural disasters, threats to global security the instability in the global economy, including the oil and food price 
increase and instability in the international financ ial markets.  These could eliminate the economics 
gains accrued.  The Barbadian authorities were s eeking to offset the negative impact of these 
developments through efforts to re duce the oil import bill and throu gh the implementation of national 
initiatives, such as its National Food Security Plan. 
85. Jamaica noted the open nature of the Barbadia n economy, which was characteristic of the 
small economies of the Caribbean region.  In this context, a positive and balanced outcome to the 
WTO negotiations was of vital impor tance to Caribbean countries.  Ba rbados participated in a number 
of bilateral and regional agreemen ts, which would foster its gradual and effective integration into the 
wider regional and global trading systems.  WT/TPR/M/203 
Page 18  
 
86. Barbados had participated actively in the implementation of the CARICOM Single Market 
and Economy (CSME).  The single market would enhance and deepen the trade and economic 
relations among CARICOM countries and would serve  as a platform for strengthening the region's 
economic relations with other countries in the w estern hemisphere.  Jamaica had noted from both 
reports the increasingly important role of the regiona l arrangement in the growth and development of 
the Barbadian economy.  This would have positive spillover effects in terms of the promotion and 
deepening of mutually beneficial economic re lations between Barba dos and other CARICOM 
countries in areas such as trade, investment, and key service sectors, such as tourism and professional 
services.  Important adjuncts to the CSME were the bilateral trade and economic agreements signed 
by between CARICOM and certain countries in Lati n America, which would serve diversify export 
markets, enhance regional competitiveness, and facilita te further insertion into the global economy.  
Along with its CARIFOURM partners, Barbados ha d also concluded negotiations on an Economic 
Partnership Agreement with the EC and benefited from preferential access arrangements. 
87. The representative of Ecuador
 stated that Barbados had managed to seize the opportunities 
offered by world markets.  International trade had b een instrumental in the growth of real GDP which, 
following a recession in 2001-02, had expanded at an  average annual rate of 3.9% until 2007.  The 
sustained growth of its economy, together with a stable framework of policies and skilled human 
capital, had allowed Barbados to attain one of th e highest levels among developing countries in terms 
of per capita income and human development indicators. 
88. Trade relations between Ecuador and Barba dos, though nascent, offered significant growth 
prospects, particularly in the area of agri-industria l products.  In the context of trade in services, 
Barbados had achieved a considerable  development, which had made th is sector one of the pillars of 
its economy.  Ecuador could learn from these positive experiences.  In regard to the DDA, Ecuador 
was confident that cooperation would deepen be tween the two countries, which shared similar 
positions regarding the implementation of special an d differential treatment as well as the challenges 
that small economies faced in the current international context.  
89. The representative of Haiti  stated that Barbados, a sma ll and vulnerable economy, was, 
however, one of CARICOM's most open economies.  In 2007, the ec onomy had achieved growth of 
4.2% thanks to the good performance of tourism, the main sector of activity.  After a difficult year in 
2006, cruise tourism had performed well, increasing by 15%.  Boosted by tourism sector orders, 
construction had risen by 5%.  Fishing, milk, chic ken, and beverages had increased to meet the 
demand of tourists.  Sugar cane, previously the main stay of the economy, had continued its decline.  
The Government of Barbados hoped to stop this dec line with the construction in 2008 of a plant to 
produce ethanol and electricity from bagasse, a by-product of sugar cane.  
90. Offshore financial services were another growth area.  In 2007, the authorities had approved 
470 international companies, including 7 insuran ce companies and 3 offshore banks.  The dynamism 
of the economy had resulted in a decline in unemp loyment to 8%, and an increase in international 
reserves, which had reached their highest level in five years.  According to the Governor of the 
Central Bank, inflation had remained stable, at 5. 7%.  However, the rising cost of living including 
food, was at the forefront of concerns. 
91. Barbados had participated actively in the DDA negotiations.  It had reaffirmed its 
commitment to trade liberalization and its support fo r fair international trade rules in Hong Kong in 
December 2005.  Barbados had presented joint propo sals on the major areas of negotiation, noting in 
most of these communications that  the characteristics of small vulnerable economies required special 
recognition and should be dealt with under international trade rules.  
92. The representative of Uruguay  acknowledged Barbados' important contribution to the work of 
the WTO.  Uruguay shared almost fully the view s expressed by the discussant in her exhaustive 
analysis.  WT/TPR/M/203 
 Page 19 
 
 
V. REPLIES BY THE REPRESENTATIVE OF BARBADOS AND ADDITIONAL 
 COMMENTS 
93. The representative of Barbados  wished to re-state certain point s that he considered were of 
critical importance to Barbados and that he wished the WTO to keep clearly in mind.  Barbados was a 
small, vulnerable, economy that faced a number of  unique challenges in its efforts to promote 
economic development, while at the same time inte grating into the global economy.  Smallness, was 
not just a description, it was a lived reality.  
94. Barbados was negatively affected by external  factors and developments, over which it had no 
control.  The volatility of oil prices, the crisis in global financial markets, soaring food prices, global 
economic recessions, environmental degradation by external entities and the spectre of climate 
change, were all examples.  The Government ne eded the necessary policy space to insulate the 
economy from such negative external forces.  The seemingly relatively high tariffs noted by some 
delegations were part of the strategy designed to achieve this purpose, rather than simply providing 
revenue for Government. 
95. During the meeting there appeared to have been  varying interpretations on the concept of 
openness.  Openness in the context of a small ec onomy referred to the degree of reliance of that 
economy on the rest of the world.  For Barbados, it was a characteristic and systemic feature of the 
structure of its economy, which highlighted its vu lnerability to the impact of external forces over 
which it had no control. 
96. Barbados had embraced the need to integrate in to the global economy.  Clear evidence of this 
was its active involvement in CARICOM, including leading the CSME process, its participation in 
CARICOM bilateral trade and economic  agreements with some of its neighbours and, its decision to 
sign an Economic Partnership Agreement (EPA) with  the European Communities, which was its most 
liberal trade arrangement in the last generation.   Barbados was further committed to negotiating a 
free-trade agreement with Canada, Central Amer ica and other countries in the hemisphere. 
97. Some Members had queried how Barbados propo sed to deal with certain economic indicators 
that gave some cause for concern.  The Government  of Barbados believed that solutions to these 
problems could be found within the framework of  the Social Partnership collaboration within 
Barbados.  The Government considered that each area  of this partnership, labour, private sector, and 
government, given their different perspectives and ro les, had a vital interest in this regard.  
98. Barbados was a highly open economy and, cons equently, inflation was characteristically 
supply-pushed rather than demand-driven.  Barbados  had to import far more than it produced.  This 
was reflected in food, inputs into the productiv e process, intermediate goods, and raw materials. 
Barbados recognized that there we re certain limitations in what it could do in this area.  The 
Government, however, along with the Social Partners , would seek to control aspects of inflation that 
were within its scope and power.  It would seek a mix of policies that w ould entail opening up the 
domestic retail and wholesale distributive sector to  promote increased competition, where possible. 
Barbados would seek to reduce duties on a selected basket of goods. 
99. In the last Financial Statement and Budgetary proposals, the Prime Minister and Minister of 
Finance and Economic Affairs, had introduced measu res to directly address the cost of living, 
including initiatives to increase domestic agricultura l output, to counter the high price of imported 
food.  The Government also sought and received the commitment of the Social Partners to exercise 
restraint on price and wage increases.  Ultimately, however, within the context of the Social 
Partnership, Barbados' aim was to promote grea ter efficiency in all areas of economic activity, 
including the public sector.  Its commitment was to pursue greater fiscal prudence, while seeking to 
change the composition of its national debt, more in favour of its domestic component. WT/TPR/M/203 
Page 20  
 
100. In addition, the Government had established a Council for Investment, Exports and Foreign 
Exchange Earnings (CIEX) to c oordinate its national efforts, at  home and abroad, to increase its 
foreign exchange earnings.  The Government was placing a particularly high premium on the removal 
of domestic obstacles to investment and export growth. 
101. Barbados fully supported the principle that th ere should be a direct link between development 
and the environment.  It would continue to reflect this in the promotion of its economic development.  
The environmental levy on certain goods, was one su ch effort to safeguard the environment.  
Barbados recognized however, its initial error in  imposing this levy on imported goods only and had 
now rectified this. 
102. The issue of high tariffs had been raised by so me delegations.  Barbados  did not consider its 
tariffs to be unreasonably high, relative to bound and applied tariffs in some other countries.  
Barbados needed to insulate some of its fledgling industries and sectors from full-blown and, at times, 
unfair, international competition, buttressed by a milieu of domestic support and export subsidies.  
Barbados did not believe that tourism and financ ial services could, by themselves, sustain its 
economic development.  Barbados disagreed with the suggestion that it relied too heavily on border 
taxes for its revenue intake:  the available sta tistics indicated that import duties accounted for only 
7.8% of total revenue for Barbados ;  this was not unreasonably high. 
103. On the matter of export subsidies, for which Ba rbados had been granted a waiver until 2015, 
its investors, producers, and others were being sen sitized to the reality that these programmes would 
have to be revised to bring them into conformity with its WTO commitments. 
104. A number of Members had observed that Barba dos was somewhat behind in fulfilling its 
notification obligations.  The record would show that  Barbados had been in the forefront of providing 
timely notifications to the WTO and had once been cited as a model in that particular regard.  
However, owing to increased pressure of negotia tions on a number of fronts and limited resources, 
Barbados had fallen behind in discharging its obliga tions in this area.  The representative assured 
Members that a greater effort would be made to improve this situation in the very near future. 
105. Some delegations thought Barba dos should make greater and deeper commitments in services 
and should bind the services activities that were cu rrently open to international competition.  
Barbados was in the process of revising its servi ces offers, but the representative stressed that 
Barbados' services sectors were relatively open.  Any fu ture commitments to liberalization in this area 
would be in keeping with the pace of Barbados' le vel of economic development and its capacity to 
assimilate a higher level of openness. 
106. The representative hoped Barbados had been ab le to satisfactorily address the questions 
posed.  It was commited to the aims of the WTO and was confident that, with the support and 
encouragement of Members, its efforts to further integrate into the multilateral trading system would 
not be in vain. 
107. He reminded Members that for small economies such as Barbados, the scope for failure was 
large:  the demands were great, but their resources we re small and options few.  Barbados needed to 
get it right the first time, for there might not be a second opportunity. 
108. The discussant
 understood very well the challenges faced by Barbados as a small and 
vulnerable economy, and agreed that these countries were affected more severely than others by 
external shocks.  With regard to the economic e nvironment, she was pleased that, with the aim of 
controlling inflation, especially as a country that  imported more than it produced, Barbados was 
considering reducing some tariffs and promoting th e further opening of some domestic sectors.  
Barbados had indicated that it expected to exercise greater fiscal prudence, wh ich was very positive.   WT/TPR/M/203 
 Page 21 
 
 
She was also pleased to learn that the environmen tal tax, which was previously applied only on 
imports would now also be applied to domestic products, thus elimin ating the distortion it contained.  
109. With regard to tariffs, she agreed that Barba dos' tariffs were not high compared with those 
applied by some developed countries.  This was part icularly true in the agriculture sector, which was 
faced with so many international trade distorti ons.  However, although in some cases it was necessary 
to protect domestic production, it might be approp riate for Barbados to try to correct the tariff 
dispersion mentioned by some Members, especially  in the manufacturing sector.  She understood the 
need to apply a number of support measures to Ba rbados' agriculture and manufacturing, such as 
export subsidies, which would be eliminated in 2015.  
110. She was pleased that Barbados was consider ing revising its service offers.  She understood 
that this depended on the pace of negotiations at th e WTO, but believed it was possible to contemplate 
revising the offer conditional on the result of the negotiations, thus giving greater security to 
investors.  
111. The representative of the United States  thanked Barbados for the responses provided and 
stated her appreciation for the explanation on the ap plication of the environmental levy on domestic 
products.  She sought clarification with r espect to how the levy would be applied. 
112. The representative of the European Communities  commended Barbados for its active 
participation in the WTO.  The EC looked forward to  continuing talks with Barbados in the context of 
the EPA and in the WTO. 
113. The representative of Canada  noted that Barbados' responses underscored its commitment to 
open markets. 
114. The representative of Barbados , answering the question by the United States, stated that the 
environmental levy was applied at source.  The authorities were currently studying the appropriate 
rate to be applied to the final product. WT/TPR/M/203 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
115. The second Trade Policy Review of Barbados has allowed this Body to appraise in detail the 
evolution of the country's trade policies since 2002.  I thank Minister Sinckler, Permanent Secretary Chandler, Ambassador Clarke, and their team for engaging so constructively in this Trade Policy 
Review exercise.  I would also like to thank the discussant, Ambassador Hernández, and Members 
who participated in the discussion as part of this exercise. 
116. This has been a very positive review.  Barb ados' experience stands out as a good model for 
developing countries, especially those facing similar challenges due to their small size.  We have 
heard widespread praise by Members for the reforms Barbados has undertaken, its success in 
diversifying its economy, and the general openness of its trade and investment regime.  These factors 
were seen as important contributors to Barba dos' ability to maintain high standards of human 
development.  However, the delega tion of Barbados noted that this good performance has come at the 
cost of a marked increase in the country's nationa l debt, and that Barbados' prosperity is fragile 
because of its vulnerability to external shocks.  In this respect, Barbados could further strengthen its 
fiscal situation to allow for greater use of counter-cyclical policies. 
117. Members welcomed Barbados' commitment to the multilateral trading system, and expressed 
their appreciation for Barbados' contribution to the wo rk of the WTO, particularly its coordination of 
the Small, Vulnerable Economies (SVEs) group.  A number of Members su ggested that Barbados 
should reflect its liberal services regime in d eeper and wider commitments under the GATS.  
Barbados noted that it is reviewing its offer within the context of the ongoing WTO services 
negotiations.  Barbados was also encouraged to s ubmit its outstanding notifications to the WTO, and 
to consider requesting technical assistance in order to  help accomplish this.  Barbados noted that it has 
sought faithfully to discharge its WTO obligations , but faces a number of constraints linked to its 
small size and increased pressure of negotiations. 
118. Members agreed that Barbados' import regime is  largely open, but some Members highlighted 
the need for further reducing applied tariffs, as well as narrowing both their dispersion and the gap 
between bound and applied tariffs.  Ba rbados reported that an environm ental levy previously collected 
only on imports now also applies to domestic goods.  Barbados was encouraged to eliminate the few 
existing restrictions to foreign investment.  Memb ers also made enquiries in to Barbados' plans to 
eliminate its export subsidy programmes by 2015. 
119. Members congratulated Barbados for its in troduction of comprehensive competition policy 
legislation, whose effective implementation was seen as important to improve the functioning of 
Barbados' domestic markets.  Members also comme nded Barbados for the reforms introduced to its 
intellectual property legislation to make it more co mpatible with the TRIPS Agreement, and for the 
liberalization of its telecommunications sector.  Barb ados provided replies to questions concerning a 
number of service activities such as tourism, transport, telecommunications, and professional and financial services.  We thank the delegation of Barbados for their responses to written questions. 
120. I would like to close this meeting by thanking , once again, the delegation of Barbados, the 
discussant, and the Members that took part in this m eeting for contributing to an informative review.  
May I also thank the interpreters for their hard wo rk.  I would also like to express my appreciation to 
the delegation of Barbados for addressing the variou s issues that Members have raised both in writing 
and orally.  I think we now have a much more clear  picture of your trade policies and priorities.  I 
hope that the very positive outcome of your second Trade Policy Review will be an additional strong 
motivation for your continued active engage ment in the multilateral trading system. 
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