RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/203 
13 August 2008  
 
(08-3778) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
BARBADOS 
 
  
 
This report, prepared for the second Trad e Policy Review of Barbados, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Barbados on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Angelo Silvy (tel. 022 739 5249), Ms. Katie Waters (tel. 022 739 5067) and 
Mr. Raymundo Valdés (tel. 022 739 5346). 
 
Document WT/TPR/G/203 contains the policy statement submitted by Barbados. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Barbados. Barbados WT/TPR/S/203 
 Page iii 
 
 
CONTENTS 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) E CONOMIC DEVELOPMENTS  vii 
 (2) T RADE POLICY AND INVESTMENT REGIME  vii 
 (3) M ARKET ACCESS IN GOODS  viii 
 (4) E XPORT MEASURES  viii 
 (5) O THER MEASURES AFFECTING TRADE  ix 
 (6) T RADE POLICY BY SECTOR  ix 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC DEVELOPMENTS  1 
 (i) Economic structure, production, and employment 1  (ii) Fiscal policy 3 
 (iii) Monetary and exchange rate policy 5 
 (iv) Balance of payments 7 
 (3) T
RADE FLOWS  8 
 (i) Developments in merchandise trade 8 
 (ii) Trade in services 8 
 (4) O UTLOOK  9 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 11 
 (1) O VERVIEW  11 
 (2) G ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  11 
 (3) T RADE POLICY FORMULATION AND IMPLEMENTATION  12 
 (4) F OREIGN INVESTMENT REGIME  13 
 (5) I NTERNATIONAL RELATIONS  15 
 (i) Participation in the WTO 15  (ii) Participation in regional and bilateral agreements 16 
 (iii) Other preferential agreements 17 
 (iv) Unilateral preference programmes 18  (v) Technical assistance and Aid for Trade 20 
III. TRADE POLICIES AND PRACTICES BY MEASURE 22 
 (1) O
VERVIEW  22 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  23 
 (i) Procedures 23 
 (ii) Customs valuation 24  (iii) Rules of origin 24 
 (iv) Tariffs 25 
 (v) Other charges affecting imports 28 
 (vi) Quantitative restrictions and controls, including licensing 29 
 (vii) Contingency measures 33  (viii) Technical regulations and standards 33 
 (ix) Sanitary and phytosanitary measures 36 WT/TPR/S/203 Trade Policy Review 
Page iv 
 
 
  Page 
 (3) M EASURES DIRECTLY AFFECTING EXPORTS  38 
 (i) Procedures and documentation 38 
 (ii) Taxes, charges and levies 39  (iii) Prohibitions, restrictions, and licensing 39 
 (iv) Duty and tax concessions, including subsidies 40 
 (v) Finance, insurance and promotion 42 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  43 
 (i) Legal framework for business 43 
 (ii) Incentives and other government assistance 44  (iii) Competition policy and price controls 47 
 (iv) State trading enterp rises, state-owned enterpri ses, and privatization 49 
 (v) Government procurement 50  (vi) Intellectual property rights 52 
IV. TRADE POLICIES BY SECTOR 56 
 (1) O
VERVIEW  56 
 (2) A GRICULTURE  57 
 (i) Features 57 
 (ii) Policy objectives and measures 58 
 (iii) Key sectors 60 
 (3) M ANUFACTURING  62 
 (4) S ERVICES  64 
 (i) WTO and regional commitments 64 
 (ii) Banking and insurance 66  (iii) Telecommunications 70 
 (iv) Transport 72 
 (v) Tourism 75  (vi) Professional services 76 
 (vii) Other offshore services 79 
REFERENCES   81 
APPENDIX TABLES  85 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 I.1 Basic macroeconomic indicators, 2001-07 2 
I.2 Sectoral data on GDP and employment, 2001-07 3 
I.3 Central government operations, FY2001/02-2006/07 4 
I.4 Main monetary indicators, 2001-07 6 
I.5 Balance of payments, 2001-07 7 I.6 Trade in services, 2001-07 9 
 Barbados WT/TPR/S/203 
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  Page 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Rules of origin applying to CARICOM countries  25 
III.2 Structure of the tariff, 2007 25 
III.3 Summary analysis of the MFN tariff, 2007 26 
III.4 VAT rates, 2007  29 
III.5 Imports requiring a licence under the Misce llaneous Controls (Gener al Open Import Licence) 
 Regulations, 2004 30 
III.6 Benefits under the Export Allowance Programme, 2002-06 41 
III.7 Overview of IPR protection, 2008 53 
 
IV. TRADE POLICIES BY SECTOR  
IV.1 Agricultural incentive schemes 59
 
IV.2 GDP breakdown of manufacturing sectors (current prices) 63 
IV.3 Summary of Barbados's specifi c commitments under the GATS   65  
IV.4 Offshore companies registered in Barbados, 2002-07 80 
 
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports and re-exports by group of products, 2001-06 87 AI.2 Merchandise imports by group of products, 2001-06 88 AI.3 Merchandise exports and re-exports by trading partner, 2001-06 89 
AI.4 Merchandise imports by trading partner, 2001-06 90 
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 
AII.1 Notifications by Barbados to the WTO, 2002 to end 2007     91
 
 IV. TRADE POLICIES BY SECTOR  
AIV.1 Bilateral and plurilateral air services agreements signed in Barbados    93 
  
 
 Barbados WT/TPR/S/203 
 Page vii 
 
 
SUMMARY OBSERVATIONS 
 
1. International trade has played a critical 
role in the development of the Barbados 
economy, with total trade in goods and 
services representing some 133% of GDP.  Its close integration into the global economy has helped Barbados maintain some of the highest per capita incomes and human development 
indicators among developing countries.  
Barbados' generally open trade regime, a stable policy environment and strong human capital have helped it reap the benefits of international specialization and adjust to changing circumstances since its previous 
Trade Policy Review in 2002. 
2. Barbados' applied MFN tariff stands at 
a relatively high average of 16.2%.  This creates an anti-export bias, which Barbados has tried to offset through a wide array of 
fiscal and other incentive programmes 
targeting the production of both goods and services.  Rationalizing those programmes, and continuing to take steps to enhance competition in the domestic market, would shore up the position of Barbados' mainstay 
sectors like tourism and financial services.  
They would also improve resource allocation and consumer welfare and, by strengthening the fiscal situation, provide greater flexibility for the use of counter-cyclical policies to 
smooth out economic cycles. 
(1) E
CONOMIC DEVELOPMENTS  
3. The services sector is the backbone of 
Barbados' economy;  the main service activities are finance and business, wholesale 
and retail trade, and tourism.  In contrast, the 
economic importance of agriculture and manufacturing is relatively low, with agriculture in long-term decline but manufacturing growing.   
4. The Barbados economy underwent a 
recession in 2001-02 but subsequently 
performed well.  Real GDP grew at an annual average rate of 3.9% between 2002 and 2007.  Unemployment has fallen, although it remains relatively high, at 7.4% in 2007.  Inflation appears to have been curbed (to 4.1% in 
2007), after increasing from 0.2% in 2002 to 7.3% in 2006, mainly as a result of higher oil and food prices, domestic demand pressures 
and higher import taxes.  The fixed exchange 
rate means that counter-cyclical policies must rely largely on fiscal instruments, but the use of these is limited by persistent fiscal deficits and high public debt. 
5. The external current account has 
shown a persistent large deficit, 9.7% of GDP on average during 2002-07, as the surplus of the services account has not offset the merchandise trade deficit.  The current account deficit has generally been financed by public 
and private capital inflows.  Merchandise trade 
has expanded, amounting to some 65% of GDP.  Merchandise exports are just under one fourth of exports of goods and services;  in contrast, merchandise imports account for 
80% of total imports.  Exports of services 
consist mostly of tourism and financial services. 
(2) T
RADE POLICY AND INVESTMENT 
 R EGIME  
6. Support for the multilateral trading 
system and participation in the Caribbean 
Community and Common Market (CARICOM) are at the core of Barbados' trade policy.  Barbados is an original Member of the WTO, within which it has advocated binding 
and enhancing special and differential 
treatment for developing countries, and recognition of the special status and needs of small, vulnerable, developing economies.  Barbados made commitments in the extended 
GATS negotiations on telecommunications, 
and has ratified the Fourth Protocol, but did not participate in the extended negotiations on financial services.  It has never been involved in multilateral dispute settlement procedures, either as a defendant or complainant.  
7. Barbados formulates and implements 
its trade policy within the context of its participation in CARICOM, which is in the process of consolidating a single market and economy.  Through its CARICOM WT/TPR/S/203 Trade Policy Review 
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membership, Barbados maintains preferential 
trade agreements with Colombia, Costa Rica, Cuba, the Dominican Republic, and Venezuela.  Barbados's exports have benefited 
from preferential market access under non-
reciprocal preferential trade arrangements offered by a number of developed countries.  
8. Barbados' investment regime is 
generally open to foreign investors;  
CARICOM citizens and companies are 
guaranteed the same treatment as domestic investors.  Restrictions to foreign investment are in place in areas such as tour operators, travel agents, certain ground transport, and food retail services.  Restrictions may also be 
applied to share transfers in the case of non-
CARICOM foreign investors.  Barbados has eight bilateral investment treaties. 
(3) M
ARKET ACCESS IN GOODS  
9. Barbados applies the CARICOM 
Common External Tariff (CET) with 
exceptions.  Barbados' average applied MFN tariff was 16.2% in 2007, slightly lower than its level in 2002 but the highest within CARICOM.  Effective tariff protection is further increased by a range of tariff 
exemptions granted to local producers.   
10. Barbados' average applied tariff on 
agricultural products (33.7%, WTO definition) is much higher than on other goods (12.8%).  During the period under review, tariffs were 
raised to 60% on a number of domestically 
produced manufactures, and lowered on certain agricultural products as a result of Uruguay Round commitments to reduce out-of-quota tariffs.  An environmental levy is 
maintained solely on imports; a cess tax, 
levied between 2005 and 2007, increased import duties by close to six percentage points. 
11. Barbados has bound all of its tariffs 
except on fish and fish products.  Agricultural products (WTO definition) are bound at rates 
of at least 100%, and other products at rates of 
at least 70%.  Barbados also bound other duties and charges, at 70% or higher. 12. Barbados's import procedures are 
relatively simple;  all importers must be registered.  Barbados uses the transaction value as the basis for customs valuation;  
under-invoicing continues to be a concern for 
the authorities.  Barbados requires import licences for a range of products, with different licensing regimes applying to imports from CARICOM and other countries. 
13. Barbados has not implemented anti-
dumping measures but maintains a countervailing measure against milk imports from Trinidad and Tobago.  It is delaying updating its related legislation to ensure that it is compliant with CARICOM's Single Market 
and Economy.  Barbados has no safeguards 
legislation nor has it adopted safeguard measures. 
14. A joint government-private-sector 
agency is responsible for the adoption of 
technical regulations and standards.  
Enforcement of the few technical regulations that exist in Barbados remains a challenge, and the Government is seeking to strengthen its monitoring and enforcement capacity.  Barbados has made only one SPS notification 
to the WTO, which was in 2002;  still to be 
notified is the new Plant Protection Act, which entered into force in 2007.  It is not clear to what extent SPS measures are established on the basis of an evaluation of the actual risks. 
(4) E
XPORT MEASURES  
15. Barbados continues to promote 
exports through a wide array of fiscal and other incentives programmes.  Five of these programmes have been notified by Barbados 
to the WTO as containing export subsidies.  
Barbados has requested and obtained the extension provided for under Article 27.4 of the SCM Agreement for these programmes.  Benefits take mostly the form of tax holidays.   
16. A levy is imposed on cotton exports, 
the proceeds of which are distributed among 
producers.  No other export restrictions, including taxes, are applied for economic reasons.   Barbados WT/TPR/S/203 
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(5) OTHER MEASURES AFFECTING 
 T RADE  
17. In addition to export-support 
programmes, producers of goods and services 
may benefit from tax br eaks or other forms of 
assistance.  Although the direct fiscal cost of such assistance does not appear to be high, reassessment of the many incentive programmes, with a view to their possible 
rationalization, could contribute to greater 
transparency and effici ency in their use, 
reduce the distortion of incentives, and help address Barbados' fiscal situation.   
18. Since its previous review, Barbados 
has introduced comprehensive competition 
policy legislation, a potentially important step 
given the small size and high concentration of its domestic market.  The Government maintains shareholdings in a number of commercial entities in sectors such as 
agriculture, utilities, transport, financial 
services, and tourism.  State trading is limited to imports of chicken and turkey wings.  Certain state companies are de facto  sole 
traders:  one company is the only exporter of crude petroleum and the sole importer of 
diesel, gasoline, and fuel oil. 
19. Barbados is not a party to the 
Plurilateral Agreement on Government Procurement.  Government procurement, which represents some 8% of GDP, relies 
mostly on foreign goods and services due to 
the small size of the economy.  Contracts above BDS$100,000 (US$50,000) are generally filled by open tender.  The adjudicating criterion is the "lowest evaluated 
tender".  Procurement for smaller amounts is 
mostly from registered suppliers, who must be domiciled in Barbados.   
20. Barbados has enacted legislation that 
covers all major areas referred to in the TRIPS Agreement.  Barbados' IPR-related legislation 
was reviewed by the WTO TRIPS Council in 
2001.  The legislation was amended in 2006 with the aim of making it more compatible with the provisions of the TRIPS Agreement. (6) T
RADE POLICY BY SECTOR  
21. Compared with most other developing 
countries, Barbados is a high-cost location for the production of goods, except for some niche 
products.  Without protection from import 
competition, several of the few existing activities in agriculture and manufacturing would likely contract significantly.  On the other hand, the protection granted to the 
production of goods may have weighed on the 
international competitiveness of service activities, for example tourist catering, by restricting access to the most competitively priced inputs. 
22. Barbados' few agricultural activities 
are heavily protected.  Barbados no longer 
administers a tariff quota regime for agricultural products, instead it applies the in-quota bound rates to the respective imports.  In 2002, Barbados invoked price-based special 
safeguard actions for 23 agricultural products 
including certain poultry parts, fruits and vegetables.  Two state entities have monopolies on the importation of chicken and turkey wings, and raw sugar respectively.  The sugar industry, traditionally Barbados main 
agricultural export activity, suffers from high 
costs and has shrunk considerably due to the reduction in the preferential price offered in export markets. 
23. The services sector is Barbados' main 
source of foreign exchange.  Despite the 
importance of services to its economy and the general de facto  openness of its foreign 
investment regime, Barbados has scheduled only a limited number of GATS commitments 
(21 of the 160 subsectors).  Barbados 
submitted an initial services offer in the negotiations on services under the Doha Development Agenda. 
24. Barbados operates separate regimes 
for onshore and international (offshore) 
banking and insurance.  All commercial banks 
operating domestically are predominantly foreign owned.  In view of the oligopolistic nature of the market, the Central Bank sets a minimum deposit rate for onshore banks, and, WT/TPR/S/203 Trade Policy Review 
Page x 
 
 
between 2001 and 2003, maintained temporary 
indicative rates of interest on loans.  Since 2002, the spread between deposit and lending rates has decreased.  Offshore financial 
services companies benefit from minimal taxes 
and are not subject to exchange controls.  They may generally conduct business only with non-residents and in foreign currency or assets.  
25. During the period under review, 
Barbados has liberalized its telecommunications sector, ending, earlier than initially intended, the monopoly held by the private-sector incumbent.  New legislation has entered into force and institutions have 
been created to foster competition. 26. The Government owns Barbados' 
basic air and maritime infrastructure, and during the review period has taken steps to operate it on a more commercial basis.  Private 
providers are present in ground handling at the 
airport, and in certain port services.  Barbados administers an international ship registry. 
27. Professional services are governed by 
an overarching law and profession-specific 
legislation.  For foreign persons to practice 
law and architecture in Barbados, legislation requires that reciprocity must be provided to Barbadian citizens in third countries.  Efforts are under way at the CARICOM level to develop and harmonize requirements for the 
licensing and regulation of certain professions.