Barbados' Customs Duties Cause Controversy

by Amanda Banks, Tax-News.com, London

22 August 2002

According to a report in the Barbados Daily Nation earlier this week, the jurisdiction's use of high customs tariffs to protect and stimulate certain domestic industry sectors has caused concern for major trading partners such as the United States, the European Union, and New Zealand.

During a recent World Trade Organisation review of Barbados' trade policies, and with particular reference to the import tariffs designed to protect the food and agriculture sectors, the United States observed that: 'average applied tariffs for agricultural and food products, at 36.7 per cent, (are) more than double the average applied for all products'.

Although the US praised the Caribbean nation for 'increased transparency' over tax matters, it argued that this is not enough, and that Barbados needs to be more responsive to the prevailing mood at a time of increasing international trade liberalisation.

However, Washington's questioning of the Barbadian government as to whether it had considered 'the effect of this high taxation on Barbadian consumers, particularly those for whom food costs are a substantial proportion of household expenditures?' has struck many regional observers as somewhat hypocritical, given the size of the subsidies doled out to American farmers, and the disputes in which the United States is currently embroiled with the European Union and others.

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