IMF Calls On Barbados To Speed Up Tariff Reductions

by Amanda Banks, Tax-News.com, London

13 February 2003

During the recent annual discussion on Barbados' economic policy, the IMF urged the Barbadian government to quickly reduce tariffs and protection on locally produced goods and services, arguing that in the context of CARICOM and the Free Trade Area of the Americas (FTAA) agreement, such a course of action would be in the country's best interests.

Reporting on the meeting, the Barbados Daily Nation revealed that Anthony Pellechio, who headed the IMF delegation, acknowledged that Barbados will face some 'hard choices' if it is to meet its obligations vis-a-vis forthcoming free trade agreements.

Mr Pellechio went on to add that the IMF welcomed the government's decision to reverse tariff increases adopted in 2001, and its commitment to continue reversing tariffs over the medium term, but argued that the process must be speeded up.

According to the Daily Nation:

'Pellechio said while protective tariffs might be appropriate for a short period to give some local industries time to become competitive, they raised costs for other industries, especially tourism, and hurt consumers by raising the costs of imported food and other supplies.'

However, he warned that 'protective barriers are often difficult to remove because of vested interests'.

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