Any local businesses looking to export local goods and services internationally should be aware of the existing trade agreements that they can take advantage of. These agreements, which are essentially contractual partnerships to promote trade between two or more countries, can help Bahamian businesses to attract international customers and clients.
The major advantage of exporting products to jurisdictions that currently have trade agreements with The Bahamas is that tariffs and duties tend to be lower or even nonexistent. As a result, local products can be exported and sold in these jurisdictions at a lower rate, allowing for more competitive final prices in the partner country. This is very helpful because higher prices are one of the main barriers that prevent imported products from being competitive compared to local alternatives. Even unique product offerings can be cost-prohibitive depending on the expenses and tariffs associated with the specific product.
Lower prices are not the only benefit. Trade agreements can also create access to new markets, facilitate faster customs clearance times, and support legislative reforms that make it easier to engage in international trade. Many local entrepreneurs may not be aware of the preferential trade agreements that The Bahamas has signed on to as a part of wider Caribbean-based agreements with major developed countries.
The Bahamas has existing trade agreements with the United States, Canada, European Union, and the United Kingdom. Exporters of goods to countries with which The Bahamas has a trade agreement will have to obtain the necessary Authentication Certificate/Certificate of Origin from the Customs Department to accompany the goods if they wish to enjoy the preferential treatment.
The Bahamas is currently signed on to four trade agreements.
- Caribbean-Basin Initiative (CBI) – The CBI allows for widespread duty-free access to the US market for goods grown or manufactured in Caribbean countries, including The Bahamas. Other benefits include the ability to bid on US government procurement opportunities, participation in select US-sponsored business development programs, and the tax deductions for US companies attending conferences and conventions in The Bahamas.
- Caribbean Free Trade Agreement (CARIBCAN) – CARIBCAN is an economic, trade and development assistance agreement establishing unilateral, duty-free access to the Canadian market for most goods exported from Caribbean countries that are Caribbean Community (CARICOM) members.
- United Kingdom Economic Partnership Agreement (CARIFORUM) – The CARIFORUM countries have also agreed to a trade agreement with the UK scheduled for the first of January 2021. This agreement spans goods, services, and government procurement activities and is intended to replace the current EU agreement as the transition period for Brexit comes to an end on the last day of 2020.
For a more detailed look at each trade agreement, click here.