The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has expressed concern over “the erosion of US trade preferences” for its polystyrene industry, largely Polymers International.

The concerns were expressed in submissions made to the US International Trade Commission for its latest report on the Caribbean Basin Economic Recovery Act (CBERA), which also disclosed that the Bahamas wanted its trade preferences extended to services - the bulk of this nation’s economic activity.

The details were contained in submissions sent to the Commission by the Caribbean Association of Industry and Commerce, which appeared to be speaking on behalf of the Bahamas and other regional nations in its June 20, 2013, submission.

This nation’s principal concern, apart from extending trade benefits to its services industries, was that free trade agreements (FTAs) being signed by the US elsewhere in the region were undermining Polymers International’s preferential market access.

“The Bahamas mentioned the erosion of preferences for its polystyrene industry due to new US FTAs in the region, and sought to include services in CBERA provisions,” the Caribbean Association of Industry and Commerce feedback suggested.

Still, despite the concerns, the US International Trade Commission report noted that Polymers International’s US exports had recovered almost to pre-recession levels last year, growing by 35.6 per cent between 2010 and 2012.

Polystyrene exports accounted for 99.3 per cent of Bahamian exports entering the US under the CBERA’s trade benefits in 2012. Yet just 25 per cent of this nation’s total exports entered under these preferential terms.

“The Bahamas had the sixth-highest CBERA utilisation rate at 24.8 per cent, and was the fifth-largest source of US imports under CBERA in 2012,” the Commission report said.

“US imports under CBERA from the Bahamas are almost entirely made up of polystyrene, a plastic product used in many forms of packaging and consumer uses. Polystyrene enters duty-free exclusively under CBERA, as the Bahamas is not a GSP [general system of preferences] beneficiary country.

“Imports of polystyrene under CBERA decreased substantially between 2008 and 2009 due to the economic recession in the United States, but increased by 35.6 per cent between 2010 and 2012 to near-2008 levels. Polystyrene accounted for 99.3 per cent of US imports from the Bahamas under CBERA in 2012.”

The percentage of Bahamian exports entering the US under the CBERA benefits rose sharply in 2012, growing from 15.5 per cent in 2011. This was also up from 13.1 per cent in 2009, and 14.3 per cent in 2010.

“The future effect of any increase in imports under CBERA from the Bahamas on the US economy is likely to be minimal largely because the Bahamas is, and is likely to remain in the near term, a very small supplier to the US market,” the Commission’s report said.

“FDI in the Bahamas was $465 million in 2012, down from $960 million in 2010. Although the Bahamas has been a designated CBERA beneficiary since 1985, high wage rates and the small size of the country’s agricultural and manufacturing sectors have limited the country’s ability to utilize CBERA benefits, according to the US State Department.”