0

Bahamas Exports Drop 40% In 2020

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian goods exports declined by 40 percent in 2020 amid the COVID-19 pandemic, it has been revealed, with those entering the US under trade preference regimes hitting a ten-year low.

The US International Trade Commission’s recently-released 2021 report on the Caribbean Basin Economic Recovery Act (CBERA), the initiative by which millions of dollars in Bahamian goods enter that country duty-free, revealed the extent to which total exports to the country’s northern neighbour have progressively declined over the past decade.

Some 69 percent, or $269m, of The Bahamas’ $390m in total worldwide exports were dispatched to the US during 2020, with the latter figure representing a $264m year-over-year decline compared to 2019, the report found.

“Goods exports from The Bahamas in 2019 totaled $654m, the highest level since 2016, “The country’s top exports included spiny lobster (35 percent by value), polystyrene (33 percent) and heterocyclic compounds (15 percent). Exports fell to $390m in 2020, a decline of 40 percent from 2019,” the US International Trade Commission said.

“The Bahamas is the fifth-largest source of US imports under CBERA, at 5 percent of total CBERA imports. Total US. imports from The Bahamas have trended down over the last ten years, hitting a low of $269m in 2020.

“Imports from The Bahamas under CBERA followed a similar trajectory, with import values of $61m and $57m in 2019 and 2020, respectively, which were the lowest in the last ten years - even compared to a drop in 2016 after Hurricane Matthew.”

The report continued: “The number of products imported into the US from The Bahamas increased until 2006, and then decreased through 2020. From 2005 onward, The Bahamas’ export diversification index had several swings, but showed less reliance on major products in 2020 than in 1990....

“The number of products exported increased between 1990 and 2020 for Trinidad and Tobago, Guyana, and The Bahamas, and decreased for Haiti and Jamaica.”

While last year’s decline, and its extent, can be attributed largely to COVID-19’s worldwide economic disruption, the slippage trend is likely to cause concern for economic policymakers given that The Bahamas’ few goods exports - chiefly fisheries (crawfish) and Polymers International’s products - still represent valuable sources of diversification and foreign currency earnings.

And US environmental regulatory initiatives are taking their toll on the Freeport-based manufacturer. “Almost all (more than 98 percent) of imports under CBERA, and 20 percent of total imports from The Bahamas in 2020, were expandable polystyrene (EPS), which is used as a construction material and as packaging,” the US International Trade Commission report said.

“This has been the case for many years. EPS production is dominated by a single export-oriented manufacturer, Polymers International, which exports 90 percent of its production to the US. Imports of polystyrene from The Bahamas fell from a peak of $155m in 2014 to $55m in 2020.

“This drop is attributed primarily to environmental initiatives banning EPS packaging introduced throughout the US, which resulted in a steep drop in demand. The Bahamas issued its own ban on single-use Styrofoam, a trademarked term for EPS, for packaging, which went into effect January 1, 2020,” the report continued.

“In addition to polystyrene, the other significant exports include rock lobster (13.7 percent of 2020 imports by value); salt (8.2 percent); gravel (12.0 percent); and petroleum oils (5.3 percent). None of these other products enter under CBERA preferences.”

The US International Trade Commission report, though, acknowledged concerns from the Bahamas’ embassy in the US, as well as Bahamas Customs and the Government’s “trade and industry unit”, that more needs to be done to make Bahamian companies aware of the benefits and advantages conferred by CBERA’s import tariff concessions.

“A written submission from the Embassy of the Bahamas suggested that CBERA utilisation could increase with greater public education and awareness regarding coverage provided by the CBERA trade preferences,” the report said.

“It also stated that it would be helpful if the US International Trade Commission could organise a webinar on CBERA and provide additional engagement opportunities for Bahamian authorities to assist the public in ensuring that CBERA-eligible products receive maximum benefits.

“The Bahamian trade and industry unit and the Customs Department also ‘advise that for local companies to benefit from CBERA, challenges for micro enterprises should be addressed, including scaling-up issues; logistics management; marketing and promotion; e-commerce; and connecting with niche market opportunities’.”

The US International Trade Commission report also suggested that some CBERA-eligible Bahamian exports were failing to take advantage of tariff-free access to US markets. “Despite the Government of The Bahamas targeting areas outside tourism for development, the number of products exported in significant quantities has remained limited,” it said.

“In addition, there are indications that some exports that may be eligible for CBERA preferences fail to claim the benefit. The Bahamas’ CBERA utilisation rate was 73 percent in 2020 and 58.2 percent in 2019; both slightly above the average for CBERA beneficiaries.

“The Bahamas is the largest registry of cruise passenger ships, is second in the Caribbean in container ship traffic. Consequently, The Bahamas is involved in ship repair and maintenance, some of which constitute dutiable exports to the US. Though some repairs are eligible for CBERA preference, imports totaling $28m in 2018; $18m in 2019; and $5m in 2020 did not claim the preference.”

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment