The Bahamas could face a new 12.5 percent tariff on exports to the United States under a proposal by the Office of the United States Trade Representative (USTR), which has determined that this country has failed to impose and effectively enforce a prohibition on goods produced with forced labor.
The USTR revealed in a Notice of Determinations and Request for Comments it published recently that this change in duty forms part of a sweeping Section 301 trade action targeting 60 economies, including The Bahamas, that USTR says maintain policies that distort global trade and place US producers at a competitive disadvantage.
The USTR said The Bahamas was among 46 jurisdictions that participated in consultations with the USTR following the launch of the investigation in March.
Following those consultations and a review of public comments, testimony and government submissions, USTR concluded that The Bahamas and dozens of other countries have “failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labor”.
The agency determined that the acts, policies and practices of the countries under investigation are “unreasonable and burden or restrict US commerce, and thus are actionable under section 301(b) of the Trade Act”.
The USTR argued that countries that do not prohibit imports made with forced labor create an uneven playing field by allowing goods produced at artificially low costs to enter their markets.
“The failure of each of the investigated economies to impose and effectively enforce a forced labor import prohibition is unreasonable because it: (1) undermines the universal aim of eliminating forced labor; (2) permits firms that avail themselves of forced labor to produce goods at lower cost and thereby distort market conditions for firms that do not use forced labor; (3) undermines the profitability of firms that do not use forced labor; and (4) contributes to the circumvention of existing forced labor import prohibitions,” the USTR said.
As a result, the USTR has proposed imposing additional tariffs on products from the identified countries.
While nations that already maintain forced labor import prohibitions would face a proposed 10 percent tariff, The Bahamas falls into a different category.
“For all other economies that have failed to impose and effectively enforce a forced labor import prohibition, the Trade Representative proposes 12.5 percent as the rate of additional duties,” the notice stated.
The proposal remains subject to further review and objections by interested parties during a hearing slated for July before any final action is taken by the United States.
Last year, the region had to defend itself against a multimillion-dollar threat as the USTR proposed trade action that would have imposed a port fee of $1 million per port call on any Chinese-built vessel calling at US ports.
Advocacy to the USTR led to the body carving out exemptions to the agency’s plan for the Caribbean region.
