Bermuda–United States relations

The United Kingdom is formally responsible for Bermuda's foreign and defense policy. USA policy toward the UK is the basis of US-Bermudian relations. In the early 20th century, as modern transportation and communication systems developed, Bermuda became a popular destination for wealthy USA, British, and Canadian tourists. While the tariff enacted in 1930 by the US against its trading partners ended Bermuda's once-thriving agricultural export trade - primarily fresh vegetables to the US. It helped spur the overseas territory to develop its tourist industry, which is second only to international business in terms of economic importance to the island.

During World War II, Bermuda became a significant US military site because of its location in the Atlantic Ocean. In 1941, the US signed a lend-lease agreement with the UK giving the British surplus US Navy destroyers in exchange for 99-year lease rights to establish naval and air bases in Bermuda. The bases consisted of 5.8 square kilometers (2.25 square miles) of land largely reclaimed from the sea. The US Naval Air Station was on St. David's Island, while the US Naval Air Station Annex was at the western end of the island in the Great Sound.

Both bases were closed in September 1995 (as were British and Canadian bases), and the lands were formally returned to the Government of Bermuda in 2002.

The Government of Bermuda has begun to pursue some international initiatives independent of the UK in recent years. Bermuda signed a cultural memorandum of understanding with Cuba in 2003. The island also joined the Caribbean Community (CARICOM) as an associate member in 2003. The United States Coast Guard (USCG) provided search and rescue assistance immediately following Hurricane Fabian in September 2003 but Bermuda declined subsequent offers of reconstruction assistance from the US and UK, preferring to accept assistance from its Caribbean neighbors. The USCG continues to provide search and rescue assistance as needed.

An estimated 8,500 US citizens live in Bermuda, many of them employed in the international business community. There also are a large number of American businesses incorporated in Bermuda, although no actual figures are available. Despite the trend of American businesses moving to Bermuda or other offshore jurisdictions to escape US taxes, Bermuda maintains that the island is not a "tax haven" and that it taxes both local and foreign businesses equally.

While US visitors to Bermuda are critical to the island's tourism industry, the number of US visitors to Bermuda is declining. In 2006 only 76% of air arrivals originated from the US compared to 83.9% in 1990. The number of air and cruise passengers from the US totaled 464,000 in 2000. That number fell to 451,924 American passengers in 2006. Another 3,861 Americans sailed to the island via private yacht in 2006.

In 2005, 74% of Bermuda's imports came from the US Areas of opportunity for US investment are principally in the re-insurance and financial services industries, although the former US base lands also may present long-term investment opportunities.

Principal US Officials

* Consul General - Gregory W. Slayton
* Deputy Principal Officer - Matthew Johnson
* Consul - Margaret Pride

Diplomatic missions

The US Consulate General is located just outside Hamilton, the capital of Bremuda.

References

StateDept [http://www.state.gov/r/pa/ei/bgn/5375.htm]