Premier Jennifer Smith said it would be a "folly" for Bermuda not to join the Caribbean Community (Caricom) as an associate member, and it is her duty to ensure Bermuda was not left out of the bigger picture.

She added in a speech to the Chamber of Commerce yesterday that Bermuda would not join the Caribbean economic trading bloc if the costs were prohibitive.

"Government is not stupid," she said, adding that the Island enjoyed a high standard of living and the Government would not do anything to damage that. "If the cost is exorbitant we won't do it."

In a frank talk followed by a question-and-answer session, she told business leaders that joining Caricom would not result in an influx of workers to Bermuda because the Island could not sign up to the Caricom agreement on free movement of labour because of its work permit policy.

She added Bermuda would also not be signing up to the Caribbean Court of Justice and would continue to use the Privy Council in London as Bermuda's highest court.

She also revealed that the United Kingdom had given permission for Bermuda to seek membership, but said Government had not yet spoken to the United States on the issue of joining up.

She said there were obvious trade benefits between Bermuda and the Caribbean which were a well-kept secret of some businesses on the Island.

"There is a lot of opportunity if you would but be open to it," she told the businessmen and women at the breakfast meeting.

In her speech she pointed to the success of the Economic Union as a regional trading block that had succeeded, adding: "Not as prominent in size, but of great significance to a group of smaller countries in the Caribbean is the Caribbean Community."

She said while Bermuda was a world leader in the financial sector, outside this area "we are far too small to have any impact on the world stage".

She pointed to social similarities as the reason for Bermuda to join this league of small nations.

Ms Smith said the fact is that Bermuda is too far north to be in the Caribbean and is a colony with ties to Britain, inundated with American culture. "We do not fit into any mould," she said. "We do not have allies and strategic links with which we share a cultural bond. The partnerships Bermuda has forged have always been financial and commercial in nature. In fact, it can be argued, with some justification, that we have been insular. We don't even have close bonds with other small countries."

She pointed to strong historic links with the Caribbean with migration of Bermudians to many islands in the Caribbean and those who have come to Bermuda from the Caribbean to work and live.

"Bermuda and the Caribbean countries face some common issues and many of the same public policy challenges. Housing, health, crime, education, drug prevention, maritime issues and sound social programmes . . . are topics that concern both Bermuda and the Caribbean countries."

She added: "The time is right for Bermuda to reach out and take an active role in an organisation that approximates our geography, history and culture. Such involvement offers the potential for us to share our values and talents in a truly participatory fashion with our hemispheric neighbours.

"Bermuda must be at the table. If not, we will be on the outside, looking in."

She urged the audience to look beyond the "confines of the reefs that protect us" and "appreciate the wisdom of linking arms with our Caribbean neighbours in a concerted effort to protect and advance our vested interests".

Ms Smith also pointed to possible educational links with the Caribbean and the way Caricom has pooled resources and research in the prevention and care of HIV and AIDS patients.

She said that in the aftermath of September 11, general concern for security had increased and added that a concerted effort was needed to fight crime and heighten regional security.