The Tribune

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas' lead World Trade Organisation (WTO) negotiator "can't imagine" that the next government would fail to complete the process of achieving full membership, arguing that this was vital to preventing other nations from "abusing" this country and its private sector.

Noting that the Bahamas was the only Western Hemisphere nation not yet a full WTO member, Raymond Winder told Tribune Business that achieving such status would give this country a protective "umbrella" to shield it against arbitrary trade-related actions taken by other countries.

Because it is not yet a full member of the body that sets the rules for global trade, Mr Winder said the Bahamas "continually exposes" itself to potential action by other nations that would harm its business community, especially exporters and importers. And, because it is outside the WTO, the Bahamas has no recourse, such as filing a trade dispute.

"I can't imagine any new government coming to power and not being committed to that," Mr Winder replied, when asked by Tribune Business about the importance of the next administration completing the process of accession to full Bahamian membership of the WTO.

The Free National Movement (FNM), which started the process in 2001-2002, late in Hubert Ingraham's first stint as prime minister, reignited the WTO full membership drive after being re-elected to office in 2007. The party's 2012 manifesto commits to concluding the process if re-elected again, but the positions of the Progressive Liberal Party (PLP) and Democratic National Alliance (DNA) on the issue are as yet unclear.

"It goes without saying," Mr Winder added, when asked by Tribune Business about the importance to the Bahamian economy of concluding the WTO membership negotiation.

"We are the only country in the Western Hemisphere that is not part of the WTO," the Deloitte & Touche (Bahamas) managing partner explained. "We continually expose our trading regime to enormously damaging rules and actions if countries so desire to enforce or legislate these changes.

"We don't have any way of counteracting that. We need to have the umbrella of the WTO to manage and protect our trading regime in a more globally, modernised framework, whereby we use the WTO as a means to ensure other countries around the world do not abuse the Bahamas when it comes to trading opportunities."

The Bahamas has to negotiate its full WTO membership with countries, such as the likes of the US, Canada, China and the European Union, who are its major trading partners and thus have an interest in obtaining the most favourable trading regime from the Bahamas as possible when it comes to their interests.

A WTO Working Group that will take the point on negotiating the Bahamas' full WTO membership has already been formed, with these nations to the fore. A first meeting has already been held, with the Bahamas having submitted preliminary services and goods offers, and sent replies back to the Working Group's first set of questions.

Another meeting between the Working Group and the Bahamas is set for this summer, with a further round of questions on this nation's trading regime expected from the former.

"We're still there," Mr Winder told Tribune Business. "We have consulted with all the industries in New Providence, Grand Bahama and Abaco, and got their input and their comments.

"To date, we have addressed all their concerns, but it is still early days, and we have not started the process of negotiating tariff issues and a transition period and so on. We will keep those companies and individuals involved as we go through this process."

Apart from forcing the Bahamas to switch to an alternative tax regime, given that Customs/import duties are viewed as barriers to trade, Mr Winder said the WTO would also remove the authority to make investment-related decisions from politicians, transferring it to law. Full membership, he added, would force this nation to modernise its economy and way of doing business.

"I think the greatest impact the WTO will have on the Bahamas is in relation to its tax regime, in terms of how we will have to be far more innovative and creative in coming up with alternative taxes to the system we have," Mr Winder told Tribune Business.

"The second biggest impact the WTO will have is that we, as a country, will not be in a position to allow politicians to make investment decisions based on policy.

"We're going to have to be more precise and exact by coming up with laws regarding what areas of the economy we're prepared to allow foreigners to participate in, and what areas we're prepared to allow only Bahamians to participate in."

The current Ingraham administration has already foreshadowed that it is developing a Bill that will translate the National Investment Policy into a statute law, something all trade-related agreements require.

"The big positive impact the WTO will have on us is to modernise our economy. Everything will become far more modern than we currently are," Mr Winder added.

Referring to the proposed AsiaMart buyers emporium/merchant market for Freeport, the Deloitte & Touche (Bahamas) accountant expressed confidence that the Bahamas "can meet all the WTO standards related to creating this new mega industry".

He added, though, that procedures needed to be implemented to ensure that goods leaving the AsiaMart emporium attracted the same duty rates as those arriving in Freeport, and the rest of the Bahamas, via other routes to ensure there were no WTO-related problems.

"Once this has started, proper controls need to be in place to ensure products leaving this area attract the level of duty required by the WTO," Mr Winder said. "You don't want a scenario where products coming into the country attract one rate of duty, and those coming into and leaving Freeport attract another. That will not be acceptable under the WTO regime."