The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckezie@tribunemedia.net

The Bahamas Trade Commission’s chairman yesterday said opening up this nation’s economy would have the “opposite” impact to many people’s fears, expressing confidence that it would boost incomes and employment.

Philip Galanis also expressed optimism that tax reform and this nation’s accession to full World Trade Organisation (WTO) membership would come together like “the hand fits the glove”.

“Hopefully, it’s going to be a comfortable fit,” Mr Galanis said, noting that it was “no accident” that the move towards a Value-Added Tax (VAT) and the country’s accession to the WTO were happening at the same time.

“It really is no accident that VAT and the Bahamas’ accession to WTO is almost coinciding with each other,” he added.

“One of the things the Government has to do in order to replace revenue is to look for additional sources, because with the accession to WTO a lot of the tariffs, a lot of the Customs duties, have to decrease.

“As a result of that there has been an acceleration in trade negotiations, both at the Economic Partnership Agreement (EPA) and at the WTO level.”

Mr Galanis said: “There is an implementation unit that has been established by Cabinet to implement our obligations under the EPAs, and that process is working itself out.

“WTO, of course, is a whole different can of worms and we are not quite there yet. I’m not quite sure when we will be there, although the objective is to have those two trade agreements coincide. That is the law with respect to VAT and the accession to WTO.

“I think some people have that fear that with the opening of the border, and with the trade liberalisation, that the local professionals might see their business being impacted adversely by foreign competition,” he added.

“I think that just the opposite is true. I think that with the liberalisation of trade, what we’re likely to see is an increase in the levels of income, increased investment, more opportunities for Bahamians not only at home but also abroad.

“A whole lot of things are coming together now: EPA, WTO and VAT, tax reform, so all of these things are extremely timely. They are coming together almost in a way where the hand fits the glove. Hopefully it’s going to be a comfortable fit,” said Mr Galanis, who gave a presentation at yesterday’s session of the Bahamas Institute of Chartered Accountants (BICA) accountants’ week seminar.

Mr Galanis added that while the Bahamas was negotiating various trade agreements, there was growing concern among local manufacturers, for instance, over foreign competition and the impact of trade liberalisation on their businesses.

“The manufacturers and the people involved in agriculture have expressed concerns. The egg producers, for instance, are extremely concerned because there is an excess of eggs in the Bahamian market presently, and part of the reason is they are saying the food stores can buy eggs a lot cheaper in the United States,” Mr Galanis said.

“They feel threatened or vulnerable to what is happening, and are hoping that the Government will help them in a way either by increasing tariffs on importation or limiting the importation.

“It really creates a dichotomous situation. We understand the needs and the concerns of the producer, but at the same time the Government has to take into account the needs of the citizens. It’s a balancing act.”