The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s ability to protect Bahamian companies from foreign competition is “long gone”, the country’s lead WTO negotiator yesterday warning business to “think bigger for survival”.

Raymond Winder called on the private sector to “begin to take a more global look at how you do business” prior to the Bahamas becoming a full member of the World Trade Organisation’s (WTO) rules-based, liberalised trade regime.  

The Deloitte & Touche partner, who co-leads the Bahamas’ WTO negotiating team with former director of trade, Viana Gardiner, told Tribune Business that many Bahamian businesses needed to look beyond this nation’s borders and “sell to the world” to ensure their survival as the Government seeks to reposition the economy for future growth.

Completing the world’s longest-running WTO accession process is a key element in the Minnis administration’s strategy, and Mr Winder - in what effectively was a ‘wake-up’ call - said change is already being forced upon local companies by the new purchasing habits of Bahamian consumers.

He pointed to the retail sector as a prime example of how Bahamian companies are being squeezed by intense online competition, as locals increasingly purchase goods and services from abroad using the Internet - a trend that has sparked a major expansion in local courier firms.

Mr Winder said this highlighted why the Government can no longer protect Bahamian businesses with high tariffs, laws, regulations and other trade barriers, while also exposing the urgent need for a change in local business culture and mindset. “Long gone are the days when the Government can apply rules and regulations to protect us,” the well-known accountant told Tribune Business. “But the general feeling is we in the Bahamas have a lot of control over matters related to trade and its impact on our country.

“That has generally given us this perception that the Government can enact rules, laws and procedures to protect us.... The Bahamian merchants need to understand there’s nothing we can do to prevent Bahamians from purchasing goods and services from around the world.”

Mr Winder said the Internet’s development, and the increasing online access enjoyed by many Bahamians, meant local consumers were no longer restricted to either having to fly to Florida or purchase goods from local retailers.

“We need to fully educate Bahamians about the trends that are having a tremendous impact on our retail sector,” he added. “Bahamians have always been a major purchaser of goods and services through our neighbour to the north, and companies no longer have to move to the Bahamas to provide goods and services to Bahamians.

“All they need to do is put items, goods and services online. One of the fastest growing businesses in our country are couriers and how they are having an impact on business. Matters like that the Bahamian public don’t really understand and truly appreciate.

“The consumers are dictating where goods are being purchased and services are being purchased. No amount of government laws and regulations are going to prevent that from happening. It’s not that businesses are driving business to Florida; Bahamians are doing that by where they spend their dollars. The consumer is king.”

Mr Winder said this highlighted why the Bahamas’ age-old reliance on protectionist measures to safeguard local companies and jobs will no longer work in an increasingly integrated and globalised world, regardless of whether the country joins the WTO and other rules-based trading regimes.

Brent Symonette, the Cabinet minister with responsibility for trade and financial services, last year confirmed to Tribune Business that the Government is targeting full WTO membership by 2019, and Mr Winder yesterday urged all Bahamian businesses to start preparing now.

“I think all Bahamian businesses need to begin to take a more global look as to how they do business,” he told Tribune Business, “and recognise the challenges they face; the global challenges, and that the Government may not be able to protect them from that.

“They need to begin the process of reconfiguring their business processes to adapt to the new way Bahamians are purchasing goods and services. They need to re-engineer their business processes and identify how best to serve the Bahamian consumer.

“Right now, the Bahamian consumer is trying to maximise their utilisation of every dollar, and where they can purchase goods and services at best price. If you go online, your economic status in the country doesn’t matter; you can purchase products and have them delivered in a matter of days.”

Mr Winder said the Bahamas’ WTO accession negotiating strategy will be to protect Bahamian businesses and workers where it could, ‘reserving’ or excluding key sectors from being opened to foreign competition. Where it is unable to achieve this, the Government will seek to phase-in liberalisation over a period of time to enable local firms to prepare.

“Where we can control and have an impact we will do our best to protect Bahamian businesses in that regard,” he pledged. “Where we can’t, we will try to provide a timeline and framework where we protect and maintain Bahamian interests as long as we can. That’s the game plan and general thinking.”

Much will depend on the skill of Mr Winder and the Bahamas’ negotiating team to achieve the best possible terms of accession for this nation. Besides the potential pitfalls for Bahamian businesses and their ‘way of life’, there are also potential growth opportunities that could be unlocked by WTO membership.

Mr Winder identified one such area as Freeport which, under the Hawksbill Creek Agreement and its strategic location near Florida, has long been identified as the Bahamas’ manufacturing and assembly/logistics/transhipment hub.

He argued that a major impediment to such industries “taking off” is the Bahamas’ failure to join the WTO, as this exposes Grand Bahama-based exporters to the possibility of foreign countries making their products uncompetitive through the imposition of high tariffs and other trade barriers. 

WTO membership would give the Bahamas and such exporters access to recourse via the filing of trade disputes, and Mr Winder said the absence of such protection had likely deterred greater investment in Freeport’s manufacturing sector.

“Grand Bahama happens to be an area we had identified as an industrial area for years,” Mr Winder said. “One of the many reasons we’ve been unable to make it happen was because the Bahamas was not part of the WTO. 

“No major company, especially in goods, is going to set up millions of dollars in infrastructure in Grand Bahama if they don’t have protection for the goods they’re shipping around the world. It’s not going to happen. That’s an area we have to look at.

Mr Winder added that he “can’t help but believe” that WTO membership could also “recreate and improve the financial services industry to where it used to be”, suggesting that new business lines and opportunities could be opened up.

“Businesses have to begin to look at how to utilise the infrastructure and resources the Bahamas has,” Mr Winder told Tribune Business, calling upon companies to see the world - not just this nation and its 375,000-strong population - as their market.

“We will no longer just be merchants selling goods,” he argued. “For those staying in that line of business, they will be doing that in a completely different world.

“The reality is we have to think a lot bigger, and think not only of the Bahamas’ market but the world. We can no longer survive just selling to Bahamians. We have to sell to the world if we are to survive and move forward.”