The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-Port Authority (GBPA) attorney yesterday blasted the private sector for "sleepwalking" towards WTO membership, saying he was "astounded" by its "full panic mode" reaction.

Carey Leonard told Tribune Business he was "frustrated" by the business community's failure to pay attention, pointing out that the Government had given clear signals it was "marching towards" this destination through legislative reforms enacted over the past five to six years.

He pointed to Value-Added Tax (VAT), the Customs Management Act, a suite of intellectual property-related Acts, and Food and Animal protection laws as examples of trade-related reforms designed to make The Bahamas compliant with the World Trade Organisation's (WTO) rules-based regime for when the time came.

Yet Mr Leonard argued that many in the private sector had been "asleep at the wheel", ignoring such signs until they realised that the Government is serious and full WTO accession is upon them.

He added that The Bahamian business community now had little choice but to "dip into its pocket", and finance economic impact assessments and other studies which should have been conducted over the past 17 years.

"What I'm astounded at is the reaction of the business community now it's coming closer to them," Mr Leonard told Tribune Business. "They have taken no proactive measures whatsoever, that's what frustrates me.

"I've suggested over the years that they contribute $500 a month to the Chamber of Commerce, so that a consultant can be hired to advise them of the impact and what to look for. For $150,000 to $200,000, you can get pretty good advice.

"Now, it's almost as if the horse has bolted, and they're in full panic mode. That does not bode well for the negotiations."

The Bahamas first served notice of its intent to accede to full WTO membership in 2001 and, after several false starts under successive PLP and FNM governments, the Minnis administration has decided to accelerate the process to completion by end-2019 as part of its strategy to restructure and reposition the Bahamian economy through liberalisation/deregulation.

This nation now has to negotiate the terms of its accession, including which industries it liberalises and "opens up" to foreign companies and imports, with a WTO "working group". This will be formed from countries that have an interest in trading with The Bahamas, such as the US, Canada, the UK, European Union (EU), China, other CARICOM states and, possibly, Latin America.

Mr Leonard yesterday said it was vital the private sector be fully engaged, and advise the Government and its negotiators on the positions they should take, otherwise the Bahamas' WTO accession terms will "not be a pretty result" for many industries and businesses.

The now-Callenders & Co attorney recalled how clients, due to the lack of input at the time, were now complaining about the negative effects of the Economic Partnership Agreement (EPA) with the European Union (EU) on their businesses.

Warning that this could happen post-WTO accession, Mr Leonard said: "I think it's very necessary that the business community fully assist the negotiating team in every way to give them the necessary arguments to secure a good deal.

"It's going to be tough negotiations, hard work, but businesses are going to have to man up and provide support to the negotiating team, including consultants. The fact of the matter is that unless business gets engaged this is not going to have a nice, pretty result.

"Business must get engaged, and they've going to have to put their hand in their pocket. We've let it go for 17 years, not done what we should, and are now facing the inevitable. It's like a hurricane, where you have no choice but to go out and buy hurricane shutters."

All Bahamians, and businesses, are going to be impacted by WTO membership through tax reform, as the Government will have to either eliminate or slash many import tariffs given that these are viewed as 'barriers to trade' by rules-based regimes.

Those industries most vulnerable are the likes of the domestic manufacturing and retail sectors, which currently enjoy protection - through either high tariff rates or the 'National Investment Policy' - from an influx of rival imports or foreign competitors establishing a physical presence in the Bahamas.

Mr Leonard, though, said he was "fascinated" by the wider private sector's failure to pick up on the 14-15 laws passed by Parliament over the past five-six years that were intended to prepare the Bahamas for its full integration into the global economy and trading system.

"We're racing towards it, and have been for five years, and nobody seems to have paid any attention," he told Tribune Business. "WTO has been relentlessly marching onwards on the Bahamas. It's coming. It's been creeping along, gradually coming to us. Sleepwalking is a good way of putting it."

Mr Leonard warned that, as the last Western Hemisphere nation to seek full WTO membership, the Bahamas will have to meet much higher standards that have evolved since, for example, many of its fellow CARICOM states acceded in the 1990s.

"It's very important that our negotiating team delivers a good agreement for us, and that's not going to be easy," he told Tribune Business. "We're the last to come to the table.

"It's important for people to realise the standards have changed, and we have to meet the new standards these days."

The Callenders & Co attorney also blasted the GBPA for its perceived lack of involvement in the WTO process, saying: "The GBPA, of all the groups in the Port area, is the one that really needs to do something.

"It has to yet to show any form of leadership whatsoever. Their silence has been deafening. It's a very poor showing by them. The Port should participate on the negotiating team, pay for and support it. They seem to have buried their heads in the sand and are pretending it's not going to happen."

The Government's industry-specific WTO consultations move to Freeport next week, a move that Mr Leonard welcomed, as he described the city as "as good a place as any to deal with WTO".

"The infrastructure is already here," he added. "It's much easier if you're going to be doing production or any services because of the way Freeport is set up," he added.

"The world is going much more global these days, so Bahamians are going to have to look outside their own market as it's not big enough to sustain a lot of businesses. The world is changing."