By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
An ex-Cabinet minister yesterday called for more focus, and specific policy actions, for vulnerable industries that may not be able to withstand the “initial shock” of World Trade Organisation (WTO) membership.
Ryan Pinder, now a Graham, Thompson & Company attorney and partner, told a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) breakfast meeting on the WTO that the most “significant challenge” for this nation’s accession is the impact on Bahamian-owned industries that rely heavily on existing tariff protection.
Using retail as an example, Mr Pinder argued that this industry was already under “tremendous pressure” due to the continued growth in Bahamians shopping online and travelling abroad. He pointed out that, with further tariff reductions stemming from WTO membership, the sector could “disappear” entirely given the ease for consumers to bring in goods from the US.
The same applied to Bahamian manufacturers and light industries, who rely heavily on import tariffs to offset their higher production cost bases and maintain price competitiveness with rival imports.
Mr Pinder said this sector, though relatively small in terms of its contribution to Bahamian gross domestic product (GDP), has a significant impact on the economy in terms of employment.
“In negotiations when I was minister, in speaking with the water, mattress and paint manufacturers, just a 5 per cent variance in their peak [tariff] rate can really prescribe destruction for their industries,” he warned.
“Although the Government has said it it will pursue a ‘peaks and valleys’ structure in negotiations, we don’t know what the peaks are. I would ask for a little more transparency on specific rates.”
Mr Pinder’s “peaks and valleys” comment refers to a negotiating strategy where The Bahamas seeks to maintain existing high tariff rates on products/industries that are vulnerable to competing imports, while reducing others to meet the average tariff rate demanded by the WTO.
The rules-based trading regime, which views import tariffs as barriers to trade rather than a revenue-raising mechanism, requires The Bahamas to reduce its average tariff rate from the current 32 percent to 15 percent upon obtaining full membership. This nation will likely be given a three to five-year transition period to make the adjustment.
Meanwhile, turning to the agricultural sector, Mr Pinder asked: “Do we have the infrastructure and ability for farmers and fishermen to comply? What about Family Island farming communities; do they have the ability to comply with sanitary and phytosanitary regulations? I don’t know if we can withstand the initial shock to see the prolonged growth that is forecasted.”
Mr Pinder said there has been a shift towards more multilateral trade agreements, and added: “If you look at the global economy today I think there is a trend towards more multilateral trade agreements. In the last five years there have been a number of multilateral agreements put in place. The vulnerabilities of The Bahamas economy need to be address with more specificity.”
Ramesh Chaitoo, a trade and investment consultant working with Oxford Economics, argued: “The problem with plurilateral agreements is that when you’re little you have very little leverage. Small countries have very little protection in plurilateral agreements.”
Mr Pinder said the WTO’s “crown jewel” was often portrayed as its common dispute resolution platform, but he argued this held less benefits for smaller nations such as The Bahamas.
He said: “If you look at the ‘crown jewel’, which is the common platform for dispute resolution in WTO, that is dominated by larger economies. The crown jewel of the WTO is not the crown jewel of economies like The Bahamas.”
Comments
Economist 5 years, 11 months ago
"Using retail as an example, Mr Pinder argued that this industry was already under “tremendous pressure” due to the continued growth in Bahamians shopping online and travelling abroad. He pointed out that, with further tariff reductions stemming from WTO membership, the sector could “disappear” entirely given the ease for consumers to bring in goods from the US."
Unless there is a big disparity between the import duty charged to the man in the street who is importing the goods and the rate charged to the retailer the Bahamian will be able to get things on line cheaper than he can get them locally. WTO WILL NOT AFFECT THE CURRENT ADVANTAGE OF BUYING ON LINE.
He obviously does not know what he is talking about.
ohdrap4 5 years, 11 months ago
for clothing the retailer can get duty free but individuals pay 20% on the courier, that is a significant disparity.
Economist 5 years, 11 months ago
The problem then, is a much bigger mark up which they should reduce or most of us will keep going to the Amazons of life.
The retailer are ripping the public off.
ohdrap4 5 years, 11 months ago
the higher markup might come from high business costs like rent , salaries and utilities.
i usually buy computers and their accessories locally because the difference is negligible compared to the courier costs. same with shoes.
however, clothing is a different proposition, especially if one is in need of sizes outside average.
ThisIsOurs 5 years, 11 months ago
Is the WTO necessary? If the major points are "promoting lower prices", but we have evidence lower duties don't mean lower prices and we can shop online for lower prices.. if trade will be heavily skewed on the import side just like it's always been...with advent of the ecommerce and mobile solutions providing inroads to world markets that didn't previously exist...has the landscape changed so much in 17 years that WTO accession is irrelevant? Can we accomplish the positives, tax reform without it?
TalRussell 5 years, 11 months ago
The COMRADE Imperial red shirts playing the deflect WTO game of not having explain PeoplePublic, why they're so gung ho brungs the free movement of people from across its fellow CARICOM members boundaries..... including Haiti.
Joining WTO, will require full removal customs duties - which must increase what PeoplePublic must pay in VAT..... remember, PM just finished saying no increase VAT - that is until after the next general election which he can rungs bell anytime on or before maximum governing mandate runs out mid 2022.
Why the join WTO rush when we done been at this 18 years and why would we even want join WTO - before we get see if indeed the US deliveries on its threat exit WTO?
COMRADES, Get your pockets all ready pay through roof when VAT SKYROCKETS to 18.5% - 22.5%, right after the general election.
ohdrap4 5 years, 11 months ago
the duties are not fully removed, only reduced to 15% average.
cars for example , are now duty free!!! we no longer pay customs duties on cars. what we pay is 65% EXCISE TAX. Aha, full removal of duties.
ohdrap4 5 years, 11 months ago
And, one more thing, they have been talking about WTO accession by 2019 since the election.
why is it that this fella, as former chief negotiator, waited until november 2018 to say something?
realitycheck242 5 years, 11 months ago
so will that 65% Excise tax on automobiles be reduced before WTO ....and if so when???
ohdrap4 5 years, 11 months ago
no, because that is not a barrier to trade.
for example, the environmental levy is an excise tax, the various taxes on a gallon of gas are also excise taxes, so WTO will not cause that to be reduced.
KALIK is more expensive at home because you pay excise tax on it at the time of retail, Those who sell it in Miami do not.
I finally understood why they keep mentioning "sugar tax" in the news. they do not want to let go of the 30% duty on juices.
I bet there will be many more such taxes.
BTW , download the new Frequently imported items brochure, the customs department is actually called: Bahamas customs AND EXCISE DEPARTMENT.
realitycheck242 5 years, 11 months ago
ok
Sickened 5 years, 11 months ago
to get the average duty down to 15% we just need to add a whole bunch of items that we will never import (sand, shark fin, ostrich eggs, reindeer meat, cow testicles, snow plows etc.) a have them at 0%.
TalRussell 5 years, 11 months ago
Unlike other caribbean countries we do not suffer from lack of funds targeted for PeoplesPublicPurse..... our problem is out control national debt, 50% overstaffing government ministries, corporations, departments, mismanagement, poor governing, graft, under the table payoffs officials, corporate welfare, jobs political cronies and family members, corruption and tiefing..... And we exempt the comrade well-to-do from even paying a tenth of one percent of what they should have started paying into PeoplesPublicPurse - long before 60% population were born. Any citizen earning less than $30,000 yearly should be made exempt from paying into Income Tax and BahamaCARE, which are both just around Minnis's and KP's corners.
birdiestrachan 5 years, 11 months ago
They should listen to the brilliant Ryan. and stop the spin guy, from talking foolishness
BahamaPundit 5 years, 11 months ago
Much better content than Laing. A critical approach. Laing talks like he read a brochure on WTO. Ryan talks like he actually has spent some time with players in the field and analysing the situation. At the end of the day, neither of them seem extremely specialized in international trade and the WTO, so it is still difficult to make a final decision.
TheMadHatter 5 years, 11 months ago
Wonder if Bahamians will wait until after WTO signing (when it's too late) to hold a week-long national strike?
Chucky 5 years, 11 months ago
Problem with his arguement is the underlying fact that nobody wants to admit.
Our useless, lazy, under educated, bad attitude workforce is not only responsible for the lack of ability to compete for the private businesses, but also responsible for the inefficiencies in all the government run operations ....ie BEC etc, and for example this causes the extremely high power bills that we in business have to contend with over and above our useless workforce.
It's high time we are honest about our real problems , and start to address them.
Aint no amount of talk gonna fix anything if we can fix our crappy people.
What this idiot Pinder think that we can wrangle some deals with a few countries at a time , deals that are structured in such a way that we can charge enough to be profitable with our crap infrastructure and crap workforce. Idiot, just proves you can't fix stupid.
Educate our people, change their attitudes, arrest and charge the criminal businessmen politicians, set an example.
All the talk in the world will do you know good without action
ThisIsOurs 5 years, 11 months ago
I agree with the last part. Facebook start with 7 employees and rose to 25,000 in 7 years with 2 billion users. We need education and investment in innovation. That's it. The solution is in US, not the Peter Kreiger and Dhunna Sharks of the world.
TalRussell 5 years, 11 months ago
Upon coming to power PM Minnis, promised that his red shirts administration WILL reclaim ALL Crown land from those the PLP leased it to did not use it for its intended purpose.
Up to June 2018 since coming to power the comrade red shirts cabinet itselves - have executed "52" crown land leases - totally 540 acres for the "exclusive" use farming.
Maybe the PM and KP can update PeoplePublic on what farming is/has been done on leased crown lands and to whom are they being leased to, lease period and dollar value back PeoplesPublicPurse?
TalRussell 5 years, 11 months ago
Correction: PM Minnis, promised that his red shirts administration WILL reclaim ALL Crown land from those the PLP sold it to did not use it for its intended purpose.
SP 5 years, 11 months ago
All of the smoke and mirrors of the "benefits" of joining the WTO could all be very easily put to rest if the WTO could present a few economies of scale to show the Bahamas how THEY benefited from joining the WTO!
This whole matter need only be a very short conversation. I have certainly NEVER heard about a single country that has anything positive to report about WTO membership, and Mr. 49% is the same as 51% Lang does not remotely inspire me to even begin to listen to anything he advocates.
That being said, WTO lobbyist should be made to produce individuals capable of showing tangibal evidence of the benefits their country enjoy from the WTO, or simply STFU and go away!
joeblow 5 years, 11 months ago
If you have nothing to trade why join the WTO?
Dawes 5 years, 11 months ago
Trade is not just in goods, but also in services for example when a foreign tourist comes to Bahamas, this is international trade. As such pretty much all we do is trade. Now whether WTO is good or not is probably based on the person you are asking. For the poorest in society it should be. For the middle maybe not, for the top who knows.
BahamaPundit 5 years, 11 months ago
First Point: Bahamians should stop wasting their time arguing using reason and logic, because this country is majority ruled by the same type of African tribal cabal that is currently raping and looting South Africa to death.
Second Point: The Bahamas is joining WTO for corrupt reasons, likely because China is pushing it, so logic and research is not relevant.
Third Point: The Bahamians that will benefit from WTO are the black ruling class that are in the pockets of large multinational corporations. They would push the Bahamas to join WTO even if it meant the Bahamas islands would sink under the sea.
Fourth Point: The Haitian and Jamaican lobby are also pushing WTO, in order to increase migration and further dominate and limit Bahamian sovereignty.
My main contention is that whether or not the Bahamas joins WTO will be determined by a Bahamian political elite that will profit from handouts and corruption. They will be given share equity and high paying positions on company boards. We can scream and shout all we want, but the fate of the Bahamas will be determined by passionate self interest and corrupt purposes, not by logic, research and expert analysis of the pros and cons for the Bahamian people.
Sign in to comment
OpenID