The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas should go “full steam ahead” in pursuing World Trade Organisation (WTO) membership through a private sector-driven approach that improves competitiveness, an attorney is arguing.

Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house counsel, told Tribune Business he was not convinced that the country has adopted “the holistic approach” necessary for maximising the potential benefits of joining the world’s rules-based trading overseer.

The now-Callenders & Co attorney, warning that The Bahamas’ accession terms will become “tougher” the longer negotiations take, added that the country would be better prepared for WTO if it undertook reforms essential for improving economic competitiveness such as energy costs and reliability.

Mr Leonard also called for The Bahamas’ approach to be flipped so that it was the private sector telling the government what negotiating stance to adopt, and what it should be seeking, rather than the latter telling the business community - the group most affected by the country’s accession terms - what it is doing on their behalf.

He added that he was not surprised to hear Zhivargo Laing, The Bahamas’ chief WTO negotiator, disclose that this nation is under pressure to open up some of the 16 services industries previously reserved solely for local ownership but more details were required.

Meanwhile Paul Moss, who unlike Mr Leonard is a WTO opponent, agreed that there was little shocking in Mr Laing’s revelations given that the WTO is “a one-size fits all” regime whose overriding goal is liberalisation and the removal of all barriers to trade.

He warned that “the Bahamian people will not stand” for the opening up of industries reserved for Bahamian ownership to see local companies being “overrun” by foreign competitors with deeper pockets and better access to capital.

Still, Mr Leonard said of Mr Laing’s remarks: “What I’m curious to know is which industries he’s talking about and how much of an impact that really would have. That’s the first thing to look for, and a number of us can compete. We have some wiggle room.

“I do not think this is surprising. This is a negotiating process, which also means he [Mr Laing] needs to consult with the various industries that will be affected on the various impacts, and where we draw the line in the sand.”

To create such flexibility and “wiggle room”, Mr Leonard said both the Government and private sector needed to focus on reforms that improved the ease and cost of doing business such as energy sector transformation.

“If we’re expecting our businesses to agree to open up their industry or lower tariffs then we must make it more efficient for them to produce and consume energy more cheaply,” he added. “There has to be a holistic approach and I’m not seeing it.”

Mr Laing said last week that The Bahamas’ accession to full WTO membership will take at least another five years given that political considerations will likely take over after the initial June 2020 deadline is missed, but Mr Leonard warned it would be a mistake to lose momentum.

“The longer we wait, the tougher the negotiations are going to be because the openings have closed with other negotiations, and we will have to comply with more stringent regulations,” he told Tribune Business.

“To me, it makes no sense at all. I think we should be going at it full steam ahead, but we need to be talking to the business community a great deal more than we are. We’ve got to involve the business community much more. We’ve got to engage them completely.

“In other words, we shouldn’t be looking to the Government to tell us what it’s doing. We should be suggesting to the Government the stance it should be taking.”

Pointing to France’s recent “blacklisting” of The Bahamas and its financial services industry, Mr Leonard said that by remaining outside the WTO this nation is unable to use a mechanism that the likes of Barbados used to successfully defend itself against the Organisation for Economic Co-Operation and Development in 2001.

And nor is it able to exploit “openings” created by other countries’ WTO accessions to obtain concessions it wants, while giving up unimportant items in return, if it halts its own negotiations.

However, Mr Moss suggested that Mr Laing was only now talking about the liberalisation demands being made of The Bahamas by other WTO members because this nation is unlikely to complete the accession process under the Minnis administration.

“We cannot reserve things for ourselves like we’re the main player in the agreement,” Mr Moss said. “It’s a stretch. It’s not going to happen. He’s [Mr Laing[ being forthright because he knows we cannot complete the process in the timeframe set out. It’s amazing that he’s speaking out now rather than when the talks were hot and happening.

“He’s part of the school of thought that this is the right way to grow our economy, but he’s been stopped in his tracks. He’s been very instrumental in starting the process of getting to the WTO, but now his hands are tied and he cannot get it to happen.”

Mr Laing initiated The Bahamas’ bid for full WTO membership when a Cabinet minister in 2001, but Mr Moss argued that The Bahamas was “not ready” and needs to focus on growing its own companies and industries until they are strong enough to compete with foreign rivals.

“I can tell you the Bahamian public are not going to stand by and allow them to liberalise industries that will be overrun by foreigners because they have the capital,” he told Tribune Business. “There’s no deal where we can negotiate reservations.

“It’s a pipe dream. It’s a one-size fits all programme. We cannot say we are reserving these industries for Bahamian ownership only. It cannot fly. If it does fly, it goes against the tenets of the agreement. The longer it takes, the better it is for us to grow our industries.”