‘Fine tooth comb’ for WTO offer

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian poultry producers are already facing WTO-related tariff cut pressures, with the private sector yesterday pledging to examine this nation’s opening offers “with a fine tooth comb”.

Darron Pickstock, who heads the Chamber of Commerce’s trade and investment division, told Tribune Business that while the initial goods and services offers were said to represent the “status quo” of the National Investment Policy there were “minor changes” that required further scrutiny.

His comments came after Zhivargo Laing, The Bahamas’ chief negotiator in the bid for full World Trade Organisation (WTO) membership, revealed that poultry was one area where foreign countries were interested in seeing tariff reductions beyond what this nation has offered to-date.

“Some countries have asked us to lower duties further in areas in which they have an export interest; poultry is one of those areas,” Mr Laing said. That is not good news for the likes of Abaco Big Bird Poultry Farm and other local poultry producers who have relied on tariffs to remain price-competitive against rival imports.

The Government has also used quotas and health and safety regulations to limit foreign chicken imports, but Mr Laing’s comments highlight how The Bahamas will come under pressure during the WTO accession talks to further reduce tariffs or open up certain industries to foreign companies as other countries seek to advance the interests of their own private sector.

Mr Laing, meanwhile, said the National Investment Policy “status quo” was maintained for all but eight of the 106 industries included in The Bahamas’ services offer. The eight are legal services; landscape architecture services; market research services; multi-modal courier services; franchising; educational services; hospital services; and maintenance and repair of vessels.

He explained that all eight were “unbound” when it came to opening up to foreign firms and allowing them to establish a physical presence here, meaning The Bahamas currently does not have to liberalise them or offer incentives currently extended to local firms beyond what is included in the National Investment Policy.

Praising the Government for following through on its commitment to transparency by releasing the full 300-page goods and services offer, Mr Pickstock said it represented “a good basis” from which The Bahamas can begin negotiations.

“I understand that it is the status quo, but there were small minor changes made of no consequence, according to the chief negotiator,” he told Tribune Business. “We have to go through it with a fine tooth comb just to see what the end result of that offer could be.

“We know it’s a status quo, and that’s a good basis to start. From there we will canvass our members to see what their feedback is on the offer. That will go a long way to informing us at the Chamber what our members expect and our study will come into play.”

The Oxford Economics consultancy’s study, commissioned by the Chamber to determine what the impact of joining the WTO will be for specific industries and the wider economy, is due to be completed by end-March/early April.

“We owe this to our members to get this right,” Mr Pickstock told Tribune Business. “I don’t think our membership would be pleased if we were there advocating a position that was not based on facts and analysis.

“We owe it to our members. They’re a reflection of the public. We owe it to all to get it right. We’re not going in the direction of supporting the WTO, and not going in the direction of opposing the WTO. We are going to base our position on facts and analysis.”

Mr Pickstock said The Bahamas’ opening offer would give the business community “confidence”, even though the final accession terms will likely be much different in some areas once negotiations are completed.

“We really want to applaud the Government for releasing the goods and services offer. It’s critical,” he added. “People want to know what is in this offer, and people really want to know what is being negotiated on my behalf.”

Tax reform, triggered by the requirement to eliminate or reduce existing tariff rates from an average 32 percent to 15 as part of the WTO accession, will impact every Bahamian - especially as the Government has to cover the resulting $40m revenue shortfall.

Jeffrey Beckles, the Chamber’s chief executive, expressed hope that the Government would seek to make-up any revenue shortfall - as indicated by Mr Laing - through reducing the estimated $1bn of investment incentives handed out annually rather than by new or increased taxes.

“I was very happy to hear the chief negotiator give some hope on how the shortfall will be made up, so Bahamians are not further burdened to make it up,” he told Tribune Business. “We’re currently giving up $1bn in concessions, and I was very happy to hear that being offered.

“The fear is that with all this pending change the Bahamian public can expect a significantly increased tax burden. It was very positive to hear him say that, rather than putting it on the backs of the Bahamian people.”