The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has failed to meet its first scheduled tariff reduction obligations under the Economic Partnership Agreement (EPA), Tribune Business has been told, with a “broader question” relating to whether the Government has created a specialist unit to implement the trade treaty.

Branford Isaacs, head of CARIFORUM’s EPA implementation unit, confirmed in response to this newspaper’s questions that the Bahamas was among the eight Caribbean nations that the European Union (EU) had identified as not having implemented the first round of tariff cuts as scheduled under the agreement.

“At this stage, the Bahamas has not yet introduced the first phase of tariff reductions, which were scheduled for January 1, 2011,” Mr Isaacs confirmed.

The revelation is again likely to raise questions as to whether the Bahamas is fully committed to - and if it has the required resources to - properly implement the obligations it signed up to when committing to the EPA agreement with the EU in mid-2009.

The Bahamas, and all other members of the CARIFORUM negotiating group, are supposed to either eliminate or reduce tariffs on EU imports in a phased approach stretching over several decades - with the 2011 adjustments supposed to be the first of many.

Ryan Pinder, minister of financial services, who has responsibility for trade matters in his portfolio, did not return Tribune Business’s request for comment yesterday.

However, Hank Ferguson, a Bahamian trade economist who served as the private sector and Chamber of Commerce’s main adviser over the EPA, said the issue could stem from this nation failing to report tariff adjustments to the EU-CARIFORUM Council that oversees implementation of the agreement.

This body has only met twice since the EPA was formally signed in December 2008 (the Bahamas signing on six months later), and Mr Ferguson said the situation raised “a broader question as to whether we have established an EPA Implementation Unit”.

Several CARIFORUM countries have created such a unit to oversee their implementation of the EPA’s obligations, but there has been no sign of one in the Bahamas - either under the former Ingraham administration or the new Christie-led government.

Pointing out that talk by V. Alfred Gray, minister of agriculture, marine resources and local government, of increased tariffs to protect Bahamian farmers from international competition was inconsistent with the Bahamas’ EPA and emerging trade obligations, Mr Ferguson told Tribune Business: “The broader question now is what we do about EPA implementation.”

He added that over the coming years the Bahamas was required to enact a wide range of legislative and policy reforms in numerous areas, such as government procurement; sanitary and phytosanitary measures (SPS); creation of a Standards Bureau; and creation of a Competition Watchdog and related policies/laws.

On the EPA Implementation Unit issue, Mr Isaacs told Tribune Business: “There is no direction to states with respect to the establishment of EPA Implementation Units.

“A number of CARIFORUM States have established such a stand-alone structure and appointed staff. Some other CARIFORUM states have strengthened institutions which previously had responsibility for bilateral relations, adding responsibility for EPA implementation to the earlier list of commitments. A few states have assigned the responsibility to line Ministries with little or no assignment of additional manpower.

“I suggest direct contact with the relevant authorities on the approach adopted by the Bahamas.”

Zhivargo Laing, minister of state for finance during the 2002-2007 Ingraham administration, told Tribune Business he could not recall specific details about the tariff adjustments the Bahamas was supposed to implement in January 2011.

Suggesting any tariff cuts could have been postponed due to the Government’s fiscal woes, Mr Laing added that they would not have created any significant revenue losses due to the relatively low volume of European imports.

Acknowledging that the situation “has to be addressed by the Government”, Mr Laing told Tribune Business: “One thing is certain. I don’t believe the Bahamas would deliberately default on obligations arising out of the agreement.

“But I would venture this much: Regard being had to the fiscal circumstances in which we found ourselves, tariff cuts possibly could have presented challenges at that point.”

When it came to progress made by CARIFORUM in general on EPA implementation, Mr Isaacs told Tribune Business: “As regards trade in goods, I believe that all CARIFORUM States have introduced the rules of origin, which govern trade in goods under the agreement. These rules are less stringent than those previously in place, thus making qualification for preferential access of exports from CARIFORUM States to EU Member States easier.

“With respect to trade in services, considerable work with respect to bringing national legislation in line with what is required under the EPA has proceeded.

“The so-called ‘gap analysis’ has been conducted for the majority of CARIFORUM States, and preparation of draft legislation as necessary is proceeding. The next stage will be the enactment of the relevant national legislation,” Mr Isaacs added.

“A number of CARIFORUM States have mounted selling and exploratory missions to EU Member States, some with support from Caribbean Export Development Agency, headquartered in Barbados, some with support from other sources and, in some cases, with national support.

“Representatives of two sectors, architects and engineers, are in dialogue with their counterparts in Europe on the establishment of Mutual Recognition Agreements.”

When it came to the major challenges being experienced over EPA implementation, Mr Isaacs added: “CARIFORUM states have been challenged by a shortage of legal drafting capacity in-country. To a degree, this has been relieved by support from the EPA Implementation Unit in the Secretariat.

“Some of the areas for attention under the EPA address disciplines where, in some states, in-house capacity is not strong. In some of these cases, external consultants have been recruited. “