The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Panama’s honorary consul to the Bahamas “can’t for the life of me figure out” why trade opportunities between the two nations have not been better explored, telling Tribune Business that the Central American state offered this country “substantial” savings in areas such as food and auto imports.

Speaking as the Bahamas Chamber of Commerce (BCCEC), the Government and Grand Bahama Port Authority (GBPA) undertook a Trade Mission to Panama, David McGrath said that with facilities such as the Panama Canal and Colon Free Trade Zone, the Central American country offered the Bahamas a ‘cheaper”, alternative supply chain route to the US.

Suggesting that Bahamas-based hotel and restaurant chains could enjoy significant savings if they imported meats and seafood delicacies through Panama, Mr McGrath said trade between the two countries might have developed more quickly had the large container ships been calling at Nassau rather than Freeport.

“I’ve certainly talked about it for quite a few years before the onset of Copa Airlines,” Mr McGrath said of trade between the Bahamas and Panama. “I suggested that with Hutchison Whampoa’s investment in Freeport in the early days that there was a great opportunity to exploit trade between the Bahamas and Panama.

“There’s so much common interest between the two; banking, offshore services. The two countries think in so many common ways. They should have explored it over the years.

“For the life of me I can’t figure it out. If the ships were coming here to Nassau rather than Freeport, it would have happened earlier. It’s the last mile of delivery. That’s the problem, because it’s when the produce goes off.”

Panamanian dealers and wholesalers, Mr McGrath said, were “selling all over the Caribbean and missing out in the Bahamas, which is the easiest shipping route”.

BCCEC, government and GBPA officials have met with Panamanian government ministers and officials during their visit, plus visited the Canal and Colon Free Zone. Hutchison Whampoa’s presence in Panama serves as a further link.

Prior to their departure, Mr McGrath said he had encouraged the group to explore the procurement of food produce, as well as commercial goods sourced from Asia, via Panama.

“It’s a wide-open opportunity and I told them they should look at everything, even buying produce,” he told Tribune Business. “Produce is very cheap there, and if you get refrigerated containers coming up to Freeport....... Everything from seafood to poultry to beef is cheaper than getting it through the US. $1 goes a long way.”

Beef tenderloin, Mr McGrath added, was available in Panama supermarkets at $3.50 per pound, as opposed to $20 per pound here and $15-$17 per pound in the US.

He pointed at a Panamanian company, Gourmar, which exported grouper and smoked trout - the latter produced for individual consumption at $3.

“It’s probably half that if you get it in quantities,” Mr McGrath said. “Other than that, they sell grouper and fish far cheaper than here.”

Panamanian firms also brought in smoked salmon from Chile, provided all the labour and packaging, and got the product ready for export.

“It’s at a fraction of the cost of they did it in Nassau, and they land it far cheaper than if you buy it here,” Mr McGrath said.

“The hotels could be supplied by local suppliers far cheaper than if they did it through Miami. It’s something they [the Trade Mission] should explore down there. Any small chain of restaurants could get their supplies from Panama, be able to lower costs to consumers and improve business drastically.”

He added: “If you get hold of bulk ships and ship it [produce] through Freeport, you could really save a lot of money here. It’s hard to get people to realise it, because Miami is a lot closer and more convenient. The shipping routes are more frequent and smaller ships, I would think, are easier than bulk ships.”

Acknowledging that there would be a cost to distributing to the rest of the Bahamas from Freeport, Mr McGrath reiterated: “But when you’re saving such great amounts on purchasing and packaging down there, we should benefit here.

“If the food comes out less than 50 per cent, then everything is lower. The duty on the value of the food is lower, all the costs go lower. The shipping from Panama will be higher, but that’s a fraction of the overall cost.

“I’ve not worked the numbers out, I’m not an economist, but I’m sure it’s an opportunity being lost. All the labour going into it is a fraction of the US and Europe.”

Asian car manufacturers, Mr McGrath added, ran all their distribution to Latin America through Panama, cutting out the US ‘middlemen’.

And he pointed out that all new car models sold through Panama were less encumbered with US specific regulations, such as certain windshields and bumpers, and emission control specifications.

All these added to the cost of vehicles directly imported to the Bahamas from the US, Mr McGrath said, but would not be present on those brought in via Panama - making their cost much less.

Suggesting that there was enough potential cargo to make bulk shipping from Panama to the Bahamas economically viable, Mr McGrath said trade between the two nations was “on the right track”.

Increasing numbers of Bahamian small businesses and store owners were contacting him seeking ‘leads’ for Panamanian suppliers, and he added: “Anything that can save the landed cost for these stores means a great savings for consumers if they pass it on.

“It’s a good opportunity for some young Bahamians to make a future out of it.”