By NEIL HARTNELL
Tribune Business Editor
The Government will “not abandon” this nation’s $146.56 million annual export trade with Canada, Tribune Business was told yesterday, should the Bahamas’ guaranteed market access be jeopardised.
Ryan Pinder, minister of financial services, said that Bahamian exports to Canada - chiefly crawfish and the Bahamas Oil Refining Company’s (BORCO) petroleum products - could lose their preferential market access to Canada by year-end.
This was because the existing CARIBCAN agreement between the region and Canada, which governs the Bahamas’ trading relationship, is set to expire by end-2013.
As a ‘one-way’ preferences system, with all the benefits (such as lower tariffs on Bahamian exports) going to the Caribbean, the CARIBCAN agreement requires a World Trade Organisation (WTO) waiver to be extended.
Mr Pinder said there were indications that such a waiver may not be granted by the WTO, and with negotiations between the Caribbean and Canada on a new two-way preferences agreement unlikely to conclude by year-end, the Bahamas was faced with the loss of preferential market access.
The Minister used the ‘Canada situation’ to show a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) luncheon why there were “undeniable benefits” to the Bahamas becoming a full WTO member.
These benefits, he said, were “guaranteed market access” for Bahamian exporters, and clearly defined trade rules that gave them all the required protection.
Noting that the CARIBCAN waiver was set to expire at year-end, Mr Pinder said: “There are indications this waiver will not be extended.”
As all other Caribbean countries were full WTO members, they would be able to fall back on the Most Favoured Nation (MFN) provision - their exports now being subject to the best tariff rates Canada offered to other countries.
“The Bahamas, as the only country in the Western Hemisphere not in the WTO, does not have the luxury of falling back on these provisions,” Mr Pinder said.
“These are issues we need to address in an expedited fashion. There is no Plan B for the Bahamas if the CARICOM-Canada trade agreement is not finished. As a non-WTO member, we do not have guaranteed market access.”
According to Statistics Canada, the Bahamas exported some $146.56 million worth of goods to Canada in 2012. The majority of this trade, more than 95 per cent, came from mineral and chemical products, plus food exports.
Still, Mr Pinder later indicated that the Government did indeed have a ‘Plan B’, namely negotiating with Canada to obtain Most Favoured Nation (MFN) preferences via policy.
“The Bahamas government has no intention of abandoning its industry and trade with Canada,” he told Tribune Business.
“If we feel confident the waiver will not be extended, whatever they did, we can request a Most Favoured Nation (MFN) clause by policy, which the US does now.
“We believe we will have success in doing that, because of out diplomatic and business relationship with Canada. We will explore all options to protect our industry and growth.”
Mr Pinder added that “the oil that goes through BORCO is significant”, and said: “We will look to put forward a position that the waiver be extended. We have indications it may or may not be extended.”
And Mr Pinder said preferential market access to overseas countries was “core” to his much-touted value-added trade strategy.
Meanwhile, the Minister told Tribune Business that the Bahamas would be unable to properly link its agriculture industry with tourism - and the Bahamas’ five million visitors annually - without a proper sanitary and phytosanitary regime.
Major hotels and international restaurant chains had to meet certain quality standards and insurance requirements, and without an SPS regime, Mr Pinder said, the Bahamas could not certify that its homegrown food products were up to scratch.
And, by increasing local food supplies to the hotel and restaurant industries, Mr Pinder said the sector would gain economies of scale that ultimately took it into the export market.