By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Government will today give "a definitive response" to opponents of its Budget tariff cuts, the Deputy Prime Minister saying it was "minded" to assist Bahamian manufacturers.
K P Turnquest yesterday pledged it would ensure local manufacturers remain competitive against rival imports, with any cuts likely to cause "hardship" under review.
"We are considering their request, and we are minded to do something in respect of that," Mr Turnquest said of the cries from Bahamian drink, paint and battery manufacturers.
"Obviously, the Government of the Bahamas is very much interested, as stated in our plans, in wanting to support local manufacturing as it does create opportunities and employment for our people.
"To the extent the proposal causes hardship, we want to look at that," he added. "Tomorrow [today] we will come back with a definitive position, but we are minded to consider their request.
"We're likely to make sure local manufacturers can stay or be competitive."
Tribune Business revealed yesterday how Bahamian juice drink manufacturers fear their businesses will suffer "irreparable harm" if the Government goes through with plans to eliminate the current 60 per cent duty on rival imports.
Aquapure warned it may have to terminate up to 20 staff if the proposal is implemented, as sales for its Tampico product will be eroded by more price-competitive imports.
Leslie Miller, former minister of trade and industry, raised similar concerns on behalf of local paint and battery manufacturers the previous week, warning that the planned tariff cuts would have a similar effect in those sectors.
"There are one or two concerns that do not really arise, as they do not affect local manufacturers at all or affect them marginally," Mr Turnquest told Tribune Business. "Tomorrow, we will come back with a considered, definitive position on all this."
While indicating that the Minnis administration was set to respond favourably to the cries of Bahamian manufacturers, Mr Turnquest reiterated that this nation needed to identify non-protectionist measures to make these industries more competitive.
He argued that tariff barriers to foreign imports were losing their effectiveness regardless of whether the Bahamas became a full World Trade Organisation (WTO) member or entered into other liberalised, rules-based trading regimes, which see such measures as impediments to global trade.
"It is also important that we let the business community know that we're going to have to figure out how we can be more competitive in an open market," Mr Turnquest told Tribune Business.
"We have to look at other factors that affect the cost of doing business in the Bahamas, so they can be competitive without protection."
The Minister identified reduced energy costs as one production input that would help all Bahamas-based businesses, and added: "Whether we eventually join the WTO or not, the globe is getting more competitive.
"To survive as manufacturers, we have to step up our game and do business in a global environment. To that end, we will be setting up a Competitiveness Council to see to what extent we can assist local manufacturers - and those who could be manufacturers - to help improve their processes, competitiveness and efficiency."
Mr Turnquest warned that "even to the extent they [tariff barriers] remain in force they may not be effective", given the global drive to reduce or eliminate them.
The Minister's comments are again a subtle warning that Bahamian businesses cannot rely on protection from outside competition for ever, given the move to enter rules-based, liberalised trading regimes that seek to remove tariffs and other forms of protectionism.
The Government's introduction of Value-Added Tax (VAT) on January 1, 2015, as its main revenue earner is seen by many as a necessary step towards the gradual reduction, and eventual elimination, of many import duties in line with the Bahamas' growing trade commitments.
However, the Minnis administration's Budget tariff cuts were yesterday seized upon by the Opposition leader, who accused it of placing Bahamian manufacturers "in peril".
Philip Davis, in his contribution to the Budget debate, said: "I invite the Government to look at the rebates they intend to give, as they will have an adverse effect on the ever-evolving, but challenged, light industries in the Bahamas."
Specifically pointing to paint and toilet tissue manufacturers, Mr Davis said the tariff cuts would act as a disincentive to both existing businesses and those entrepreneurs seeking to enter the sector.
"The light industries and farming industries are being put in peril by what is now intended by the Budget," he added. Mr Davis argued that manufacturers "must operate against all odds", and the Government's plans could "eliminate this sector of our economy".
The Opposition leader said the change of government every five years made it difficult for manufacturers to plan, and added: "I urge the Government to resist these adjustment, particularly for those items that are manufactured locally."
Comments
proudloudandfnm 6 years, 9 months ago
Well if we can't get rid of duty it's definitely time to withdraw our membership from the WTO and repeal VAT immediately....
The_Oracle 6 years, 9 months ago
"He argued that tariff barriers to foreign imports were losing their effectiveness regardless of whether the Bahamas became a full World Trade Organisation (WTO) member or entered into other liberalized, rules-based trading regimes, which see such measures as impediments to global trade." Precisely the Point and driving force behind the WTO, EU-EPA and all other trade agreements! Even the OECD and IMF are circling the swamp that is Nassau. No prior Government has been open and honest about our various commitments and timelines on our strategy (minimal at best) or objectives (again, what are they?) or our commitments. The overall strategy is to alleviate all the other limiting factors and constrictions preventing firstly internal competition and external competitiveness. Unfortunately the Government is offender #1.
sealice 6 years, 9 months ago
really the juice manufacturers are complaining? they bitching about the rising costs of making juice that is spreading diabetes like a hooker with AIDS???
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