The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport needs “two seats” in the WTO negotiations because the Grand Bahama Port Authority (GBPA) cannot be trusted to look after its licensees’ interests, an outspoken QC has warned.

Fred Smith QC, the Callenders & Co attorney and partner, said the deal agreed with the former Christie administration over Freeport’s expiring tax breaks exposed the willingness of the GBPA to “sacrifice” its 3,000-plus licensees.

While the GBPA, Hutchison Whampoa and all their affiliates received an automatic 20-year renewal of their expiring incentives, all other Freeport businesses were required to apply to the Government to receive the same - until the May 10 general election produced a change in administration and policy.

As a result, Mr Smith told Tribune Business that the GBPA and its licensees need to be represented “independently” in the Bahamas’ upcoming World Trade Organisation (WTO) membership negotiations, with Freeport’s “unique” status demanding the city be “at the table”.

Describing Freeport as the Bahamas’ equivalent of Hong Kong, he said its creation as a ‘free trade zone’ merited special attention and protection in the WTO talks, given that the Hawksbill Creek Agreement lasts until 2054.

Praising the Government for consulting with the private sector and civil society on the accession terms the Bahamas should seek, Mr Smith said: “I hope that the Government is giving the Port Authority and the licensees a seat at the negotiating table.

“I have noted that there has been very little focus on treating Freeport as an independent economic jurisdiction within the Bahamas. Freeport within the Bahamas can be compared to Hong Kong. It has a different economic model. It has unique tax and other exemptions, including Immigration.”

Recalling how former Court of Appeal president, Dame Joan Sawyer, had once described Freeport as “a state within a state” in a judgment, Mr Smith urged Brent Symonette, minister of financial services, trade and industry and Immigration, his officials and the Bahamas Trade Commission to recognise the city’s status and potential benefits to the Bahamas post-WTO.

“I urge Minister Symonette and his colleagues to appoint two negotiating representatives to the table; one representing the interests of the Port Group of Companies, and the other, the licensees,” he told Tribune Business.

“As we saw in the Grand Bahama (Port Area) Investment Incentives Act 2016, passed by the PLP, the Port Group of Companies sold out the interests of the licensees. The interests of the licensees were sacrificed under the Act in favour of the Port Group of Companies and Hutchison.

“The licensees were left completely unprotected, and although huge 20-year tax exemptions were provided to the Port Group and Hutchison, they were not made available to the licensees. That is why I say there are two very important economic interests - the licensees and the Port - that should be independently represented at the WTO negotiations.”

Freeport’s status as a ‘free trade’ or ‘special economic zone’ should not cause undue problems for the Bahamas in negotiating its WTO membership terms, which have to be hammered out in multiple sessions with a WTO Working Group formed from all nations interested in trading with this country - the US, Canada, China, UK, European Union (EU) and CARICOM states.

Numerous nations with ‘free trade zones’ have joined the WTO over the years, although the Bahamas will have to be careful about creating a preferential regime in Freeport that favours goods and services produced there compared to the rest of the country.

Mr Smith, warning the Minnis administration against “selling out” Freeport’s interests, said the city needed “a voice at the table” in the WTO talks simply because the Nassau-based central government may not understand the potential consequences of what it was negotiating.

“As a licensee, I want a voice at the negotiating table, and I also want the Bahamian government not to sell out the interests of Freeport as an independent economic zone,” he told Tribune Business.

“Freeport needs a seat at the WTO negotiating table. I don’t trust central government in Nassau to properly represent the interests of Freeport. Not so much because they are against Freeport but because they simply don’t have a well-informed appreciation of the complexity of our state within a state under the Hawksbill Creek Agreement, which is to last until 2054.

“To the extent that this FNM administration has made a commitment to resurrect the Grand Bahama, then we should be treated as a major partner with the Government in the WTO negotiations,” Mr Smith continued.

“We are unique, we have special interests, and we know things better than anyone else. This is where true transparency, accountability and consultation needs to occur. I am very concerned that the issues relating to Freeport will be buried under the national carpet.”

Mr Smith added that Freeport’s concerns went beyond mere tax exemptions, adding that it would be “sensible and responsible for this government to be very focused on the unique interests of Freeport in the WTO negotiations” given that Grand Bahama currently provided it with five MPs and two Senators, including the Senate president.