By NATARIO McKENZIE
Tribune Business Reporter
The Bahamas has already breached the local ownership exemptions it is seeking for certain industries, the country's chief World Trade Organisation (WTO) negotiator said yesterday.
Zhivargo Laing, the former Cabinet minister, told the the Rotary Club of West Nassau that The Bahamas has to "some degree" already permitted foreign ownership in sectors supposedly reserved for Bahamians only under the National Investment Policy.
"One of the negotiating challenges that faces us when we go to the WTO is we say that we reserve wholesale for Bahamians only," Mr Laing explained, "but who is the largest wholesaler in the Commonwealth of The Bahamas?
"Bahamas Food Services, which is owned by Sysco, an American company. We say we reserve the retail trade for Bahamians but, when we go down Bay Street, who is retailing in those stores? Indians and Mexicans and so forth. I say that to point out that to some degree we have already breached the very polices that we say that we are negotiating."
Mr Laing said the Government stands to lose $40m in revenue by eliminating or reducing import tariffs as part of its accession to full WTO membership. "Based on our very extensive model is that, given the offer we have put on the table, it will be to the order of $40 million," he added.
"I have been in the Ministry of Finance. The Government of the Bahamas wastes about $40m annually. Not only that; the Government of the Bahamas gives up $1bn in exemptions to international and domestic companies. It could reduce that by 10 per cent and make up $40m. It is not insurmountable."
Responding to concerns that the long-standing dispute between the US and Antigua and Barbuda over Internet gambling demonstrated that the WTO lacks "teeth" to enforce its rulings, Mr Laing argued that the case proved smaller nations can get "fair play" in the process.
"It is one of many resolved disputes in the WTO," he added. "When you got to court in The Bahamas you say I want $1m, the judge looks at the matter, rules in your favour and says you aren't getting $1m; they say $200,000. That's what they assess.
"Antigua won its settlement, which shows small countries can get fair play in the process. In the WTO, the rules allow for you to get relief in many ways. The US opted for a certain way. Antigua wanted $250m, and why not? What is unresolved is not that they won, and not that they have relief to get; it's the kind of relief."
This past summer, the island nation's US ambassador, Sir Roland Saunders, was reported stating that Antigua and Barbuda was losing hope that it would get justice in its 15-year dispute.
The dispute between the two countries stems from the US government's efforts to prohibit Americans from gambling at online sites domiciled in Antigua and Barbuda. Antigua and Barbuda won the right to suspend its obligations to the US in respect of intellectual property rights to recover $2m annually, but reportedly has not acted on that authorisation in the hopes of reaching a fair settlement.
Mr Laing, meanwhile, said The Bahamas would have between three to five years to adjust to its WTO accession terms, dismissing concerns that compliance will have to be "immediate" and "automatic" upon completion of negotiations.
Suggesting that local industries will have time to make the necessary adjustments, he explained: "There is a view that The Bahamas government is seeking to complete these negotiations by the end of next year, and the view is that once we complete these negotiations by the end of next year, come January 2020, the Government has to make all of these exorbitant adjustments to WTO rules. That is absolutely untrue.
"If you complete the negotiations by the end of 2019, there is a ratification process by the trade ministers of the WTO that will not take place until June 2020. After that, the Government of The Bahamas has to pass legislation to ratify The Bahamas' involvement in WTO. Any adjustment will be no earlier than three years and as much as five years."