Full membership of the World Trade Organisation (WTO) will not be achieved “at the expense of the Bahamian people”, the Government’s director of trade pledged yesterday.
Dr Keva Bain told the Bahamas Business Outlook conference that this nation’s accession was designed to make the economy “more competitive”, adding that just two percent of industries were deemed “sensitive areas” when it came to tariff reductions.
She also moved to dispel claims that becoming a full WTO member will lead to an unrestricted influx of foreign workers who will take Bahamian jobs, or that it will allow multinational conglomerates such as Wal-Mart to effortlessly enter this market, branding such assertions “myths”.
“WTO is about trade, free trade,” Dr Bain said. “Free trade is a misnomer. We’re not talking about everything coming in with no rules and no tariffs, anyone showing up to our border. The WTO is not about that but about creating rules which set the parameters about how the country is going to trade its goods and services.”
She added: “What we are seeking to do is reduce tariffs and make the Bahamas more competitive. However, we are not going to do that at the expense of the Bahamian people.
“When you look at the Bahamian economy in terms of goods and services, goods protected by tariffs are only two per cent. It’s that two per cent that we call sensitive areas that we are in consultation with stakeholders that may be impacted.”
The Bahamas must lower its average tariff rate from 32 percent to 15 percent as part of the WTO accession terms, as rules-based trading regimes frown on such border taxes as barriers to trade.
This represents a potential threat to domestic water producers and other Bahamian manufacturers that have traditionally relied on high import tariffs to remain price competitive with foreign rivals. These are the “sensitive areas” that Dr Bain is referring to, but the Government is employing a strategy of seeking to maintain existing high tariffs for those vulnerable sectors while still hitting the 15 percent average.
It is also looking at enhancing non-tariff protections for these industries, using methods that are WTO-compliant, but whether these outcomes are achieved depends on the skills of The Bahamas’ negotiators and the demands of its major trading partners who will negotiate the terms of this nation’s accession.
Dr Bain acknowledged as much, saying: “The negotiations are not cast in stone.... The negotiations are a live issue. We are meeting with stakeholders, are going to continue meeting with stakeholders to engage them. We will continue to educate the public on the process.
“This process is not something where you just sign on the dotted line and walk away. The world no longer works like that. Yes, we are a small developing country, and there are rules that apply to us as a developing country. Unless we are part of the discussion we can’t have a say in the outcome.”
She added that “The Bahamas needs to see itself as a global participant”, and that “we cannot expect to grow and think we can stand back”, pointing out that as a small, open economy this nation already depended heavily on trade.
Dr Bain said tourism and financial services, “our bread and butter”, were already open to foreign investment and trade, adding: “The standard of living we experience in this country has been made possible by international trade.”
Turning to the misinformation circulating on social media about WTO membership’s impact, she added: “There are a lot of myths out there. The WTO is not about the free movement of labour. ‘Mode 4’, as it relates to services, is about the temporary presence. The Government of the Bahamas will still be in control of Immigration, citizenship and permanent residency.
“The WTO is not about allowing big companies like a Wal-Mart to come in. Who you look at a company like Wal-Mart and its business plan, you look at The Bahamas, its structure and its population. Wal-Mart would not be interested in a small country like The Bahamas.”
Dr Bain cited modernisation, the reduction of high tariffs and a more transparent and predictable economy for potential investors as being among the benefits of full WTO membership.
“A more competitive, transparent, predictable economy is one that potential investors who would be interested in coming to our country to invest would have confidence in. They would know that rules would not suddenly change on a whim,” she said.
Zhivargo Laing, The Bahamas’ chief negotiator, released The Bahamas’ initial goods and services offer to the WTO last week. The goods offer lays out how which Customs duties will be reduced, and by how much, should The Bahamas join the WTO, while the services offer outlines what aspects of each service industry would be open or closed to trading countries.