By Neil Hartnell
Tribune Business Editor
WTO opponents must stop using “inaccurate scare tactics” to intimidate The Bahamas from joining world trade’s rules setter, a prominent local attorney charged yesterday.
Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house counsel, told Tribune Business there was plentiful evidence from elsewhere in the Caribbean to prove that small businesses and ‘Mom and Pop’ stores “will not be wiped out” upon this country becoming a World Trade Organisation (WTO).
The now-Callenders & Co attorney, pointing out that FOCOL Holdings’ acquisition of Shell’s local assets demonstrated how Bahamian companies can buy-out multinational interests, said the recently-released Oxford Economics report had reinforced his belief that the Government was right to finally complete this nation’s 18-year accession bid.
He argued that “part of the struggle” was the private sector’s failure to hire advisers “who know what’s going on with the WTO” until the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) commissioned that study.
Bahamian businesses, Mr Leonard said, “might not be so frightened” of WTO and its potential implications if they had engaged consultants to guide them through the process and explain what trade-related jargon meant.
Warning that it was the private sector’s responsibility to provide the necessary “ammunition” to the Government’s WTO negotiating team, so that The Bahamas could obtain the best accession terms possible, the Callenders & Co attorney added that “moaning” and wishing to retain the economic status quo “doesn’t cut it”.
He reiterated that The Bahamas would fail to enact the necessary governance, structural and ease of doing business reforms to improve this nation’s economic competitiveness without the pressure of WTO forcing it into change.
“From what I’ve read so far,” Mr Leonard said of the report, “it seems to me we should be doing it because we as a country are not going to enact the necessary changes the Oxford Economics people talk about unless forced to do so by the WTO, quite frankly.
“It will drive a lot of this; it won’t do it all, but it will force us into a position where we can finish the job. It’s quite clear that if we do it properly it can help us so much. As a country we tend to do it last minute, and only when we’ve really got to do it to survive. Everything I’ve read so far I agree with.”
The Oxford Economics study concluded that The Bahamas will only maximise the benefits of full WTO membership if it combines accession with broad-based domestic economic reforms that tackle this nation’s long-standing governance, transparency, red tape and ease and cost of doing business weaknesses.
Should The Bahamas adopt this approach, Oxford Economics estimated it could lift the economy’s long-run average annual GDP growth rate to around 2 percent - higher than the 1.5 percent currently forecast by the International Monetary Fund (IMF).
It also projected that this would help slash The Bahamas’ national unemployment rate from its current 10 percent to 6.5 percent over the next decade, driving it to its lowest level this century.
“The positive effects would quickly build in subsequent years, lifting the average growth rate of the economy to 2 percent per annum across the forecast, compared with 1.5 percent per annum in the baseline. By the end of the forecast period in 2029, this leaves the economy 5.7 percent larger than baseline levels,” Oxford Economics said.
Mr Leonard, noting the report’s conclusion that the Government may have to relinquish its iron grip on the foreign direct investment (FDI) approval process in return for maintaining tariffs that protect Bahamian manufacturers, said the end to “opaque” rules and processes that this implies will be another benefit from full WTO membership.
“The other point I have raised is everybody’s complaining that Wal-Mart is going to come in here,” he told Tribune Business, “but please remember Shell is now run by a Bahamian company in FOCOL, and Winn-Dixie, which owned City Markets, has been replaced by a Bahamian company in the shape of AML Foods, the Solomon’s owner.
“It’s not the case that everybody is going to be forced out. The little man is not going to lose out. Go everywhere in the Caribbean and you still find ‘Mom and Pop’ operations. A lot of the scare tactics, and I call them scare tactics, are not accurate.... Yes, there are going to be changes, but sometimes you need to change to improve things.”
Mr Leonard questioned who was advising Super Value principal Rupert Roberts, who has come out strongly against The Bahamas joining the WTO, even though the Oxford Economics report confirms that retail and wholesale services can be reserved for Bahamian ownership only in the accession negotiations by not including them in this nation’s offer.
“I’ve only been approached by one company to assist them with WTO, and the Government’s negotiating team has already done 50 percent of the work we’ve wanted,” he said. One of the successes we had was we were able to refer to key terms of the WTO, talking about small island states and special economic development zones
“A part of the problem is our business community, until the Chamber of Commerce did something, has not bothered to engage the services of people who know what’s going on with WTO. There’s a lot we can do, and our businesses might not be so frightened if they understood what WTO is and the language involved with WTO.
“We need to be able to give our negotiating team the ammunition they need to be able to negotiate,” Mr Leonard continued. “Just moaning, saying we have to leave this where it is today, is doesn’t cut it.
“We have to explain why we need certain things in WTO terms, and you cannot expect the Government to know your business. That’s the one you’re running. Government doesn’t run your business. Before businesses go around proclaiming the end of the world, they really should get some good, proper advice.”
Mr Leonard said claims that WTO membership will result in the complete free movement of labour were another “scare tactic’, and reiterated that if The Bahamas enacted the reforms it should be making anyway - regardless of whether WTO exists or not - this nation’s economy will enjoy long-term benefits from accession.
“If we don’t join WTO we won’t feel the need to make the changes, we won’t have the desire to make the changes and, at the end of the day, we will be far worse off for not joining,” he told Tribune Business. “That’s one of the primary drivers for why we should join the WTO.”
Mr Leonard added that many Bahamians had forgotten this nation had already committed to lower/eliminate tariffs and enact other trade-related reforms as a result of signing on to the Economic Partnership Agreement (EPA) with the European Union (EU) in 2008.
The creation of agencies such as the Standards Bureau, and legislation to reform intellectual property rights, had already been driven by the EPA, and he added: “WTO is going to help us finalise all the other things we should be doing.”