I am pleased to be here to join you in this discussion about the Caribbean Single Market and Economy.  This is not a revolutionary concept, and not a difficult one to understand.  It is also a work in progress even in the countries that will be CSME compliant according to the terms of the treaty as at 31st December 2005.

The concept of a CSME is contained within what is known as the Revised Treaty of Chaguaramus which came into effect when the leaders of the Caribbean met in Nassau in their 22nd Conference in Nassau on 5th July 2001.  There was an earlier treaty under the same name, signed on 4th July 1973.  We became signatories of that Treaty in 1983. We did not, however, join the provisions establishing a Common Market. The revised treaty, unlike the previous treaty then incorporated the provisions of the single market as opposed to having a separate protocol, and we were not able to sign on to those provisions.  So we remain members of Caricom by practice.  The question: how do we proceed in our association with Caribbean states?  Do we join the provision of the Caribbean Single Market and Economy?

In a sense the answer is obvious when one examines the innocuous nature of what is being asked of our country.

First, it is important to say that The Bahamas is part of the Caricom region and group for geo political reasons. In other words, the world looks to the region, hardly ever to the country when seeking to decide approaches to international agreements.  When China or Japan or the United Kingdom or France or the United States speak to us, they tend to speak with us as a region.  In international fora, your strength is as a region. There are fourteen votes, and fifteen if you include Haiti in this regional bloc.

Once again, the primary reason for joining and being a part of Caricom is political and strategic. The question is whether or not there is an additional benefit by embracing the economic portions of the agreement?

The Bahamas as a country is a single market and economy. There are twenty five inhabited islands.  Each has its own population centres, its own economy and its own Government, tied politically together under one constitution, making it one political unit.  What that means is that you can buy or create goods and services in one island from Abaco and Grand Bahama in the north to Inagua in the south, without having to pay any taxes for crossing from one island to the next.   The idea of a Caribbean Single Market is to extend that concept to the Caribbean.  You will be able to purchase goods and services without any taxes when crossing from country to another.  That is the single market concept. The single economy concept is that all the countries would agree to coordinate their economic and fiscal policies so that they operate the economy as a single unit.  That is similar to the European Union.

That is the theory but Caricom is a long way from that.  The Bahamas itself has difficulties with  moving from where we are today to the Caribbean Single Market and Economy but there are many who argue that we are in a position to  take advantage of some of its provisions while reserving or excepting ourselves from those provisions which are not in our national interests.  The countries of the region have agreed that The Bahamas has special circumstances and would be allowed to enter the reservations in our national interests.

What I need to say is that a reservation means that The Bahamas would exclude itself from these provisions as a condition of entry into the Treaty.  The provisions that we have identified are: those that require the free movement of people, the Caribbean Court of Justice, the provisions on the Common External Tariff, and that on Monetary Union.

We will continue to cooperate and coordinate policies on foreign affairs, fisheries, health, agriculture, the environment, education and a host of other areas in which we now participate.

Where is the Government on the issue?  Brent Symonette, the Opposition's spokesman on Foreign Affairs made several assertions in the press on Thursday 31st March 2005.  He was quoted as saying the following:

“I am nervous about the pressure being brought on The Bahamas to join the various trade groups.  You see the government, particularly the Minster of Foreign Affairs saying that it is right for The Bahamas to join CSME.

“We have to realize that we are in terms of the wealth and GDP and the pure dynamics of our country, fairly high on the totem pole and people want to come here so the movement of labour is not a good thing.

“I think that were running into dangerous water and unless someone convinces me otherwise we are not going to collect in VAT what we are currently collecting in import tax, even with all its perfections.”

Mr. Symonette then questioned how much of what I have been saying is a reflection of my own views as opposed to the official position.  He said:

“A minister should not have a personal view.  It is simply the view of the Government that matters, so is he dragging the government along or is he offering the government’s considered view?  A Minister loses his personal views when he becomes a Minister.”

First, it is not true that a Minister loses his personal views when he becomes a minister.  A minister ought to be careful to distinguish that personal view from the view of the Government, if he does have a personal view on a matter.  No such distinction has been made by me.  In fact, it will be clear from the text of any public address that I have made since 21st December of last year, that the Government made a decision on that date to begin this present process.  A white paper has been drafted and will be circulated to the public on what the Government's ideas are.  You would not be surprised that the paper will contain the reservations that I just announced.

It is also a bit surprising for the Opposition spokesman to give the public the impression that he is unaware or cannot get access to information.  Mr. Symonette knows that the Ministry of Foreign Affairs and its personnel are available to him and any member of the Opposition for briefings at any time and that he is in fact briefed from time to time on foreign affairs matters. That is a policy of this administration. The paper prepared by High Commissioner Leonard Archer which answers 38 questions on CSME was laid in parliament by me on behalf of the Government.  Mr. Symonette was there on the day it was done and he asked the same questions that he asked in the newspaper, and got the answers to the questions that he asked. Ambassador Archer's paper has been circulated to various civil society groups and available on the Ministry’s website at www.mfabahamas.org.  There have been public discussions over this for the three years since I have been a Minister including an official visit by the Barbadian Prime Minister, the lead Prime Minister with responsibility for CSME Owen Arthur.  There were discussions when Mr. Symonette was a part of the Government.  Surely, there must be a time for discussions to come to an end.  Mr. Symonette does not agree.  He says he does not think that there has been enough discussion on the matter.  It is time for his party to say what its position is.

If he is nervous, one wonders why since it was the government of which he was a part that signed The Bahamas on to the Free Trade Agreement of the Americas and you will remember that there was no consultation with the public then.  It was his government that signed The Bahamas to and that agreed for The Bahamas to become a full member of the World Trade Organization (WTO).  It was Prime Minister Ingraham who signed on to the revised Treaty of Chaguaramus, making us a part of Caricom with the reservation that we could not join the single market and economy.

However, having made the decision to join WTO for the country, a decision by which we are bound, the Government wants to give us the best advantage as we become part of WTO.  Joining CSME provides us some advantage because the same duty regimes and approaches on the provision of trades in goods and soon on services will apply.  In other words to become WTO compliant, the CSME process assists our country.

As to value added tax, a new form of taxation for The Bahamas, the Minister of State for Finance has not been involved in rumblings on the matter.  It is clear what the policy of the Government is.  A study is being conducted by the Crown Agents on value added tax, and recently the Minister was quoted as saying that tax changes in this direction may be some two to three years away.  There is nothing revolutionary about VAT, and it promises to provide a larger tax base for a tax starved government that in this present tax configuration does not have the revenue to pay for the goods and services it needs to provide for the country.  We have experience in the region to help us with its implementation if it comes.

These policy decisions then are about preparing this country for the future.  It is about rearranging our trade arrangements so that the wealth of the country is enhanced.  It is trying to position the country so that our businessmen and women will have an easier time to trade throughout the region.  Instead of looking at just The Bahamas as a market for selling goods and services, Bahamians can look toward the entire region to sell their goods, to buy their goods, to obtain services, and provide services, to sell capital and to obtain capital without taxes that are discriminatory on the basis of nationality, and without taxes for simply crossing borders.  The present volume of trade with the region is one per cent of our total trade.  That will mean that there is unlikely to be any negative immediate impact on the revenue, but the potential for growth in cheaper goods and services in enormous.

This group gathered here this morning should then be ready willing able to embrace there opportunities in a liberalized trade environment.

Thank you very much indeed.