Opposition Spokesman on Foreign Affairs, Foreign Trade and the Public Service

The Economic Partnership Agreements

Mr. Speaker,

When the FNM administration came to office and made the decision to take Foreign Trade from the Ministry of Foreign Affairs that was a portent of an ill fated result, a star crossed design.  The FNM that started out being the proponents of free trade was about to repudiate any legacy of modernity that they had left behind.  Its principle spokesman on trade who had been the author of a book on the subject promoting free trade and the integration of the Bahamian economy, the now Minister of State in the Ministry of Finance would be forced and did resile from his public positions on trade.  The result could only be retrogression.

No one could have imagined however that the government of The Bahamas under the FNM would take the decision without communicating to the country with a full and expansive explanation to abandon the process of signing an agreement with European Union.   This country’s international trade relations have been governed by a regime on duty free access for at least 40 years starting with the Lome Agreement and then the Contonou Agreement that succeeded it.

Every government since independence has been at the table with the EU on trade.  Today, the Contonou Agreement is the governing instrument on both political and economic matters with Europe.  When that is gone, there will be no other instrument and we will have to rely on bi lateral relations and the less satisfactory general trade and political regimes. This will be a step backwards.

It you start before the Lome Agreement, the Bacardi Company came to The Bahamas in 1959 following the revolution in Cuba not only because it was a safe and democratic haven but because of our ties to the British Commonwealth. There was access into the British markets from here on a preferential duty basis. That continued with the Lome and Contonou Agreements.

Now it appears that has all been abandoned in the face of what is being called a review of the international trade potion of The Bahamas.  The expertise that resided in our Ambassador to Caricom Leonard Archer has been abandoned.  All the patient work with the private sector on developing a position has been lost or so it appears.

The first public hint  of trouble on this matter was when the Minister of State announced  that the Government needed eight months more to decide whether or not they would sign on to the Economic Partnership Agreements (EPAs). The EPAs are the successor agreements to Lome and Contonou.   I raised a voice of concern at that time in an address in Miami on 20th September.  The Europeans had made it abundantly clear that deal had to be signed by 31st December of this year.  New arrangements then had to be in place by 1st January 2008.

At the time, other Cariforum countries were not sure that the process could be completed by 31st December.  But now all of that has changed and all countries in the region except The Bahamas are working to try to meet the deadline of 31st December, seeking to preserve their market access.

Mr. Speaker, the trade regime that we now enjoy with the Europeans, Americans and Canadians is a one way preference regime.  That is not compliant with the rules of the World Trade Organization (WTO).  The new requirement is for reciprocal access.  The principle is if I open my markets to you, you must open your markets to me.

There are of course negotiations on the extent to which the markets can be opened.   There are two parts to the agreement.  There is a market access offer which deals with the access of goods.  There is a services offer which deals with access to services.    There is a transition period for accomplishing the access.  There is funding for those countries that need assistance in adjusting their markets to meet the new conditions.  There is a development chapter in the agreement, and I should not here Mr. Speaker that the EU is the only group that continues to offer development assistance to The Bahamas.

When we left office, we left in place a decision to create a Department of Foreign Trade to be headed by Leonard Archer the Ambassador to Caricom.  He has extensive knowledge in the field.  We also left in place a decision to hire a number of economists in the new Department of Foreign Trade to assist in rationalizing our Foreign Trade matters.  In fact we wanted to recruit back to the service Hank Ferguson who also is an expert on these issues.  That effort was abandoned by the now government.

Instead, we have learned not by public announcement but through back channel access that a Canadian consultant who assisted in the preparation of the World Trade Organization application has been brought back into the country to help The Bahamas rationalize its positions in foreign trade.

The government has also reappointed a Trade Commission.  Unfortunately the Trade Commission is headed by someone who is an isolationist and did not during the last five years demonstrate an understanding of the issues of Foreign Trade.

When we left office, the market access or goods offer was complete.  The Cabinet had instructed our negotiators to join the Cariforum offer (Cariforum is the combination of the Caricom countries and the Dominican Republic) on market access.  We determined that the revenue loss to the country would not be significant when compared to the protection of jobs and the in flows of foreign exchange.  This would have protected the market for Bacardi whose rums entered the EU duty free, the crawfish industry that exported some 48 million dollars into the EU duty free and also the market for Polymers in Freeport.  All of these players were at the table at the Ministry along with the Chambers so Commerce of both Nassau and Freeport.

 As you know Mr. Speaker Bacardi has now made the decision for other reasons to leave The Bahamas.  But the crawfish industry needs its markets protected in Europe, particularly at a time when we are advised that the market for crawfish in the North American market appears to be going soft.  It is that industry that remains concerned about the latest developments.  We are also advised that Polymers in Freeport that hires some 114 ( it is in fact 88) are also concerned about the loss of the European market after 31st December 2007.

It is therefore startling that the Government has not made a comprehensive communication on this matter and what it believes the position will be on 1st January 2008 when the duty free access will expire.

In addition, our advice is that other countries in Cariforum and the EU have been told that The Bahamas is opting out of the Economic Partnership Agreements.  We in this country have not been told however.  Last week, we are advised that no representative of The Bahamas even at the technical level attended the Heads of Government meeting with the Europeans in Montego Bay, Jamaica on 4th and 5th October.  We are advised that the technical meeting that followed up on those discussions this week did not have a representative from The Bahamas either.   Even if the government can wait eight months to make a decision which we doubt and certainly think is unwise, should The Bahamas not be at the table to look after its interests and be in the picture?

With regard to the services offer, this is a most vexing issue for all Cariforum countries because in its most extreme form it means that the services sector of the country would be open to competition from outside companies whereas the market in so many of the services is essentially a cartel.    This is where the skill comes in negotiating, and we had authorized our representative before we left office to join the services offer of the Cariforum but they had strict instructions to avoid any encroachment on the financial services sector or agree to anything approximating changes in our tax laws that would mean disclosure of tax information about European residents in The Bahamas to EU officials.  We are advised that the FNM stopped that offer from being made in the name of this review that they are conducting.

We cannot speak for the private sector and the interested parties but we must bring this matter to the attention of the public.  We are advised that the fishing industry in the country is the bread and butter for as many as 20,000 people in The Bahamas.  That is a work force that is the size of the Public Service.  Something which adversely affects that sector is of major significance to our country and deserves the government’s full attention.  It does not appear that the private entreaties of the sector are being heard.  We are calling for the government’s position on this matter to be known with dispatch.

I add also that the EPA will also govern investment and development assistance. The significance of an investment regime should not be underestimated because potential European investors will look to the EPAs before coming to The Bahamas.

Mr. Speaker I am also requesting that the Minister of Finance arrange for a briefing of the Opposition by those who are responsible for Foreign Trade matters in the Government.

Thank you, Mr. Speaker.