REMARKS BY

THE HON. FRED MITCHELL

MINISTER OF FOREIGN AFFAIRS

CARIBBEAN SINGLE MARKET & ECONOMY

DISCUSSIONS WITH CIVIL SOCIETY

On 21^st December 2004, the Government of The Bahamas made the decision to move to the next stage in the national dialogue on the important subject of just where we are to go next with Caricom. You will have heard me say many times on the Government’s behalf that this is crucial geopolitical relationship. It is the closest relationship that we have on the international level save that of the United States of America.

Tonight at the Ministry we meet with the group that got its genesis out of the Caricom movement. You will recall that it was prior to the Heads of Government conference of 2002 in Georgetown, Guyana that the civil society discussions began. We have been discussing the matter from that day to this. The time for discussion to come to an end is fast approaching. It is now time to make a decision.

It seems to me that the course is clear. We ought to reaffirm

What we already are in practice, that we are part of the Caricom family. We cooperate in all areas: health, tourism, business, education, foreign policy. Signing on to the new Treaty of Chaguramus will simply put the officials seal on what we do already.

I want to take all of the drama out of this decision. While it is an important decision, it is not a decision that will dramatically change our way of life. What we do expect is that undoubtedly in the long term we will enhance our way of life.

I said on another occasion that I do not see a down side to this. I see that we will enhance the opportunities for our businessmen in particular. Already, the decision making for the region of which we are a part, is being carried out in the capitals of Barbados, Trinidad and Tobago and Jamaica. This is especially evident in the banking and insurance industry. I believe that it is in part because of the country's inability to embrace the opportunities inherent in a regional movement that the important centres of decision making have all fled to the southern Caribbean. It is time to reverse that trend.

In the two years that this discussion has gone on, we have identified several areas that will require some derogation from the main treaty and from several of its provisions. What this seeks to do then is to make a formal commitment to the region, but at the same time request special and differential treatment for The Bahamas with regard to its unique circumstances and economy where the country is more dependent than any other on the revenue from customs duties to pay for the delivery of goods and services provided by the Government.

The principle derogation or reservation that needs to be secured and we believe that we have secured is against that of the demand for free movement of people. But at the same time that there is a reservation on that point, it must be recognized that in fact The Bahamas does today very much embrace the principle. The dynamism of our economy attracts more Caricom nationals to this country than another in the region. The work permit regime that is in place is not a barrier to entry, therefore, it is very much a revenue earning measure. By one estimate work permit fees earn the country some 20 million dollars per year.

The other area that we have identified that would require reservations are against those that require participation in the Caribbean Court of Justice on its appellate side. One must hasten to prepare for the day when the British decide to abolish the Privy Council. Another area is that of any commitment to monetary union, although in fact that is not part of the existing structure of Caricom at the moment.

We also know that there will have to be transition provisions for The Bahamas on the decisions as to the common external tariff (CET). This is quite an important issue for us. The CET is bar that will be set for the level of tax at which goods will enter The Bahamas. In the region, it is lower than The Bahamas present average rate. The adjustment of that rate has revenue implications. The requirement must then be for transition provisions over a long time to the required level. It may also mean the migration to a system of Value Added Tax. The Ministry of Finance is of course studying these issues.

The important point about the CET, however, is that once that level is agreed and set, then as part of a regional group, accession into the World Trade Organization or WTO becomes less problematic since those are the levels that will be argued as consistent with our WTO position. As you know we have already agreed to accede to the WTO.

I think the issue are quite simple. Now it is possible for this to be polluted by prejudice and emotion, but what I am appealing to is rationality. We are a nation, now finding its way in the world. We cannot continue to box up out business people, denying them the opportunities for wealth enhancement by increased opportunities throughout the region, not just confined to the single market and economy which is The Bahamas, but a single market and economy which includes The Bahamas and the other millions of people who live in this region.

This will require great leadership skills on the part of politicians, on the part of civil society, especially the business community. This requires the aid of the those who have lived in other countries in the region, and experience the way of life in those places, I think particularly of our students in the University of the West Indies to help our countrymen lift ourselves out of any prejudices which might exists in this matter.

What is clear is that this is not a matter to be afraid of. The Bahamas can benefit by embarking on rules based system of trade, as the ultimate protection in a system which ungoverned will be predatory. I look forward to the discussions, and out of this is to come a white paper for the approval of the Cabinet and the consideration of the public.

Some times, governments are called upon to make difficulties decisions. The most difficult decision in our young nation's life was that of moving toward political independence. Now that we have that independence, we are forced to make choices including with whom we are to associate as we forge our country’s way in the world. This decision is not nearly as crucial, but it is an important decision. Sir Lynden Pindling and his colleagues could not sit back in 1972 an fail to step up the plate and act. By doing what they did in 1972, they enhanced the way of life so that we can live the life we live today. I believe that we will be thanked for making the right decision on this matter by the generations which succeed us. If we make it, it will position the country well in the future. If we don’t, then generations later may ask us why we left the burden to them. Just think, if we had joined the WTO at the start, we would not have the burden today of trying to negotiate our way in. Now is the time to consider our positions and move while we are wanted in, and can get a great deal for ourselves. We can have our cake and eat it too.

I hope that you are able to help us lead the debate.