WTO accessions are often hard to see from the outside. You only get tiny hints of what's going on. So, I've been very interested to read what the Bahamians have had to say publicly in relation to how they are thinking about their accession process, which is just starting up. From various articles in the Bahamas Tribune:
Bahamas to offer 'highest binding tariff rates' possible
The Bahamas' initial goods (market access) offer to the World Trade Organisation (WTO) will submit the "highest binding tariff rates" possible in a bid to protect Bahamian manufacturers, this nation's chief negotiator has told Tribune Business, pointing out that "far more" small and medium-sized firms rely on the tariff structure for competitive advantage than many think.
Raymond Winder, the Deloitte & Touche (Bahamas) managing partner, told Tribune Business that Bahamian companies would have to radically alter their mindset once this nation acceded to full membership in the WTO, becoming proactive in both developing existing business lines and acquiring new ones, as opposed to the current "reactionary" posture many adopted.
Pointing out that discussions on the impact that WTO and other trade agreements would have on the Bahamas' import tariff system had largely been confined to the Government's possible revenue losses, Mr Winder pointed out that many in the private sector - especially producers and light manufacturers - also relied on the same structure to help them maintain a competitive edge versus imports.
"We will be committed to protecting the existing Bahamian businesses," Mr Winder told Tribune Business. "As I go through the country and talk to various businessmen, I'm finding that a lot of small and medium-sized businesses that rely on tariffs for competitive advantage are not on the radar."
He added that he was seeking to gather data to determine "how many businesses rely on the tariff regime for trading advantage", and said: "Far more rely on it than you think. We're making sure we identify as many as possible, so that they come forward and share with us the kind of positions involved, the kind of employment being generated, and the drivers making their businesses go, apart from tariffs and legislation."
When it comes to drafting the Bahamas' initial goods offer, which is likely to be submitted to the WTO in time for June 2011's meeting in Geneva with the working party negotiating the terms of this nation's accession, Mr Winder told Tribune Business: "Our strategy on the first goods offer is to basically capture, take into consideration, all the various businesses that are currently relying on tariffs as a competitive advantage. We want to have all the information on them, because our general belief is that we will do all we can to protect our businesses."
Skills
Much, Mr Winder said, would depend on the skills of Bahamian negotiators, and prior to presenting its goods offer the Bahamas is scheduled to have bilateral meetings with the US, Canada and the European Union (EU) - its key trading partners - so they can express concerns they have on particular products, and where they would like to see more trade liberalisation.
Still, giving further insight into the Bahamas' goods strategy, Mr Winder said it aimed to offer the highest binding rates possible to protect Bahamian manufacturers or, at the very least, offer tariff rates in line with what is currently imposed on rival foreign imports.
"It's our intention to have our binding rates at the highest rate we can charge on a particular product, or at least meet the minimum requirements for our product manufacturers," Mr Winder said. "Our binding rates will be even higher ensure they are not lost in the negotiating process."
'Bilateral' WTO member talks to start 'early in New Year'
Pointing out that the Bahamas had held preliminary discussions with key trading partners when it submitted its Memorandum of Trade Regime to the Geneva-based WTO last year, formally kicking-off the process for full membership accession, Mr Winder said: "Early in the New Year, we're really going to start the bilateral discussions, the first being the US."
He added that talks with the US were likely to take place "some time before the end of February", with both himself and the Government in the meantime setting themselves the goal of collecting - and analysing - as much data from the Bahamian private sector as possible.
This is with a view to the Bahamas being ready to submit its initial goods/market access offer by June 2011, when it returns to Geneva for a meeting with the Working Party handling its membership application.
Confirming that this nation had to complete its goods offer by then, Mr Winder told Tribune Business: "In June, we're anticipating going for the next Working Party meeting in Geneva, so we should have the goods offer before then.
"This all hinges on making sure we get sufficient details and data from the private sector."
Some Bahamian industries will 'die a slow death'
The Bahamas' chief negotiator for World Trade Organisation (WTO) membership has outlined how he will seek to reduce the "pain" associated with the multitude of changes this nation's business climate will be forced to undergo, describing strategies he has to protect Bahamian industries, but warning that some will inevitably "die a slow death" through trade liberalisation.
Responding to a concerned industry stakeholder on Friday, Raymond Winder, Deloitte & Touche (Bahamas) managing partner, said he is hoping a two-pronged approach will bear fruit for the Bahamas in the WTO accession negotiation process.
This will see Bahamian negotiators seek to maintain protective tariffs on imports on goods that Bahamian manufacturers also produce and, where this does not work, to call for an extended adjustment period before elimination of those tariffs.
But he warned that the fact some light industries in The Bahamas "do not generate a lot of jobs" and, in some cases, have very few companies participating in them, could increase the challenge he will face as he negotiates with countries such as the US or Canada over why these Bahamian sectors should remain protected to the extent they are now from foreign competition.
Speaking on the Bahamas' proposed WTO membership at the Bahamas Institute of Chartered Accountants (BICA) week-long seminar on Friday, Mr Winder said: "One of the challenges with light industry is that it's not really an industry per se, because we don't have more than one, maybe two, companies involved in that industry. For example, with Blanco Bleach. So when I sit at the table to talk about that, it doesn't look like a scenario where we are a country talking about an industry. That looks like I am trying to give my friend Pinder a good deal."
Nonetheless, Mr Winder described his plan of attack to protect certain Bahamian manufacturers, in particular, which seems to involve putting forward a position on behalf of this nation that would allow space for it to concede tariff eliminations/reductions without moving substantially from where matters stand in practice at present.
"We are going to attempt to bind our tariffs for light industry much higher than where they are now. In other words, for example, the rate on bleach is 40 per cent, so we are going to give them our binding rate at 60 per cent," Mr Winder said.
"And to the extent that we can't get what we want to get, our next level of commitment would be to stretch out for as long as we possibly can the transitional period as to when those reductions will happen."
Mr Winder noted that most countries acceding to WTO membership had an average import tariff rate of between 9 to 20 per cent, while the average tariff for the Bahamas is 33 per cent. He and a team from the Ministry of Finance have already begun meeting with industry representatives from sectors such as beverage manufacturing, packaging, publishing and furniture operations to appraise them of the accession process and seek their input on the changes that will have to be made affecting their industries. Other meetings with key groups are planned.
"We have to go through a painful process of identifying where we are going to make changes to accomplish a lower average tariff. We all know that will have an impact on revenue, so government will have to do that in line with whatever changes they plan to make to where they get their revenue from," said Mr Winder.
He added that there are 12 service areas that the WTO has asked the Bahamas to "debate, discuss and determine what kind of commitment and level of involvement we are going to allow for non-resident companies and individuals to participate in our economy in those areas".
Bahamas negotiates WTO membership
Mr Winder told of possible tariff changes that will affect some Bahamian businesses.
"We want to get a sense from them as to the areas that they can assume or tolerate some changes and those areas where they will not be able to tolerate any changes at all," he said.
"We want to share this information with government because all changes in tariff has some impact on the revenue base of the country."
Some companies may have to experience some aspects that may not be positive to their businesses, he said.
"However, our decisions will be made with the broader base of all Bahamians involved.
"As we weigh the differences between the various groups, that will be the primary basis under which we will make our final determination as to what is best for the Bahamas."
Tariff, he said, is always viewed as "one of those sticky points used by countries around the world to prevent products from coming into their country.
"As part of our negotiating process, tariff has been a revenue generator for the Bahamas while we do not have a major manufacturing sector.
"Our tariff has never really been used as a basis to prevent products from coming into the Bahamas but as a means for government to collect revenue.
"And so that is a transitional point that the Bahamas will have to take into consideration because tariff is viewed by other countries as a barrier to trade.
"They don't accept the principle which we bring to the table that it is our major source of revenue."
It is the government's position to try to retain as many as possible aspects of the tariff structure, he said.
"As we have to make changes, then government will have to make alternative arrangements.
"I understand the government is in the process of looking into alternatives in terms of increasing the revenue," said Mr Winder.
