NASSAU, BAHAMAS – The government is continuing its push for accession to the World Trade Organization (WTO).
On Wedensday, the Government’s lead negotiator, Zhivargo Laing, made public the goods and services offer which was officially submitted to the WTO in August 2018.
The paper, which outlines The Bahamas’ terms for accession, also includes recommendations and responses from member countries including the United States (US).
Liang explained the pros and cons of the country joining the international body.
One of the major cons, he said, is that government stands to lose a significant amount of money from customs duties if the country signs on to the WTO.
Laing indicated that if government signs onto the agreement, it would lose an estimated $45 million dollars in customs duties as the average rate of duty will drop from about 32 per cent to around 15 per cent.
That loss in revenue, according to Laing, is the most significant challenge in this process, but it’s not the only hurdle.
“If you’re lowering customs duties on imports and you have a local manufacturer who is competing with that import, then that local manufacturer will face added competitive pricing pressures and so responding to how we deal with the disadvantage that might accrue to that manufacturer is a challenge,” Laing explained.
“You also have the challenge in agriculture because they too grow items where duties might be lowered on their items and they might feel some pressure in that way.”
Laing signaled that signing onto the international trade agreement does offer its advantages as well.
He revealed that there would also be a 2 per cent growth in the economy for up to five years.
“If you are living in The Bahamas today as a business person you know that before you sell one item of your business, you bring in stuff and pay custom duties up front. Today, on average is 30 per cent or higher. In a WTO process you are lowering that on average to 15 per cent,” he said.
“That freed up capital gets to be a part of what a business can use to do new hires, expand save or invest and also becomes a benefit to the economy.
“Additionally, if you are a consumer, if the average rate is 30 per cent that cost is then being tacked onto your cost purchasing here at home but if the rate is lowered you get the benefit of those savings and that means monies in your personal pockets to save to do other things.”
Laing acknowledged that some business owners may be worried that free trade can result in foreign companies setting up shop in The Bahamas, but he said there are ways to ensure that local companies stay afloat.
Laing stressed that negotiations are ongoing and that nothing has been agreed as yet.
The next step, he noted, is to meet with the business community and receive feedback on The Bahamas’ offer before presenting an amended version to the international body when they meet again in February to continue accession talks.