In this presentation let us take a took at "benefits" for The Bahamas, especially since many continue to ask the question "how would The Bahamas benefit from trade liberalisation? "
The view by those, directly involved in these discussions is that The Bahamas would gain indirectly if all other economies in this hemisphere were to expand more rapidly because of trade liberalisation. As the world and regional economies grow, there would be more international demand for tourism, financial services, and other services, which the Bahamian economy provides.
The direct benefits are not readily apparent. This is because, at present, The Bahamas does not have major export manufacturing industries, which would benefit from easier access for their products to foreign markets in exchange for easier access to the Bahamian market for foreign products. This situation could change in the coming years if, for example, The Bahamas were to become a major manufacturer of exportable goods.
Most feel that trade liberalisation in the hemisphere could be advantageous to The Bahamas according as The Bahamas develops as an e-commerce center of excellence. In addition, e-commerce holds the key for thousands of talented and enterprising Bahamians.
Here is another often asked question as it relates to free trade and the way we are use to doing business in The Bahamas: What about facilitating Bahamian businesses and consumers without necessarily going all the way to free trade?
During the initial course of the FTAA discussions, a list of measures were drawn up which, if implemented throughout the hemisphere, would assist businesses and consumers in each participating country. These measures are entitled "Business Facilitation Measures". These measures basically provide for electronic Customs clearance procedures. Moreover, if you recalled the 2000 speech from the Throne, you would be reminded that it called for the Customs Department and the Business License section to implement measures to further computerise their operations to facilitate businesses and consumers.
The eight business facilitation measures outlined for the Customs Department include:
I . Temporary entry of goods.
2. Express shipment (provisions)
3. Low Value
4. Compatible electronic data interchange
5. Harmonised Commodity Coding
6. A Hemispheric Guide
7. Code of conduct for Custom Officials
8. Risk Analysis
These measures are expected to be in place well in advance of the start up of the FTAA agreement.
Realising that sometimes, something which is theoretical sound may not be practical or easily implemented, a group of experts have been appointed to assist in meeting these objectives in a timely manner. However, at resent, some difficulty still exists.
A matrix is available on the Internet, indicating the state of readiness of the various countries (Administrations).
Certainly, it is desirable to establish a modem customs service capable of providing professional, efficient service with a high level of integrity.
It is hoped that trading partners would realize the maximum benefit of free trade as a result of this responsive and modernised customs service. (More on the Customs side of it later)
Another essential question is what major policy issues arise for the Bahamas from trade liberalisation.
The most obvious issues are the questions of the possible impact of trade liberalisation on the structure of indirect taxation of The Bahamas, which is heavily orientated towards taxes on imports. The thinking of the previous government as well as this present government is that in negotiations on international trade arrangements the government will continue to seek to maintain the existing system of indirect taxation. Thus, entry by The Bahamas into free trade arrangement could entail either the Bahamas' obtaining derogation from the tariff reduction commitments of the free trade arrangements, or The Bahamas' negotiating the phasing of tariff reduction over a suitably long period of years.
Other issues arise such as the question of the terms on which foreign firms would be permitted to establish in the Bahamian economy.
So far, no policy decisions have been taken by the government on these or other policy issues, which arise in the process of considering trade liberalisation whether in the context of the World Trade Organisation, CARICOM or FTAA.
