The most important influence of trade agreements on The Bahamas is legislative reform, according to Senior Counsel in the Office of the Attorney General, Bernadette Butler, who is urging diversification of the tourism market.
“(The Bahamas tourism) industry faces a number of challenges to its dominanceﾅwithin the context of more liberalised trade,” Ms. Butler said.
“The Bahamas has lost market share in the category of stopover visitors to nearby destinations such as Cuba, Mexico and the Dominican Republic.”
Ms. Butler made this observation as she spoke at the Bahamas Chamber of Commerce inaugural Globalization Conference recently, while giving Bahamian entrepreneurs a rundown on the implications of trade agreements on the Bahamas.
She said that another area into which Bahamian entrepreneurs can diversify is the international services market, noting the innate advantages the Bahamas has in shipping and other related services like housing, ship inspection, freight forwarding and freight insurance among other areas.
“Because the Bahamas is a natural transshipment point between the North and South American markets, this industry has tremendous potential to drive growth in the future in the light of the increased movement of goods and commodities between the two markets,” Ms. Butler explained.
In manufacturing, Ms. Butler noted “the light manufacturing sector continues to face significant competition from imports despite the governmentﾒs policies to encourage the sector and promote import substitution.”
She said the transition to free trade, once the Bahamas accedes to international agreements aimed at encouraging free trade, will engender “significant adjustment costs,” and that light manufacturers would probably have to reorient toward very specific niche markets.
“Products that hold a certain cultural aesthetic such as locally brewed beer, rum and soft drinks would have excellent potential. In addition, the fashion of intricate conch shell jewelry could also be a potential niche market,” Ms. Butler advised.
She noted that before The Bahamas can enter various trade agreements, domestic legislation must be enacted to position the economy “so that Bahamians can extract maximum gains while minimising the costs of adjustment.”
For example, to help diversify the tourism sector, Ms. Butler pointed to the proposed Film Incentive Act, as well as a proposed amendment to the Time Share Act.
Ms. Butler delineated six “pillars” of economic growth denoted by the government; tourism and financial services, e-commerce, international services, manufacturing and agriculture and fisheries.
“The Bahamas currently ranks among the top 10 international financial centers in the world,” she said, adding that the Ministry of Financial Services and Investments is attempting to modernise the sector to capture more market share.
Among the legislation proposed and enacted to achieve this modernisation, Ms. Butler cited the Financial Reporting Transactions Act, which applies and enforces “know your customer” anti-money laundering rules, the Financial Intelligence Unit Act, which establishes a Financial Intelligence Unit, and Evidence Act, which deals with international cooperation.
“Such measures are viewed by the international community as necessary for the effective growth of international trade,” Ms. Butler said.
She also told the entrepreneurs the Bahamas needs to “prepare our market and be proactive to ensure that we are ready to seize the opportunities presented by the financial markets of other parties to such (international) agreements.”
“We must focus on increasing our competitive strength in areas such as the insurance industry, and international trust instruments, thereby broadening the scope of the international services available to investors, and increasing the facilitation of foreign direct investment,” she said.
Ms. Butler pointed out that new “e-commerce” legislation has been passed, including the Electronic Communications and Transactions Act and the Data Protection (Privacy of Personal Information) Act, which is not yet in force.
“These acts give legal force to contracts and signatures contained in electronic messagesﾅLegislation must be continuously modernized to keep pace with global developments in the e-commerce industry.”
By: Quincy Parker, The Bahama Journal
