In a press conference on Monday, the ministry of trade and industry said: “What was said in the meetings was in fact it may not be necessary for small economies such as The Bahamas to derogate from the norm that is ongoing in the economy today. We may not have to dismantle our tax system.”
“I don’t think we can expect any country to dismantle its tax regime just to be a participant in this process called FTAA, especially in the Bahamas where our taxation system is not discriminatory; its straight across the board. Personally I don’t see any reason why we should have to dismantle our tax system just to become players,” he said.
Hillary Deveaux, executive director of the Securities Commission, said at the press conference that at last week’s meetings, the FTAA countries were allowed to determine the level of commitment they wish to undertake in the process.
“So you have a situation where countries don’t have to agree to this concept of a comprehensive process. Essentially you get out what you put in; your benefits will be measured by what you commit to.”
He said this new format allows countries such as The Bahamas to put on the table areas that would best suit The Bahamas.
“We don’t have to go the whole hog.”
Both men said the decision to change the tax structure in The Bahamas should be made at a countrywide level and not in response to pressures from FTAA.
“We should be looking at our tax structure but we should determine when we want to implement change in our tax system, not have FTAA dictate to us,” Mr. Deveaux said.
Mr. Miller said though trade ministers at the Miami meeting are committed to a comprehensive and balanced FTAA that would foster economic growth, the reduction of poverty and development, they also recognized the need for flexibility to “take into account the needs and sensitivities of all FTAA partners.”
He said the bilateral agreements being pursued by the United States with individual countries are a cause of concern for a number of countries involved in the negotiating process, including The Bahamas.
Most recently the United States has concluded bilateral trade agreements with the Dominican Republic, Panama, Bolivia, Columbia, Ecuador and Peru. These parallel bilateral initiatives are seen by some as the United States bringing pressure to bear on countries to commit to the FTAA or face isolation from U.S. markets and the negotiations process.
Despite this, however, Caricom has not deterred from its position of negotiating as a group. According to Mr. Miller, Caricom is of the view that though multilateral discussions were difficult and further complicated by imbalances in the economies and sectors, a united front is the best route for achieving successful transparent, free and fair trade liberalisation.
The minister said a forceful theme that Caricom has maintained throughout the negotiations is the need for “special and differential treatment” for small economies for Caricom-member states.
He said this should include longer adjustment periods, greater flexibility and the right to undertake obligations at their own pace. He noted that this treatment was particularly important in the areas of agriculture, intellectual property rights, market access and government procurement.
Another issue raised in Miami by smaller economies was the need for reliable and predictable sources of funding to assist with educating civil society and the adjustment process to FTAA.
“Caricom maintained that sources of funding should be identified and include grants and non-reimbursable sources of funding for institutional reform as well as development funding for adjustment,” Mr. Miller said.
Saying the next 13 months would be critical in the FTAA process, Mr. Miller speculated that very soon the exclusion of Cuba entirely from the process would have to be addressed.
Cuba has trading relationships with a number of countries in the hemisphere and is also an associate member of Caricom.
Mr. Miller said Caricom is also seeking special treatment for Haiti, which was classified by the United Nations as a “least developed country.” Haiti is the only country in the region of the Americas holding this title. “In our draft we made it implicit that Haiti would get special treatment beyond what we (Caricom) would get.”
By Martella Matthews, The Nassau Guardian
