DNA releases position paper on WTO accession
WTO not priority for the Bahamian people
Government did not campaign on WTO accession
Bahamas and WTO in need of urgent reforms
Accession is not panacea for country’s challenges
Revenue replacement measures unclear
The Democratic National Alliance (DNA) has followed with much interest the national discourse on the Government’s plan to accede to the World Trade Organization (WTO) by December 2019.
The DNA wholeheartedly supports the principles of a free market economy and initiatives that will provide a fair global trading system. We note that e-commerce, technology and the phenomenon of globalization have removed national barriers to cross-border trade regardless of membership of trading blocs.
It is noteworthy that successive administrations have advanced the policy of full accession to the World Trade Organization (WTO) despite the serious concerns raised by the populace and private sector stakeholders. During this period, the Government has failed to present a strong case to justify WTO accession and clearly articulate the expected benefits.
In the aftermath of implementing massive tax increases and policies that have exacerbated the hardship on the Bahamian people, the government continues to have misplaced priorities. Their disconnection from the plight of the masses has prevented them from seeing that WTO accession is not a priority for struggling Bahamians. The enormous resources expended on this initiative further raises questions seeing that the Free National Movement (FNM) did not campaign on joining the WTO on the 2017 campaign trail.
The Bahamian economy is in urgent need of structural reforms to improve productivity, efficiency, competitiveness and the overall ease of doing business. Further the cost of entering and remaining in business remains high within our nation. Accession to the WTO is not required to implement these long overdue reforms and should not be an impetus for same. Concurrently, the WTO is also in need of sweeping reforms to ensure fairness in international trade for developing nations, the use of state-owned enterprises and an effective policing and dispute resolution regime. This issue is further complicated by the threat of the United States – our number one trading partner – to leave the WTO.
The recent release of The Bahamas’ offer to the WTO is welcomed insofar as it is an indication of the beginning of transparency in the government’s dealings. The DNA encourages the government to apply this practice to all aspects of governance rather than select initiatives.
The government has indicated in its most recent release that lost revenue following accession will only amount to $40 million. We submit that a proper analysis and realistic projection on revenue loss is meaningless until a final WTO offer has been agreed upon. Any projection of revenue loss by the government is premature and cannot be relied upon at this time. It also remains unknown how the government will replace lost revenue within a regressive tax system.
In this vein, the DNA calls on the government to release empirical data to support its conclusion. Additionally, the government should also reveal the vulnerability study completed by the government so that the same can add to a productive discourse on the effects of WTO accession for The Bahamas.
Successive administrations have squandered opportunities over the years to empower Bahamian entities in preparation for the competitive pressures that accession to the WTO will present. On the contrary, the tax burden on Bahamian residents and businesses have been increased by governments subscribing to a “tax, spend and borrow” philosophy. We submit that accession to the WTO is not a panacea to the myriad challenges confronting us as a nation and should not be touted as such. The government should reprioritize and focus its attention on addressing the systemic restrictions and structural deficiencies within our economy.
We are concerned that vulnerable sectors in The Bahamas will be further challenged and unable to compete with nations equipped for mass production/exportation with accession to the WTO. This is consistent with the widely held view that the structure of the WTO provides a greater advantage to developed countries and the obvious detriment of small developing nations.
It is our official position that The Bahamas should not move forward with its accession to the WTO. The rationale for this position is outlined in our position paper which is attached for review by the general public. We propose that as an alternative, The Bahamas should explore bilateral, plurilateral and sector-specific trade agreements with its main trade partners with the sole criterion being the best interest of the Bahamian people.
The DNA submits that the government has failed to make the case for acceding to the WTO and that The Bahamas is not ready to accede to the WTO based upon the reasons outlined in our position paper. The DNA further submits that government’s efforts should be redirected at addressing the structural impediments to productivity, efficiency and a decent standard of living for all Bahamians.
Arinthia S. Komolafe
Deputy Leader, Democratic National Alliance