When asked which of the Caribbean islands is the most beautiful, the debate is endless and almost always without consensus. Barack Obama may well change that. Very few travelers who have hiked the trails through La Sierra de los Organos to the spectacular Vinales Valley, or strolled the white sands of Varandne will vote for anyplace other than Cuba. The only factor standing between Cuba being a travel destination of choice for the U.S. traveler is of course, the U.S. Policy toward Cuba.
But what if the U.S. Policy would change? What are the implications for Cuba, as well as the Bahamas and the Caribbean countries whose economies depend almost entirely on tourism? When Barack Obama is sworn in as the 44th President of the United States on January 20, 2009, there will be change. Only the nature and pace of the change is as of yet unknown.
During a campaign swing through Miami, celebrating Cuban Independence Day, Obama said, “My policy toward Cuba will be guided by one word: ‘libertad,’ the Spanish word for liberty. His promise to the Cuban-Americans was to lower travel restrictions for Cuban-Americans visiting family members, plus an increase in the allowable money transfers to Cuba. Many expect this promise to be honored in the first 30 days of the Obama Presidency. He is also expected to expand the people-to-people exchange policy initiated by the Clinton administration, and all but eliminated under the Bush administration. The number of academics, church groups, students and other groups without commercial purpose travelling to Cuba would increase dramatically.
The real question is whether Raul Castro will respond favorably to these changes in U.S. Policy and begin his own policy changes affording the Cuban populace more personal liberties. If that door opens would Obama and the U.S. Congress consider lifting the embargo and allowing unlimited commercial and personal travel? And what would that mean?
The U.S. traveler will win; Cuba’s economy will win, but I wonder what of the other countries of the Caribbean and their need for the tourist dollar? Is there enough to go around? While the residents of the Caribbean countries overwhelming favored Obama for president, citing “change” as the critical factor, many experts are concerned harder times are coming for the tourism industry. These difficult times would only be exacerbated by an increase in Cuban tourism.
Furthermore, the government coffers of many countries have grown fat with the influx of high end resort developments spending, and promises to spend, hundreds of millions of dollars to develop large tracts of land, often very remote, into high end developments featuring golf courses, casinos and marinas built for the largest yacht. These vacation, investment or second homes often are priced well over a million dollars. A cornerstone of the Obama campaign was his promise to raise income taxes for anybody who could afford one of these properties. An entry from an expat blog, the Belize Gringo, “………the tax reforms that Obama plans to put in place would severely cut the disposable income that this income tax bracket previously spent on vacationing and investing in Belize” is representative of the concern.
For those countries whose financial and banking sectors generate a significant source of national income, Obama policies may also have an impact. He is a staunch supporter of eliminating tax havens in the Caribbean, having proposed the “Stop Tax Haven Abuse Bill” while in the Senate. The French and Germans have suggested a primary blame for the world wide banking crisis is the existence of these tax havens and have discussed embargos to force change. It would be strange world if at the end of the Obama presidency the trade and travel restrictions now imposed on Cuba have been moved to the Caymans and other “tax havens.”
The first ninety days of any presidency is often viewed as a measuring stick for the next four years. No group will be watching the Obama Presidency closer than the Caribbean community.
IslandandResort is an Information Portal for the Bahamas, Caribbean and Florida Islands. Roger Washburn, editor of IslandandResort, invites you to comment on this article, Please visit us at http://www.IslandandResort.com
Friday, December 5, 2008
Thursday, November 13, 2008
Sea Turtle Flown From Virgin Islands to Key West
Here is a great little article on how folks are coming together to save our future.
I found this on the website of the Monroe County Tourist Development Council.
A rare hawksbill sea turtle that was attacked by wild dogs as she nested a month ago on a beach in St. Croix, Virgin Islands, arrived at the Florida Keys-based Turtle Hospital Tuesday night.
Weighing 170 pounds, the female turtle was transported for free on an American Airlines flight to Miami International Airport. It was then loaded on to the Turtle Hospital's ambulance to make the trip down the Keys Overseas Highway to Marathon.
"The goal is get her rehabilitated and released back to the ocean," said Micah Rogers, a turtle rehabilitation specialist. "She's a nesting female and that means if we lose her, we're losing every single nest she could possibly make in her lifetime.
"She's a critically endangered animal," Rogers said. "Every single female counts."
St. Croix-based U.S. Fish and Wildlife Service officials discovered the injured reptile Oct. 10 during a turtle survey in the Sandy Point National Wildlife Refuge. Named "Sandy," the turtle sustained serious injuries to her two front flippers and left rear flipper.
The turtle was treated at St. Croix's Island Animal Clinic, but veterinarians there decided to send "Sandy" to the Turtle Hospital, the only licensed veterinary facility in the world exclusively dedicated to treating sick and injured sea turtles.
Officials hope to eventually return "Sandy" to St. Croix.
I found this on the website of the Monroe County Tourist Development Council.
A rare hawksbill sea turtle that was attacked by wild dogs as she nested a month ago on a beach in St. Croix, Virgin Islands, arrived at the Florida Keys-based Turtle Hospital Tuesday night.
Weighing 170 pounds, the female turtle was transported for free on an American Airlines flight to Miami International Airport. It was then loaded on to the Turtle Hospital's ambulance to make the trip down the Keys Overseas Highway to Marathon.
"The goal is get her rehabilitated and released back to the ocean," said Micah Rogers, a turtle rehabilitation specialist. "She's a nesting female and that means if we lose her, we're losing every single nest she could possibly make in her lifetime.
"She's a critically endangered animal," Rogers said. "Every single female counts."
St. Croix-based U.S. Fish and Wildlife Service officials discovered the injured reptile Oct. 10 during a turtle survey in the Sandy Point National Wildlife Refuge. Named "Sandy," the turtle sustained serious injuries to her two front flippers and left rear flipper.
The turtle was treated at St. Croix's Island Animal Clinic, but veterinarians there decided to send "Sandy" to the Turtle Hospital, the only licensed veterinary facility in the world exclusively dedicated to treating sick and injured sea turtles.
Officials hope to eventually return "Sandy" to St. Croix.
Impact of Obama victory on Caribbean Tourism
The Islandman believes this is only the first of what will be many articles written on the impact of the Obama victory on the US relationship with Cuba and the resulting efffect on the tourist industries of other Caribbean countries.
What do think???
Lifting of Cuba ban could hit rest of Caribbean
By Benedict Mander in Caracas
Published: November 10 2008 02:00 | Last updated: November 10 2008 02:00
Fears are growing that the tourism industry in many Caribbean nations could suffer if Barack Obama, US president-elect, decides to weaken or lift the long-standing US embargo on Cuba.
US passport holders are now banned from going to Cuba. But if American tourists - the Caribbean's biggest group of visitors - were granted unrestricted access to what is potentially the region's largest tourism destination, a "seismic shift" could hit the Caribbean, said Rafael Romeu, an International Monetary Fund economist who has studied the issue.
What exactly an Obama administration will do on Cuba remains unclear. But any shift allowing US travel to the Caribbean's largest island could represent the single most significant change in US policy towards the region and its economies.
While Cuba has suffered from strict trade barriers for the past half-century, the rest of the region has benefited as a result. Now, however, they will need to act quickly to prepare themselves for this large loss in what amount to implicit trade preferences - or suffer the consequences, said Mr Romeu.
Destinations most vulnerable are those that depend most heavily on US tourists, such as the Bahamas and Cancún, while others that have a higher proportion of European visitors will be less hit, such as the Dominican Republic and Barbados.
Mr Romeu expects a net increase of more than 10 per cent in the region's visitors as costs of visiting fall.
About 1.4m people visit Cuba each year. But Cuba is expected to receive as many as 3.5m US visitors alone if the US changes its policy.
What do think???
Lifting of Cuba ban could hit rest of Caribbean
By Benedict Mander in Caracas
Published: November 10 2008 02:00 | Last updated: November 10 2008 02:00
Fears are growing that the tourism industry in many Caribbean nations could suffer if Barack Obama, US president-elect, decides to weaken or lift the long-standing US embargo on Cuba.
US passport holders are now banned from going to Cuba. But if American tourists - the Caribbean's biggest group of visitors - were granted unrestricted access to what is potentially the region's largest tourism destination, a "seismic shift" could hit the Caribbean, said Rafael Romeu, an International Monetary Fund economist who has studied the issue.
What exactly an Obama administration will do on Cuba remains unclear. But any shift allowing US travel to the Caribbean's largest island could represent the single most significant change in US policy towards the region and its economies.
While Cuba has suffered from strict trade barriers for the past half-century, the rest of the region has benefited as a result. Now, however, they will need to act quickly to prepare themselves for this large loss in what amount to implicit trade preferences - or suffer the consequences, said Mr Romeu.
Destinations most vulnerable are those that depend most heavily on US tourists, such as the Bahamas and Cancún, while others that have a higher proportion of European visitors will be less hit, such as the Dominican Republic and Barbados.
Mr Romeu expects a net increase of more than 10 per cent in the region's visitors as costs of visiting fall.
About 1.4m people visit Cuba each year. But Cuba is expected to receive as many as 3.5m US visitors alone if the US changes its policy.
Sunday, October 26, 2008
Bahamas to open consulate office in Atlanta
Published on Friday, October 24, 2008
by Lindsay Thompson
NASSAU, Bahamas (BIS): In January, 2009, the Ministry of Foreign Affairs will open a Consulate General Office in Atlanta, Georgia to alleviate the strain on The Bahamas Consulate General Office in Miami, said Deputy Prime Minister and Minister of Foreign Affairs Brent Symonette.
The Ingraham Building in Miami houses the Consulate Office, which will be relocated to another floor to accommodate the goals of the Ministry, including processing ePassport applications and other diplomatic functions.
Minister of Foreign Affairs Brent Symonette. (BIS Photo/Raymond
A. Bethel)
“The Miami office is a very busy office where passports and visas are processed. We are looking at upgrading that with a number of changes,” Symonette said.
The Ministry of Foreign Affairs maintains nine overseas offices – four in the United States (the Embassy in Washington, the Consulate General in Miami and New York, and the Mission to the United Nations), the High Commissions in London, United Kingdom; and Ottawa, Canada; and Embassies in Haiti, China and Cuba.
Ambassador C A Smith is in Washington; former Commissioner of Police Paul Farquharson is The Bahamas High Commissioner to London; former MP Mike Smith is The Bahamas High Commissioner to Ottawa, Canada; ex-Senator Gladys Johnson-Sands is Consul General in Miami; former NEMA Director Carl Smith is Consul General in New York; career diplomat Dr. Paulette Bethel is the Permanent Representative of The Bahamas Permanent Mission to the United Nations; and ex-Cabinet Minister Elma Campbell is Ambassador to the People’s Republic of China.
The new ambassadors to Haiti and Cuba will be announced shortly, Symonette said. Carlton Wright served as The Bahamas Ambassador to Cuba, and Dr Eugene Newry as Ambassador to Haiti.
Another area of change on tap for the Ministry of Foreign Affairs is in the Department of Immigration. Mr Symonette said that a look at immigration policies is underway to determine whether Bahamians are interested in certain areas of the workforce normally sought by foreigners.
“I intend to meet with a cross section of the community to discuss whether we can accept that there are certain levels of the workforce in which Bahamians desire not to work. We have to come to the realisation that certain sectors of the community workforce are not jobs Bahamians traditionally want to go into,” Symonette said.
He noted that work permits are being sought in such areas as gardening, live-in maids, handyman, and similar areas.
“Technically, it is illegal to have a work permit for someone and work for another,” he said. “We want to streamline that process.”
The Immigration Board has been meeting regularly in Grand Bahama and New Providence to look at a number of applications for work permits in order to get rid of the backlog of cases, Symonette said.
For More Information on the Laws and Regulations of the Bahamas please visit our website http://www.islandandresort.com/content/category/38/99/202/
by Lindsay Thompson
NASSAU, Bahamas (BIS): In January, 2009, the Ministry of Foreign Affairs will open a Consulate General Office in Atlanta, Georgia to alleviate the strain on The Bahamas Consulate General Office in Miami, said Deputy Prime Minister and Minister of Foreign Affairs Brent Symonette.
The Ingraham Building in Miami houses the Consulate Office, which will be relocated to another floor to accommodate the goals of the Ministry, including processing ePassport applications and other diplomatic functions.
Minister of Foreign Affairs Brent Symonette. (BIS Photo/Raymond
A. Bethel)
“The Miami office is a very busy office where passports and visas are processed. We are looking at upgrading that with a number of changes,” Symonette said.
The Ministry of Foreign Affairs maintains nine overseas offices – four in the United States (the Embassy in Washington, the Consulate General in Miami and New York, and the Mission to the United Nations), the High Commissions in London, United Kingdom; and Ottawa, Canada; and Embassies in Haiti, China and Cuba.
Ambassador C A Smith is in Washington; former Commissioner of Police Paul Farquharson is The Bahamas High Commissioner to London; former MP Mike Smith is The Bahamas High Commissioner to Ottawa, Canada; ex-Senator Gladys Johnson-Sands is Consul General in Miami; former NEMA Director Carl Smith is Consul General in New York; career diplomat Dr. Paulette Bethel is the Permanent Representative of The Bahamas Permanent Mission to the United Nations; and ex-Cabinet Minister Elma Campbell is Ambassador to the People’s Republic of China.
The new ambassadors to Haiti and Cuba will be announced shortly, Symonette said. Carlton Wright served as The Bahamas Ambassador to Cuba, and Dr Eugene Newry as Ambassador to Haiti.
Another area of change on tap for the Ministry of Foreign Affairs is in the Department of Immigration. Mr Symonette said that a look at immigration policies is underway to determine whether Bahamians are interested in certain areas of the workforce normally sought by foreigners.
“I intend to meet with a cross section of the community to discuss whether we can accept that there are certain levels of the workforce in which Bahamians desire not to work. We have to come to the realisation that certain sectors of the community workforce are not jobs Bahamians traditionally want to go into,” Symonette said.
He noted that work permits are being sought in such areas as gardening, live-in maids, handyman, and similar areas.
“Technically, it is illegal to have a work permit for someone and work for another,” he said. “We want to streamline that process.”
The Immigration Board has been meeting regularly in Grand Bahama and New Providence to look at a number of applications for work permits in order to get rid of the backlog of cases, Symonette said.
For More Information on the Laws and Regulations of the Bahamas please visit our website http://www.islandandresort.com/content/category/38/99/202/
Royal Caribbean to scrap fuel surcharges in 2010
Finally we are starting to see some relief in fares. Lets hope the airlines follow soon.
Posted on Saturday, 10.25.08 Miami Herald reprint
Royal Caribbean Cruises (RCL) is scrapping fuel surcharges for its ships from 2010 and may reimburse partial tariffs for some 2009 trips if oil prices remain lower.
Supplements won't be charged on bookings made from Nov. 10, the Miami-based company said.
Royal Caribbean raised fuel surcharges to $10 per traveler per day on Royal Caribbean International and Celebrity Cruises, and $15 for Azamara Cruises, from June 30, as oil prices soared. It had imposed a $5 fuel surcharge in November and increased it to $8 in April, and earlier this year said it was changing some itineraries to lower fuel consumption.
Every $10-a-barrel drop in oil prices trims $20 million from Royal Caribbean's annual fuel cost, the company said in July. Bunker fuel, used by ships, fell 18 percent in the three months ended Sept. 30, to $590.50 per metric ton
Posted on Saturday, 10.25.08 Miami Herald reprint
Royal Caribbean Cruises (RCL) is scrapping fuel surcharges for its ships from 2010 and may reimburse partial tariffs for some 2009 trips if oil prices remain lower.
Supplements won't be charged on bookings made from Nov. 10, the Miami-based company said.
Royal Caribbean raised fuel surcharges to $10 per traveler per day on Royal Caribbean International and Celebrity Cruises, and $15 for Azamara Cruises, from June 30, as oil prices soared. It had imposed a $5 fuel surcharge in November and increased it to $8 in April, and earlier this year said it was changing some itineraries to lower fuel consumption.
Every $10-a-barrel drop in oil prices trims $20 million from Royal Caribbean's annual fuel cost, the company said in July. Bunker fuel, used by ships, fell 18 percent in the three months ended Sept. 30, to $590.50 per metric ton
Monday, October 20, 2008
Caribbeans 10 best resorts
By Ian Keown
Caribbean Travel and Life
updated 9:28 a.m. ET, Fri., Oct. 17, 2008
A night at Antigua’s Curtain Bluff for $80, including breakfast and dinner? How about a suite and all meals at Little Dix Bay on Virgin Gorda for $125? It’s hard to believe, but those were the going rates in the first edition of my guidebook "Caribbean Hideaways", published in 1978. Thumbing through it recently, I was delighted to discover that many of my favorites from back then have retained their places in the Caribbean pantheon and are still going strong. Three decades at the top is an extraordinary achievement, what with new resorts opening every other month, each hailing itself as the last word in style and service.
So how do the classics do it? Here’s one theory: New resorts have business plans while the classics have innkeepers. Many of the golden oldies are still owned and, in some cases, still managed by their founders, who are tirelessly devoted to their properties. In many ways, these venerable resorts are younger than ever. Along with the perpetual maintenance required to counter the challenges of a tropical climate, these hotels also have to keep pace with the tastes and expectations of the children and grandchildren of their longtime guests, and to attract a new clientele. So they have gradually (and sometimes reluctantly) modernized, installing flat-screen televisions, Wi-Fi and air conditioning and relaxing dress codes while staying true to their original spirit and sense of place.
Since it’s probably safe to say that no one has been rating resorts in the Caribbean longer than I have, I feel qualified to honor the region’s classics. Choosing only 10 wasn’t easy, so I applied this yardstick: The resort must have been around for at least 30 years, remaining at the head of the class for most of them. I also considered the condition of the property; the quality of its cuisine and the ambience of its restaurants; the range of activities available; value for money; and, of course, the standard of service delivered by its staff.
Anse Chastanet, St. Lucia
Bitter End Yacht Club, Virgin Gorda, BVI
The Buccaneer, St. Croix, USVI
Caneel Bay, St. John, USVI
Coral Reef Club, Barbados
Curtain Bluff, Antigua
Jamaica Inn, Jamaica
La Samanna, St. Martin
Little Dix Bay, Virgin Gorda, BVI
Round Hill Hotel & Villas, Jamaica
For the full article by Ian Kewon,
please visit
http://www.islandandresort.com/content/view/2198/461/
Caribbean Travel and Life
updated 9:28 a.m. ET, Fri., Oct. 17, 2008
A night at Antigua’s Curtain Bluff for $80, including breakfast and dinner? How about a suite and all meals at Little Dix Bay on Virgin Gorda for $125? It’s hard to believe, but those were the going rates in the first edition of my guidebook "Caribbean Hideaways", published in 1978. Thumbing through it recently, I was delighted to discover that many of my favorites from back then have retained their places in the Caribbean pantheon and are still going strong. Three decades at the top is an extraordinary achievement, what with new resorts opening every other month, each hailing itself as the last word in style and service.
So how do the classics do it? Here’s one theory: New resorts have business plans while the classics have innkeepers. Many of the golden oldies are still owned and, in some cases, still managed by their founders, who are tirelessly devoted to their properties. In many ways, these venerable resorts are younger than ever. Along with the perpetual maintenance required to counter the challenges of a tropical climate, these hotels also have to keep pace with the tastes and expectations of the children and grandchildren of their longtime guests, and to attract a new clientele. So they have gradually (and sometimes reluctantly) modernized, installing flat-screen televisions, Wi-Fi and air conditioning and relaxing dress codes while staying true to their original spirit and sense of place.
Since it’s probably safe to say that no one has been rating resorts in the Caribbean longer than I have, I feel qualified to honor the region’s classics. Choosing only 10 wasn’t easy, so I applied this yardstick: The resort must have been around for at least 30 years, remaining at the head of the class for most of them. I also considered the condition of the property; the quality of its cuisine and the ambience of its restaurants; the range of activities available; value for money; and, of course, the standard of service delivered by its staff.
Anse Chastanet, St. Lucia
Bitter End Yacht Club, Virgin Gorda, BVI
The Buccaneer, St. Croix, USVI
Caneel Bay, St. John, USVI
Coral Reef Club, Barbados
Curtain Bluff, Antigua
Jamaica Inn, Jamaica
La Samanna, St. Martin
Little Dix Bay, Virgin Gorda, BVI
Round Hill Hotel & Villas, Jamaica
For the full article by Ian Kewon,
please visit
http://www.islandandresort.com/content/view/2198/461/
Tuesday, October 14, 2008
Bahamas - EU Partnership
Interesting article on the possibility of the Bahamas joining the EU. It is a small world growing smaller.
Reprinted from Caribbean Net News
caribbeannetnews.com
Commentary: EU Economic Partnership Agreement - what it means for the Bahamas
Published on Tuesday, October 14, 2008
By The Nassau Institute
If the proposed Economic Partnership Agreement with the European Union covering trade both in goods and services is signed in its present form by the Bahamas, the effects on the country’s economy and way of life will be far-reaching.
The Government should be commended for its efforts to consult stakeholders, as well as members of the public through town meetings, and for its publication last month of a detailed explanatory document about the EPA.
However, it appears that, for the most part, the Government has not entered into a genuine consultation about the fundamental issue of whether it is in the general interest of the Bahamas to sign an EPA at all; and many Bahamians remain uninformed about its likely impact on their lives and welfare.
There has been no formalized national consultation involving political parties, the trades unions, the churches and the private sector as a whole. Instead, the Government has taken a policy position, in line with other CARIFORUM countries, to go along with the EPA. It has sought to explain and justify its decision rather than to debate the overall merits and demerits of the EPA as far as the nation is concerned.
With the Government now set to sign later this month a “goods-only” EPA dealing with market access issues, while deferring its services offer for at most 6 months, it is timely for the Nassau Institute to set out briefly the main issues in a readily comprehensible form and to draw attention to a number of questions which should be examined further.
What is the EPA?
The Lome Convention of 1975 and its successor, the Cotonou Agreement of 2000, provided preferential tariff access into the EU for exports from the African, Caribbean and Pacific (ACP) states. This, of course, included the Bahamas.
The original intention of the EU was laudable. Its stated purpose was to help eradicate poverty in the context of sustainable development in developing countries with a view also to strengthening democracy and good governance.
Even though cynics suggested that the EU’s real purpose was to secure a steady supply of raw materials or primary products, the fact was that the ACP countries benefited from these trade preferences.
The Cotonou Agreement envisaged that such preferences would eventually be replaced by Free Trade Agreements (FTA). This was necessary in order that the EU could meet its non-discriminatory obligations required by the World Trade Organization (WTO). But the EU itself has now gone further.
Notwithstanding its own protectionist policies, the EU is looking (for its own purposes) to other countries to open their markets to European goods – former EU Trade Commissioner, Peter Mandelson, has publicly stated that the EU, as the largest economy in the world and a major trading bloc, is likely to benefit from more accessible world markets.
So, over and above its commitment to make arrangements for trade in goods that are compatible with WTO rules, the EU has proposed an EPA as a Free Trade Agreement which, on a basis of reciprocity, not only provides for the removal of all tariffs on the export of goods but also covers trade-related matters such as services, investment, e-commerce and capital movements as well as issues like competition, intellectual property and public procurement.
How would the Bahamas benefit from free trade with the EU under the EPA?
The USA and Canada together constitute the largest trading partner of the Bahamas, 83% of whose exports of goods go to them compared to only 13% to the EU.
Professor Norman Girvan of the University of the West Indies states that, since some 72% of the Bahamas’ foreign currency earnings derive from tourism and financial services, and with the preponderance of trade of goods with the USA, just 4% of total export earnings come from Europe.
The Government is keen to preserve the duty-free access for its exports to the EU worth some $90million and thereby to maintain its existing trade surplus. Loss of this access would result, for example, in imposition by the EU of an 8% tariff on crawfish exports.
In return, the EPA requires the Bahamas to give up tariff rates on 85% of EU imports, phased out over a 25-year period. The estimated loss of revenue is $6million. Since the main purpose of import duties is to generate government revenue rather than act as a barrier to trade, this loss will have to be offset by other taxes.
‘Trade-related’ matters
Under this section, a range of services areas will be opened up to EU competition enabling European companies and professionals to set up business here and Bahamians likewise to enter the EU marketplace.
However, Zhivargo Laing, minister of state for finance, has made it clear that the services offer to be presented to the EU “mirrors our current National Investment Policy” which presently reserves 13 areas of the economy for Bahamians.
To some observers, the benefit to the Bahamas of opening up the EU’s services sector is illusory since there are few Bahamian companies or individuals currently equipped or ready to compete in an EU market of 27 countries with over 400 million people and in the face of prohibitive costs, non-tariff barriers, subsidies and other hurdles.
It is not yet clear what the additional cost will be of complying with the EPA obligations; for example, the creation of new institutions, regulatory bodies and laws.
Effect of the EPA on trade with third countries
According to Stephen Lande, president of Washington-based consultants Manchester Trade, the major concern with the EPA is the impact of its Most Favoured Nation (MFN) provision on future relations with the USA.
If signatories enter into an FTA with a developed country which gives more favourable treatment than that provided to the EU under the EPA, they are obliged to consult the EU first. This could interfere with the Bahamas’ ability to enter into FTAs with other major trading countries as well as the USA.
A further consideration is that the USA, Canada and other non-EU trade partners are unlikely to accept that the EU can expect duty-free access to the Bahamas unless they can do so as well.
In the case of the USA, leading attorney Brian Moree argued at a Nassau Institute seminar on the EPA in June that, since MFN status meant no discrimination between countries, the Bahamas would have to offer – at the time it negotiated a replacement of the Caribbean Basin Initiative (CBI) – at least the same trade preferences and benefits it offered to the EU.
In practice, this would mean that, because the Bahamas’ level of trade with the USA was greater than with the EU, the starting point in negotiations would be – in his words – the ‘EU EPA plus’. Given that in 2007 the US exported to the Bahamas some $2.5 billion worth of goods, the loss to the latter would be substantial.
Mr. Moree further argued that, in order to meet the WTO’s demands for an end to one-way discriminatory preference regimes such as the Cotonou Agreement, a “goods-only” deal would have been sufficient so that it was not necessary to address trade-related issues such as services, investments, capital movements etc. Nor was it wise to address the so-called Singapore issues before it became necessary to do so (see ‘Further Issues’ below).
Way forward
Signature of a “goods-only” agreement as a first step now appears to be a fait accompli. It will secure tariff-free access to the huge EU market. The reciprocal removal of tariffs on imports from the EU will anyway become necessary as the Bahamas seeks to join the World Trade Organization. Membership of the WTO will require the phasing out of import duties across the board and development of an alternative means of generating government revenue.
Meanwhile, deferral of the Bahamas’ services offer is to be welcomed. This will allow time for debate.
Further issues
Services
An agreement covering services as well as goods seems, prima facie, to be heavily in favour of the EU. It is unnecessary because, if the conditions are suitable, EU investment is likely to continue without an EPA.
The Chamber of Commerce stressed recently the need to build capacity and competitiveness and to develop new ideas and entrepreneurship. But market access to the EU’s services sector does not necessarily lead to market presence.
Moreover, inclusion of the ‘Singapore issues’ – government procurement, intellectual property, trade facilitation, investment and competition policy – is premature since these issues have not yet been settled in WTO global trade talks. Why should the Bahamas allow itself to be cajoled by the EU into jumping the gun and getting ahead of the WTO itself?
Regional integration
One of the stated objectives of the EPA is to promote Caribbean regional integration. It is an exaggeration to claim that the agreement constitutes a commitment to CSME, but its implementation requires some regional cooperation which will result in a higher level of integration than now exists.
History shows that high levels of economic integration cannot be achieved without a significant degree of political integration resulting in the creation of supranational powers vested in regional agencies.
This raises the question whether greater regional economic integration is in the interest of the Bahamas and thus whether it shares this objective with the promoters of the EPA. Has the matter been addressed as a general principle?
There will also be extra costs; for example, in implementing common procedures like customs management. How will regional agencies be funded and will contributions from CARIFORUM member states be based on GDP figures? If so, with the highest GDP in the region the Bahamas is likely to be called upon to pay disproportionately more. Assuming the Government has studied this, will it publish the figures?
Institutional and legal reform
Advocates of the EPA claim that, in order to fulfill its commitments under the agreement, the Bahamas will be forced to carry out much needed institutional reform; for example, the tax system, customs, competition, public services etc. Reform of customs administration is perhaps the most important. A host of new legislation, including harmonization of laws with CARIFORUM countries, will also be required.
Has the cost of all this been assessed? Mr. Laing has spoken of an ‘implementation framework’ which addresses these issues. Will he make this available in order to reassure the public that the Government has the capacity and commitment to fulfill its obligations in this respect and to pay for their implementation? Will he also provide information about plans for the ‘enabling legislation’ which will be required following signature of the “goods-only” EPA this month?
Conclusion
A cautionary note. The EPA is entitled as being “between CARIFORUM states and the European Community and its member states”. But, although the Caribbean Regional Negotiating Machinery has led the way in negotiations, in practice Caribbean countries will sign it individually rather than collectively.
The result will be that, in the event of any dispute, each country will be at a serious disadvantage since it will be pitched individually against the massive resources of the EU. Have Caribbean negotiators considered the need to insist that the region should be able to speak as one in the settlement of disputes affecting individual countries?
The Government should not underestimate the repercussions of a “goods-only” EPA in negotiating trade arrangements with third countries, and it should now initiate a public debate about, in particular, its proposed services offer. It is important that those seeking to question the wisdom of government policy should not be characterized as being insular, unenlightened or opposed to change.
The Nassau Institute is an independent, a-political, non-profit institute that promotes economic growth in a free market economy with limited government, in a society that embraces the rule of law and the right to private property. Web Site: www.nassauinstitute.org
Reprinted from Caribbean Net News
caribbeannetnews.com
Commentary: EU Economic Partnership Agreement - what it means for the Bahamas
Published on Tuesday, October 14, 2008
By The Nassau Institute
If the proposed Economic Partnership Agreement with the European Union covering trade both in goods and services is signed in its present form by the Bahamas, the effects on the country’s economy and way of life will be far-reaching.
The Government should be commended for its efforts to consult stakeholders, as well as members of the public through town meetings, and for its publication last month of a detailed explanatory document about the EPA.
However, it appears that, for the most part, the Government has not entered into a genuine consultation about the fundamental issue of whether it is in the general interest of the Bahamas to sign an EPA at all; and many Bahamians remain uninformed about its likely impact on their lives and welfare.
There has been no formalized national consultation involving political parties, the trades unions, the churches and the private sector as a whole. Instead, the Government has taken a policy position, in line with other CARIFORUM countries, to go along with the EPA. It has sought to explain and justify its decision rather than to debate the overall merits and demerits of the EPA as far as the nation is concerned.
With the Government now set to sign later this month a “goods-only” EPA dealing with market access issues, while deferring its services offer for at most 6 months, it is timely for the Nassau Institute to set out briefly the main issues in a readily comprehensible form and to draw attention to a number of questions which should be examined further.
What is the EPA?
The Lome Convention of 1975 and its successor, the Cotonou Agreement of 2000, provided preferential tariff access into the EU for exports from the African, Caribbean and Pacific (ACP) states. This, of course, included the Bahamas.
The original intention of the EU was laudable. Its stated purpose was to help eradicate poverty in the context of sustainable development in developing countries with a view also to strengthening democracy and good governance.
Even though cynics suggested that the EU’s real purpose was to secure a steady supply of raw materials or primary products, the fact was that the ACP countries benefited from these trade preferences.
The Cotonou Agreement envisaged that such preferences would eventually be replaced by Free Trade Agreements (FTA). This was necessary in order that the EU could meet its non-discriminatory obligations required by the World Trade Organization (WTO). But the EU itself has now gone further.
Notwithstanding its own protectionist policies, the EU is looking (for its own purposes) to other countries to open their markets to European goods – former EU Trade Commissioner, Peter Mandelson, has publicly stated that the EU, as the largest economy in the world and a major trading bloc, is likely to benefit from more accessible world markets.
So, over and above its commitment to make arrangements for trade in goods that are compatible with WTO rules, the EU has proposed an EPA as a Free Trade Agreement which, on a basis of reciprocity, not only provides for the removal of all tariffs on the export of goods but also covers trade-related matters such as services, investment, e-commerce and capital movements as well as issues like competition, intellectual property and public procurement.
How would the Bahamas benefit from free trade with the EU under the EPA?
The USA and Canada together constitute the largest trading partner of the Bahamas, 83% of whose exports of goods go to them compared to only 13% to the EU.
Professor Norman Girvan of the University of the West Indies states that, since some 72% of the Bahamas’ foreign currency earnings derive from tourism and financial services, and with the preponderance of trade of goods with the USA, just 4% of total export earnings come from Europe.
The Government is keen to preserve the duty-free access for its exports to the EU worth some $90million and thereby to maintain its existing trade surplus. Loss of this access would result, for example, in imposition by the EU of an 8% tariff on crawfish exports.
In return, the EPA requires the Bahamas to give up tariff rates on 85% of EU imports, phased out over a 25-year period. The estimated loss of revenue is $6million. Since the main purpose of import duties is to generate government revenue rather than act as a barrier to trade, this loss will have to be offset by other taxes.
‘Trade-related’ matters
Under this section, a range of services areas will be opened up to EU competition enabling European companies and professionals to set up business here and Bahamians likewise to enter the EU marketplace.
However, Zhivargo Laing, minister of state for finance, has made it clear that the services offer to be presented to the EU “mirrors our current National Investment Policy” which presently reserves 13 areas of the economy for Bahamians.
To some observers, the benefit to the Bahamas of opening up the EU’s services sector is illusory since there are few Bahamian companies or individuals currently equipped or ready to compete in an EU market of 27 countries with over 400 million people and in the face of prohibitive costs, non-tariff barriers, subsidies and other hurdles.
It is not yet clear what the additional cost will be of complying with the EPA obligations; for example, the creation of new institutions, regulatory bodies and laws.
Effect of the EPA on trade with third countries
According to Stephen Lande, president of Washington-based consultants Manchester Trade, the major concern with the EPA is the impact of its Most Favoured Nation (MFN) provision on future relations with the USA.
If signatories enter into an FTA with a developed country which gives more favourable treatment than that provided to the EU under the EPA, they are obliged to consult the EU first. This could interfere with the Bahamas’ ability to enter into FTAs with other major trading countries as well as the USA.
A further consideration is that the USA, Canada and other non-EU trade partners are unlikely to accept that the EU can expect duty-free access to the Bahamas unless they can do so as well.
In the case of the USA, leading attorney Brian Moree argued at a Nassau Institute seminar on the EPA in June that, since MFN status meant no discrimination between countries, the Bahamas would have to offer – at the time it negotiated a replacement of the Caribbean Basin Initiative (CBI) – at least the same trade preferences and benefits it offered to the EU.
In practice, this would mean that, because the Bahamas’ level of trade with the USA was greater than with the EU, the starting point in negotiations would be – in his words – the ‘EU EPA plus’. Given that in 2007 the US exported to the Bahamas some $2.5 billion worth of goods, the loss to the latter would be substantial.
Mr. Moree further argued that, in order to meet the WTO’s demands for an end to one-way discriminatory preference regimes such as the Cotonou Agreement, a “goods-only” deal would have been sufficient so that it was not necessary to address trade-related issues such as services, investments, capital movements etc. Nor was it wise to address the so-called Singapore issues before it became necessary to do so (see ‘Further Issues’ below).
Way forward
Signature of a “goods-only” agreement as a first step now appears to be a fait accompli. It will secure tariff-free access to the huge EU market. The reciprocal removal of tariffs on imports from the EU will anyway become necessary as the Bahamas seeks to join the World Trade Organization. Membership of the WTO will require the phasing out of import duties across the board and development of an alternative means of generating government revenue.
Meanwhile, deferral of the Bahamas’ services offer is to be welcomed. This will allow time for debate.
Further issues
Services
An agreement covering services as well as goods seems, prima facie, to be heavily in favour of the EU. It is unnecessary because, if the conditions are suitable, EU investment is likely to continue without an EPA.
The Chamber of Commerce stressed recently the need to build capacity and competitiveness and to develop new ideas and entrepreneurship. But market access to the EU’s services sector does not necessarily lead to market presence.
Moreover, inclusion of the ‘Singapore issues’ – government procurement, intellectual property, trade facilitation, investment and competition policy – is premature since these issues have not yet been settled in WTO global trade talks. Why should the Bahamas allow itself to be cajoled by the EU into jumping the gun and getting ahead of the WTO itself?
Regional integration
One of the stated objectives of the EPA is to promote Caribbean regional integration. It is an exaggeration to claim that the agreement constitutes a commitment to CSME, but its implementation requires some regional cooperation which will result in a higher level of integration than now exists.
History shows that high levels of economic integration cannot be achieved without a significant degree of political integration resulting in the creation of supranational powers vested in regional agencies.
This raises the question whether greater regional economic integration is in the interest of the Bahamas and thus whether it shares this objective with the promoters of the EPA. Has the matter been addressed as a general principle?
There will also be extra costs; for example, in implementing common procedures like customs management. How will regional agencies be funded and will contributions from CARIFORUM member states be based on GDP figures? If so, with the highest GDP in the region the Bahamas is likely to be called upon to pay disproportionately more. Assuming the Government has studied this, will it publish the figures?
Institutional and legal reform
Advocates of the EPA claim that, in order to fulfill its commitments under the agreement, the Bahamas will be forced to carry out much needed institutional reform; for example, the tax system, customs, competition, public services etc. Reform of customs administration is perhaps the most important. A host of new legislation, including harmonization of laws with CARIFORUM countries, will also be required.
Has the cost of all this been assessed? Mr. Laing has spoken of an ‘implementation framework’ which addresses these issues. Will he make this available in order to reassure the public that the Government has the capacity and commitment to fulfill its obligations in this respect and to pay for their implementation? Will he also provide information about plans for the ‘enabling legislation’ which will be required following signature of the “goods-only” EPA this month?
Conclusion
A cautionary note. The EPA is entitled as being “between CARIFORUM states and the European Community and its member states”. But, although the Caribbean Regional Negotiating Machinery has led the way in negotiations, in practice Caribbean countries will sign it individually rather than collectively.
The result will be that, in the event of any dispute, each country will be at a serious disadvantage since it will be pitched individually against the massive resources of the EU. Have Caribbean negotiators considered the need to insist that the region should be able to speak as one in the settlement of disputes affecting individual countries?
The Government should not underestimate the repercussions of a “goods-only” EPA in negotiating trade arrangements with third countries, and it should now initiate a public debate about, in particular, its proposed services offer. It is important that those seeking to question the wisdom of government policy should not be characterized as being insular, unenlightened or opposed to change.
The Nassau Institute is an independent, a-political, non-profit institute that promotes economic growth in a free market economy with limited government, in a society that embraces the rule of law and the right to private property. Web Site: www.nassauinstitute.org
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