The Tribune, Bahamas

Bahamas ’did not yield in areas of unease’ over EPA

By Neil Hartnell, Tribune Business Editor

26 August 2010

The Bahamas "did not yield in areas that would cause the population some unease" in its Economic Partnership Agreement (EPA) services offer, a government minister telling Tribune Business that the ’watering down’ of this nation’s initial position that European Union (EU) firms joint venture with Bahamian companies in numerous sectors had done "no harm".

Confirming that the Bahamas’ services offer had been accepted by the joint CARIFORUM-EU Trade and Development Committee that overseas the EPA, Zhivargo Laing, minister of state for finance, said that while the Government’s initial offer opened some industries to EU firms only if they entered joint ventures with Bahamian firms, this requirement was largely dropped in the finalised version because it did not reflect this nation’s current National Investment Policy.

The Bahamas’ final EPA services offer, which has been obtained by Tribune Business, showed that sectors including research and development services (science and engineering); management and consulting services; services related to manufacturing, agriculture and forestry; packaging services; courier services; and a whole slew of environmental services - including sewage services, waste and water management services, refuse disposal services and non-hazardous waste collection services - had potentially been opened up to access by EU firms.

Although the Bahamas’ horizontal commitments still offer Bahamian firms operating in these sectors a degree of protection, as EU companies must obtain approval to enter this market from the Government (National Economic Council), this nation’s initial services offer had only opened the named industries to European subsidiaries/branches if they were part of joint ventures with Bahamian companies.

This ’watering down’ may draw concern from some Bahamian firms, who feel they could not compete with European companies, or that a joint venture would have greatly assisted the ’knowledge transfer’ and development of local businesses.

However, Mr Laing explained to Tribune Business that the Bahamas’ EPA services offer had maintained the existing ’status quo’ offered under the current National Investment Policy, which did not mandate that market access for overseas companies in these industries was conditional on them entering joint ventures with Bahamian firms.

"Any movement along those lines will be a movement from a position that did not reflect current policy," Mr Laing told Tribune Business. "The policy does not reflect, mandate joint ventures. The current policy does not require it.

"Once we entered into finalising our position in these negotiations, nothing changed with respect to what the [National Investment] Policy allowed.

"From our point of view, no harm was done in the end. But nothing prohibits joint ventures in these areas."

Mr Laing added that the Government was "satisfied" that it achieved its goals with respect to the Bahamas’ EPA services and goods/market access offers, given that they largely preserved the existing National Investment Policy.

"We were satisfied that we achieved the ends we sought to achieve with an offer that was consistent with our current Investment Policy," Mr Laing told Tribune Business. "We did not have to..... yield in areas that might cause the population some unease.

"It reflected the detailed attention we paid to the negotiations, and the Bahamas’ investment climate is not a closed one to any great degree. It might life a bit more doable in seeking to achieve an offer."

Mr Laing explained that the Bahamas’ initial services offer was a "conservative one" that was reflective of a more-closed economy than the reality. This, he said, was a negotiating tactic, as no party in talks such as those for the EPA submitted its best offer upfront.

"The offer changed to better reflect what we actually do in this country," Mr Laing told Tribune Business. "We had put in a much more conservative offer initially, which did not reflect our current practices. Our investment practices are more liberal than the offer we had made.

"As a matter of negotiating tactics, you offer a more conservative than liberal offer, and work towards a position more in line with the existing investment policy of the country."

Mr Laing added: "It was clearly our intent to end up with an offer that is consistent with our policy. It really is a liberal policy. It has 12-13 areas reserved for Bahamians, and vast majority of areas certainly allowed non-Bahamian participation.

"That liberal strategy and position we felt we could live with, because we’ve been living with it for decades now." The Government, he pledged, would continue to "preserve" economic sectors reserved for Bahamian ownership only.

Tribune Business Editor

THE Bahamas "did not yield in areas that would cause the population some unease" in its Economic Partnership Agreement (EPA) services offer, a government minister telling Tribune Business that the ’watering down’ of this nation’s initial position that European Union (EU) firms joint venture with Bahamian companies in numerous sectors had done "no harm".

Confirming that the Bahamas’ services offer had been accepted by the joint CARIFORUM-EU Trade and Development Committee that overseas the EPA, Zhivargo Laing, minister of state for finance, said that while the Government’s initial offer opened some industries to EU firms only if they entered joint ventures with Bahamian firms, this requirement was largely dropped in the finalised version because it did not reflect this nation’s current National Investment Policy.

The Bahamas’ final EPA services offer, which has been obtained by Tribune Business, showed that sectors including research and development services (science and engineering); management and consulting services; services related to manufacturing, agriculture and forestry; packaging services; courier services; and a whole slew of environmental services - including sewage services, waste and water management services, refuse disposal services and non-hazardous waste collection services - had potentially been opened up to access by EU firms.

Although the Bahamas’ horizontal commitments still offer Bahamian firms operating in these sectors a degree of protection, as EU companies must obtain approval to enter this market from the Government (National Economic Council), this nation’s initial services offer had only opened the named industries to European subsidiaries/branches if they were part of joint ventures with Bahamian companies.

This ’watering down’ may draw concern from some Bahamian firms, who feel they could not compete with European companies, or that a joint venture would have greatly assisted the ’knowledge transfer’ and development of local businesses.

However, Mr Laing explained to Tribune Business that the Bahamas’ EPA services offer had maintained the existing ’status quo’ offered under the current National Investment Policy, which did not mandate that market access for overseas companies in these industries was conditional on them entering joint ventures with Bahamian firms.

"Any movement along those lines will be a movement from a position that did not reflect current policy," Mr Laing told Tribune Business. "The policy does not reflect, mandate joint ventures. The current policy does not require it.

"Once we entered into finalising our position in these negotiations, nothing changed with respect to what the [National Investment] Policy allowed.

"From our point of view, no harm was done in the end. But nothing prohibits joint ventures in these areas."

Mr Laing added that the Government was "satisfied" that it achieved its goals with respect to the Bahamas’ EPA services and goods/market access offers, given that they largely preserved the existing National Investment Policy.

"We were satisfied that we achieved the ends we sought to achieve with an offer that was consistent with our current Investment Policy," Mr Laing told Tribune Business. "We did not have to..... yield in areas that might cause the population some unease.

"It reflected the detailed attention we paid to the negotiations, and the Bahamas’ investment climate is not a closed one to any great degree. It might life a bit more doable in seeking to achieve an offer."

Mr Laing explained that the Bahamas’ initial services offer was a "conservative one" that was reflective of a more-closed economy than the reality. This, he said, was a negotiating tactic, as no party in talks such as those for the EPA submitted its best offer upfront.

"The offer changed to better reflect what we actually do in this country," Mr Laing told Tribune Business. "We had put in a much more conservative offer initially, which did not reflect our current practices. Our investment practices are more liberal than the offer we had made.

"As a matter of negotiating tactics, you offer a more conservative than liberal offer, and work towards a position more in line with the existing investment policy of the country."

Mr Laing added: "It was clearly our intent to end up with an offer that is consistent with our policy. It really is a liberal policy. It has 12-13 areas reserved for Bahamians, and vast majority of areas certainly allowed non-Bahamian participation.

"That liberal strategy and position we felt we could live with, because we’ve been living with it for decades now." The Government, he pledged, would continue to "preserve" economic sectors reserved for Bahamian ownership only.