FTAA Ratification Unlikely In 2005 Says Bahamas Trade Minister

by Amanda Banks, Tax-News.com, London

15 June 2004

In comments made last week, Bahamian Trade and Industry Minister Leslie Miller cast doubt on whether a full Free Trade Area of the Americas agreement will be finalised before the 2005 deadline.

Contributing to the budget debate last Wednesday, Mr Miller told the House of Assembly that it could more likely be 2008 before the FTAA pact is ratified by all parties.

The effort to unite the economies of the Americas into a single free trade area began at the Summit of the Americas, which was held in December 1994 in Miami. The Heads of State and Government of the 34 democracies in the region agreed to construct a Free Trade Area in which barriers to trade and investment will be progressively eliminated.

They agreed to complete negotiations towards this agreement by the year 2005, and to achieve substantial progress toward building the FTAA by 2010.

However, from a Bahamian perspective, some important issues remain to be resolved; not least the question of tax reform, since the jurisdiction’s government earns a substantial chunk of revenue through import tariffs.

With taxes on income seemingly ruled out, the Bahamas will likely need to replace tax revenues lost through abolition or reduction of tariffs with some form of sales or value added tax.

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