Mitchell Mounts Defence Of Bahamas’ Position On The CSME

by Amanda Banks, Tax-News.com, London

25 May 2005

As the debate on The Bahamas' participation in the CARICOM Single Market Economy rages on, Foreign Affairs Minister Fred Mitchell was seen vigorously defending the government's half in half out position regarding the CSME during a recent broadcast.

Mitchell, who spoke during a radio debate on the CSME at the weekend, insisted that there will be no fundamental changes if the Bahamas signs up to the agreement and expressed frustration over what he termed misinformation by opponents to the treaty.

"What I'm saying is, let's not frighten ourselves by saying that there is going to be some fundamental change," he said.

"There is going to be no fundamental change and as for whether the reservations will last, I cannot say. I can only speak for the Government of the Commonwealth of The Bahamas today," he added.

The Bahamas is not fully embracing the CSME and has decided to opt out of certain aspects of the deal, including the free movement of people, the Caribbean Court of Justice at the appellate level, the single currency and monetary union and the Common External Tariff.

However, many, including Brian Moree, a leading attorney and head of Financial Services Consultative Forum, believe that the Bahamas would be a lot better off eschewing the CSME completely.

"I do not think that The Bahamas should join a single economy with 14 other countries within the region. That is my primary concern. I don't think there are compelling economic interests for The Bahamas to join this single economy," Mr Moree stated on the same radio broadcast.

With the CSME set to open its doors during 2005, supporters of the free trade agreement have been actively drumming up support for the Bahamas' position in recent weeks. During a speech given earlier in the year, Mitchell argued that the jurisdiction risks isolating itself from the from the rest of the region if it does not participate in the CSME, to the detriment of many economic sectors, including financial services.

"We would be the only country in the Caribbean, apart from Cuba, that would be outside a regional trade bloc; and since trade blocs provide benefits for their members that are not provided to non-members, it could easily be reasoned that our tourism industry, our manufacturing industry, our beleaguered agriculture industry and even our financial services industry would be immediately and negatively affected, largely in terms of the relatively higher cost of doing business in The Bahamas that we would have invited by trying to stand alone," he noted.

"The fact is, decision making in banking and insurance takes place in the sector largely in the Southern Caribbean. So we ought to be in a position to keep and to attract those decision making centers here in Nassau. But if you keep rules and laws that are a disincentive to that happening, you are going to lose out many times," Mitchell warned.

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