The Bahama Journal | May 9th, 2008
Laing: Telecom, Real Estate Excluded From EPA Negotiations
By Tameka Lundy
Telecommunications and real estate in The Bahamas are two sectors that are, for now, off limits for negotiations under the proposed Economic Partnership Agreement [EPA] between the European Community [EC] and CARIFORUM, State Minister for Finance Zhivargo Laing reported yesterday.
Despite sentiments to the contrary, Minister Laing asserted that the trade agreement would bring a degree of clarity and transparency to The Bahamas’ trading relationship with CARIFORUM and the EC.
However, there are some local professionals who have been mounting vigorous opposition to the EPA with the EU and are urging the government to abandon its current course of action.
As he touted the benefits of the EPA to members of the real estate sector yesterday, Minister Laing said under the investment, e-commerce and trade in services schedule the Bahamas is required to make offers in 116 out of 155 service sectors because it is considered a More Developed Country in the CARIFORUM context.
Telecommunications is not open for negotiation because of the pending privatization of the Bahamas Telecommunications Company, Mr. Laing explained. The same is true for real estate because local realtors have been perpetually complaining about foreign agents invading their territory and eroding their revenue base.
"The government needs more time to develop a comprehensive framework for the development of this sector in consultation with the Bahamas Real Estate Association and other stakeholders," Mr. Laing said. "So for The Bahamas, the real estate sector is not part of the current EPA Services Schedule.
He said the reality is the rules governing the international trading environment have changed. The Bahamas is considered a major exporter of services and actively participates in the global economy through tourism and financial services. The European Union is a major market for goods and services.
"A trade agreement that provides predictable and transparent rules for trade in goods and services with our neighbours and one of the largest trading blocs in the world cannot be ignored," the minister told real estate professionals attending the Bahamas Real Estate Association’s luncheon at the British Colonial Hilton Thursday.
CARIFORUM states including The Bahamas have been performing their respective legal reviews of the EPA ever since the Caribbean Regional Negotiating Machinery [CRNM] completed a legal scrub of the document last month.
CRNM Director General Ambassador Richard Bernal said when the legal review is completed, the respective Cabinets can confer authority to a minister to sign the EPA.
Officials had previously agreed that signature of the EPA text would take place in April. However, that schedule was scrapped, as the vetting process took longer than expected.
The EPA has three major parts; the first section details the rules that govern trade in goods, the second outlines the commitments with respect to service and investment and the final section addresses trade related issues.
The investment schedule deals with investment in five non-service areas: agriculture, fisheries and forestry; fishing; mining and quarrying; manufacturing and production, transmission and distribution of electricity, gas, steam or hot water.
"Each country is required to list the existing restrictions, reservations or exclusions with respect to investment in these sectors," Mr. Laing said.
"In the forestry sector, there are currently no investment restrictions however, The Bahamas like many of the CARIFORUM countries would have reserved the right to adopt measures on investment in this sector. Similarly, restrictions on foreign fishing in the Exclusive Economic Zone would have been listed as an exclusion in the fisheries sector."
One of the areas that has created concerns relates to the temporary movement of persons under the EPA. Minister Laing said the concern is one shared by all parties.
"As a consequence great efforts have been expended to define these categories of persons. These provisions are important for persons in the professional services and tourism sector," he said.
"The EC has provided access for contractual service providers in a number of areas that includes architectural and engineering services, environmental services, chefs de cuisine, fashion models and travel agency services."
The signing of the CARIFORUM- EC Economic Partnership Agreement (EPA) has taken longer than was initially anticipated. The CRNM said recently that delays in the signing of the agreement could result in CARIFORUM States losing their preferential access to Europe.
The EPA would provide for continued duty-free, quota-free access for CARIFORUM’s goods on the European market. However, without full signature of the Agreement, CARIFORUM’s preference in that regard does not have legal cover under the law of international trade, the group said.
Minister Laing pointed out that for The Bahamas, the EPA is not a guarantee that there will be additional investment in any sector of the economy.
"It does however provide a framework for persons seeking to understand our investment regime to readily decipher which sectors are open for investment and the mode through which the service can be provided to Bahamian consumers," the minister said.
"Tourism and financial services are sectors where we encourage inward investment and our offer in the EPA indicates the existing openness in these sectors."
Already, the CRNM has concluded that strengthening the consultation components of the negotiating process is inextricably linked to ensuring the optimum engagement with and participation of key stakeholders, particularly the private sector.
It has urged increased emphasis on increasing the allocation of resources to facilitate private sector engagement and to build the capacity of firms to identify and articulate defensive and offensive interests in external trade negotiations.