EPA - The Bahamas First Trade Liberalization Agreement

When it is signed later on this year the Economic Partnership Agreement between CARIFORUM (of which The Bahamas in a member) and the European Community will be the first trade liberalization agreement that The Bahamas is a party to. The actual formal signing of the EPA will basically be just a formality as the European Commission and the CARIFORUM States, including The Bahamas, initialed the EPA, a comprehensive regional free trade agreement that covers trade in goods, services and investment, on the 16th of December, 2007.

The goal of trade liberalization is to bring about the reduction of barriers imposed by governments that prevent free trade. The free trade model provides for free access to markets for the trade of goods and services without tariffs, regulatory legislation, import quotas, subsidies for producers, trade restrictions that impede transactions, as well as the free movement of labour and capital. In the context of trade liberalization, globalization, or more correctly economic globalization, is the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology. The pace of globalization is quickening and will continue to have a growing impact on business organization and practice as national boundaries blur into transparency for economic purposes.

Although "globalization" was first coined in the 1980s, some would say the world was as globalized a century ago as it is today in regards to international trade and migration. However the depression of the 1930s put an end to globalization as nations withdrew, with the realization that international markets could bring about untold misery in the form of poverty and unemployment. In the aftermath of World War II western states resolved to build and strengthen international ties which laid the groundwork for today's globalization based on trade liberalization. This has resulted in the blending of individual national markets and the stimulation of free movement of capital.

If we step back and look at The Bahamas from a global viewpoint, we see that The Bahamas has long been benefiting from globalization. Our tourism industry is supported by a global market. Our financial industry is supported by a global market. These two pillars of our economy have made The Bahamas the wealthiest nation in the Caribbean.

The vigorous trade of globalization is largely seen as a good thing by consumers and capitalists, who point to greater spending, the raising of standards of living, the promotion of information exchange, and a greater understanding of other cultures. But there is a growing opposition to the forces of globalization that cannot be ignored if we are to be properly informed on these matters. Critics say that the more wealthy nations gain at the expense of developing countries and that the global income of the poorest people in the world is dropping.

In the developed world globalization has lead to increased insecurity in the workplace, with manual workers in particular under threat as companies shift their production to countries with low-wage economies. The major concern is the appearance that huge trans-national companies may become more powerful and influential than democratically elected governments and put shareholder interests above those of communities. Ecologists say that corporations are disregarding the environment in favour of mega-profits and marketplace supremacy. Human rights groups are saying that corporate power is restricting individual freedom. Even many business persons are fearful that the economies of scale the trans-national companies enjoy can put them out of business.

The Bahamas has benefited from the global economy in tourism and financial services, however our success in the global arena has been on our terms. We have retained our sovereignty, our tax system, and determined who could and could not come into our country to invest or work. Formalized rules-based globalization and trade liberalization is something very new to us and will require that we make drastic changes in the way our country operates.

For more information on trade liberalization and globalization visit BECon's website:
http://www.bahamasemployers.org/documents/tlg/index.shtml

Civil Society's Role in Globalization and Trade Liberalization

Simply put, Civil Society excludes government and comprises employers, employees, non-government organizations (NGO) and non-violent, non-criminal non-state actors (NSA). These organizations, groups and individuals make up Civil Society. Trade liberalization and globalization will affect all Bahamians for generations to come, therefore it is important that the process be made as transparent as possible and that the public be informed each step of the way. Government should acknowledge that the private sector is the primary stakeholder in trade talks and invite Civil Society to become more involved in the process and be allowed to provide input in a constructive manner.

The signing of the EPA is just the beginning as it will be phased in with certain achievements scheduled to take place at various intervals such as three, five, seven and up to twenty-five years. During these periods new legislation needs to be put in place and our reliance on import tariffs (duty, stamp tax, etc.) as the major source of government revenue needs to be replace with a new tax regime. Other globalization and trade liberalization initiatives that will require negotiation and further changes to our society include membership in the World Trade Organization, a replacement of the Caribbean Basin Initiative (CBI) with the United States and a replacement of the Caribbean-Canada Agreement (CAIBCAN) with Canada. Civil Society needs to be involved in the process.

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