FRIDAY, JULY 1, 2016
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Air cargo costs to rise ‘tremendously’ By NATARIO McKENZIE Tribune Business Reporter and NEIL HARTNELL Tribune Business Editor BAHAMIANS were yesterday warned that the cost of imported air freight will increase “tremendously” as a result of the new Customs fees and fines set to be imposed on operators from today. The warning came as Florida-based air cargo companies confirmed Tribune Business’s exclusive Thursday article that a withdrawal from the Bahamas market remains an option
Freight operators ‘up in air’ on continued service Claim Customs ‘want us to do their jobs’ Say new fines ‘bad thing for the Bahamian people’ should the amendments to Customs regulation 147 not be reversed.
Air cargo pull-out threat result of ‘ill thought-out policy’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE threat of a Bahamas boycott by Florida-based air cargo operators was yesterday branded as “the unintended consequences of ill-thought out policy” by the Opposition’s deputy leader. K P Turnquest warned that as an import-dependent economy, reliant on international transportation links, the Bahamian economy could only suffer if freight companies reduced or eliminated services to this nation. “At present, we depend on them to bring in perishables, fruit and flowers and the like, and ‘just in time’ kinds of material,” the FNM’s finance spokesman told Tribune Business. “To the extent they actually reduce or don’t provide the service, that’s obviously going to have an effect on the products we can offer on the hotel and tourism side of the economy. “It will have an obvious knock-on effect,” he added. “In the short-term, it’s going to have some adverse downstream effects if we’re unable to find replacement cargo carriers. “It’s just another little knock back. The unintended consequences of plans and policies that were not well thought out or consulted upon.
FNM deputy fears ‘knock back’ for economy
K. PETER TURNQUEST “With this increased cost and increased bureaucracy that accompanies it, all the processing and Customs involvement, that whole model becomes questionable.” Mr Turnquest was speaking after Tribune Business exclusively revealed on Thursday how Florida-based air cargo companies are threatening to boycott the Bahamas over the new Customs fees and fines set See PG B6
Services Coalition ‘irony’ over WTO By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net LACK of private sector involvement has been a key factor in why the Bahamas’ bid for full World Trade Organisation (WTO) membership has lasted 15 years and counting, a former Securities Commission principal believes. Hillary Deveaux said it was “extremely ironic” that the Bahamas launched its membership effort in 2001, the same year that 13 Caribbean countries began efforts to establish a Coalition of Services Industries in their nations. The Bahamas this week became the 14th regional nation to create such a Coalition, which has as a key objective to advance and protect the interests of services industries in trade negotiations. Mr Deveaux, who was recently appointed as the Bahamas’ alternate chief negotiator for the WTO membership effort, said the absence of advocacy bodies such as a Coalition of Services Industries had impeded the country’s progress in these talks. “It shows why we have not progressed in the accession to WTO,” Mr Deveaux said of the 15-year delay in the Bahamas forming its own Coalition of Services Industries. “It’s one of the reasons, but not the only reason, why See PG B4
15-year wait highlights why Bahamas accession slow Business must protect itself as ‘free trade not fair’ Intellectual property ‘one of our main violations’
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Walter LeBlanc, chief pilot for Fort Lauderdale-based Island Wings, said he and his colleagues were mulling whether to end services to the Bahamas, telling this newspaper: “It’s up in the air right now.” He explained: “It will have a major impact. Basically, they are making us responsible for doing their jobs. Customs officers are supposed to inspect incoming cargo passengers and their baggage. What they are doing is now they are putting that job on us, and if it is not done they are fining us heavily, which I don’t think is not fair deal.”
And Mr LeBlanc then warned: “This is going to cause the price of freight to go up tremendously, which is a bad thing for the Bahamian people. They hit us two years ago with the $150 on each flight. “How is that fair, when we have an airplane that carries seven people, and Jetblue has an airplane that carries 250 people? We both have to pay $150. They can spread that out on 250 passengers, and we have to spread it out on seven passengers. “It’s just getting to the point See PG B7
Govt ‘accelerates’ WTO member push By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s reconstituted trade negotiating bodies face a “huge task”, its chief negotiator acknowledged yesterday, adding that his appointment showed it wanted to “accelerate” the Bahamas’ accession to full World Trade Organisation (WTO) membership. Philip Galanis, principal of the HLB Galanis accounting firm, told Tribune Business that while the Government had set “no timelines” for the Bahamas to become a full WTO member, it was likely to be at least an 18-24 month exercise. He confirmed that the Bahamas Trade Commission, consisting of private sector representatives, had been reformed in March, with a mandate to represent the business community’s various positions on trade issues. The Trade Commission will also be responsible for educating the Bahamian people on trade, and what it means to their lives, and is planning to conduct a first public survey on the topic next month. Mr Galanis, meanwhile, said himself and the Government’s
Galanis named Bahamas chief trade negotiator Says: ‘Onerous task, but we’re not daunted’ ‘No timeline’, but suggests 18-24 month process alternate chief trade negotiator, former Securities Commission chief, Hillary Deveaux, headed a 15-person negotiating team that would negotiate the terms of the Bahamas’ WTO accession directly. The other 13 members are permanent secretaries and senior officials from government ministries and bodies that will be directly impacted by the Bahamas’ entry into the global economy’s rules-based trading regime, such as the Governor of the Central Bank of the Bahamas. “The Government is committed to accelerating the discussions on WTO,” Mr Galanis told Tribune Business, implySee PG B5
Bahamas exports decline by 36% to five-year low Imports also fall to lowest level since 2011 in 2015 Merchandise deficit narrows 12% to $2.7bn Drops reflect low economic activity levels By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas’ merchandise trade deficit fell by 12.3 per cent in 2015 to $2.719 billion, as the decline in imports offset a more than one-third reduction in exports. The annual trade report, released by the Department of Statistics, revealed that Bahamian goods’ exports - a vital source of foreign currency earnings - dropped by $246.4 million or 35.7 per cent year-over-year in 2015. The decline, from $689.2 million to $442.8 million, was attributed largely to declines in the re-export of ‘mineral fuels’ and ‘chemicals’, but was offset by a greater fall in the Bahamas’ import bill. This fell by $628.5 million, or 16.5 per cent, dropping from $3.79 billion in 2014 to $3.162 billion last year. Bahamian imports thus fell to their lowest level in five years, since 2011, another sign of a struggling economy where consumer demand is relatively low. A major contributor to the decline is likely to have been the reduction in global oil prices, which lowered the Bahamas’ nine-figure annual fuel import bill, plus a reduced level of economic activity highlighted by a 1.7 per cent contraction in real gross domestic product (GDP). These factors are likely to have figured prominently in reducing the Bahamas’ merchandise (physical goods) trade deficit from 2014, when it breached the $3 billion mark at $3.101 billion. “The trade deficit decreased by 12.3 per cent between 2014 and 2015, resulting in a negative trade balance of $2.7 billion,” the Department of Statistics report said. “The value of commodities imported into the Bahamas totalled $3.2 billion, resulting in a significant decrease of 16.5 per cent between 2014-2015.” It conceded that there had been a “significant decline” in the total value of Bahamian exports, attributing this especially to a 57.4 per cent fall in the value of ‘mineral fuels’, which dropped from $165.3 million to $70.4 million. “The category of ‘chemicals’ also See PG B6