business@tribunemedia.net
WEDNESDAY, DECEMBER 11, 2019
$4.56
$4.57
Energy industry eyed for $80m post-Dorian boost By NEILHARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamian energy sector is being targeted for an $80m post-Dorian investment that seeks to combine better stormresilient infrastructure with increased renewable energy penetration. Documents seen by Tribune Business reveal that the Inter-American Development Bank (IDB) Board is due on January 29, 2020, to discuss approving a project that is intended to convert the category five storm’s natural disaster into an opportunity to advance The Bahamas’ energy reform goals. Promising that “the main beneficiary... is Bahamian society”, the IDB papers detail how two-thirds of the $80m - some $53.5m - will be dedicated to rebuilding Abaco and east Grand Bahama’s generation and transmission and distribution networks after they
• IDB project sees opportunity in disaster • Will rebuild infrastructure with renewables • And tackle climate change with cost, reliability were smashed by Dorian’s winds and rain. A further $20m is being allocated to improving energy reliability and costs throughout New Providence and the Family Islands, with a focus on developing “models” for solar photovoltaic (PV) plants as well as rooftops and microgrids. And the $5.5m balance is targeting legal and regulatory reforms to support this renewable roll-out, in addition to strengthening the local solar industry’s supply chain. Explaining the rationale for its intervention, the IDB said: “The devastation brought by Hurricane Dorian has signalled a new sense of urgency for the need to craft a comprehensive reconstruction
and resilient infrastructure programme that addresses the climate challenges The Bahamas is facing, as well as those related to high electricity costs, poor reliability and an overwhelming dependence on imported fossil fuels. “The focus on renewable energy resources is critical as the steady cost of solar PV and wind technologies has declined, and renewable energy is becoming an increasingly competitive way to meet new generation needs. The objective... is to advance renewable energy within The Bahamas, improving the reliability, resilience and costs of supplying electricity in the country. “The objective of the
first operation is to support the government of The Bahamas with the rehabilitation of critical energy infrastructure, enabling a resumption of livelihoods and productivity sectors while facilitating introduction of a renewable energy programme to improve the cost, reliability and resilience of the electricity system in The Bahamas.” The project’s main $53.5m component, according to the IDB, aims to “ensure renewable energy and resilience are built into all systems” in Abaco and east Grand Bahama as they are rehabilitated and recover from Dorian’s devastation. An environmental and
SEE PAGE 4
$4.65
$4.65
Developer interest sought over LPIA commercial offices By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Lynden Pindling International Airport’s (LPIA) operator has launched a formal bidding process to determine if third-party developers are interested in meeting demand for office space at its location. A Nassau Airport Development Company (NAD) spokesperson, responding to Tribune Business’s questions, said it released this week’s expression of interest (EOI) document in response to inquiries by both government and private sector entities about obtaining office space near LPIA. “We have had interest expressed in office spaces proximate to the airport by multiple government entities and others. As such we determined to gauge the interest of qualified developers to undertake this project,” they said. “[We] will be better positioned to speak to the interest of developers once
the process ends on January 31, 2020.” The spokesperson added that NAD has “identified five acres of airport land north-east of our terminal buildings” that would be suitable for an office and commercial complex. It is seeking, according to advertisements published on Monday, entities/persons with eight to ten years’ experience in developing, owning and operating “major office and/ or commercial complexes in The Bahamas” and the ability to raise necessary financing. “NAD’s goal is to develop its landholdings within the footprint of the airport to satisfy potential demand for office facilities near the airport, and to create general facilities to support and stimulate aviation-related and other business and economic activity,” the advertisement stated. Meanwhile, the spokesperson said NAD had yet
SEE PAGE 6
Bahamas must flip DPM: VAT relief for services ‘too costly’ • And too ‘difficult to control’ post-Dorian approach to WTO • Concession enjoyed by those not in need By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas should go “full steam ahead” in pursuing World Trade Organisation (WTO) membership through a private sector-driven approach that improves competitiveness, an attorney is arguing. Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house counsel, told Tribune Business he was not convinced that the country has adopted “the holistic approach” necessary for maximising the potential benefits of joining the world’s rules-based trading overseer. The now-Callenders & Co attorney, warning that The Bahamas’ accession terms will become “tougher” the longer negotiations take, added that the country would be better prepared for WTO if it undertook reforms essential for improving economic competitiveness such as energy costs and reliability. Mr Leonard also called for The Bahamas’ approach to be flipped so that it was
CORRECTION IN AN article published on December 9, 2019, it was reported that Jeffrey Prescott Kerr was a 50 percent shareholder of Island Luck. This is not correct. He is a 50 percent shareholder in Playmark Entertainment, an entity jointly owned with Island Luck principal, Sebas Bastian.
CAREY LEONARD the private sector telling the government what negotiating stance to adopt, and what it should be seeking, rather than the latter telling the business community - the group most affected by the country’s accession terms - what it is doing on their behalf. He added that he was not surprised to hear Zhivargo Laing, The Bahamas’ chief WTO negotiator, disclose that this nation is under pressure to open up some of the 16 services industries previously reserved solely for local ownership but more details were required. Meanwhile Paul Moss, who unlike Mr Leonard is a WTO opponent, agreed that there was little shocking in Mr Laing’s revelations given that the WTO is “a one-size fits all” regime whose overriding goal is liberalisation and the removal of all barriers to trade. He warned that “the Bahamian people will not stand” for the opening up of industries reserved for Bahamian ownership to see local companies being “overrun” by foreign competitors with deeper pockets and better access to capital.
SEE PAGE 6
ELIMINATING VAT on services in the Dorian-hit islands would be difficult to police and too costly, the deputy prime minister said yesterday, while granting tax breaks to companies that do not need them. K Peter Turnquest, pictured, explaining the government’s rationale for maintaining VAT on services in its newly-established Economic Recovery Zones, told Tribune Business that “we’d love to do more” but there is still a public sector with multi-billion funding needs. Singling out construction labour, in particular, as an area where the government
• Govt would ‘love to do more’, but constrained
already granted. Confirming that the Minnis administration is trying to achieve a delicate balance between facilitating post-Dorian recovery and The Bahamas’ fiscal health, he added that the government was hoping to beat its revised $677.5m deficit target and ensure public would have liked to provide spending “doesn’t get out of concessions, Mr Turnquest control” such that it stores said it needed to “be rea- up even greater long-term sonable” because the problems for the country. While the government has Public Treasury stands to lose “significant” revenues been urged to “revisit” its through the tax breaks decision to exclude services
from the Recovery Zone VAT breaks, Mr Turnquest countered by suggesting it would be virtually impossible to prevent evasion, fraud and other forms of tax crime if such a concession were granted. He added that wealthy businesses, which had no need of such relief, would also benefit alongside those that do. “One, because it is difficult to control,” Mr Turnquest told Tribune Business of the government’s thinking in
SEE PAGE 5
DPM: No monies for public sector minimum wage rise By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE deputy prime minister yesterday revealed that the government has made no provision for a public sector minimum wage increase in this year’s Budget with Cabinet still discussing the issue. K Peter Turnquest, speaking ahead of the weekly Cabinet meeting, said: “We do not have in our budget this year for a minimum wage increase. Cabinet is still discussing the matter, so it would be premature for me to give any definitive statement on it. “As you know, we are in the middle of negotiations with a number of unions and some are about
• No provision made in 2019-2020 budget • Issue still being debated by Cabinet • Mixed messages from govt over hike to come up. So this will all be a part of what we have moving forward on how we address all of the labour issues before us, and how we settle all these matters as quickly as possible.” Mr Turnquest’s remarks raise questions over how close the government actually is to approving a public sector minimum wage increase, and the extent of any rise. The prospect of this was first raised by the prime minister in comments to reporters last week that public sector employees can expect a minimum
wage increase, but he did not go into details. Dr Minnis also indicated that an increase to the private sector minimum wage, which currently stands at $210 per week, would only happen after consultations with employers to determine the impact on jobs/ hiring, investment and the overall economy. However, Peter Goudie, vice chairman of the National Tripartite Council (NTC) and the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) representative
on labour relations, said that the NTC - the body that deals with discussions on the minimum wage - has no knowledge of what the prime minister. Then John Pinder, director of labour, said the government was eyeing an increase in the public sector minimum wage to between $300 to $350 per week. That represents an increase of between 42.9 percent and 66.7 percent. Taking the lower $300 threshold, and Mr Pinder’s
SEE PAGE 5
PAGE 2, Wednesday, December 11, 2019
THE TRIBUNE
PORT AUTHORITY TEAMS WITH ENGINEER GROUP THE Grand Bahama Port Authority (GBPA) teamed with a non-governmental engineering organisation to ensure Freeport’s rebuilt infrastructure can better withstand future Doriantype storms. Its partnership with Engineers Without Borders (EWB), a global consortium of engineering professionals, whose mission is to build a better world through projects that empower communities,
resulted in a joint threeweek structural assessment of the damage inflicted by the category five storm. “Our team worked alongside members of EWB on structural assessments for approximately three weeks following Hurricane Dorian,” said Nakira Wilchcombe, the GBPA’s director of building and development services. “The partnership facilitated the sharing of professional experiences
and input regarding damage assessments, and discussion on opportunities for greater resilience in the construction industry.” The EWB team was led by Kevin Hagen, a civil engineer with more than 40 years’ experience. “EWB partnered with GBPA to provide engineering advice to help them best decide how to move forward with recovery in a resilient manner,” he said.
OVER a three-week period, EWB shared professional experiences, provided input on damage assessments, and discussed opportunities for greater resilience in the construction industry. From left: Kevin Hagen, EWB; Sherwin Mullings, GBPA building and development services; Ole Madsen, EWB; Peter Sturtevant, EWB; Martin Aquino, EWB; Amit Seeram, GBPA building and development services; and Nakira Wilchcombe, GBPA building and development services. Photos: GBPA/Barefoot Marketing
“Effective engagement of local and regional engineering, architecture and construction resources is central to long-term improvement in the built environment on the island.” Ms Wilchcombe said the GBPA previously brought local industry practitioners together to discuss where improvements could be made to the building code to increase resiliency, particularly against waterrelated damage. EWB shared its professional experiences, provided input regarding damage assessments, and discussed opportunities for greater resilience in the construction industry.
“Resilience in construction is, of course, a direct benefit to the property owner in reducing risk of loss,” said Mr Hagen. “Equally important, more resilient construction reduces the broad economic disruption that occurs with major disasters.” Contractors, engineers, and other design professionals were invited to a workshop to discuss damage assessments and provide input as it relates to the industry. “The GBPA is very grateful for the assistance provided by Engineers Without Borders,” said Henry St. George, GBPA vice-president. “With their
support we were able to preempt bottlenecks in the rebuilding phase by adding resources and technical insight to our inspection team. “We were able to draw on EWB’s considerable experience from other disaster responses, and could not have asked for a more willing and able team to assist us. While we have always dealt with exposure to hurricanes, Dorian clearly highlighted the impact of climate change and the realities that come along with it. Our plan is to rebuild the island’s infrastructure in a way that considers those climate change challenges.”
THE TRIBUNE
Wednesday, December 11, 2019, PAGE 3
Top labour official: No need for general strike By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE government’s top labour official yesterday argued there was no need for a general strike, which should be the “last thing” trade unions should resort to. John Pinder, pictured, director of labour, told Tribune Business that Obie Ferguson, the Trades Union Congress (TUC) president, had been agitating for this for many years even though today’s industrial relations climate does not support such a move. “For many years I think Mr Ferguson has been trying to get a general strike,” Mr Pinder said. “But I keep saying what happened back then with the general strike, you had the minority oppressing the majority.That is not happening right now. “What is happening right now is different employers are having different views on certain points, and different unions are having different challenges with different things. Not every union is faced with major challenges; some unions are doing pretty good, and some workers are doing pretty good. That’s my point of view. I don’t see sufficient or real pressing issues that they cannot be resolved where it would lead to a general strike.” “Striking, in my view, should be the very last
thing a union resorts to,” he added. “That’s when no one is talking and there is a stalemate, and you can’t get anyone to intervene and no one to mediate between the union and employer. That’s when you have a general strike. There is no need to talk about a general strike when people are still talking and trying to negotiate and working things out.” Mr Pinder added that “too many Bahamians try to pre-empt things and jump ahead, and cause some type of demonstration or awareness to be made to the general public, and when it happens they want to take credit and say that ‘if it wasn’t as a result of this the government would not have done this or that’. “That’s what’s killing us,” he said. “I’m not saying Mr Ferguson is grandstanding, but I’m saying that I don’t see us having those kinds of labour issues at a national level to cause a general strike.” Mr Pinder also disagreed with Mr Ferguson’s assertion that the current industrial relations climate is the “worst in 35 years”, telling this newspaper: “I really can’t say that this is the worst time. Again, what I think is happening is there are a lot of unions that have a lot of issues, and if they apply their issues to their employers at this kind of time that they can get sympathy from the general
public and, in some cases, even from the government. “Unions have always been very active, and have always been playing a role, and sometimes some people would want to suggest that unions have been obsolete. So when you keep making those statements, especially for the union to now raise their heads and raise their voices, so that you can now know they are relevant, when you start to challenge the unions and union leaders they will make it that they are relevant. “So it may appear as though they are a little more radical than in the past. But a lot of them have their mandate, and they have to do what is necessary to satisfy their membership. I just always hope that they can be reasonable and that the employers can also look at what is happening with them and try to resolve these matters in an amicable way that it doesn’t have to reach to the point where unions are having to bring industrial action against their employers.”
BAHAMAS GAINS TOP TOURISM CONFERENCE
A MAJOR Caribbean hotel investment conference will be held in The Bahamas late next year at Baha Mar’s Grand Hyatt resort. The Caribbean Hotel Investment Conference & Operations Summit (CHICOS) will celebrate its 10th anniversary from November 12–13, 2020, at the Cable Beachbased resort complex. “It’s a thrill for us to celebrate this monumental event, our 10th anniversary celebration of the conference, back where it all started; in The Bahamas,” said Parris Jordan, an HVS managing director and the conference chairman.
“We have been so fortunate over the years to experience our conference throughout the most diverse and attractive region of the world, and to now host our hospitality developers and lodging companies at the new Baha Mar, back in The Bahamas where I’ve had the pleasure of living for four years, is meaningful to me personally and to the loyal CHICOS attendees and advisory board members.” The Ministry of Tourism is the planning partner for CHICOS 2020. Dionisio D’Aguilar, minister of tourism, said: “The Bahamas was given the privilege of hosting the inaugural CHICOS
conference ten years ago. We are excited that Baha Mar will be the home of CHICOS 2020. “We anticipate showcasing the myriad investment opportunities available in The Bahamas, and we look forward to welcoming the 10th anniversary edition of CHICOS, plus everyone who has a stake in tourism and hospitality in our region.”
To advertise in The Tribune, contact 502-2394
Freeport retailer targeting MINISTRY TEAMS early 2020 for full rebound TO LAUNCH By YOURI KEMP Tribune Business that the TRAVEL AWARDS Tribune Business Reporter company’s housewaresykemp@tribunemedia.net
A MAJOR Freeport retailer/wholesaler, which yesterday partially reopened its retail store for the first time since Hurricane Dorian, has ambitions to complete the full renovation by end-January 2020. K Peter Turnquest, deputy prime minister, said it was “admirable” that Kelly’s (Freeport) did not layoff any of its 124 staff as it steadily rebuilt its building materials and retail operation in the aftermath of the Category Five storm. Lynn Lowe, Kelly’s (Freeport) managing director, said that while “computerrelated issues” had delayed the retail section’s re-opening until yesterday it was now a “flurry” of consumer activity inside the store. “We are looking for the end of January for a full reopening,” she added. “We felt it was important to have this open for Christmas, so right now only one-third of our inventory is open to the public, but we have a warehouse of stuff just waiting to put on display.” Describing Kelly’s (Freeport) as “self insured”, Mrs Lowe explained that while the company had lost 10 staff members post-Dorian this was due to voluntary departures rather than lay-offs. John Doherty, Kellys (Freeport’s) general manager, had previously told
focused retail store had suffered five-and-a-half feet of flood water intrusion due to Dorian. “In 54 years we’ve never sustained this type of damage,” Mr Doherty told Tribune Business. “Dorian was something that nobody anticipated being as strong, powerful and damaging to all the companies on this island. It was unforeseeable that something of this magnitude could happen to Kelly’s and many businesses in this area. “Kelly’s is here to stay, and will help to rebuild the island. We’re up to the challenge, and will open back up as the new Kelly’s. We’re redesigning and coming back stronger than ever. Not many companies have been able to maintain their entire staff.” It is now more than three months since Dorian’s passage, but many Freeport and Grand Bahama-based businesses have been struggling to either re-open their doors or maintain operations in the storm’s aftermath. A survey conducted shortly after Dorian’s passage by the Grand Bahama Chamber of Commerce revealed that more than half the businesses surveyed remained closed a month after the storm, with at least 11 percent planning not to reopen and others still uncertain about their plans.
THE Ministry of Tourism has partnered with the Caribbean Journal publication to launch The Bahamas Travel Awards. The initiative aims to celebrate the persons, places, hotels and experiences that are vital to The Bahamas’ visitor experience, with award categories ranging from destinations and hotels to restaurants, people-to-people programmes and the best bartenders and chefs. “The ultimate goal of all those of us who work in the tourism and hospitality sector in The Bahamas is customer satisfaction. Validation of hard work is always appreciated,” said Joy Jibrilu, the Ministry of Tourism’s director-general. The award categories include Best restaurant of the year; Best taxi driver of the year; Best chef of the year; Best bartender of the year; Best marina of the year; Best airline of the year; Best beach bar of the year; Best experience of the year; Best people to people host/hostess of the year; Best fishing lodge of the year; Best cruise line of the year; Best all-inclusive resort of the year; Best boutique hotel of the year; Best luxury resort of the year; and Best destination of the year. Persons are encouraged to vote online at https://www. surveymonkey.com/r/bahamastravelawards by midday on December 20, 2019. The winners will be announced during the Caribbean Hotel & Tourism Association Marketplace on January 22, 2020.
PAGE 4, Wednesday, December 11, 2019
THE TRIBUNE
Tourism staff discuss industry ‘disruptions’ TOP Ministry of Tourism executives met with their global sales and marketing workforce to discuss travel industry trends and “the disruptions” impacting the sectors. Joy Jibrilu, the Ministry’s director-general, and Ellison “Tommy” Thompson, deputy directorgeneral, joined Bridgette King, executive director of global sales, for the threeday gathering designed to prepare staff for the future. Attendees included
persons from many of The Bahamas’ top visitor markets including New York, Atlanta, Florida, Houston, Toronto, Europe and Latin America, as well as the departments of sports, groups, weddings and honeymoons and communications. Mrs Jibrilu said: “The tourism industry must be driven by initiative, innovation, and creativity.” She added that the Ministry’s role is to “inspire vacationers to come to The Bahamas”, and added that
Energy industry eyed for $80m post-Dorian boost FROM PAGE ONE social assessment conducted on the IDB’s behalf by Washington DC-based Environmental Resources Management (ERM), which has also been seen by Tribune Business, details some $21m worth of potential investments in Abaco and $5.4m in east Grand Bahama with a heavy focus on the roll-out of microgrids to support
small communities. Besides rebuilding Bahamas Power & Light’s (BPL) transmission and distribution network in Abaco, the ERM report also suggests that some $10m be invested in creating a three megawatt (MW) microgrid be installed between Marsh Harbour’s clinic and government complex using roof-top and ground-mounted solar panels. A $1.5m spend on solar
STAFF members at the Ministry of Tourism’s global sales meeting. Seated from left are Andre Miller, director, global communications; Betty Bethel, director of sales, Florida; Ian Ferguson, executive director, administrative operations; Mia Lange, executive director, global communications; Joy Jibrilu, director-general; Ellison “Tommy Thompson, deputy director-general; Bridgette King, executive director, global sales and marketing; Eldece Clarke, director of sports tourism development; and Greg Rolle, senior director, private aviation. the meeting “was also an are emerging constantly, and Travel Advisors (ASTA) to utive director of global incredible opportunity to decoding travellers’ book- share their expertise on the communications; and Andre expose our young sales lead- ing behaviour has gotten future of travel, the big data Miller, digital director. ers to cutting edge trends in so much harder to predict, question, consumer bookThe meeting closed with the travel space”. our young leaders must be ing funnels and the evolving highly competitive team Mrs King said: “The ses- prepared for a future that is travel industry.” presentations on how sions were intended to dynamic and volatile. Other senior tourism to solve a number of critiinvoke discussions around “So we brought in some executives who led the cal challenges facing The the future of travel and the of the best in various travel training sessions were Ian Bahamas. Mr Thompson disruptions that are reshap- categories like Airbnb, Tri- Ferguson, executive direc- described the gathering as “a ing the travel industry. At a pAdvisor, Travel Zoo, Trip tor of administration/ huge success and a model for time when new technologies Tuner and Association of operations; Mia Lange, exec- future meetings”. carports at these two government buildings, complete with electric vehicle charging stations and batteries, is also on the list of recommendations as are multiple microgrids for storm-ravaged east Grand Bahama. Finally, the ERM report also suggests allocating some $12m-plus for the “solarisation” of Exuma. It suggests this could be kick-started by the installation of a three MW solar system, complete with a two MW hour battery storage system at the island’s “old airport”, together with two 100 kilo watt (kW) rooftop installations on government buildings. While all this has yet to be approved, the IDB documents show that $20m in project funding will “support the introduction and implementation of new models to develop resilient solar PV installations in The Bahamas. “This will include an assessment of energy systems in Nassau and the Family Islands with a view to improve reliability, resiliency and cost. This component... will finance individual projects that will include deployment of decentralised solar PV
plants, rooftop systems and microgrids with storage capacity and grid modernisation technologies to improve the reliability and resiliency of the power network in the islands,” the IDB said. “It aims to increase the contribution of clean energy sources, such as solar PV, by strengthening the institutional capacity to regulate and modernise the energy sector.” The $80m loan is part of a total $170m facility being readied to enable The Bahamas to meet its long-cherished ambition of deriving 30 percent of its total energy mix from renewable sources by 2030. The IDB document says the full sum is to be drawn down over a 12-year period as part of an initiative to “transition the power sector In The Bahamas to a more resilient and sustainable sector”, even as many Bahamas-based renewable provider express scepticism that the 2030 goal will be met because this nation has left itself too much to do. Apart from strengthening the energy industry’s regulatory framework, the IDB project documents also reveal plans to create
a special purpose vehicle (SPV) that will be used to “deploy renewable energy solutions”. “The SPV could take the form of a licensed electricity supplier or generation company under the Electricity Act, and for distributed generation it could provide financing directly or via intermediary institutions,” the IDB suggested. “This component will also support capacity building and technical assistance to establish the SPV, to improve access to capital and to strengthen entrepreneurship and job creation opportunities in the energy sector.” The $170m sum and SPV mirror almost exactly the Government’s renewable energy strategy, as set out in the 2019-2020 Budget and recently-unveiled Fiscal Strategy Report, which both spoke to renewable energy investments in the Family Islands. With BPL estimating that repairs to its Abaco transmission network will cost $90m alone, the IDB paper added: “The provision of quality, cost-efficient, and climate-resilient infrastructure in The Bahamas is critical to positioning the
country for the reconstruction efforts and higher and inclusive economic growth. “The electricity system in The Bahamas was already vulnerable and faced structural challenges even before the hurricane. With an electricity generation based on fossil fuels, The Bahamas suffers from a high fuel import bill (seven percent of GDP) and high electricity prices. Volatile oil prices have contributed to make electricity tariffs among the highest in the Caribbean. “In addition, the stateowned utility BPL has been financially challenged and its operation has been affected by frequent power outages and elevated system losses. The power infrastructure lacks resiliency in its design, and as such is highly exposed to climate-related hazards, further compromising reliability of electricity and limiting productivity.” Despite the Electricity Act reforms and publication of the National Energy Policy, the IDB paper said the government effectively realises that more support is required to convert talk of embracing renewable energy into action.
To advertise in The Tribune, contact 502-2394
THE TRIBUNE
DPM: VAT relief for services ‘too costly’ FROM PAGE ONE
declining to provide the Bahamian economy’s dominant services sector with a VAT break. “Second, if we do that, we would be giving wide-ranging concessions to businesses that don’t really need it; hotels, Freeport’s industrial sector, and all those various entities that provide services. Remember, the concessions are intended to help with the reconstruction effort. We are giving concessions on items people have to replace. “In addition, this is a significant cost to the government, and we still have a government to run which has to be funded,” the deputy prime minister continued. ‘We’ve done the best we can. We’d love to do more, particularly as it relates to construction labour. “We’d love to do more, but we have to be reasonable. It is significant, that’s all I’m prepared to say at the moment. It’s very significant.” Ken Hutton, the Abaco Chamber of Commerce’s president, had last week told Tribune Business that the Government was in danger of leaving the post-Dorian recovery effort “half finished” by failing to eliminate VAT on services as well as physical goods imports. Calling for a rethink, he said such a policy would continue to levy 12 percent VAT on contractor bills and
Wednesday, December 11, 2019, PAGE 5 those of other repair professionals, inclusive of labour costs, while at the same time leaving all construction materials tax-free. Calling for services to be treated as VAT-free for the recovery zones’ full sevenmonth duration, the Abaco chamber chief said: “In a tourist-centred or servicecentred economy like Abaco, it’s one thing to rebuild but it’s another thing to earn a living here. “Services is definitely one of the things - everything from construction to restaurants and taxis. We need to have a little bit of breathing room for the interim; the same period of time. It’s also going to affect things like insurance bills and medical bills. “You may save VAT and duty on the construction materials, but you don’t save it on the intermediaries. I think it’s important. We need a little bit of breathing room to get this place back up and running. Having it solely for the materials and not the services is really job half finished.” Mr Turnquest, though, argued yesterday that the mixture of VAT, duty, excise and real property tax breaks will “be of tremendous benefit and value” to Grand Bahama and Abaco residents in their post-Dorian rebuilding efforts. Asked how many homeowners and businesses are likely to benefit, he replied: “It remains to be seen. I couldn’t say at this point how many people are able to benefit from the tax concessions because it all depends on timing; the receipt of insurance payments and being able to take advantage
of the concessions. “It’s difficult to predict a number, but we anticipate it will be a tremendous benefit and value to those Bahamians able to find the resources to do reconstruction and repairs.” The deputy prime minister added that the government still had programmes aimed at “providing direct assistance” to homeowners in the category five storm’s aftermath, and reiterated: “There’s only so much we can do with the resources we have.” Having projected a $137m deficit for the 2019-2020 fiscal year, which would have kept the government in line with the one percent of gross domestic product (GDP) benchmark set by the Fiscal Responsibility Act, the Minnis administration is projecting it will now have to seek parliamentary approval for an extra $508m in borrowing post-Dorian. This is to cover the $677.5m deficit now forecast from a combination of revenue losses and increased spending in the category five storm’s aftermath. The government’s recently-released Fiscal Strategy Report projects it will have to borrow almost $1.15bn over the next two fiscal years, with the national debt set to hit almost $9.5bn by 2024-2025. Mr Turnquest, though, affirmed that the government was seeking to beat its own deficit forecasts. “We’re working hard to do that,” he told Tribune Business. “The idea is to manage it as prudently as we can without stifling the recovery and the economy.
DPM: No monies for public sector minimum wage rise FROM PAGE ONE estimation that 2,000 or ten percent of the Bahamas Public Services Union’s (BPSU) 20,000 members will benefit, this translates into an annual $4,680 increase for every minimum wage worker and adds around $9.36m to the government’s yearly payroll. Mr Pinder said any minimum wage increase in the public sector was designed to force the private sector to follow suit. Should the government do it for one group, the pressure from other public sector unions and private sector employees to follow suit is almost guaranteed as it is only the BPSU that will benefit. And Dion Foulkes, minister of labour, also said a public sector minimum wage hike will occur this fiscal year - directly contradicting Mr Turnquest, who said there were no monies allocated in the budget for it. The mixed comments coming from government are thus increasingly adding to the suspicion that Dr Minnis’s comments were merely designed to cool a volatile industrial relations climate. Responding to Philip Davis, the opposition leader, advocating for a
“livable wage” as opposed to just an increase in the minimum wage, Mr Turnquest yesterday said: “Again, everybody would advocate and support a ‘livable wage’. However, there are limitations in any system. “Those of us who have been private sector employers know what the pressure is of all of the personnel costs that are a part of operating a business, particularly a service business. And so we have to take all of these things into account to make sure we do not stifle the growth that we have started to see over the last two years. We have been on a reasonable path, and we have to make sure that we continue to stoke that and not do anything that may discourage people from investing and from the upward trend we have seen.” The first, and last, increase in the private sector minimum wage occurred in mid-2015 in a bid to cushion the impact of value-added tax’s (VAT) introduction and associated cost of living increases - on low income earners. The 40 percent rise from $150 to $210 per week was the first such occurrence since the minimum wage was introduced by law in The Bahamas in 2002. Pressure for further increases has come at regular intervals due to The Bahamas’ economic difficulties over the past decade, especially
when factors such as the VAT rate rise to 12 percent reduce household purchasing power. Many Bahamians argue that $210 per week, or $840 per month, is not a “liveable” wage and it is impossible to make ends meet with such an income especially if the worker has a family to support - given the constant rise in the cost of living. However, minimum wage increases come with other consequences. They inevitably increase employer costs, especially marginal labour expenses, which can result in companies laying-off staff or becoming reluctant to take on new hires. Given that those earning minimum wage salaries tend to be young workers, such as school leavers, just entering the workforce, any reluctance by employers to hire at an increased salary could create barriers to entering the world of work. There is also a social cost to this, as young, unskilled minimum wage earners are often those responsible for the current level of crime. Companies could also choose to pass increased minimum wage costs on to consumers, raising the cost of living, while any increase in salary at the workforce’s lower end can result in greater expectations for a rise among higher-salaried workers - leading to costpush inflation.
PAGE 6, Wednesday, December 11, 2019
THE TRIBUNE
Bahamas must flip approach to WTO FROM PAGE ONE
Still, Mr Leonard said of Mr Laing’s remarks: “What I’m curious to know is which industries he’s talking about and how much of an impact that really would have. That’s the first thing to look for, and a number of us can compete. We have some wiggle room. “I do not think this is surprising. This is a negotiating process, which also means he [Mr Laing] needs to consult with the various industries that will be affected on the various impacts, and where we draw the line in the sand.” To create such flexibility and “wiggle room”, Mr Leonard said both the government and private sector needed to focus on reforms that improved the ease and cost of doing business such as energy sector transformation. “If we’re expecting our businesses to agree to open up their industry or lower tariffs then we must make it more efficient for them to produce and consume energy more cheaply,” he added. “There has to be a
holistic approach and I’m not seeing it.” Mr Laing said last week that The Bahamas’ accession to full WTO membership will take at least another five years given that political considerations will likely take over after the initial June 2020 deadline is missed, but Mr Leonard warned it would be a mistake to lose momentum. “The longer we wait, the tougher the negotiations are going to be because the openings have closed with other negotiations, and we will have to comply with more stringent regulations,” he told Tribune Business. “To me, it makes no sense at all. I think we should be going at it full steam ahead, but we need to be talking to the business community a great deal more than we are. We’ve got to involve the business community much more. We’ve got to engage them completely. “In other words, we shouldn’t be looking to the government to tell us what it’s doing. We should be
suggesting to the government the stance it should be taking.” Pointing to France’s recent “blacklisting” of The Bahamas and its financial services industry, Mr Leonard said that by remaining outside the WTO this nation is unable to use a mechanism that the likes of Barbados used to successfully defend itself against the Organisation for Economic Co-Operation and Development in 2001. And nor is it able to exploit “openings” created by other countries’ WTO accessions to obtain concessions it wants, while giving up unimportant items in return, if it halts its own negotiations. However, Mr Moss suggested that Mr Laing was only now talking about the liberalisation demands being made of The Bahamas by other WTO members because this nation is unlikely to complete the accession process under the Minnis administration. “We cannot reserve things for ourselves like we’re the main player in the agreement,” Mr Moss said. “It’s a stretch. It’s not going to happen. He’s [Mr Laing[ being forthright because he knows we cannot complete the process in the timeframe set out. It’s amazing that he’s
speaking out now rather than when the talks were hot and happening. “He’s part of the school of thought that this is the right way to grow our economy, but he’s been stopped in his tracks. He’s been very instrumental in starting the process of getting to the WTO, but now his hands are tied and he cannot get it to happen.” Mr Laing initiated The Bahamas’ bid for full WTO membership when a Cabinet minister in 2001, but Mr Moss argued that The Bahamas was “not ready” and needs to focus on growing its own companies and industries until they are strong enough to compete with foreign rivals. “I can tell you the Bahamian public are not going to stand by and allow them to liberalise industries that will be overrun by foreigners because they have the capital,” he told Tribune Business. “There’s no deal where we can negotiate reservations. “It’s a pipe dream. It’s a one-size fits all programme. We cannot say we are reserving these industries for Bahamian ownership only. It cannot fly. If it does fly, it goes against the tenets of the agreement. The longer it takes, the better it is for us to grow our industries.”
Developer interest soughts over LPIA commercial offices FROM PAGE ONE to select a winning bidder for the proposed airport hotel despite the Request for Proposal (RFP) launched last year generating substantial inquiries. “The process generated significant interest from proponents. We do not have a selected proponent at this point,” they added. Tribune Business exclusively revealed plans for an airport hotel back in October 2011. The original developers were the owners of the Atlantic Resort & Spa in Fort Lauderdale, who were looking to construct the hotel on a three-acre site immediately to the south of Windsor Field Road, right between the two entrance and exit roundabouts for LPIA. The project was anticipated to create between 100-150 full-time jobs, and the developers were aiming to construct a facility of ‘four-star’ standard, rather than the typical ‘two-star’ airport hotel, targeting the private aviation market and foreign directors of Bahamas-based companies
who fly into LPIA for Board and other meetings. George Allen, one of the principals in the original developer group, subsequently told Tribune Business they had elected not to pursue the LPIA ‘airport hotel’ because feasibility studies showed it could sustain only 50 rooms. This was 50 percent of the inventory eyed by NAD, and Mr Allen said the group had instead looked at developing a mixed-use proposal for the site involving a smaller hotel, offices, retail and restaurant. This, though, failed to match NAD’s demands. “The feasibility was not that good,” he said in explaining why the project was not pursued. “It can barely sustain 50 rooms based on the feasibility we did. We didn’t pursue it. “We were trying out restaurants, offices, shops, and they wanted a larger hotel there. That would have had to go to a chain that was willing to sacrifice and wait ten years for it [investment returns] to happen.”
PUBLIC NOTICE
INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, NANCY JANVIER ofBoatswain Hill, Carmichael Road, New Providence, Bahamasintend to change my name to NANCY JANVIL. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.
NOTICE Pursuant to the provisions of Section 138 (4) of the International Business Companies Act, 2000 Notice is hereby given that DOVE SECURITIES S.A is in dissolution and the date of commencement of the dissolution is the 11th December 2019. The Liquidator of said company is ELCO CORPORATE SERVICES LTD. Located at Loyalist Plaza, Don Mackay Blvd. P.O.Box AB 20377 Marsh Harbour Abaco Bahamas
NOTICE NOTICE is hereby given that CALEB DADA, of Spanish Wells, Eleuthera Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 4th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
MARKET REPORT www.bisxbahamas.com
(242) 323-2330
TUESDAY, 10 DECEMBER 2019
NOTICE
(242) 323-2320
ALL SHARE INDEX: CLOSE: 2,194.06 | CHG: 3.61 | %CHG: 0.16 | YTD: 84.61 | YTD%: 4.01 BISX LISTED & TRADED SECURITIES 52WK HI 4.45 22.65 7.00 6.10 2.60 2.00 5.47 11.75 6.17 4.64 11.01 2.81 4.01 10.21 7.60 16.99 9.40 3.63 14.20
52WK LOW 3.35 20.91 4.90 4.46 1.35 0.22 2.00 9.30 5.60 3.95 6.75 2.35 1.76 8.00 6.10 12.15 6.41 3.01 13.01
SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Class A Focol Class B
CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
PREFERENCE SHARES
1.00 10.00 1.00
1.00 10.00 1.00
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
SECURITY Fidelity Bank Note 22 (Series B) +
SYMBOL FBB22
Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y
BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
LAST CLOSE 3.70 17.43 6.00 6.10 2.46 1.80 4.20 11.06 6.16 4.15 8.01 3.31 3.96 10.22 7.60 16.99 9.33 3.20 14.00
CLOSE 3.70 17.43 6.00 6.10 2.46 1.80 4.40 11.06 6.16 4.15 8.01 3.31 3.96 10.16 7.60 16.99 9.33 3.20 14.00
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 -0.06 0.00 0.00 0.00 0.00 0.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
CLOSE 100.00
CHANGE 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
LAST SALE 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
VOLUME
1,500
VOLUME
EPS$ 0.239 0.932 1.760 0.369 0.070 0.000 -0.438 0.722 0.449 0.184 0.140 0.102 0.467 0.646 0.728 0.816 0.939 0.203 0.631
DIV$ 0.170 1.260 0.000 0.260 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.434 0.060 0.328 0.240 0.540 0.200 0.120 0.610
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000
P/E 15.5 18.7 N/M 16.5 N/M N/M -10.0 15.3 13.7 22.6 57.2 32.5 8.5 15.7 10.4 20.8 9.9 15.8 22.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0
YIELD 4.59% 7.23% 0.00% 4.26% 0.00% 1.11% 0.00% 6.51% 3.57% 2.89% 0.00% 13.11% 1.52% 3.23% 3.16% 3.18% 2.14% 3.75% 4.36% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75%
MATURITY 19-Oct-2022
6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%
20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022
YTD% 12 MTH% 3.06% 3.81% 1.91% 3.39% 2.23% 2.75% 4.99% 6.20% 7.18% -0.08% 2.88% 3.80% 4.56% 6.50% 3.35% 4.17% 5.77% 7.89% 11.19% 12.08% 18.66% 19.64% 4.33% 5.06% 10.43% 7.24% 5.42% 5.77% 3.11% 0.77% -0.71% 0.16% 7.40% 2.70% 10.20% 1.30%
NAV Date 31-Oct-2019 31-Oct-2019 25-Oct-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019
MUTUAL FUNDS 52WK HI 2.27 4.32 2.08 194.86 158.57 1.65 1.82 1.74 1.21 8.23 10.10 6.85 11.45 12.32 10.74 10.00 8.69 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.58 1.69 1.66 1.09 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Preferred Income Fund Leno Growth Fund Leno Diversified Fund Leno Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
NAV 2.27 4.32 2.08 193.72 158.42 1.65 1.82 1.74 1.19 8.31 10.26 6.88 11.45 12.32 10.70 9.92 8.68 11.38
MARKET TERMS
BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | COLONIAL 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333
30-Mar-2019 30-Mar-2019 30-Mar-2019
NOTICE is hereby given that MAXENE JEAN, of Rock Crusher P.O.Box N-9426 Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 11th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that RONALD PIERRE, of Fox Hill Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 11th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that JOHN TARRY PETIT-HOMME, of Rahming Street, Fox Hill Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 4th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
THE TRIBUNE
Wednesday, December 11, 2019, PAGE 7
Democrats, White House forge new North American trade deal WASHINGTON Associated Press HOUSE Democrats and the White House announced a deal yesterday on a modified North American trade pact, handing President Donald Trump a major Capitol Hill win on the same day that impeachment charges were announced against him. Both sides hailed the deal as a win for American workers. They said the revamped US-Mexico-Canada Agreement was a significant improvement over the original North American Free Trade Agreement, with Democrats crowing about winning stronger provisions on enforcing the agreement while Republicans said it will help keep the economy humming along. “There is no question of course that this trade agreement is much better than NAFTA,” House Speaker Nancy Pelosi, D-Calif, said in announcing the agreement, saying the pact is “infinitely better than what was initially proposed by the administration”. Trump said the revamped trade pact will “be great” for the United States. “It will be the best and most important trade deal ever made by the USA. Good for everybody Farmers, Manufacturers, Energy, Unions - tremendous support. Importantly, we will finally end our Country’s worst Trade Deal, NAFTA!,” the president said in a tweet. The deal announcement came on the same morning that Democrats outlined impeachment charges against Trump. The trade pact is Trump’s top Capitol Hill priority along with funding for his long-sought border fence. Trump said it was no coincidence that Democrats announced they had come to an agreement shortly after laying out the two impeachment charges they will seek against him. “They were very
MEXICO's Treasury Secretary Arturo Herrera, left, Deputy Prime Minister of Canada Chrystia Freeland, second left, Mexico's President Andres Manuel Lopez Obrador, centre, Mexico's top trade negotiator Jesus Seade, second right, and US Trade Representative Robert Lighthizer, hold the documents after signing an update to the North American Free Trade Agreement, at the national palace in Mexico City yesterday. Photo: Marco Ugarte/AP embarrassed by (impeachment), and that’s why they brought up USMCA an hour after because they figure it will muffle it a little bit,” Trump told reporters at the White House before departing for a campaign rally in Pennsylvania. In Mexico City, Trump’s son-in-law and senior adviser, Jared Kushner, US Trade Representative Robert Lighthizer and Canadian Deputy Prime Minister Chrystia Freeland joined Mexican officials to sign the updated version of the United States-MexicoCanada trade agreement, or USMCA, at a ceremony in Mexico City’s centuries-old National Palace. Mexican Foreign Minister Marcelo Ebrard congratulated the negotiators for reaching a second set of agreements to answer US concerns about labor rights in Mexico, and regional content. “Mission accomplished!” Ebrard told the gathered officials. Lighthizer praised the joint work of the Trump administration, Democrats, business and labor leaders to reach an agreement, calling it “nothing short of a miracle that we have all come together”. “This is a win-win-win agreement which will provide stability for working people in all three countries
for years to come,” Freeland said. “That is no small thing.” A US House vote is likely before Congress adjourns for the year and the Senate is likely to vote in January or February. Senate Majority Leader Mitch McConnell said the vote on the trade deal will likely occur after an expected impeachment trial in the Senate. Pelosi was the key congressional force behind the deal, which updates the 25-year-old NAFTA accord that many Democrats — especially from manufacturing areas hit hard by trade-related job losses — have long lambasted. She and Ways and Means Committee Committee Chairman Richard Neal, D-Mass, forged a positive working relationship with Lighthizer, whom they credited with working in good faith. “Thanks to President Trump’s leadership, we have reached an historic agreement on the USMCA. After working with Republicans, Democrats, and many other stakeholders for the past two years we have created a deal that will benefit American workers, farmers, and ranchers for years to come,” Lighthizer said. “This will be the model for American trade deals going forward.”
PAGE 8, Wednesday, December 11, 2019
THE TRIBUNE
US STOCKS DIP AHEAD OF LOOMING WEEKEND DEADLINE ON TRADE NEW YORK Associated Press
US stocks edged lower yesterday ahead of a looming weekend deadline for trade talks between Washington and Beijing. A new round of US tariffs is scheduled to take effect on Chinese goods on Sunday, the latest escalation in a trade dispute that has dragged on economies around the world. But media reports suggested the US may delay the tariffs on phones, laptops and other popular products as the two sides negotiate a limited “Phase 1” deal. The S&P 500 flipped repeatedly between small gains and losses throughout the day, and the market
was nearly evenly split between losers and winners as markets await more certainty about what the rules of global trade will be. Losses for Comcast, Netflix and other communications companies weighed most heavily on the market, but gains for health care and energy stocks helped limit the damage. The S&P 500 slipped 3.44 points, or 0.1%, to 3,132.52. It earlier swung between a gain of 0.2% and a loss of 0.3%. The Dow Jones Industrial Average lost 27.88, or 0.1%, to 27,881.72, and the Nasdaq composite fell 5.64, or 0.1%, to 8,616.18. The Russell 2000 index of smaller stocks was an outlier and rose 2.10 points, or 0.1%, to 1,631.71.
Sunday’s deadline isn’t the only big potential event for markets in the coming days. The Federal Reserve and European Central Bank will make decisions on interest rate policy this week. Big moves by both of them earlier this year helped send prices for stocks and bonds around the world surging. A report will also arrive Wednesday on inflation in the United States, which is key because tame inflation has allowed the Fed to keep interest rates low. Investors are nearly unanimous that the Fed will vote today to keep interest rates steady. The biggest wild card for stocks recently has been trade, though, and markets have been swinging on every
iota of progress in talks between Washington and Beijing. The longstanding conflict has hurt manufacturing around the world and caused US businesses to hold back on making investments. The saving grace for the economy has been a strong job market and consumer spending, and the economy grew at a 2.1% annual rate in the third quarter. “The market does seem to be pricing in somewhat good news,” said Mike Dowdall, investment strategist at BMO Global Asset Management. “And by good news, I define that as tariffs not going into effect. But beyond that, it’s quite unclear.” That long-term perspective in any potential deal is likely to be the most
important thing for markets. “The real issue is not the exact details or timing, but the durability,” said David Kelly, chief global strategist at JPMorgan Funds. “Multiple changes of direction on trade over the last few years means nobody can trust that what we’re headed for here is a durable peace, rather it is a fragile cease-fire.” Elsewhere on the trade front, Democrats in the House of Representatives and the White House announced a revised deal with Mexico and Canada. The deal would replace the North American Free Trade Agreement and would offer more provisions for US workers. Bond trading was nearly as quiet as stock trading
was. The yield on the tenyear Treasury held steady at 1.83%, the same as late on Monday. Overseas markets were mixed. In Asia, Japan’s Nikkei 225 index slipped 0.1%, South Korea’s Kospi gained 0.4% and the Hang Seng in Hong Kong slipped 0.2%. In Europe, France’s CAC 40 gained 0.2%, and the German DAX lost 0.3%. The FTSE 100 in London also slipped 0.3%. Benchmark crude oil rose 22 cents to settle at $59.24 a barrel. Brent crude oil, the international standard, rose nine cents to $64.34 a barrel. Wholesale gasoline was unchanged at $1.65 per gallon. Heating oil climbed two cents to $1.97 per gallon. Natural gas rose three cents to $2.26 per 1,000 cubic feet.