Critique of Minister Mitchells Grand Bahama Chamber Speech

First Published: 2005-05-16

Following is a critique of Minister Mitchell’s recent speech at the Grand Bahama Chamber of Commerce. The comments by the Nassau Institute are in bold type within the text of the speech.

ADDRESS BY THE HON. FRED MITCHELL MP

MINISTER OF FOREIGN AFFAIRS & THE PUBLIC SERVICE

Grand Bahama Chamber of Commerce – 11th May 2005

Caricom Single Market and Economy

Today, it is a special honour to speak to you the business community in Freeport. Some of you may remember that I once counted myself amongst the residents of the city, even voting here in the 1987 General Election. I can say then that I too am a Freeporter.

This is the first of two addresses that I will make here today. We are near the end of making the Government's case on this matter. For those who would wish a political battle to be joined on this, I think they need to pick another battle. I say this because the opponents of this have tried to be clever, saying behind closed doors they are for it, but creating a public smokescreen.

Ladies and gentlemen the Government has put and is making a calm, reasoned case, but the plan of the opponents seems to be to make a political battle over something about which they say – again, behind closed doors – that they agree with us and have no problem. One wonders if what they are really after is to get us to withdraw from Caricom.

Nassau Institute comment: Blaming those opposing CSME for creating a "smokescreen" and talking behind "closed doors" sounds like the pot calling the kettle black.

I begin then by reminding you that Freeport is an invention of economic theory. Some one looked at the laws of The Bahamas and divined that by carving out an exception to the law; there could be economic benefits for themselves as investors, and for The Bahamas at large. No one can argue that the decision to draw up the Hawksbill Creek Agreement was not almost an act of genius. It has brought untold value to the Gross Domestic product of the Bahamas. It has increased the wealth of thousands of Bahamian families who might not have otherwise been able to survive.

The Hawksbill Creek Agreement is an agreement between a private company and the Government of The Bahamas. It has enforceable clauses. It is fifty years old today. The agreement is widely honoured and respected. It is justiciable in the courts. It has even been amended when the parties agreed that it was in the best interest to do so. In fact it was amended soon after it was agreed. Parties do it all the time when they perceive it to be in their best interests.

Imagine then if we did not make that decision 50 years ago what a mistake would have been made. We would not have known each other and this speech today would not have been possible.

Nassau Institute comment: It is misleading to compare the Hawksbill Creek Agreement with the potential Agreement that commits the Bahamas to rules and regulations that will originate outside the country. Why equate the two?

My point is that the Revised Treaty of Chaguaramas is a document agreed between sovereign states. It is a document that has a political side. It has an economic side. The provisions are contained in one document. The Bahamas is part of the Caribbean Community. It has been so since 1983 when The Bahamas signed the original treaty. It participates in all of the various bodies of the Community, except what used to be called the Common Market. We have benefited from its provisions:

* Support in the international arena for our country;

* Education of our students;

* Help in times of emergency;

* Assistance to our hospitals and health care;

* Help in agriculture;

* Help in development lending assistance;

* Training for our lawyers…

Nassau Institute comment: The seven statements are generalizations without evidence of whether they are benefits or liabilities.

There is more. The revised Treaty of Chaguaramas, in which we are being asked to continue, has among its objectives: Improved standards of living and work; expansion of trade and economic relations with third States; enhanced levels of international competitiveness; the achievement of a greater measure of economic leverage and effectiveness of Member States in dealing with third States, groups of States and entities of any description and enhanced functional co-operation, an example of which we have just seen in the recent hurricanes.

Nassau Institute comment: Improved standards of living, expansion of trade and competitiveness are a consequence of decisions made by individuals in the market place, not bureaucrats in a collective body. The cost of being a member of CSME and setting up the bureaucracy to represent our interests – will run into the millions – and will expand every year – like all structures of this kind. It is a socialist arrangement with entrenched structures managed by individuals serving their own self-interests first. A disaster fund – or contingency fund earning interest is the better option – than funding a supra-national body in the Caribbean.

And now that we are called upon to complete the final step of membership of Caricom, we cannot leave Caricom; we cannot opt out.

Nassau Institute comment: How Is Caricom an irreversible commitment to CSME? This requires clarification.

My friends leaving Caricom would be the effect of not signing the revised Treaty, but The Bahamas should be at the cutting edge of change. We must not regress; we must not go backwards, and leave all of the regional bodies of which we are a part and from which we have benefited out of Caricom. We must sign the Treaty, we cannot just pick up our Georgie bundles and retreat behind the Caribbean seas to the islands of The Bahamas.

Nassau Institute comment: Not signing is described as a "retreat" – when we have not committed to anything from which to retreat??? Or have we???

It is important that the Government get all Bahamians to understand what trade agreements mean and how we have benefited from them. Certainly the people of Freeport who have benefited from the Hawsksbill Creek Agreement would understand that.

Nassau Institute comment: Hawksbill Creek is an internal Agreement – government with private enterprise in the Bahamas.

When we obtain the reservations as part of the treaty; as a sovereign nation we cannot be pressured in the future into admitting to the free movement of people. Of course there is substantial support already in the business community for a freer policy of immigration laws, to make it easier for work permits to be granted for persons working particularly in the financial services sector.

We must be rationally consistent with our arguments and understand that in treaties and agreements there is the principle of words having their plain and ordinary meaning, unless by the context we can import some other concept into those words. So, if you enter a reservation, we are bound and so are our partners by those reservations.

Nassau Institute comment: We are "rationally" consistent in the position that there is no benefit to Bahamas in joining an organization in which our best interests may be decided by a vote or a policy that would include the decision-making of 13 other countries. We are outvoted 13/1.

One becomes suspicious when arguments are not rationally consistent that there may be other motivations behind the criticism. For example, could there just be prejudice as opposed to rational arguments. Is there something intrinsically wrong with the people contemplated under the Caricom regime? Is it their social status, their class, their education, and their geographical position? Or is it something even more intrinsic and fundamental to them as people? But I hasten to add that no one, no one contemplates agreeing to the Free Movement of People, pursuant to articles 45 and 46 of the Treaty.

Nassau Institute comment: Deciding not to join CSME is not prejudice against, status, class etc of other countries. Where does the "irrationality" lie? In being unwilling to give up autonomous control of our economy? The social status of the Caricom is not an issue. Why make it one?

My friends, I have come to Freeport, the land created out of law and out of an agreement that has been honoured for fifty years, where people know that agreements do work, to appeal to rationality. I do not appeal to fear and I do not appeal to prejudice.

Nassau Institute comment: This appears as patronizing to gain consent. It is just "touchy feely" political doublespeak.

I repeat, in order for the revised Treaty of Chaguaramas to come into force, the instruments for ratification have to be lodged by all countries that presently form a party of the old Caricom under the terms of the 1983 treaty. Article 234: "This Treaty shall enter into force on the deposit of the last instrument of ratification by the States mentioned in paragraph 1 of Article 3. Article 3 lists The Bahamas as one of the 14 countries.

In other words; in order for The Bahamas to maintain its current position in CARICOM with all the attendant geopolitical and other advantages we have built up over almost a quarter of a century, this is a critical step.

Nassau Institute comment: This is not a compelling argument until the alleged advantages are clearly defined. He should list the advantages of Caricom, and how they will disappear if we do not sign onto the CSME?

Therefore ladies and gentlemen, what we are engaged in is a straightforward exercise of maintaining The Bahamas position in Caricom, and reserving our position on the principle economic aspects of the Treaty. The bargain: we obtain the political benefits, the best of the economic benefits, and a prime strategic trading position for the future. The down side is minimal or none at all. That is it people, plain and simple.

Nassau Institute comment: What is the economic "bargain". If there is a political "bargain" – the beneficiaries will be the representatives that we have to house and pay salaries to. What is meant by a "prime strategic trading position"?

I do not agree that this matter has created a huge and spontaneous outcry of opposition.

Nassau Institute comment: Bahamians are not given to "spontaneous outcries" However if a referendum were held – We believe the vote would be "NO". Why no referendum? Is it perhaps because he knows it would be a no?

What is happening now is not a general cry from the Bahamian people, but a strident minority campaign by those who can commandeer the airways, and the press and are able to create a din; a smokescreen of deceit that will obfuscate what is a clear issue. This campaign is suspect in its motives and built on fear, prejudice and a reckless disregard for the economic future of the country. The decision to do this has to be in the best interests of the Bahamian people.

Nassau Institute comment: "Fear" is rational – it is a means for preserving life when it is threatened. The opposition is not based on "reckless disregard". On the contrary, it appears to be out of concern. It is simply an assumption that the "best interests" would be served. Not to question the Mitchell agenda would be irresponsible.

The Caricom Treaty has no implications for Freeport as a free trade zone. The ability to continue to do business in Freeport will still be there. The only mention of free trade zones in the treaty is at article 239, which says the Member states undertake to elaborate a protocol relating inter alia to free trade zones. That means that the matter has not even been addressed.

Nassau Institute comment: How can this be the case if they must establish a protocol to deal with free trade zones in the region? This should be clarified to inform people how the protocol might change with regard to Freeport.

I also point to Article 28 of the Treaty; the Conference of Heads of Government of Caricom is the supreme body for the provisions of the treaty. It says in Article 28 that the decisions of the conference shall be taken by the affirmative vote of all members of Conference. That means for there to be any decisions there has to be a unanimous decision. The Bahamas alone can stop any decision. This, in itself, is an important and irreducible back stop for the Bahamian people.

Nassau Institute comment: It is unlikely that the "unanimous vote" will prevail indefinitely. Fulfilling the obligations requires compromise and gradual slackening of the principle. The Bahamian representatives called on to vote at CSME will be vulnerable to pressure from within the organization.

May I say this, The Bahamas has an airport in Nassau that is badly in need of repair, and those repairs are now being effected. However, we knew this for ten years, and nothing was done about it. When this administration came to office, it was faced with the immediate decision to fix the NIA runway, and to find a better way to run the airport. If we had only taken the decision during the past ten years, perhaps we would not have been faced with the hard decisions we have today.

Nassau Institute comment: How is this paragraph relevant to joining CSME? Party bashing and politicking. The PLP built the airport – at huge over-runs and shockingly bad work – rife with corruption.

The Bahamas knew that a water crisis was coming, that the system of barging water from Andros was fraught with difficulty. Yet we allowed the water plant in New Providence to run down, and today we are faced with the difficult and painful choices, with people running out of water in some areas of New Providence.

Nassau Institute comment: More party bashing & politicking. The PLP during their 25 years in charge did not solve the water problems. There is plenty of blame for both political parties for their inefficiencies, corruption and so forth. It is the nature of bureaucratic structures. It will be the same in the CSME – probably worse. It will be difficult – if not impossible to flush out the corruption that is bound to be a part of the "super-state" – CSME.

The Bahamas is a storm zone. We knew that. Yet here in Grand Bahama, notwithstanding our knowledge that one day storms would come, who can now say in hindsight that we paid enough attention to be sure that we were ready to face the storms when the inevitable finally happened? I know our lack of preparedness, because I sat with the Prime Minister as he struggled to find water for the people of Grand Bahama to drink when the storm took place.

Nassau Institute comment: This is more of the disingenuous argument. Is it not misleading to suggest that CSME will resolve problems arising from hurricanes? National pride requires that we take responsibility ourselves. Be prepared in advance.

Today, we now realize that we have to have a national emergency management system covering the entire Bahamas. This island cannot afford to be off line again for six weeks, six days or even six hours if we can help it.

Nassau Institute comment: The payment for reconstruction comes from the private market – one way or another. A national Emergency program is a local issue. To suggest that being in CSME will mitigate loss is na?ve and uninformed about the way multi- country organizations function. The UN is an example.

My point is that, a Government, its leaders of civil society, cannot be so cloaked and myopic that they do not see the larger picture. They must have a vision which looks into the future. We must take care of today but we must also ask ourselves: where should The Bahamas be in the year 2020? We can see that protectionism has only limited success and is not in the long-term interests of our economy. We know that while there must be some transitioning time, in the long term protectionism causes higher prices for consumers.

Nassau Institute comment: Formulating visions for the future is not a problem, but they are founded on the realities of the present, and our own capacity for change and improvement at the lowest level.

Why not then migrate slowly from one system to another, from a system of trading that is presently predatory to one that is rules based. The rules are the ultimate protection for a small country. Again, I point out that you who are the beneficiaries of the Hawksbill Creek Agreement must know that if you know nothing else.

Nassau Institute comment: We would like to have Mr. Mitchell's description of our "predatory" system of trading. We already have "rules" – for example Ten Commandments, the rule of law, honouring contracts and so forth. What rules would be developed by a Supra-national state that we do not already have. The idea of "managed" trade is anathema to the principle of economic freedom.

That is all that is being talked about here, positioning our country for the future. Now if that those are not compelling arguments I do not know what else we can say.

The Bahamas itself is already a single market and economy. In other words you can produce a good in Grand Bahama and sell it in New Providence or Exuma without it attracting any duties for simply crossing the border into New Providence. That is a single market.

Nassau Institute comment: Yes, we are "single market" but one with unlimited potential in a Global economy. Is there a suggestion that if we are not in the CSME they will not trade with us? The argument is equally valid that as part of a larger structure and a rule-making body there will be restraints affecting our current competitive advantage.

The idea then of a Caricom Single Market and Economy is simply to have a single market from Bermuda in the north to Suriname in the South. You can produce Bacardi in The Bahamas for example and sell it in Trinidad without any duty on that product. By the way Bacardi employs 150 Bahamians.

After the signing of the revised Treaty of Chaguaramas – if we do it:

* We will continue to have the international leverage of being part of the region;

* Nassau Institute comment: What leverage is he referring to – it should be identified.

* We will be able to negotiate our entry into the rules-based trading blocs of the world from a position of relative strength and not be a voice of only 300,000 among groups in the millions and tens of millions;

* Nassau Institute comment: "Rules based trading blocs" is just a phrase until you know the "rules". Who is going to make the rules? We seem to have managed so far. Will the rules be changed? How do we know they will suit us?

* We will continue as members of all the key regional organisations like the Caribbean Tourism Organisation, the Caribbean Disaster & Emergency Response Agency, the Caribbean Development Bank and the University of the West Indies;

* We will keep our Bahamian dollar, exactly as it is today – at the same value of the U.S. dollar;

* Nassau Institute comment: There is no guarantee that this will continue indefinitely. There is bound to be pressure for a Single Currency. The decision will not lie with persons directly answerable to the Bahamian public.

* We will have tremendous advantages for The Bahamas in the area of services at which we are the pre-eminent leader in the region;

* Nassau Institute comment: What "advantages" ? How are they different from the existing "advantages"?

* We will be able to do business much more freely and to our greater advantage across a much wider range of territory.

* Nassau Institute comment: In what way specifically?

But, after the signing of the revised Treaty of Chaguaramas – if we do it:

* We will not be subject to the free movement of people from other countries through The Bahamas;

* Nassau Institute comment: Perhaps not right away – but no doubt it will arise. The advantages that now lie with the Bahamas will be viewed as "unfair" advantages, and it is only a matter of time – until the "fairness" and "level playing field" ideas become compelling forces for changing this condition.

* We will not be subject to the final decisions of the Caribbean Court of Justice on appeal, keeping instead the Law Lords of the British Privy Council in London, just as it now is;

* Nassau Institute comment: The Privy Council is the most independent and object court we could ever have, and it costs us not a penny. The Privy Council comprises the best legal minds in English Law and is not open to corruption.

* We will not be part of any single currency or monetary union;

* Nassau Institute comment: For how long? Our interests are aligned with the U.S. dollar. Not devalued Jamaican or other Caribbean currencies.

* And finally, we will not join in any Common External Tariff until we in The Bahamas work out for ourselves the best way to replace our reliance on Customs Duties.

Without these exceptions agreed just for us – The Bahamas will not sign! It just won't happen.

Nassau Institute comment: We have to decide whether we believe this or not. They have already entertained joining, and there has been no substantive material circulated to the various interest groups.

We are also, at the request of the pharmacists, looking at how to modify our position on the rights of establishment for community nationals – this has to do with the ability of community nationals to set up businesses in businesses previously reserved exclusively for nationals of the particular country.

We are engaged here in an education exercise. The process is almost at an end, and we believe we have explained any rational objections. The draft of the formal request to Caricom to settle the reservations is almost ready. The draft white paper is finished. Once these are all done, the Ministry is finished in the sense that it has followed the directive of the Cabinet in its decision of 21st December 2004. The rest awaits the Prime Minister's return.

Yesterday, the entire Cabinet was moved by the voice of the Prime Minister who called us by telephone during our Cabinet meeting. It was quite an emotional time for us all. We are not used to his chair being empty and we are not used to his voice being silent. He spoke to us for about an hour. He reminded us of our comradeship, and how we came to office and our connectedness to the Bahamian people. He told us that we do not need to pick unnecessary fights. We can only take the country as far as it has the capacity to go. He reminded us of the need to lead and to be cohesive. The national debate has been incisive. The discussion is enlightening, but try as they might, there will be no fight over this. The Bahamas has reached the point where its political leaders must know when to say no to potentially destructive partisan behaviour and publicly come together for the good of the country.

Nassau Institute comment: The propaganda strategy again.

When, in 1983, the original Treaty of Chaguaramas was signed, the late Sir Lynden Pindling reminded us that there is more in the region that binds us than separates us and that is the basis for us to work together.

Nassau Institute comment: This is political speak. Vote winning rhetoric. We are obviously more bound to that continent on our western border. It is the source of most of our wealth and prosperity.

I appreciate the opportunity here today. I look forward to the dialogue and I rest my case.

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