With Cabinet approval of The Bahamas' offer to the World Trade Organization (WTO) paving the way for the offer to go to the Geneva-based trade organization, Guardian Business has learned that there is significant concern among stakeholders that the international organization will push for "EPA-level" concessions by The Bahamas when negotiations commence.
Guardian Business understands that the offer The Bahamas will make to the international trade organization, with regards to what extent it will liberalize trade in goods and services in order to obtain accession to the body, has now been determined.
The offer itself went before Cabinet in the last three weeks, and was approved.
This just leaves a process of negotiation with the WTO to determine definitively what the terms of this nation's belated accession to the trade body will be.
A source with knowledge of the matter said the proposal that The Bahamas will make to the WTO is more open than the previous version put forward under the Ingraham administration.
Minister of Financial Services Ryan Pinder, who has responsibility for international trade, previously described the offer as "ludicrous" given that it suggested The Bahamas wanted to close more industries to international competition than current practice and the National Investment Policy reflects it already does.
Of the new offer, the source said: "It is much more liberal than where we were before (the previous offer by the government to the WTO). (Under this offer) The Bahamas would reduce more duty rates and is likely to open up more modes of services than we suggested we would before."
However, while more liberal than the previous WTO offer, the offer is not as broad-ranging and liberal than the terms of the EPA (economic partnership agreement) deal with Europe.
Critically, as the last country in the western hemisphere to join the WTO, The Bahamas falls into the unique position of negotiating to become a member after first signing a more broad-ranging free trade deal with a bilateral trade partner - Europe.
The EPA is considered "WTO plus" for The Bahamas in so far as the number of tariff lines that must be reduced are concerned, and by how much, as well as with respect to the number of service areas that European companies will be able to compete with domestic companies in once it is fully implemented over the next 20 years.
Having agreed to the far-reaching liberalization of trade in goods and services with Europe under the EPA, which it is now in the process of implementing, The Bahamas now finds itself in the position of having to defend itself against possible requests from the WTO that it provides the same level of openness in its arrangements with the WTO, suggested the trade source.
The difference will be that whatever agreement The Bahamas agrees to with the WTO will affect its trading relations with the entire world, rather than just Europe.
This means that any agreement to lower tariffs to a certain level, or to permit foreign competition in a particular service sector, would ensure that ease of access for goods and services is available not only to one but all countries who are members of the WTO.
"The problem is whether The Bahamas can get away with something less than what we gave away with the EPA. The government is concerned whether WTO will ask for what we offered in the EPA agreement. When you have already given so much away, how can you say no? If The Bahamas was already a member of WTO (when it negotiated the EPA) it wouldn't be a problem (because it would have already set the parameters of engagement with the WTO)," said the trade stakeholder.
The Bahamas has a deadline of December 31, 2013 to conclude its negotiations with the WTO and become a member of the organization, which creates and seeks to enforce liberalized global rules of trade among nations based on a principal of non-discrimination.
This nation's high tariffs must be lowered in order to accede, given that these are considered a discriminatory barrier to trade by the organization.
Among the benefits of WTO accession, Pinder has highlighted a level of protection from arbitrary discrimination against this nation's exports by other countries, as well as predictability for investors.
A reduction in tariffs should also reduce the up front costs of acquiring inventory for businesses.
However, The Bahamas must in turn replace the revenue which will be lost by the tariff reduction exercise that the WTO accession necessitates, which is one of the reasons for the introduction of value added tax in 2014.
A process of public education relating to the WTO accession is expected to commence in the coming months.
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