PM says SVG ready for EPA challenge
St Vincent and the Grenadines is better prepared for the challenges of trade liberalization from a revenue standpoint than Grenada or St Lucia because of the May 1, 2007, introduction of the Value Added Tax (VAT).{{more}}
Prime Minister Dr Ralph Gonsalves made the point on Monday, September 15, in a press conference at which he was reporting on a CARICOM Heads of Government meeting which took place last week in Barbados, where the Economic Partnership Agreement (EPA) between the European Union and the CARIFORUM was discussed.
He explained that when the agreement is eventually signed, it will trigger the process of freeing up the regional market to European imports, removing various tariffs, over the next 15 years, which will result in diminishing income from international trade taxes.
An independent study commissioned by the Commonwealth has suggested that the EPA could result in an adjustment cost of up to 938 million pounds loss of revenue from import duties and charges.
The Prime Minister said that his government looked forward and saw how this development would affect this country which was one of the strategic reasons for the introduction of the VAT, shifting taxes more towards domestic consumption.
This type of thinking, he remarked, is one of the hallmarks of good leadership.
âOne of the functions of leadership is to see further and clearer than persons whom you are leading and to outline to those you are leading what you are seeing further and clearer.â
The Prime Minister again reiterated the position that he has articulated on many occasions, that is, while the EPA isnât a perfect agreement, it is the best in the situation, and based on things put in place regarding world trade with the formation of the World Trade Organization in 1994, it cannot be avoided.
He explained that aid for banana, agricultural diversification and the development of the rural economies is enshrined in the agreement.
He also dismissed the suggestion that he and the other leaders in CARICOM have not been listening to the critics of the agreement, like Professor Norman Girvan.
The Prime Minister said that while he respected their views and has read all the noteworthy critical papers on the subject: â…government is not a continuing university seminar and I have to make choices and I have to have balances in place. I have to make decisions in going forward.â (KJ)
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