Editorial: Co-operation or compliance?

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Many times we are left to wonder how the big countries of this world expect smaller, developing nations to make a living? We ask the question in light of the blacklisting threat from the European Union (EU) regarding our offshore taxation policies.
The word from the EU is that if we do not harmonise our tax rates for onshore and offshore financial services then we will get blacklisted and suffer all the economic impacts that such a label attracts. More specifically, the EU has warned those already blacklisted that it “strongly encourages” them to make the changes requested or face “defensive measures” which could include both taxation and non-taxation steps. It is reminiscent of a science fiction movie where the invading aliens demand compliance or face extinction.  
Prime Minister Gaston Browne made the blacklist revelation in Parliament recently after the European Council of Finance Ministers published a list of 17 countries it regarded as non-cooperative jurisdictions in taxation matters. We are not yet on the list because of recent hurricanes, but we will be assessed in February of next year, and all indications are that we will secure a spot. Notably, the most famous of offshore financial nations in the Caribbean, the Cayman Islands, is not on the list. In fact, it appears that the Cayman Islands and other U.K. overseas territories and Crown dependencies are absent from the dreaded blacklist. They are to be found on the commitment list. Hmmmm!?!
Now, when they say, “non-cooperative,” don’t they mean “non-compliant with our demands?” You see, if you threaten someone with serious consequence, you are not talking about co-operation, you are demanding compliance. As if we do not have enough to be worried about in the financial world with the other threat of derisking. It seems that it makes no difference what we do to cooperate, there is always something more.
Remember the days when gambling was a massive social issue for the United States so they killed the industry? Then, to add insult to injury, they refused to give us a penny of compensation as awarded by the World Trade Organization (WTO). Now the powerful U.S. lobby for online gambling appears to be gaining traction with the current administration, and the social ills that were the foundation of beating down our online gambling appear to be evaporating before our very eyes.  
Heck, we couldn’t even grow bananas in the region without someone objecting. The same United States took the EU to the same WTO to complain that the EU was giving Caribbean banana producers (former colonies) special access to European markets, and that broke free trade rules.  
Mind you, only approximately a paltry seven percent of Europe’s bananas came from the Caribbean. The rub? The United States multinational corporations control the Latin American banana production and three-quarters of the EU market. The U.S. does not export any bananas to Europe. So they used the WTO to decimate the Caribbean banana industry, and they refused to abide by the same WTO when they were told to compensate Antigua and Barbuda regarding gambling. Go figure!
As the PM says, this latest threat leaves the country between “a rock and a hard place.” He detailed the problem when he stated, “If we were to eliminate, let’s say 23 percent on the domestic rate and reduce it to two percent, then we would see perhaps $60 million reduction in revenue which the government certainly cannot afford to. Now on the other hand, if we increase the offshore sector to 25 percent, we may lose the entire industry. So we have … a serious dilemma which we’re not sure how we’re going to resolve this one.”
What really do these big countries expect us to do? Are we just to be servants to their needs when they come on vacation? If there is any concern by the European Council of Finance Minister for Antigua and Barbuda, they would be pressing the United States to comply with the WTO decision. Their first step would be to point their threats towards the U.S. so that we could get the decade plus of compensation, plus the annual U.S. $20 million. Maybe then we could have a serious talk about harmonization of tax rates.
Right now, we are just trying to keep our head above water in this region. Weather alone is a serious threat to the small countries of this region. We do not need another. The PM has correctly identified the problem as a “major dilemma for CARICOM countries,” and he has said that he will arrange consultations with those in the offshore sector. We recognise that this is a near insurmountable challenge, and we wish him and his administration luck.
We are normally a very optimistic group, but we feel like we have seen this movie before. And it does not end well, which leads us back to our initial question: How do the big countries of this world expect smaller, developing nations to make a living when we can’t even grow a few bananas, cater to those who want to gamble like Las Vegas, or have a small offshore sector? Please, anyone, tell us.

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