Building treaty negotiating capacity among Barbados’ challenges
Monday January 31 2011 | 02:49 AM

Barbados needs to develop a cross-sectoral approach to building its treaty negotiating capacity if it is to capitalise on the momentum gained from recent successes in concluding a range of double taxation agreements (DTAs).

This is in the opinion of Mr. Bruce Zagaris, a Washington-based international business law expert who has three decades of experience working with the Barbados government to shape the island’s international financial services sector.

Speaking at the January luncheon of the Barbados International Business Association (BIBA) Mr. Zagaris suggested the Barbados government train more professionals with knowledge and experience in negotiating DTAs which, he said, would necessitate the involvement of multiple ministries and collaborations with the private sector.

As he addressed the topic: “Challenges and Opportunities Facing Barbados in the US and Other Markets in 2011 and Beyond”, Mr. Zagaris underscored the need for Barbados to work with regional organizations, such as the Caribbean Financial Action Task Force (CFATF) and the University of the West Indies, to strengthen the capacity of the region’s financial regulatory systems and mechanisms.

He told the audience gathered at the Barbados Hilton in Needhams Point, St Michael, that developments on the United States legislative front could also provide challenges. He cited the Foreign Account Tax Compliance Act and the Dodd-Frank Act, both passed last year, as legislation that could bring an added level of regulatory bureaucracy to international business between Barbados and the United States. He noted that this was such a concern among some Swiss and other foreign banks that they were avoiding taking on new US clients altogether.

However, Mr. Zagaris also highlighted several opportunities that existed for Barbados. The legal advisor pointed to the economic partnership agreement between the Caribbean Forum and European Union countries as providing added advantage for international business companies registered here since no other Caribbean country had as comprehensive a double tax treaty network with the countries of Europe as Barbados has.

Closer to home, Mr. Zagaris also pointed to tremendous opportunity for business relations with Latin America. He pointed out that Barbados already had a DTA and bi-lateral investment treaty with Venezuela and Cuba, plus Colombia had a Caribbean trade and investment incentive initiative, which all provided rich opportunities, especially within the cultural industries. Of greater interest to him within Latin America was relations with Brazil, which he highlighted offered several opportunities for Barbados to serve as an intermediary for Brazilian investment and trade into the Caribbean, as well as encouraging more Brazilian cultural linkages to enhance Barbados’ tourism product. However, the attorney sent the message that Barbadians must be willing to enhance their Spanish and Portuguese if they were to deepen these linkages.

Mr. Zagaris recommended that, in addition to tax treaties, Barbados should look to broaden its investment, tourism, and co-production in film agreements. These types of agreements, he pointed out, would enable Barbados to develop its services economy.

Mr. Zagaris also encouraged Barbadian authorities not to shy away from joining the Financial Action Task Force (FATF) in solidarity with CARICOM. Alternatively, he advised that Barbados’ membership of FATF could actually strengthen the work of the CFATF by allowing Barbados to represent the Caribbean’s interest in FATF deliberations, as well as providing direct insight to CFTAT of FATF perspectives on matters that could affect the Caribbean.