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Washington, 9th January 2001

OECD Barbados Meeting Begins After Weekend Of Lobbying

by Mike Godfrey

     The eagerly-awaited Barbados forum between the OECD and a number of Caribbean states accused of unfair tax competition opened yesterday with Barbados' Prime Minister and Finance Minister, Owen Arthur, in the chair. Dame Veronica Sutherland, Commonwealth Deputy Secretary-General, and Seuchi Kondo, Deputy Secretary-General OECD are the co-chairpersons.

     Preparatory meetings during the weekend between the Caribbean states had attempted to reach a consensus position on the issues confronting the forum. Barbados' International Business Minister, Reginald Farley, said at the weekend that he was hoping for some consensus among Caribbean countries on the harmful taxation issue ahead of the meetings involving OECD delegations at the Sherbourne Conference Centre on Monday and Tuesday. "We will have a settled CARICOM position, we hope, after the meeting," he said.

     By Monday morning it did seem that the states had agreed among themselves on the need for a set of common rules to manage offshore financial business and appeared to be prepared to go into battle over their right to determine their own tax policies.

     The weekend also saw briefings given by representatives of the US Centre For Freedom And Prosperity (CFP) to Caribbean politicians. Daniel J. Mitchell, Chairman of the CFP, spoke on why tax competition should be celebrated, not persecuted; Marshall Langer, tax lawyer with Shutts & Bowen, and well-known author, pointed out that the OECD is holding low-tax nations to harsher standards than its own members; Elizabeth Tobias, top tax aide to House majority leader Dick Armey, who has come out strongly against the OECD's campaign, shared her perspective from Capitol Hill; and, Andrew Quinlan, President and CEO of the CFP, discussed the activities of the Coalition for Tax Competition. The talks, which were off-the-record, were described as 'successful', and no doubt assisted the Caribbean states in assembling a common line.

     As the OECD meeting itself began on Monday, Don McKinnon, secretary-general of The Commonwealth Secretariat, one of the organisers, was saying that the meeting should aim to arrive at mutually accceptable definitions of terms such as "harmful tax competition". That in itself was not going to be easy and many thought that the meeting, rather than meet that aim, would probably do no more than set the stage for further discussions. 

     The opening session, as might have been expected, saw a rehearsal of previously announced positions, with Seiichi Kondo, the OECD's deputy secretary-general, saying: "Tax regimes which fail to meet the (previously set-out) criteria, whether they are operated by countries within or without the OECD, are harmful." 

     Barbados' Owen Arthur (well-coached by the CFP no doubt!) emphasised that free-market principles encouraged competition. "The most competitive product will attract the largest market share," he reminded the OECD, in case the organisation had fogotten this elementary economic law. "Those who gain market share call it exploiting the competitive advantage; those who lose market share call it harmful."


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