Government is to allow international businesses to compete with local companies on a more level playing field by 2005.

But Finance Minister Eugene Cox stressed yesterday that this would not mean a wholesale invasion of Bermuda by multi-national chain stores.

A review of the 60/40 company ownership rule is also on the cards as part of Government's commitment to implementing "an expanded, but carefully planned integration'' of the domestic economy into the global one.

Mr. Cox made the comments as he was outlining the pledges Government made in its attempt to adhere to principles set out in a recent Organisation for Economic Cooperation and Development (OECD) report.

The news was met with expressions of strong support from local businesses.

Chamber of Commerce president Cris Valdes-Dapena said, as long it was done on a case-by-case basis, a majority of Bermudian businesses would embrace change as "inevitable'' and set about adapting to it accordingly.

However Shadow Finance Minister Grant Gibbons branded Mr. Cox's statement as "ambiguous'' and "vague'' and called for a "full report'' on "the terms, the lines and the timetables'' relating to the issues that were going to be considered.

In his statement, Mr. Cox announced a joint Government and private sector committee was already established to review the question of building a stronger link between the local and global markets, the findings of which were expected to be made known.

He said the adopted recommendations would be implemented by December, 2003, in respect to the financial sector and by December, 2005, for other sectors of the economy.

Mr. Cox said the proposed strengthened relationship between local and international markets would be achieved by "allowing international companies to participate in previously sheltered sectors of the economy''.

However he added that the changes would be made "subject to appropriate considerations for small business and/or considerations of a strategic or national concern''.

"I would hasten to say that this will not mean that Bermuda's merchants are suddenly going to find themselves competing with multi-national department stores, or that another door has been opened to franchise-type restaurants,'' Mr. Cox added.

"What it does mean is that Bermuda is going through a process of re-configuration in order to mould ourselves into a shape a little more in keeping with the realities of life in the 21st Century.

"We intend to do this without altering in any substantial way the protections that have been built into the Bermuda in consideration of our tiny size.'' Mr. Cox also pledged to continue to apply the same regulations and taxes to both local and international entities.

He said the OECD had "not demanded a single change in Bermuda's tax structure'' in its report, which was published on June 25.

However, he added that legal mechanisms would be implemented to ensure that the exchanging of tax information between the Island and other jurisdictions happened "in a more timely and effective manner''.

Island opens for business This is in line with the 1986 tax exchange agreement that Bermuda has with the United States.

And Mr. Cox pledged to introduce or amend company legislation by 2003 "to require the filing or auditing of company accounts and access by appropriate Bermuda authorities to such accounts''.

"This requirement would apply equally to local and international companies in all spheres of activity,'' he said.

Reacting to news that international companies will be able to participate in "previously sheltered sections of the economy'', Ms Valdes-Dapena said Mr.

Cox's statement seemed to allude that as much consultation as possible was being done "to prevent too much damage to small businesses''.

"It appears to me that it is being looked at in a responsible way and that's all I ever really suggested was necessary.'' She added: "We know that the world economy is changing and we know that Bermuda has to respond to the altered global environment. We all saw it coming down the road.

"We've always had to be pretty canny and I think this change could bode well for businesses here. It just needs to be done in a careful and collaborative way.'' "I don't think Bermuda has too much to fear from the mega-merchants either.

Our market is uncommonly small and the margins that we offer to merchants here are not what most other companies are accustomed to.

"Anyway, everyone knows that being sure of your footing in a constantly changing environment is exactly what it takes to survive.'' See Page 5 for the full transcript of Finance Minister Eugene Cox's statement in the House of Assembly