Jamaica’s trade problems with Caricom

Difficulties encountered by some Jamaican companies wishing to enter certain Caricom markets have attracted outrage and prompted strong-worded responses from our government and the private sector in recent years. But Jamaica’s problems with Caricom are much deeper and cannot be solved with the setting up of Jamaica/Trinidad trade facilitation. The root of the problem goes to the heart of competitiveness and the rules governing the operation of the Treaty of Chaguaramas.

Fresh in the mind of Jamaicans is the initial refusal of Jamaican Tastee patties to the T&T market while Trinidad goods enjoyed a US$526.2 million positive trade balance with Jamaica in 2009. Jamaica accuses T&T of providing unfair energy subsidies to its manufacturers, thus giving that country’s manufacturers a huge competitive advantage in trade. T&T manufacturers pay US $0.06 cents a kilowatt while Jamaican manufacturers pay US $0.40 cents. Obviously the high cost of electricity in Jamaica means the consumer will pay a higher price for a product. The anti-Caricom and anti-Trinidad rhetoric being amplified by Jamaican business and some political leaders is growing louder each day. Jamaica continues to struggle with a widening trade deficit with Caricom, nearly US $1. 2 billion. Trinidad’s producers and businesses completely dominate Jamaica’s market, while Jamaican producers and businesses have minimal presence in Trinidad’s market. Jamaica is the largest market in Caricom, importing approximately 30 per cent of intra-regional exports, while it produces less than two per cent of those exports and it does not help that T&T accounts for the bulk of the trade deficit between Jamaica and Caricom. The trade deficit between the two countries is in favour of the twin-island republic and is estimated to be more than US$1 billion a year.

It is widely acknowledged that Trinidad-owned companies in Jamaica make significant contribution to the country’s economy in the form of millions of dollars paid in taxes and the thousand of Jamaicans gainfully employed. Despite the obvious problems, companies from both countries have set up shop—Guardian Holdings, Trinidad Cement Ltd through Carib Cement and Caribbean Airline’s acquisition of Air Jamaica—and on the other hand, Jamaica Money Market Brokers acquisition of TT’s Intercommercial Bank Ltd and Grace Kennedy (among others) are two of Jamaica’s best-known brands in the Trinidadian market. In 2010, then agriculture minister Dr Christopher Tufton accused T&T of using unfair practices to dominate Caricom’s agro-processing sector. Dr Tufton said T&T agro-processors have been using raw materials imported from outside the region and as a result Jamaican producers are not operating on a level playing field, completely ignoring the rules of the Treaty of Chaguaramas. It therefore came as no surprise when the Industry, Investment and Commerce Minister Anthony Hylton announced in his sectoral presentation to parliament that Jamaica had imposed additional duties on lube oil products from T&T, accusing the oil rich twin-island republic of engaging in a scheme “to circumvent the rules of origin in the Treaty of Chaguaramas, governing the Caribbean Community.”

It is this continuous circumventing of the rules which continue to deprive the treasury of greatly needed revenue; estimated to be as much as J$20 billion in customs duties foregone in 2008. Yes T&T has oil, but we cannot continue to blame Trinidad for our anti-production policies of past governments and our inability to re-tool and actively seek new markets, which has left Jamaica the most uncompetitive economy in the region. Our business and political leaders are so keen on identifying and analysing problems yet we never spend any time on solutions and implementation. While T&T boast per capita income several times greater than ours, the anti-Caricom, anti-Trinidad debate rages on.

http://www.trinidadexpress.com/letters/Jca-trade-problems-with-Caricom-211312781.html http://www.newsday.co.tt/letters/0,179158.htmlImage

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