Wed | Nov 14, 2018

CARICOM policy shift?

Published:Sunday | October 26, 2014 | 12:00 AM

With the unrestrained congratulations by International Monetary Fund (IMF) officials about the Government?s management of the Jamaican economy, it is unsurprising that significant intervention by Peter Phillips on the Caribbean Community (CARICOM), and perhaps its future, went largely unnoticed.

So far, though, it is unclear whether the finance minister, at the Montego Bay conference on economic growth in the region, was signalling a shift in the Simpson Miller administration?s staunchly pro-CARICOM policy, in which event, it needs to put on the table more and far better particulars. For it would be a shame if Dr Phillips were to join that growing Jamaican pastime, with regard to CARICOM, of policy by innuendo

and declarations. To be fair to the finance minister, though, his remarks were, on the face of it, reasonable and, for the most part, contextually well placed.

What will immediately resonate with Jamaicans is his call for the ?Caribbean to revisit the foundations of regional endeavours and arrangements?, which, clearly is shorthand for an overhaul of CARICOM, and of the 15-member free trade and emerging single-market arrangement of which Jamaica is an important member. More specifically, the proposed review ?of current taxation treaties?, including the common external tariff (CET), which CARICOM countries apply to third-party imports.

?Regionalism need not only induce growth,? Dr Phillips said, ?but (must) be equitable.?

Our interpretation of these statements: a coded shot across the bow of Trinidad and Tobago, CARICOM?s wealthiest member, whose petroleum-based economy is bolstered by its strong manufacturing sector, which allowed it to ride out the economic storm of recent years while others in the region foundered. Jamaica is an egregious example.

no fair play

Critics of the Trinidadians, especially Jamaica?s political Opposition and some business people, claim that they do not play fair in regional trade. Port-of-Spain is also accused of subsidising its manufacturers with underpriced energy, then worsening its unfairness by placing non-tariff barriers in the way of imports, especially from Jamaica. They are also accused of cheating on CARICOM?s value-added protocols.

Reasonably, Dr Phillips also proposed ?a regional strategy for energy?, but seemed, curiously, to suggest that this was something to be marshalled by the international community.

With Jamaica having a trade deficit of around US$800 million with CARICOM, of which imports from Trinidad and Tobago account for the bulk, the administration has faced calls ranging from withdrawing from CARICOM altogether or suspending the CET, with the prospect of earning between J$17 billion and J$20 billion annually in forgone import tariffs. This inflow would significantly remedy, if not fully solve, the Government?s fiscal problem.

We believe that these are issues worthy of serious debate, rather than the emotional anti-regional spiel that tends to characterise too much of the discussion about CARICOM, whose value to a bunch of mini-states in an unforgiving world rests on the potential of its whole being more than the product of its individual parts. In that respect, we hope that if Dr Phillips? statement is a shift by Government, it will be followed by hard analysis and structured discussions with Jamaica?s CARICOM partners.

A decade ago, one of Dr Phillips? Cabinet colleagues, Anthony Hylton, insisted that CARICOM?s treaty implied that there should be fair access by the energy-deficit countries to the Community energy resources. He threatened to take the matter to the Caribbean Court of Justice. Jamaica, however, merely talked.