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Caricom has ignored invitation for rum talks, says USVI governor

Published:Sunday | October 20, 2013 | 12:00 AM

US Virgin Islands Governor John de Jongh last Friday said Caribbean governments had refused to back away from plans to take ongoing rum dispute before the World Trade Organization (WTO).

In March, de Jongh wrote to regional leaders urging them to avoid the WTO, claiming that this could lead to a prolonged legal case that could also be divisive and difficult to win.

"I think if you are going to oppose a US programme and oppose it at the WTO or oppose it at the US Trade Representative Office ... it makes sense to at least first talk with me and to hear my opinion," he told a news conference.

"No Caribbean prime minister, no Caribbean ambassador has reached out and spoken to me, even after I made the call. I reached my hand out to all of them saying I would like to have a dialogue with you before you decide ... to take any action."

De Jongh said revenue from the rum sector had been a major boost for the USVI during the recession, given also that a major company had closed its doors in January 2012 with the loss of a significant number of jobs.

"The United States Virgin islands lost over US$200 million and I could not afford not to have this programme. This programme is what helped sustain the US Virgin Islands," he said.

Caribbean countries have in the past reiterated the need for an amicable solution to the rum dispute with the United States.


The regional countries say they are determined to seek a satisfactory solution to the matter of trade-distorting subsidies being granted to the USVI, and Puerto Rico rum producers that threaten the long-term viability of the rum industry in the Caribbean.

Last December, the Council for Trade and Economic Development (COTED) said the region was having "serious concerns" regarding the competitiveness of Caribbean rum in the United States.

"In addition to being the largest agriculture-based export industry in CARICOM, the rum industry is a substantial employer and a major contributor to foreign-exchange earnings and government revenues," COTED said.

UK-based Diageo Plc reportedly warned that should CARICOM mount a complaint to the WTO over the alleged subsidies, it would "re-evaluate" its Caribbean interests.

Diageo has denied 'flooding' the US market and has defended the US Government's 100-year-old 'cover over' programme, which it said granted the USVI and Puerto Rico much-needed revenues to promote economic stability and fiscal autonomy.

De Jongh said that the rum taxes in the USVI are part of the "strategy that Congress gave to us and goes back to 1917. "I still maintain that what we are doing is all within the US context," he said.

"We are a US territory. We are not trying to grow our rum industry beyond the US market. We are not looking at international markets."