Unfair trade practices in CARICOM

Published: Sunday | December 22, 2013 Comments 0
Prime minister of Trinidad and Tobago, Kamla Persad-Bissessar.
Prime minister of Trinidad and Tobago, Kamla Persad-Bissessar.
Portia Simpson Miller, Jamaica's prime minister.
Portia Simpson Miller, Jamaica's prime minister.
The business and industrial district of Trinidad's capital Port-of-Spain. Jamaican manufacturers have been complaining of unfair trade advantages received by their Trinidadian counterparts.
The business and industrial district of Trinidad's capital Port-of-Spain. Jamaican manufacturers have been complaining of unfair trade advantages received by their Trinidadian counterparts.

Byron Blake, guest columnist

Unfair trade practices could involve any of a range of situations which are not permitted by the Treaty of Chaguaramas.

These practices include:

Unauthorised subsidies

Dumping

Abuse of monopoly position

Failure to satisfy the agreed rules of origin criteria.

Denial of effective, and timely access for qualified goods or services

Extension of benefits or assistance by a member which frustrate the benefits expected by other members from the operation of the CSME.

Responses to these breaches or perceived breaches are provided for in various sections of the Revised Treaty. Subsidies, for example, are provided for in 21 articles in Part Three of Chapter Five which addresses 'Trade Policy'. Additionally, subsidies specifically directed at the agricultural sector are treated in eight articles in Part Four and Dumping in 10 articles in Part Five.

These provisions not only define the breaches in their legal treaty context but set out the procedures at national and regional levels to investigate and remedy them.

Jamaica has the technical and institutional capacity in the Customs Department and the Trade Board; the Anti-Dumping and Subsidies Commission and the ministries of Agriculture, Industry and Commerce, and Foreign Trade to identify and pursue allegations of breaches.

The rules and procedures in the treaty are clear. Allegations have to be substantiated and a prima facie case made on the available facts to trigger action at the regional level and to provide the basis for remedy. This requires information.

The private sector - those in production and the trade and their organisations - should generally be the first line for information to activate the national processes. The national process, once satisfied, engages the regional processes.

SEARCHING FOR A REMEDY

The rules of engagement, including for access to information and the timelines for certain actions at the regional level, are stipulated in the treaty. The approach to the search for remedy is usually through regional mechanisms, although there are circumstances in which national action is permitted. National action must be reported within specified time frames.

In this area of perceived unfair trade practices, Jamaica has the opportunity to proceed on the two tracks simultaneously. Important here would be agreement on objectives, coordination, and the generation and sharing of resources, including information.

There is a high probability that if products are being subsidised, dumped or traded in circumvention of the Rules of Origin, this would not be constrained to the Jamaican market. Information can, therefore, be obtained from collaboration or exchanges with other markets where the product is present. The authorities and businesses in those countries should have little incentive to conceal data.

The time might now be appropriate for well-conceived and coordinated action by Jamaica in the area of unfair trade practices. While not pretending to suggest to either the public or private sector in Jamaica what action or strategy might be most appropriate, we would simply suggest that a strategy to seek 'declaratory' opinions or judgments by the Caribbean Court of Justice (CCJ) should not be spurned. This could be especially useful in light of the often-cited difficulty of obtaining information, or full cooperation, from some member states.

The CCJ has powers and resources often not available to individual member states. On the private sector side, it should not be forgotten that the treaty gives the right to establish, import and distribute your products in any market in the CSME area.

WITHDRAWAL BY JAMAICA

CARICOM is a voluntary organisation of sovereign states. Each state, therefore, has the right to withdraw. An agreed process is usually provided for to provide certainty in the treatment of past obligations.

As stated earlier, there is a treaty-provided process in CARICOM, even though the drafters inadvertently omitted it in the Revised Treaty. It does not provide for partial withdrawal by members. A member might suspend the extension of certain obligations for specified periods under agreed conditions. The member returns to standing and resumes its obligations on the expiry of the conditions.

REAPPLICATION NEGOTIATIONS

A member may withdraw from the treaty, severing all obligations and rights. There are several, although not all, regional institutions in which membership is explicitly linked to membership of the Caribbean Community. Withdrawal from the treaty would signal withdrawal from these bodies and areas of cooperation. A member which has withdrawn might reapply for membership but the conditions would have to be renegotiated with the existing members at the time.

No member state has chosen to withdraw in the 45 years of economic cooperation since CARIFTA. Several states have sought membership in the period, but only four have been accepted.

Jamaica can withdraw, but not from a part of the arrangement. It would need to assess the benefits against the immediate and long-term costs. In the particular case of Jamaica, there is, in addition to the objective costs, a reputational risk.

Fifty-two years on, Jamaica has not fully recovered from its unilateral decision to withdraw from the West Indies Federation, laying the ground for 'the Eric Williams Formula' and its demise. Trinidad and Tobago, whose withdrawal led to the actual folding up, has never been accused of breaking up the Federation. That distinction is reserved for Jamaica, despite all the efforts over the years.

A second attempt, even if it did not succeed, would brand Jamaica, at best, an unreliable partner, if not a quitter. This would not only be in the eyes of the Caribbean. The international press would have a field day and potential future partners will take note.

Jamaica's hope is not in withdrawing from CARICOM but in taking hold of this development instrument at a unique point in global development to change its own and Caribbean development fortunes. Catch the vision.

Byron Blake is a former assistant secretary general of the CARICOM Secretariat. Email feedback to columns@gleanerjm.com.









Share |

The comments on this page do not necessarily reflect the views of The Gleaner.
The Gleaner reserves the right not to publish comments that may be deemed libelous, derogatory or indecent. Please keep comments short and precise. A maximum of 8 sentences should be the target. Longer responses/comments should be sent to "Letters of the Editor" using the feedback form provided.
blog comments powered by Disqus

Top Jobs

View all Jobs

Videos