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Azan demands day in court over Trinidad energy subsidy

Published:Friday | April 23, 2010 | 12:00 AM
Karl Samuda, minister of industry, investment and commerce, sees no upside to sparking a trade war with Trinidad. -File

Omar Azan, president of the Jamaica Manufacturers' Association (JMA), wants the Jamaican Government to haul Trinidad and Tobago before the Caribbean Court of Justice (CCJ) over what he claims is the discriminating pricing policy of its oil to its population.

The twin-island's manufacturers reportedly pay US three cents per kilowatt hour for electricity; Jamaicans pay US 30 cents.

But Karl Samuda, minister of investment and commerce, was not too sure that was the route to go, pointing out that Trinidad's action was not illegal under World Trade Organization (WTO) rules.

"Everybody is afraid to speak about Trinidad; it is a part of CARICOM," Azan declared at a meeting Tuesday with Samuda.

"This president is not afraid and I have spoken on many occasions … . I am not afraid to take on Trinidad."

The JMA president acknowledged that because of the structure of the subsidy, which extends to the entire population and not just the industrial or manufacturing sector, Trinidad was not, technically, in breach of trade rules.

"But I honestly believe … that it needs to be taken to the Caribbean Court of Justice and fought," he said, pointing out that the energy price advantage to Trinidad was not only affecting Jamaica but also the region, because of its advantage in producing goods at more competitive prices.

Trinidad is an energy producer, the other CARICOM countries are not.

However, while agreeing that the manufacturing sector was at a disadvantage in terms of energy inputs, Samuda said Jamaica needed to look for answers in alternative energy and improving the efficiency of monopoly power company Jamaica Public Service Company, rather than starting a fight with its trading partner.

"One of the things that we have to be mindful of is that it is very difficult to challenge the decision of a government to benefit from its own resources by making its prices more competitive. It is not an abuse of fair trading policy," the minister said at a Jamaica Trade and Invest interactive exporter forum held at the Caymanas Golf and Country Club in St Catherine on Tuesday.

Samuda's stance on the issue was supported by a competition expert inside his ministry.

"There is hardly anything that a country like Jamaica or perhaps the rest of the Caribbean can do. I take the point about going to the Caribbean Court of Justice, but primarily the fact is that it is not producing a discriminating treatment to a particular sector or community and in that regard, this is the issue we may find it difficult to challenge Trinidad on," said Beverley Rose-Forbes, director of industry, with oversight of the Fair Trading Commission.

But Azan was resolute in his criticism of Trinidad and Tobago and suggested that the Government tack duties on goods coming into Jamaica.

"We have the right under WTO, based on our balance of payments in our own country; we have the right and we don't need to give them any time. We can just advise them that we are tacking on this particular tax and we think that the revenue department of this government would gain a lot from that tax," he said, insisting that the Government should stand up for Jamaica.

Samuda said such "tit for tat" would get neither party anywhere, and that Jamaica should instead continue to lobby in the international arena for equal access to markets.