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Jamaica pointed to cheap solutions to internaltrade barriers

Published:Wednesday | March 20, 2013 | 12:00 AM
Minister of Foreign Affairs and Foreign Trade, Senator A.J. Nicholson (at podium), addresses the opening of a stakeholders' consultation on non-tariff measures (NTMs) affecting Jamaica at The Knutsford Court Hotel in New Kingston on March 6. Executive director of the International Trade Centre, Patricia Francis, is at right. - JIS PHOTO

Avia Collinder, Business Writer

Jamaica faces external non-tariff barriers to trade mainly from the United States, followed by Barbados and Antigua and Barbuda.

But a new report also cites Jamaica for throwing up its own internal blockades to trade flows, which hamper exports.

The new International Trade Centre (ITC) report on non-tariff barriers (NTMs) in the Caribbean indicates that export inspections are the most common burden affecting local companies in various agricultural and manufacturing sectors.

"Inspections were reported as being burdensome for a number of reasons including lengthy delays associated with the inspection process and damage to goods at the hands of customs inspection officials," the report states.

An ITC survey carried out in 11 countries demonstrated that, generally, of all challenging NTMs reported by exporting companies, about 75 per cent are usually applied by partner countries and 25 per cent by the home country.

Comparatively, in Jamaica, about 30 per cent of NTMs are reported to be applied by the home country, while 70 per cent are reported to be applied by partner countries.

Patricia Francis, executive director of the Geneva-based ITC, said that in light of the Jamaica's ambitions to roll out a logistics hub of the magnitude of Dubai and Singapore, the Government should move quickly to remove these roadblocks, pointing as well to several measures which are not likely to cost the GOJ a lot of money to implement.

Francis told Wednesday Business that agencies under one ministry — especially those within the portfolio of the Ministry of Investment Industry and Commerce — often request the same documentation from traders, creating duplications and delays.

"Forty five per cent of procedural obstacles reported were encountered locally. These should be tackled locally by the relevant ministries as soon as possible. Dealing with these does not require a lot of money and can be done in a straightforward way," she said.

NTMs are inclusive of measures affecting exports and imports, other than ordinary customs tariffs.

The ITC survey on Jamaica was undertaken between August 2011 and February 2012 by consultancy company, A-Z Information Jamaica Limited.

The ITC survey is being pursued in about 30 countries around the world. In the Caribbean, surveys were implemented in Jamaica and Trinidad and Tobago in 2011-2012.

In Jamaica, 600 companies agreed to participate in a complete telephone interview. Of these 25 per cent were exporting only, 25 per cent were both exporting and importing and 50 per cent were importing only.

Some 210 companies, approximately 35 per cent, indicated that they faced burdensome NTMs.

"To a large extent, NTMs reported by Jamaican enterprises varied from sector to sector. Among exporters, the highest incidence of burdensome NTMs (57 per cent) was reported in the metal and other basic manufacturing sector," said the report.

"Companies attributed this to heavy regulation placed on the scrap metal sector by the Jamaica Government in July 2011 to minimise illegal activities committed by some exporters when sourcing goods for export."

Among importers, the companies in the agricultural sector overall faced the highest incidence of NTMs — processed food and agro-based products, 40 per cent and fresh food and raw agro-based products, 35 per cent.

The report notes that from detailed face-to-face interviews, it was revealed that the greatest proportion of NTMs affecting exports in partner countries were technical regulations (35 per cent) which commonly define the product characteristics, technical specifications of a product or the production process and post-production treatment; and conformity assessments (23 per cent), which are import-related measures determining whether a product or a process complies with a technical requirement specified.

NTMs were found to be a problem for businesses of all sizes, but more so for relatively new small and medium enterprises (SMEs) because they often lack information, human and financial resources and experience on how to meet certain requirements, the report said.

The Jamaican survey

The results of the Jamaican survey were the subject of a workshop co-hosted in Kingston on March 6 by the ITC and Ministry of Foreign Affairs and Foreign Trade. Francis said ITC will follow up the release of the report with discussion with relevant Ministries.

"We are waiting for a response from the Ministry of Foreign Trade, including if they disagree with anything which they have found in the study," she told Wednesday Business.

"Following this we will produce a matrix or listing of every organisation engaged and set out the issues which have been identified for the ministries and agencies involved in the process of import and export. We will make suggestions as to how each one of these problems can be solved."

Francis said there are "several low-hanging fruits" that Jamaica can deal with easily.

"Jamaica could use the survey results as a basis to initiate bilateral discussions with other governments on their policies on NTMs and collectively examine ways in which problems associated with certain measures in their markets can be reduced," she said.

The mutual recognition agreements that Bureau of Standards Jamaica has signed with the American National Standards Institute, the American Society of Testing Material, and the National Institution of Standards and Technology, can be used as the basis for discussions with the US, she said.

"This certification should be used to Jamaican exporters' advantage but the problem is that these agreements are not being respected and the Jamaican Government should ensure that they are respected by the US Government organisations," Francis said.