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Marcia Forbes: The Trade Wars Between Jamaica and Trinidad

July 2, 2012 | 2:18 am | Print

By Marcia Forbes, PhD
CJ Contributor

The Patty War

Many in the Anglophone Caribbean would have heard of Jamaica’s Patty War with Trinidad. It came to a head in 2009. At its root was what some describe as non-tariff barriers imposed against Jamaica under the guise of the World Trade Organization’s sanitary and phytosanitary  (SPS) guidelines. These WTO guidelines concern food safety and came into effect in 1995. They allow countries to set their own standards so as to ensure that their citizens are not exposed to harmful products.

Since everyone (or nearly everyone) in Jamaica eats and enjoys Tastee patties and many have done so for close to 50 years, that war was won after the various inspections of plant and product to ensure safety supported by scientific evidence. Jamaican patties are now being enjoyed in the republic of Trinidad and Tobago, alongside the Trinis’ delightful doubles.

The Energy War

The energy war between Jamaica and Trinidad is far more complicated than the Patty War and goes back further in time. It is as yet unresolved. Interestingly, though, it is the present Minister of Industry, Investment and Commerce, Anthony Hylton, who in about 2004 negotiated the deal with Trinidad for a twenty year supply of 1.1 million tonnes of Liquefied Natural Gas (LNG) to Jamaica each year. It seems war erupted over transporting the gas to Jamaica. There are many sides to this and different understanding by different persons, depending on where they “sat”/”sit.”

In a 2009 newspaper publication, Hylton stated, “we made it clear that Jamaica was fully prepared to pay all extra processing and transport costs involved in getting gas to Jamaica. The matters remain unsettled because Trinidad and Tobago’s Prime Minister, Patrick Manning, expressed his dissatisfaction with the opinion and advised…that he intended to appeal the matter in the CARICOM Court of Justice (CCJ) once it became functional, which has yet to occur despite the functioning of the CCJ for some time now.”

There is a new prime minister in Trinidad. She is Kamla Persad-Bissessar. Months ago, Minister Hylton reported that discussions with Trinidad over LNG are back on track. To the extent that the energy Minister, Phillip Paulwell, has spoken on this matter, he has described talks as at “ground zero.”

He did not sound hopeful, even while “hoping that something would materialize.” Jamaicans are anticipating hearing more on this given Paulwell’s June deadline and that we are now at the start of July.

WTO & CARICOM

At the heart of these wars are notions of transparency and fair-play within the context of the CARICOM Single Market and Economy (SME), designed to facilitate intra-regional trade as well as against a backdrop of WTO guidelines.

With WTO, it is those pertaining to Most-Favoured-Nation (MFN) status generally, but specifically “national treatment.” Under this WTO conditions, nationals and foreigners are to be treated as equals. Their goods and services are to be treated the same, with no special favours for locals.

The trade deficit between Jamaica and the Republic of Trinidad and Tobago is vastly in favour of the latter and reportedly running in the region of well over $1 to $2 billion USD per year. The Trinis export about seven times as much to Jamaica as Jamaica exports to them.

This is partly seen as the consequence of the Trinis’ use of non-tariff barriers and sector subsidies, plus what some regard as unfair leveraging of their oil fields and natural gas trains, in contravention of the spirit of CARICOM and the letter of its Grande Anse Declaration.

There is a view that Trinidadian manufacturers, because of their reduced price of energy, have an unfair advantage compared to their Jamaican counterparts. This advantage is reflected in the cost of energy in Trinidad and Tobago being ten times cheaper than it is in Jamaica.

CARICOM, to which some in Jamaica are eager to wave goodbye, is regarded as having been impotent in dealing with these wars. Enter CARICOM’s still relatively new Secretary General, Ambassador Irwin LaRocque, close to completing one year in the post.

Secretary General Ambassador La Roque

The SG was special guest at a June 29 breakfast meeting with business leaders in Jamaica. The session was organized by Samuda & Johnson, whose founding partner, Milton Samuda, is president of the Jamaica Chamber of Commerce, as well as Chairman of JAMPRO, the government entity tasked with driving trade and investment in this island. The CARICOM SG shared some important observations.  For me these triggered an “aha moment.”

Chris Samuda

Ambassador LaRocque highlighted Jamaica’s comparative advantage in trade in services. He referenced the cultural industries, in particular musicians, as well as the work of Jamaican professionals throughout the region. He stressed the need for a widening of the construct of ‘trade’ beyond our more accustomed limited restriction to goods. It is true. Many of us forget or ignore trade in services.

This aspect of trade, while acknowledged under the terms of the CARICOM SME, is hardly measured and accounted for when issues relating to trade imbalance are discussed. This is so for Jamaica.

Often the earnings of entertainers and others in the cultural industries are not captured in the formal economy. If, or, dare I say, when this is done, the trade imbalance between Trinidad and Jamaica may begin to look less iniquitous. I hedge my bet though, because, while we haven’t heard of Jamaica refusing entry to any entertainer from Trinidad, we do know that in 2010 Ding Dong, a DJ known primarily for his happy, party lyrics, was banned, along with several others dancehall artistes from entering Trinidad for fear they would corrupt that society.

Trade Facilitation Desk

A Trade Facilitation Desk between Trinidad and Jamaica was established in October 2011. Its creation was driven by the Manufacturers’ Association in the twin island republic and specifically, it seems, by Bermudez, the high profile biscuit company with a large number of exports to Jamaica. Both Jamaica’s and Trinidad’s Chambers of Commerce, as well as the Jamaica Manufacturers’ Association and the Jamaica Exporters’ Association, are signatory to the MOU “to facilitate business opportunities and ease up trade challenges between the two countries.” This is laudable.

The primary objectives of this Trade Facilitation Desk are:

  • “To open doors in Trinidad & Tobago on behalf of Jamaican firms
  • To provide Jamaican firms with information on the T&T market including trade regulations and import procedures, including intermediating with such arms as customs, the standards authorities, and assisting with negotiating the bureaucracy etc. as required.
  • To assist with matchmaking between Jamaican firms and their T & T counterparts and or customers….”

No doubt all Jamaicans would like to see this desk deliver tangible results and meet with tremendous success.

Dr Marcia Forbes, a Caribbean Journal contributor, is a media specialist, the co-owner of multimedia production company Phase 3 Productions Ltd and former Permanent Secretary in Jamaica’s Ministry of Mining and Telecommunications and later the Ministry of Energy and Mining. She is the author of Music, Media & Adolescent Sexuality in Jamaica and the recently-released Streaming: Social Media, Mobile Lifestyles (click below for more information).

Follow Dr Marcia Forbes on Twitter: @marciaforbes

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