Government Takes Action to Address Trade Breach

As part of efforts to strengthen its monitoring of the trading practices of its partners, the Government has moved swiftly to address an alleged breach under the Treaty of Chaguaramas.

This was disclosed by Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, during his contribution to the 2013/14 Sectoral Debate in Gordon House on May 14.

“A formal report was submitted to my Ministry by a private sector firm last year, alleging a scheme to circumvent the Rules of Origin in the Treaty of Chaguaramas by a major exporter in Trinidad and Tobago,” the Minister informed.

The Treaty established the Caribbean Community and Common Market (CARICOM) in 1973. An organisation of 15 Caribbean nations and dependencies, CARICOM’s main purposes are to promote economic integration and co-operation among its members, to ensure that the benefits of integration are equitably shared, and to co-ordinate foreign policy.

The Treaty has since been revised to take into account changes in the global trading environment and the establishment of the CARICOM Single Market and Economy (CSME).

Mr. Hylton noted that the alleged scheme involved the exportation of lubrication oils by the state owned oil company, Petrotrin, “which holds the dominant share of the Jamaican market for this product…(and) has been claiming CARICOM origin status for years without attracting the applicable duties under the Customs Act.”

The Minister informed that the submission by the Jamaican private sector firm alleged that there was misrepresentation with regards to origin, in that the product was being represented to be a product of Trinidad and Tobago, when it was not.

Following discussions by the inter-ministerial trade enforcement team, the Jamaica Customs Department issued a verification query on the product to the Trinidad and Tobago Customs and Excise Division, Mr. Hylton further informed.

“The applicable rules require the Trinidad and Tobago government to respond to a verification request within six weeks. It is now over six months and there has been no verification response by the Government of Trinidad and Tobago. The silence is deafening,” the Minister said.

Mr. Hylton explained further that the rules under the Treaty allow the Jamaica Customs Department to impose interim charges equivalent to the duties to be applied in the circumstance, and to place such sums into a special escrow account. This escrow arrangement was effected in December 2012. To date, the accumulated amount in the account is in excess of $184.2 million.

He pointed out that as the competent authority for matters pertaining to Rules of Origin under the Treaty, the Industry Minister is empowered to instruct the Jamaica Customs Authority to transfer the sum in the Escrow account to the Consolidated Fund, and to impose customs duties on the lube oil entering Jamaica from Trinidad and Tobago.

“I have so instructed the Jamaica Customs Department to transfer the entire sum into the Consolidated Fund with immediate effect,” he said.

“I wish to make it clear, that this is not an affirmative statement that Trinidad and Tobago has been circumventing the Rules of Origin on this product – but it is a clear, resounding statement of the affirmative action that will be taken by the Government to enforce trade rules without fear or favour. Jamaica has asked legitimate questions and these have not been answered. Jamaica, therefore, has no choice but to exercise its rights under the Treaty in circumstances where verification evidence has not been provided,” he said.

The Minister said the entire affair raises profound and troubling questions, in the context of persistent and loud complaints by the Jamaican private sector about suspected breaches of CARICOM trade rules by entities in Trinidad and Tobago.

He pointed out that among the lessons to be drawn from this matter is the fact that the administration is prepared to “act on evidence and in accordance with the rules of the Treaty and that we must work closely with the private sector, which has the responsibility to bring specific evidence and issues to the attention of the Government.

“We want to commend those members of the private sector for coming forward with their own evidence to support this action,” the Minister added.

Minister Hylton said diplomatic and private sector efforts have been pursued over an extended period of time, in an attempt to amicably resolve the many trade issues which have arisen between Jamaican public and private sector interests and their Trinidad and Tobago counterparts, in the present and recent past.

“We will continue to co-operate fully and amicably to resolve issues, however, in this matter and in these circumstances, swift and decisive action was required,” the Minister emphasised.

Contact: Alecia Smith-Edwards