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The government has agreed to waive the 25.83 per cent duty on imported cement. Importers can now take advantage of the CARICOM Common External Tariff (CET) rate of 15 per cent, which is applicable on cement imports up to August 30.
Commerce, Science and Technology Minister, Phillip Paulwell, who made the announcement at a press conference held at his offices in Kingston this morning (March 8), to outline the government’s response to the recent challenges facing the cement market, said that the reduced rate would be applied with immediate effect.
He noted that a mid-term review of the 15 per cent CET would be completed by the end of May. “This .assessment period will allow the government to review the volume of imports and evaluate the impact of cement imports on the domestic market,” he informed.
To benefit from the waiver, importers must possess concession letters, which will be issued by the Finance and Planning Ministry. To assist with the process, the Trade Board has been designated to accept all applications and to make the appropriate recommendations to the Ministry of Finance.
“Importers, who wish to benefit from the duty waiver, will be required to obtain the required licences from the Trade Board,” Mr. Paulwell told journalists, adding that the Board would process applications within 24 hours and make the appropriate recommendation..that’s a commitment given”.
Applications may also be made online at www.tradeboard.gov.jm and these will also be processed in 24 hours. The Board will charge an administrative fee of $4.00 per tonne cement, for the processing of each waiver application.
All importers will be required to have a confirmed commitment from the overseas supplier and establish that the proposed imports meet the country’s mandatory quality specifications as set out by the Jamaica Bureau of Standards.
Meanwhile, a review committee is being formed by the Trade Board to monitor cement production and will include representatives from the Ministries of Commerce, Science and Technology; Industry and Tourism; Finance and Planning; the Master Builders Association; the Consumer Affairs Commission; and the Customs Department.
The monitoring process, the Minister said, would include regular evaluation of the quality of the product. He emphasized that this issue was of critical importance and that the recent problems associated with a batch of cement sold in the local trade was being addressed. “For cement being sold on the local market, there is a compulsory standard. Producers and importers must have appropriate systems in place to ensure that products meet this standard,” he stated.
The government, in early 2004, applied an interim duty of 25.83 per cent on the existing 15 per cent duty, while the Anti-Dumping and Subsidies Commission completed its safeguard investigation to determine if increases in imports of cement, were seriously threatening the domestic industry.
“The final affirmative determination investigation by the Commission on July 16, 2004, recommended that a final safeguard duty be applied,” Mr. Paulwell explained, adding that the analysis by the Commission revealed that the country’s domestic cement industry was under threat and required an appropriate level of protection.
The recommended safeguard tariff of 25.83 per cent, when combined with an applied rate of 15 per cent, Mr. Paulwell continued, “would yield a composite tariff of 40.83 per cent, a tariff rate that is well below Jamaica’s WTO (World Trade Organisation) bound rate of 50 per cent for cement”.
A decision was therefore made to terminate the formal safeguard investigation, but use the economic analysis from the investigation to inform the use of a rate within the tariff ceiling. In November 2004, a resolution was approved in the House raising the tariff on cement to 40 per cent.
Mr. Paulwell further explained that although Caribbean Cement Company Limited (CCCL), the country’s primary cement supplier, had already imported 29,953 tonnes of cement since December 2005, the Trade Board advised that the company would be unable to keep apace with the “robust” demand in the construction sector for 2006, due to several factors outside of CCCL’s control.
These include, an increase in the domestic construction sector with several projects underway or scheduled for start-up and unprecedented levels of regional demand due to hurricanes in 2005.
The interim regime follows extensive consultation with the CCCL and the construction industry, through the Incorporated Master Builders Association, in which it was agreed that a policy intervention was needed that would address the needs of the construction industry and consumers in general, without injuring the producer and derailing the expansion of the cement plant at Rockfort, which is now underway.