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Revise Chaguaramas, says Tufton

BY ALICIA DUNKLEY Sunday Observer senior reporter dunkleya@jamaicaobserver.com
Sunday, July 01, 2012

OPPOSITION spokesman on foreign affairs and foreign trade Senator Dr Christopher Tufton is advocating a change to the Treaty of Chaguaramas as a solution to Jamaica's regional trade concerns, instead of the country exiting the Caribbean Community (Caricom).

The Revised Treaty of Chaguaramas establishes the Caribbean Community including the Caricom Single Market and Economy.

Dr Tufton declared that the debate on Caricom had been characterised by too much emotion and needed "a dose of hard data-driven analysis and economic pragmatism".

"My own view is that we are approaching the debate on Caricom in a misguided way. This debate has too many extreme positions, right and left, but the focus should really be somewhere in the middle," Dr Tufton said, noting that there are "uncontroversial advantages to Caricom" such as capacity-building, regional security, natural disaster management and lobbying in international fora which are "impatient of debate...".

He was, however, at pains to point out that the present trade imbalance presents a major challenge which has to be addressed.

Last year, total imports into Jamaica were US$6.6 billion, while total exports were US$1.6 billion, a trade imbalance of US$5 billion. In terms of regional trade, the deficit with Caricom was US$957 million, an increase of US$157 million.

According to Dr Tufton, the country has failed to adequately take advantage of Caricom by enforcing and taking advantages of its rules, an issue further exacerbated by the fact that "Jamaica has a natural disadvantage from a purely economic standpoint within Caricom".

"The economics don't add up and, indeed, it is highly questionable whether it ever will. There is urgent need for analysis. We are the largest island and so most targeted. It is more difficult and expensive naturally and otherwise for us to access other markets in Caricom," Senator Tufton said, noting that under Chaguaramas Trinidad's oil-based economy gives that country a natural and rules-based advantage from a manufacturing standpoint.

"The issue is perhaps not whether we leave or stay with Caricom but given the non-trade benefits of Caricom and the trade-related disadvantages within Caricom should we be looking to change our relationship to give us greater freedom and flexibility on matters of trade as we seek to re-fashion our arrangements through the revised treaty," Dr Tufton said.

Among those considerations, he said, would be whether Jamaica would be better off if it were to apply a tariff to Caricom goods coming into Jamaica as is done to goods coming from elsewhere.

"In that respect, the Government should do the following; do an assessment of the revenues foregone from Customs duties through Caricom trade and determine if we would not be better off, even if we still had to import but duties were applied," Dr Tufton proposed.

He said an assessment should also be done to make more transparent the rules of origin status for traded Caricom goods to ensure that there is in fact a level playing field.

Furthermore, he said an effort must be made to "assess and rectify the breach in the spirit of the Treaty of Chaguaramas that allows a natural advantage to severely place Jamaica, the largest market within Caricom, at a disadvantage due to energy subsidies in Trinidad and Tobago".

"The spirit that guides the principle of a common market space has been compromised by the application of a wholesale subsidy on energy within Trinidad.

"On Caricom what we need is a treaty that gives us greater trade flexibility while encouraging greater collaboration on critical regional issues where we share common concerns," he added.

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