OPPOSITION senator, Bruce Golding warned Thursday that the Safeguard Act was not designed to accommodate inefficiency among local producers, as the Senate started the debate on the regulations.

“We must be clear that the Safeguard Act seeks to give local producers some level of protection only insofar as, within a specified period, they improve their efficiencies to a level that makes them competitive on the world market…it is not offering them the luxury of living in state of inefficient production”, Golding told the Upper House.

The Safeguard Act was passed in 2001, but awaits the passing of the Safeguard Regulations, which is needed to operationalise the local investigating authority — to which local producers can appeal for market protection under specific circumstances.

The local authority will be the Anti-dumping Commission headed by Beverley Morgan.

The World Trade Organisation (WTO) makes special provision for countries to apply safeguard measures “only to the extent necessary to remedy or prevent serious injury and to facilitate adjustments within certain limits”, according to the WTO’s website.

The WTO stipulates that “if the measure takes the form of a quantitative restriction, the level must not be below the actual import level of the most recent three representative years, unless there is clear justification for doing otherwise”.

It also sets four years as the maximum duration of any safeguard measure, unless it is extended consistent with the provisions of the WTO agreement. Such continuation, however, requires evidence that the particular local industry is adjusting toward a level of market competitiveness.

In supporting the safeguard regulations, Government senator, Navel Clarke, pointed out that the experience of the Caribbean Cement Company is proof of the need for safeguard measures.

“The company is putting in place new equipment and processes to increase production from just over 600 metric tons per month to 750 metric tons, but cheaper imported cement from Thailand and now Argentina have cut into the market, making it difficult for the company to recoup on its investment,” Clarke told the Senate.

Clarke, a trade unionist, also noted that unless local producers were given a chance to expand in order to achieve competitive economies of scale, the workers in those companies would also suffer.

“Trade unions are now negotiating on a basis of ‘payment by performance’ in which workers’ pay reflects their level of efficiency and productivity, but if the company’s market share has been reduced then there is no incentive for increased productivity”, Clarke explained.

While supporting the safeguard regulations, Golding noted that although any measure of protection to local producers would be tied to the achievement of certain levels of efficiency, there was “need for more information on the plan of adjustment for local companies to achieve such efficiencies and clarification on the monitoring mechanism for assessing the levels of efficiency”.

And Opposition member, Anthony Johnson, pointed out that the safeguard measures alone would not be enough to stimulate local production. “Nobody wants to take their money and go into business when they can get interest rates in the high 20s and even 30s”, he declared.

Johnson bemoaned the fact that although Jamaica accounted for almost half of the 5.6 million population of all Caricom countries, the value of Jamaica’s exports to her Caricom neighbours last year was less than 10 per cent of the $430 million imported from Caricom partners.

Debate on the safeguard regulations will continue next week, as members asked for an early adjournment due to responsibilities relating to yesterday’s nomination of candidates for the local government elections scheduled for June 19.