CEMENT WAR – Samuda vows to take ‘action’ against Dom Rep
A cement war is brewing between Jamaica and the Dominican Republic following what Minister of Industry, Investment and Commerce Karl Samuda said were attempts to block the sale of Carib Cement in that country in what is described as “a classic case of the application of nontariff barriers”.
Samuda said authorities in the Dom Rep have 24 to 48 hours within which the latest shipment of Carib Cement should be cleared before his ministry utilises measures available to it to protect the local cement industry. Samuda would not go into details on what some of those steps would be but said they could be very ‘drastic’.
Jamaica — a major market for the Dominican Republic — imported 126,000 metric tonnes of cement from that country last year.
“The underlying factor that is of significance is that we stand ready to defend our local producers against any form of non-tariff barriers that may be put against them,” Samuda warned.
“We are very, very discouraged and disappointed at what we have been witnessing over the past 15 days,” Samuda said at an emergency press conference. He said the ministry had stayed out of the issue so far with the hopes that a settlement could be arrived at between the company and the Dominican Producers Association of Portland Cement — an association of cement manufacturers in the Dom Rep that Carib Cement boss Anthony Haynes characterised as a cartel.
“So we just want to register our objection as the ministry responsible for the promotion of export and for the expansion of local production, and we want to make it absolutely clear that we expect the Dominican authorities to use their good office to have this product cleared no later than the next 24 to 48 hours so that they can get on with the business of trading,” Samuda said.
In April this year, Carib Cement shipped 2,500 metric tonnes of cement, valued at US$250,000 ($21.25 million), to a customer in the Dominican Republic. It was the second shipment since the company began exporting to that country in March last year.
However, up to yesterday the cement was not released from the wharf and no reasons were given for its containment. As a result, Carib Cement has already accrued US$50,000 ($4.25 million) in demurrage and face another US$3,500 ($297,500) per day for each day that the cement is held at the ports.
Samuda said the stance of the Dominican Producers Association is highly unreasonable given that both Jamaica and Dominican Republic are CariForum partners, and are both signatories to the Economic Partnership Agreement (EPA). “It is a larger country than ours and notwithstanding that we have been accepting imports from that country,” Samuda said. “It is an emerging difficulty which has very serious implications for regional trade and for domestic production and especially at a time when Jamaica is seeking to get out of its economic difficulty by expanding exports and this ministry has been promoting and encouraging our local producers to produce for exports,” he said, noting that Carib Cement has been one such company to heed the call to seek external markets.
“I must applaud the Cement Company for simply not just objecting to the incidence of imports into Jamaica, but to take the bold move to compete in the Dominican market. So in other words if you are exporting to us, fair trade and the rules of trade dictate that we must be able to compete in your market,” Samuda said.
The minister said Carib Cement has complied with all the necessary requirements of the country, including its standards for the cement product and showed a ‘certificate of conformity’ as proof of this compliance.
“Their equivalent agency to our Bureau of Standards has visited and have satisfied themselves as to the integrity and the quality of the product that is made by Carib Cement,” Samuda said. “They can have no issues with the quality of the cement.”
He said the real issue is that of competition as the first shipment of Carib Cement to that country “sold off overnight”.
“That is the only thing we have identified now, because there is no legal requirement why this product should not enter the Dominican Republic and they have used strategy to prevent our product from being cleared so that the Cement company and the purchaser of that product can go about their business of trading in the normal, acceptable way,” he argued.
Haynes, in the meantime, said given the support of the ministry and the attractiveness of the Dominican Republic market, he would continue to pursue exports there despite the resistance.
“Its a very important market because it’s close, it has a very good price and we have no intention from retreating from that market,” he said. “I have confidence in the minister that this will be resolved early and I have confidence also because there is no basis really for doing it. We have been through a very meticulous, a very bureaucratic process that took almost a year with getting the certification, getting the test results, building a history. So this is a non-tariff barrier approach which I think is a very crude, very heavyhanded approach and I don’t think it’s going to continue. Even when I look at the press reports coming out of the Dominican Republic, there is a sort of negative reaction from its citizens from what most people realise is a cartel.”