Manufacturers should prove T&T subsidies are unfair
The Anti-Dumping and Subsidies Commission (ADC) said Wednesday that it is encouraging local manufacturers who have concerns about subsidisation by Trinidad & Tobago of its manufacturers to file a complaint for investigation. Cases, however, must be specific and provable, the Commission said.
The Commission is the portfolio agency of the Ministry of Industry, Commerce, Agriculture and Fisheries charged with Jamaica’s implementation of the WTO Agreements on Dumping, on Subsidies and Countervailing Measures through the Customs Duties (Dumping and Subsidies) Act 1999 (the Act).
With the recent disclosure by Trinidad and Tobago that it has been subsidising its fuel at the rate of TT$31 billion over the last 10 years — or about US$5 billion over that period, or US$500 million per year, some sectors are contending unfair trade relating to the manufacture of goods at a far lower cost than Jamaican manufacturers and other regional trade partners.
Trinidad has promised to phase out the subsidy, an announcement made by Finance Minister Colm Imbert in mid-April. But the admission of the extent of the subsidy has inflamed the ire of the local private sector.
President of the Private Sector Organisation of Jamaica (PSOJ) William Mahfood, on Wednesday called for strong action to be taken against the Government of Trinidad and Tobago, describing the subsidy as “completely unacceptable”.
In response to clarification sought by the Jamaica Observer, the ADC said that the issue requires review on a case-by-case basis.
Andrea Marie Dawes, executive director of the Commission, commented: “We note your pertinent question as to whether a benefit that is conveyed to certain manufacturing concerns by the subsidy might in fact warrant countervailing measures or other sanctions. To reach this conclusion requires that products and industries be examined on a case-by-case basis.”
Dawes stated that any manufacturing community in Jamaica which believes that it has been injured by this practice by T&T needs to bring individual cases for investigation.
She noted, “We have been in discussions with the manufacturing community regarding this matter for information advice and training. We have also encouraged them to file complaints to address the concerns that they have raised in relation to subsidisation by T&T.”
The executive director explained that under the WTO Agreement on Subsidies and Countervailing Measures and the Act, a subsidy is a financial contribution by a government or public body within the territory of a Member which confers a benefit on the industry or enterprise or group of industries or enterprises.
“The fact that Trinidad and Tobago was subsidising fuel for more than 30 years was known, although the amounts to which your query makes reference were not previously well known. However, the fuel subsidy in T&T appears to be pervasive and not easily, if at all, traced to specific companies or enterprises,” Dawes told the Caribbean Business Report .
She noted that subsidies which can be disciplined under the WTO Agreement must cause or threaten injury to the producers of goods in the importing country, but must also be specific to certain enterprises or industries in order to be sanctioned by countervailing duties here in Jamaica or by dispute settlement at the WTO.
“By specific, we mean that access to the subsidy is limited, by law or in fact, to certain enterprises or industries. Our research found that there were no designated persons, entities or industries to which the subsidised fuel in Trinidad was distributed. Studies and anecdotal evidence suggest that the subsidy is pervasive throughout the T&T economy,” Dawes said.
She stated that although it would be reasonable to conclude that such a subsidy gives producers in T&T an advantage over their Jamaican counterparts, the advantage would be limited to the proportion to which the fuel costs are a component of the overall costs of production of the good.
Non-current (2011) data indicates that Trinidad and Tobago is the most outstanding beneficiary of intra-Caricom trade with exports to Caricom of US$2 billion while the value of its Caricom imports is around US$140.9 million. Jamaica is Trinidad’s largest market in the region with imports valued at US$1 billion.