Jamaica and Guyana are at it again

Sep 28, 2008 Editorial

Guyana must be careful in granting waivers of the Common External Tariff (CET) to allow countries like Jamaica to import rice from extra-regional sources. As the saying goes, if you give a man an inch, he may take a yard.

Guyana would be better advised to exercise limited flexibility, both in terms of its own trade practices as well as in terms of not objecting to applications for waivers of the CET to allow countries to import items from extra-regional sources.

Guyana itself has been accused of acting unilaterally in respect to cement, and this has forced a challenge in the courts.

We thus need to ensure that we avoid such controversies lest this becomes yet another excuse for countries to ride roughshod over Guyana.

Under the arrangements governing trade within CARICOM, arrangements which can be inquired into by the Caribbean Court of Justice, if a country wishes to import goods from outside of the region, the CET applies.
The same goods imported from within the region do not attract the CET.

Since the tariff on rice is pretty hefty, some countries apply for waivers of the CET to allow extra-regional imports.

This waiver, however, is only granted if regional producers indicate that they are unable to supply the item in the said quantities, and there is a procedure that must be activated.

At present, there is some unease over the rice market in Jamaica. The problem began this year when Jamaica applied for a waiver of the CET on rice which it intended to import from the United States of America.
Jamaica allegedly cited its reservations over Guyana’s inability to supply the rice.

Eventually, a compromise was brokered which seemingly satisfied the concerns of both sides. Jamaica agreed to import a prescribed amount of Guyana’s rice, and Guyana agreed not to oppose an application for a waiver of the CET to allow some 9,000 metric tonnes of rice which had been ordered and shipped to that country.

There are now rumblings once again about Guyana’s rice exports to that country. So far, there has been no indication that Jamaica may breach its undertaking, but the situation remains tenuous.

There is talk now about a best endeavour agreement, presumably which will entail Jamaica committing to making its best attempt to honour its promise to import 60,000 metric tonnes of rice this year from Guyana. This is not the ideal approach to the problem. In fact, such a course is fraught with danger.

All of these subsidiary agreements are totally unnecessary if the letter and spirit of the Treaty of Chaguaramas are observed. The trade agreements should be followed as they are written and as they were intended to work.

If a country needs to import emergency supplies, and wishes a waiver of the CET, it is obligated to go through the procedure which requires that notice be given to all member states of CARICOM, to indicate whether they can supply.

If it is found that the full amount cannot be supplied, then a waiver of the CET to facilitate the extra-regional import will be granted, and there will be no need for any Best Endeavour or any compromise deal.

We cannot continue to seek to massage these trade arrangements if we expect trade to work within the region. Once these laws are allowed to work, then there will be less speculation and uncertainty in trade markets.