Editorial | Who knows about Article 164?

We have several times complained in these columns, late in the dying days of the old year, of how inadequately the Caribbean Community (CARICOM) communicates with the region’s people on matters of regional integration, including on its efforts to build a genuine single market as the central pillar for a strong Caribbean economy. We might make the same claim about individual governments, including our own.

Decisions of the community are rarely told to citizens, and when they are, it is usually in arcane language, or the gobbledygook of bureaucrats that obfuscates rather than clarifies.

Take the case of last week’s announcement by the St Lucia government of its decision to, from January 1, invoke Article 164 of the Revised Treaty of Chaguaramas “to enable the growth and development of the lesser developed countries of CARICOM”.

This move is on the basis of a decision taken by CARICOM’s council of trade and development (COTED), the region’s trade ministers, more than a year ago, and subsequently endorsed by the heads of government, including, we believe, Prime Minister Andrew Holness. Yet, few Jamaicans know what this is about, despite its potential to negatively impact Jamaica’s exports to the community and, thereby, hurt this country’s resurgent, albeit slowly, manufacturing sector.

This newspaper appreciates the intent of Article 164 of the CARICOM treaty, which allows the community’s lesser developed countries (LCDs), mostly clustered in the Organisation of East Caribbean States (OECS), to, individually or as a group, on the authority of COTED, temporarily opt out of their obligation to allow goods manufactured in the so-called more developed countries (MDCs), which include Jamaica, to enter their markets as if made domestically. In other words, no duties would be paid on these goods once they meet CARICOM’s rules of origin criteria, which, in most cases, means a 60 per cent domestic value-added, which can be comprised of inputs from the country where a product is assembled, plus contributions from other CARICOM members.

The assumption of the exemption is to help the LDCs, though, on a per capita basis, wealthier than some of the MDCs, including Jamaica, to develop their manufacturing base and to catch up in the development with the MDCs, which had a head start in industrialisation.

However, the exemption of LDCs from their trade obligations isn’t supposed to be open-ended. COTED, in allowing the opt-out, is to “establish terms and conditions, including a phasing-out period, during which member states and the community shall provide support measures and the industry implement the necessary programmes for achieving competitiveness”.

DESERVES FULL AIRING

Maybe the current Jamaican minister responsible for trade, Audley Shaw, or his predecessor, Karl Samuda, or perhaps the foreign minister, Kamina Johnson Smith, who has overarching responsibility for international trade, has briefed Jamaica’s manufacturers on the terms of the COTED decision, including to which markets the exemption applies and the time for which it is to be enforced.

It is perhaps unforgivable inadvertence, or incompetence, on our part that this newspaper recalls no public engagement by the Jamaican Government or the private sector on this matter, or can find no information on the terms of COTED’s agreement on any government website. Neither is it obvious to which products the exemption applies, although St Lucia’s statement suggests it includes a variety of goods manufactured in Jamaica, such as beer, stout, curry powder, flour, paints and varnishes, among others.

CARICOM, especially the LDCs, hasn’t, in recent decades, been a major export market for Jamaica. For all of 2018, we exported US$76 million to the community and imported US$415 million from regional partners, with the bulk of the imports being fuel and minerals. We had a US$397-million trade deficit with CARICOM. Trinidad and Tobago was the major beneficiary. During the first eight months of 2019, the CARICOM-import bill was US$330.6 million, while we exported US$61 million.

However, the economic reforms of recent years have been addressing many of the issues that made Jamaica uncompetitive in the region and we sensed that domestic manufacturers are keen on going after regional markets. Whether the COTED decision is a setback isn’t clear. What, however, is obvious is that it’s a policy matter that deserves full airing. Not in secret. That’s no way to build strategic partnerships and build a culture of exporting.