EDITORIAL - Jamaica, Dom Rep both have something to lose

We note, with concern, the escalating dispute between Jamaica and the Dominican Republic over what is being reasonably construed as Santo Domingo's use of non-tariff barriers to keep Jamaica's Portland cement from its market.

Jamaica's commerce minister, Mr Karl Samuda, has, in turn, placed cement importation from the Dom Rep under licence and has warned that he will not relent until that country ends what he characterises as "renegade policies".

If good sense does not prevail soon, and the quarrel escalates, both sides could be hurt from this row which, we sense, has been a sort of mission-creep.

The proximate trigger of the disagreement was the decision by standards officials in the Dominican Republic, on a complaint by Portland cement manufacturers in that country, to prevent the release of a shipment produced by Jamaica's Caribbean Cement Company (CCC). The ostensible reason for this action was that the Dominican authorities could not vouch for the quality of the Jamaican cement.

protectionism raises its head

It is likely, however, that the real reason is a cross between an attempt by the Dominicans to protect their domestic market and retaliation, fomented by the Dominican manufacturers, against CCC.

Carib Cement had last year complained to Jamaica's Anti-Dumping and Subsidies Commission that cement from the Dominican Republic was being dumped in the Jamaican market. The commission agreed with Carib Cement but determined that "the dumping has not caused, is not causing and is not likely to cause material injury to the domestic industry". Caribbean Cement, which has been losing money in the face of a soft construction sector, was not pleased with that ruling, which it threatened to contest.

In the meantime, the company is seeking to repair its financial fortunes, in part, through exports, hence its foray into the Dominican Republic. A prolonged stalemate in that regard is not in the company's interest.

Nor is it in the broader interest of Jamaica and the Dominican Republic.

trade fallout

Dom Rep is a northern Caribbean neighbour which ought to be a natural market for Jamaica. Proximity apart, Jamaica is a member of the Caribbean Community (CARICOM), with which the Dominican Republic has a free-trade agreement. Additionally, both countries are members of CARIFORUM, which is party to the free-trade arrangement with the European Union called the Economic Partnership Agreement.

Yet, trade between the countries is anaemic, with Jamaica's exports being negligible: a mere US$1.52 million in 2010. The Dominican Republic exported US$54.72 million to Jamaica.

The danger of a stand-off is that Jamaica, its productive limitations notwithstanding, fails to explore and exploit a growing market. At the same time, there is possibility of consumers being forced to bear a penalty for this dispute.

The Dominican Republic, on the other hand, could lose the export momentum it has begun to build in Jamaica. True, US$54 million might be a very small portion of the DR's export, but it is not the kind of money that individual firms sneeze at.

It is in either side's interest that they begin to seriously talk about the issues. Jamaica's foreign affairs and foreign trade minister, Dr Ken Baugh, must quickly engage the mechanisms under the CARICOM-DR trade agreement and, separately, under CARIFORUM that handle such disputes.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.