EDITORIAL - Positive move by private sector on CARICOM

Perhaps we can now get down to a serious, coherent and fact-based analysis of Jamaica's trade relations with the Caribbean Community (CARICOM) and its membership in the Community.

Up to now, that debate has been characterised largely by emotive rants, aimed primarily at Trinidad and Tobago, in which private-sector leaders merely ran with the crowd. Now, they are doing something far more sensible and of potential value.

This week, four of the island's leading business-related groups - the Private Sector Organisation of Jamaica, the Jamaica Chamber of Commerce, the Jamaica Manufacturers' Association and the Jamaica Exporters' Association - announced the establishment of a joint working group to review the economic implications of Jamaica's membership in the Community.

They will also look at the free-trade agreements between CARICOM and Dominican Republic, and with Costa Rica, and how these impact Jamaica. These, for now, are peripheral.

The core issue is Jamaica's near US$1-billion trade deficit with CARICOM, which substantially means Trinidad and Tobago, from whom the bulk of our import, in terms of value, is petroleum products. The Trinidadians, however, export around US$300 million a year in other manufactures to Jamaica, making us their most lucrative regional market. Jamaica, on the other hand, sells substantially less than US$100 million in visible goods to all of CARICOM.

The substance of the complaint by Jamaican businesses is that the Trinidadians cheat in regional trade - that Port-of-Spain erects non-tariff barriers and provides energy subsidies to its manufacturers. These contentions may be true. Our problem is how Jamaica's businesses, and those who find it politically expedient to join the parade, advance such charges and the solutions they proffer.

They presume the contentions to be proof, without need for robust testing. They seek diplomatic, rather than juridical resolutions in an organisation that offers a range of mechanisms to settle disputes, including a court of original jurisdiction that interprets its treaty.

Latterly, the call has been for Jamaica to either leave CARICOM altogether or invoke article 43 of the treaty that permits member states with "serious balance of payments and external financial difficulties" to "adopt or maintain restrictions to address such difficulties". Jamaica conceivably falls in this category.

economic problems

The question is whether measures, which are expected to be temporary and monitored by CARICOM, anticipate the full suspension of the Community's common external tariff and the collection of tariff on CARICOM imports. This, according to some estimates, would earn Jamaica Customs J$17 billion in duties.

An issue here, however, is the assumption that Jamaica's economic problems rest with its membership of CARICOM rather than bad, and badly executed internal economic policies and social dysfunction. A retreat from CARICOM may likely, in the short term, increase the collection of duties, while it shifts imports from Trinidad and Tobago to, say, China. But, fundamentally, it will, without far more, not fix Jamaica's lack of competitiveness.

Neither will it address the matter of Jamaica's comparative advantage in CARICOM, rather than the sole focus on visible trade. The working group, in this regard, should look at the opportunities open to Jamaican service providers in the region.

Perhaps, too, there is an argument to be made against how Trinidad and Tobago allocates energy resources in the context of a regional single market. Whingeing won't make that case.

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