Jamaica subsidising Caricom by $15b a year?
JAMAICA loses $15 billion in revenues from subsidising imports from the Caribbean Community (Caricom), according to former industry minister Claude Clarke.
Clarke, who is managing director of Richmond Valley, made the declaration during his keynote address at the Jamaica Manufacturers Association (JMA) 45th Annual Awards Banquet on Thursday.
He suggested that Government collect the revenue by suspending Caricom trade subsidies, at least during the island’s lending arrangement with the International Monetary Fund (IMF).
On a separate point, Clarke called on Government to resist the urge to scrap tax concessions afforded to listings on the Junior Stock Exchange as it offered an efficient method of raising capital for small and medium-sized businesses.
“Surely the Government could not be aware of how irrational it is to handicap Jamaican producers with taxes and fees, while it surrenders as much as $15 billion of revenue to our Caricom competitors as subsidy to make them more competitive than our own producers in our own market,” said Clarke, who represented the People’s National Party during his political career, in his address at the Jamaica Pegasus hotel.
Imports into Jamaica are greatest from the USA, followed by Venezuela and Caricom member state Trinidad & Tobago (T&T). The JMA claimed earlier this year that manufacturers from T&T were misrepresenting items as originating from within Caricom — which would entitle the goods to duty-free status. However a rate of duty or common external tariff is applied on products originating from outside the grouping.
T&T manufacturers denied the claim. Clarke, regardless, wants any possible loophole removed.
“It is time for the Jamaican Government to assert its sovereign authority and suspend the Common External Tariff of Caricom, at least for the duration of the IMF programme,” he said.
Jamaica imported US$260.8 million worth of goods from T&T between January to May 2013, but the island’s exports to the twin-island republic are less than three per cent of that amount, latest Statistical Institute of Jamaica data indicates.
“Jamaica is in a dire fiscal situation — billions of dollars the Jamaican people have been foregoing for the benefit of Caricom countries that are economically far better off than we are. Billions of dollars directly invested in moving jobs out of Jamaica and out of the reach of the Jamaican worker,” he said.
The Economic and Social Survey Jamaica 2012 indicates that Jamaica’s annual trade deficit with Caricom narrowed to US$775.3 million relative to US$916.0 million in 2011. The improvement was attributed to a 22.4 per cent rise in exports to US$83.2 million and a 12.7 per cent reduction in imports to US$858.6 million.