Jamaica Gleaner
Published: Friday | June 26, 2009
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A 'fierce resolve' to trade - JMA weighs in on Jamaica-Trinidad imbroglio

President of the Jamaica Manufacturers' Association, Omar Azan (left) consults with vice-president Brian Pengelley, at the JMA annual general meeting in Kingston. - Rudolph Brown/Chief Photographer

Excerpts from a speech given by Omar Azan, president of the Jamaica Manufacturers Association, on his re-election Wednesday.

Our Leaders may be afraid to say this, but we are the private sector, the traders, the beneficiaries or losers of trade agreements.

In 2008, Jamaica's trade deficit with CARICOM stood at minus US$1.6 billion. I, therefore, question what is the benefit of CARICOM to Jamaica?

I know that you have been following the developments in the media regarding the stumbling blocks to exporting regionally, particularly to Trinidad.

While Trinidad's export to Jamaica stood at US$1.4 billion in 2008, Jamaica's export to Trinidad was US$19 million, of which I am sure, many of my other regional counterparts also face.

Why is this?

Non-tariff barriers

Firstly, barriers to trade. We believe in fair trade and, therefore, the fierce resolve of competitive Jamaican companies to enter the Trinidadian market and Jamaica's entrepreneurial spirit should not be blocked by non-tariff barriers, the weak capacity of trade regulatory agencies and bureaucracy.

Secondly, possible subsidised electricity. I am of the firm belief that a thorough investigation must be undertaken on the issue, which would mean that Trinidad's producers are being provided with an unfair competitive advantage to export goods cheaper within the region.

The industrial electricity cost in Trinidad is US three cents. In comparison to the rest of the world, this is questionable.

These issues speak to the broader concern of a CARICOM single market of which all member states are not compliant with the provisions and there remains outstanding issues with regard to implementation such as harmonisation of regulatory systems and the strengthening of Institutions.

There is need for the full and efficient functioning of the CSME if citizens are to benefit from the legal binding commitments such as free movement of goods as well as persons, etc.

However, we also have to acknowledge that Trinidad's manufacturers are supported by their government whether it is through incentives or assisting with market penetration activities. Their consumers are also loyal to Trinidadian products. We, too, must support our manufacturers, grow our economy, save and create our jobs, buy Jamaican products to build Jamaica.

The linkages need to be strengthened between our agri-cultural, tourism and manufac-turing sectors.

The tourism sector has to make greater efforts to buy Jamaican.

The Government must make policies that will help to encourage linkages between the different sectors, for example, to stipulate that a certain percentage of inputs by hotels are procured locally.

Recently, The Dominican Republic (DR) has made an application to become a member of CARICOM and if we are having a problem with CARICOM, as manufacturers we will have an even bigger problem with CARICOM including The DR.

If we have never experienced non-tariff barriers in our life, I can say without hesitation that it will be a definite. As a country, our major reason for signing trade agreements has been to gain market access.

Firstly, what Jamaican products are in demand in the DR and what products do we have that can compete with DR manufactured goods?

What I am saying is general market access means nothing if we cannot identify up front substantial benefits to Jamaica, as we have so experienced in CARICOM and the Economic Partnership Agreement.

The chances are that our products will encounter non-tariff barriers to export to the DR and on the importation side, to put it simply DR products could wipe out our manufacturing base due to the size of their domestic market and their efficiencies.

Impact assessment

Jamaica's imports are growing well above our exports, at US$8.5 billion compared to US$2.7 billion, respectively. At this juncture, we need to conduct an impact assessment of our existing trade agreements and those to be negotiated, to take into account our current realities.

However, the challenges are twofold and we must be balanced in evaluating the situation and ask, why are we uncompetitive and have only to a limited extent penetrated regional and inter-national markets? The answer is, over 25 years of anti-production policies.

I call on this government to say once more, that while there is much talk about production we need to 'walk the talk'.

Give us something meaningful which will drive production and wealth creation.

Omar Azan is president of the JMA, and chief executive officer of Boss Furniture.

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