Rohee weighs in on Jamaica CET waiver
-'The claim that Milled White Rice cannot be sourced from Guyana is unacceptable'
Business September 24, 2004
Stabroek News
September 24, 2004
Foreign Trade Minister Clement Rohee says the Caricom Secretariat should never have never issued a waiver for a Jamaican company to import 3000 tonnes of rice duty free from outside the region.
In a letter to Secretary General Edwin Carrington; he notes that "it was brought to my attention that subsequent to this Ministry's response, Minister of Agriculture Satyadeow Sawh was consulted by Mr. Byron Blake, Consultant, Trade and Economic Development on the matter and on June 29, 2004, the Caricom Secretariat issued a Certificate for the suspension of the CET (Common External Tariff) on 3,000 MT of Milled While Rice. Mr. Blake claims that the Certificate was issued on the basis of an understanding reached between himself and Minister Sawh.
"This matter was brought to the attention of his Excellency President Jagdeo and the Cabinet Minister Sawh assured Cabinet that he never gave a commitment to the Secretariat nor was a formal response communicated from the Government of Guyana to the Secretariat supporting the request for the suspension of the CET on the entire quantity or any proportion of the quantity requested."
The issuance of the waiver has local rice officials dismayed that the company, Jamaica Rice Milling Company Limited a subsidiary of Archer Daniels Midland a US$30Bn grains corporation, could be allowed the waiver when it had not taken up orders totalling 10,000 MT in the months prior to June. Instead on June 10, the Government of Jamaica in favour of the company made an application for the suspension of the CET on 7,000 MT of Milled White Rice. On June 11, 2004 Guyana indicated that it could not support the request on the basis that it could supply the rice requested by Jamaica.
Blake had told Stabroek Business in last week's edition that the secretariat went to great lengths to ascertain whether Guyana could supply the full amount and that included calling a rice mill and Sawh. "As you are aware, the Ministry of Foreign Trade and International Co-operation is the ministry with responsibility for addressing matters relating to the suspension of the CET. It was therefore inappropriate for the Secretariat to solicit from the Ministry of Agriculture or Minister Sawh, a response in favour of a waiver, "said Rohee.
"On August 1, 2004, I received a telephone call from Mr. Blake who outlined the details of what transpired and enquired on the availability of the additional supplies of rice from Guyana. I reiterated that Guyana has the capacity to supply the rice requested by Jamaica and therefore could not support the suspension of the CET.
"In the course of a subsequent telephone conversation with the Honourable Paulwell, Minister of Commerce and Technology of Jamaica regarding this request for the suspension of the CET..., it was revealed that Jamaica Rice Mills Ltd. was not in favour of procuring its supplies from Mahaicony Rice Limited in Guyana although that supplier was in a position to meet the quantities requested.
"Minister Paulwell accused Guyana, of "always letting Jamaica down at this time of the year with supplies of rice, ever since the times of Dr. Jagan." I had to remind Minister Paulwell about the agreement that was reached in 2003 between Jamaica, Guyana and Suriname which permits Jamaica, to import 65,000mt of paddy from extra-regional sources to address this problem. As you are aware the objective of this agreement is to cover shortfalls in supplies of rice from regional sources and to sustain the milling capacity of Jamaica.
"In a subsequent telephone conversation with the Honourable K.D Knights, I was informed that a crisis situation was emerging in Jamaica and there was an urgent need to get the rice at the cheapest price to the Jamaican consumer. Minister Knight also raised concerns regarding Jamaica Inter Caribbean Limited, the subsidiary of Mahaicony Rice Limited, a Guyanese Company registered in Jamaica, which imports rice from Guyana and distributes same locally at a cheaper price. This, according to Minister Knights, places Jamaica Rice Mills Limited at a disadvantage and would be in contravention of the Jamaican competition and fair trading rules.
"This I found to be paradoxical since Guyana remains committed to supply Jamaican consumers rice at the cheapest possible price. However, Guyana is not prepared to intervene in private arrangements between buyers and sellers with a view to setting prices. One would have thought that the Jamaican authorities would be interested in importing rice at a competitive price for its consumers rather than at a price to the satisfaction of the Jamaican Rice Milling Company.
"According to information received Mahaicony Rice Mills of Guyana, approached the Jamaica Government through its sister company in Jamaica, - Jamaica Inter Caribbean Limited to have 3,000 MT rice off-loaded at Port Esquivel in order to avert the impending crisis and at the same time, to reduce the cost of rice to the Jamaican consumer. This request was denied. Subsequently, what I found strange was that the much touted crisis never materialised...
"The claim that Milled White Rice cannot be sourced from Guyana is unacceptable. In 2002 Guyana supplied Jamaica 37,933 MT of rice. For 2003 and up to July 2004 Guyana supplied that market 27,695 MT and 24,590 MT respectively...
Rohee goes on to say that, "It would be most inconsistent of us to push for special and differential treatment to safeguard special and sensitive products in our external negotiations while among ourselves, at the regional level, we resort to measures that jeopardise trade in our region. Such measures will in no way contribute to the credibility and enhancement of the Caricom Single Market and Economy. The onus is on the region therefore, to promote the livelihood of its peoples by protecting sensitive industries and providing for their viability. Guyana remains committed to the CSME process however the support of other members of the Community is critical.
"The unilateral action by the Secretariat to grant a waiver despite the explicitly stated position in a letter dated June 11, 2004, that Guyana has the ability to supply rice to Jamaica, will have serious repercussions for current and future trade in rice within the community. While the decisions of the Caricom Secretariat on the other requests that were submitted by Jamaica for the suspension of the CET on rice are unknown to the Government of Guyana, it is the Guyana Government's expectation that as a matter of courtesy the Secretariat would communicate to the Government of Guyana, the outcome of these requests and that in any event, the Secretariat would have taken into account the ability of Guyana to supply the rice requested by Jamaica."