Guyana- Jamaica Rice Spat

Guyana - Jamaica Rice Spat

Source: Trinidad and Tobago Express

May 7, 2008

WHEN writing in this column two weeks ago on the scrambling by Caribbean Community governments to face up to the challenges of a deepening international food crisis, little did I realise that Jamaica and Guyana were heading for a serious row over Caricom's Common External Tariff (CET) as it relates to Guyanese rice shipments to the Jamaican market.

People in Trinidad and Tobago may be indulging in bantering over Agriculture Minister Arnold Piggott's surprise to hear that this country is also affected by a "food crisis''. Perhaps Piggott should have a chat with his boss, Prime Minister Patrick Manning, who is now seemingly anxious to release arable lands for increased food production.

For sure, Jamaica's threat to override Guyana's resistance to a standing 25 per cent suspension of the CET to enable it to import rice at more favourable prices from outside Caricom is no laughing matter.

Guyana has for years been and remains Caricom's single largest producer and exporter of rice for the regional market. Rice is one of the commodities protected by the CET against unauthorised imports from extra-regional competitors who benefit from significant subsidies at home.

Jamaica's Minister of Industry and Commerce, Karl Samuda, has warned that his government would not sit idly while Guyana defaults on rice shipments to his country (some 52,000 tonnes were shipped in 2007), and especially since the commodity could be obtained on a dependable basis at lower prices from non-regional sources.

Competitive sources for subsidised rice exports to this region have largely been the US and Thailand against which Caricom producers like Guyana and Suriname cannot afford to compete. Hence, the protection of the CET as a mechanism to prevent unfair competition to the detriment of a local industry.

Trinidad and Tobago, now reportedly again contemplating the possibility of commercial rice production, has recorded its own past failures to get a waiver of the CET to permit importation from extra-regional exporters of parboiled rice normally purchased from Guyana.

In the circumstances, it is difficult to see how Caricom's Council for Trade and Economic Development (COTED), the body that maintains oversight on the application of the CET, can possibly allow Jamaica's quest for a suspension.

Guyana's Agriculture Minister, Robert Persaud, has already publicly signalled to Minister Samuda that his country was certainly in no mood to endorse the suspension of the CET.

This, Persaud contends, would be to consciously work against "not only our own national interest in a very vital sector, but also undermine the very mechanism, the CET, we have established in the wider interest of the economies of Caricom...''

Strong stand indeed. The Guyanese minister must also be aware that just recently Trinidad Cement Ltd (TCL), with production operations also in Guyana, has found it necessary to refer to the Caribbean Court of Justice (CCJ) a dispute it has with the Guyana government for an alleged failure to impose the CET against non-Caricom suppliers of cement for the local market.

Guyana has accused TCL of having defaulted on arrangements to satisfy the demands of the local market, Consequently, it has decided to defend the legal action to be pursued by TCL before the CCJ.

For its part, Jamaica has also been claiming defaults in rice shipments from Guyana. The Guyanese private sector - producers and exporters - as well as the government, have denied this claim. They have countered that Jamaica was engaged in "misrepresentations'' in order to secure sources of foreign rice supplies at prices disadvantageous to Guyana's rice industry and national economy.

This latest spat over rice shipments between Guyana and Jamaica is expected to engage the attention of COTED.

Parties to any trade dispute pertaining to the functioning of the CET under the revised Caricom Treaty are free to access the CCJ, if dissatisfied with a decision by COTED. The CCJ has original jurisdiction on trade disputes within Caricom and its ruling is binding.

Article 83 of the Caricom Treaty makes clear that the criteria for a suspension of the CET has nothing to do with comparative prices for a foreign sourced commodity but its availability, as required, and approved quality of the Caricom product.

Whatever the outcome of this "rice spat'' it is simply one aspect of widening pressures being experienced by the region's economic integration movement and generated by the escalating worldwide food crisis.