Rum industry at risk

Barbados Ambassador to Washington, John Beale in light moment during Rotary function.

The survival of Barbados’ multi-million dollar rum industry against crushing subsidies the American government is giving to its own producers has turned into a major diplomatic lobby.

But despite assurances yesterday from United States Ambassador to Barbados and the Eastern Caribbean, Dr. Larry Palmer, that he would convey the concerns to his country’s State Department, Barbados Ambassador to the US, John Beale, did not hold out too much hope for a solution via that route.

Instead, the Barbados diplomat thinks the best option was to force the US’ hand by filing an official complaint with the World Trade Organisation.

Palmer, who addressed a Rotary Club Barbados South luncheon on the roadmap to deeper US ties with the Caribbean today at Accra Hotel, received an earful on the matter from Beale and Independent Senator Professor Henry Fraser.

Fraser called it a “horrendous and unreasonable huge increase in subsidy to American rum (for) Puerto Rico and USVI, which is going to ruin the economy and the rum industry in the Caribbean, particularly in Barbados, the nation that invented rum”.

Palmer said he was aware of the issue and that it was being dealt with by the office of the United States Trade Representative.

“This is a concern that has been brought to the attention of the State Department and the office of our trade representative and it’s under consideration. It is something that we are aware of, there have been many opinions on it, both within United States and without and Ambassador Beale I know has taken it up with officials at State Department,” he said.

“They are in the process, as I understand, of formulating an answer to your question and to your letter, … so I don’t want to get out in front of the United States Trade Representative in answering that and making a commitment for which I am not authorised… We have people far above my pay grade contemplating the way forward on that.”

Beale, however, was unconvinced that the US was keen to resolve the matter, basing his statement partly on the tardy response he said he and more than a dozen other Caribbean diplomats had received when they wrote the USTR.

“It is more serious than I think most people understand and recognise. Our rum producers are very competitive and we can compete with a small subsidy, but, … while our people could have competed in the past, you cannot compete against a company or companies that have subsidies greater than the production costs. There is no way we can compete,” he insisted.

While he believed the US subsidy to rum producers was not intended to hurt Barbados and its regional counterparts, Beale said “the United States government is not going to act on this, I can categorically tell you that it will not happen”.

“It can only happen when we go to the WTO. I think that we really will have to go to WTO. I think that people know if it goes to WTO then the US will deal with it,” he said. Palmer responded that he intended to report these latest concerns to the State Department. (SC)

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