Hogan sends warning to region about high tarifs
A strong word of warning to islands that are creating technical barriers or otherwise, to stop it because it is counterproductive to the region’s overall development.
This advice from chairman of the Council for Trade and Economic Development (COTED) Claude Hogan, in direct response to a query from Barbados TODAY regarding high tariffs being placed on some products form Barbados into St Lucia earlier this year.
In addition, Hogan told Barbados TODAY that some changes could be coming “in the not too distant future” to the Revised Treaty of Chaguaramas that could see the issue of “More Developed Countries (MDC)” and “Less Developed Countries (LDC)” resolved.
Earlier this year chief executive officer of Banks Holdings Limited (BHL) Richard Cozier complained that St Lucia slapped a 70 per cent duty on its beers and soft drinks, following on the heels of St Vincent and the Grenadines. And he said Grenada was also expected to follow suit.
The Eastern Caribbean states have joined a growing number of other countries in the region that consider themselves LDCs in invoking the Article 164 Revised Treaty of Chaguaramas that authorizes the suspension of the duty-free access of products form MDCs.
The measure was agreed to by COTED at a 2006 conference.
However, speaking to Barbados TODAY on the sidelines of the fifth meeting of contributors and development partners of the CARICOM Development Fund in Barbados recently, Hogan said the issues relating to MDCs and LDCs as well as movement of people and capital, were currently being addressed.
Asked specifically what was being done to address the issue facing the local brewery, Hogan, though not saying whether or not he was aware of the issue, declared “We need to eliminate tariff barriers among ourselves if we are going to create the CARICOM Single Market and Economy. We need to promote competitiveness”.
“Competitiveness is good for the consumer as well. Once you start to use tariff barriers you are going to carry up the cost of the Barbados beer which means that the person in St Lucia whose beer you are protecting will feel it [is] okay to bring his beer price up to as close as the Barbados beer as possible. But you should allow the Barbados beer [with lower tariffs] so that the competition allows the price of the beer to go down so people can afford it . . . I would also like to apply this to milk,” added Hogan.
He argued that free movement of goods and cross border trade was good for competition and created the environment for people to have more affordable livelihoods.
In relation to changes to the Article 164 of the Revised Treaty of Chaguaramas to solve the issues relating to MCDs and LCDs, Hogan said it was an ongoing process among the “inter-governmental task force (IGTF)” that has been in progress for some time now.
“That task force has been looking at recommendation of refining and improving the implementation of the CSME going forward. So I expect, yes, some time in the not too distant future we will have like a battery of amendments to the Treaty,” he said.
Hogan said COTED was working to ensure that the movement of capital, free movement of people, cross border trading and right of establishment.
“The regimes of CARICOM in the CSME have so far not been as wide like in the OECS. For example, the movement of people is restricted to a specific list of people who can move [to live and work in another CARICOM state]. Those areas we want to increase the band or if possible make them more comprehensive and general like in the OECS where all citizens have freedom of movement and not based on what sector or category, and just . . . whether you can handle your welfare as you go from one country to the other. Because we want to spread innovation,” explained Hogan.
“The problem we have of course is some public relations issues because people at the national level tend to get threatened by issues happening at the next level, which is the CARICOM level. But you have to let those movements happen . . . They have moved to you, they are actually participating in your economy and adding to your national economy by actually participating in the next level, which is the CSME level,” added Hogan.
In relation to the MDCs and LDCs issue, Hogan said as far as he was concerned only Trinidad and Tobago could be considered a MDC, but quickly pointed out that even that nation had its internal issues.
He suggested that CARICOM countries should not be considered MDCs given their vulnerabilities and other challenges.
“We are working with our development partners through the UN system in all of the treaties that we negotiate and make recommendation on behalf of CARICOM that there is some sense of scale that is taken into account and a sense that we are facing vulnerabilities and that our growth, sometimes in terms of what is on the paper, is not as real as it is described to me by numbers, which cause us to graduate when in fact we have grave pockets of inequalities, disadvantage and people in need of special and differential treatment,” said Hogan.