Small Business Minister Dwight Sutherland has advised Caribbean millers that it is time to confront trade agreements head on, in order to remain viable against the competition.
He delivered this message yesterday at the start of the Caribbean Millers Association’s (CMA) 23rd Annual General Meeting, at Infinity on the Beach, St. Lawrence Gap, Christ Church.
Regional delegates were reminded of the highly competitive nature of the wheat flour industry where, according to the Small Business Minister, 16 mills in the region were competing with each other for the regional market.
And, Minister Sutherland said: “We recognize, as a region, that due to our multilateral obligations under the World Trade Organization, extra regional imports are allowed into our space. As a result, the region is faced with approximately 900,000 metric tonnes of wheat flour that is imported annually. I say that this can be considered unsustainable in such a small space. The time has come therefore that we must confront our trade agreements head on.”
While emphasizing that under Article 164 of the revised Treaty of Chaguaramas wheat flour produced in the OECS enjoyed duty free access to other CARICOM countries, the Small Business Minister lamented that wheat flour, produced in the more developed countries (MDCs) of CARICOM, such as at ADM Barbados Mill Ltd., pay a duty of 70 per cent to export to the OECS region.
He remarked: “It is often articulated that continued implementation of this provision in Article 164 is critical to facilitating the operation of the productive sectors in the lesser developed countries and their adjustment to competition in the CARICOM Single Market and Economy. However, this provision of Article 164 of the revised Treaty of Chaguaramas has and continues to present a challenge to some wheat flour producers of the more developed CARICOM countries, including ADM Barbados Mill Ltd., who have to compete with duty free imports from member countries.”
Minister Sutherland further pointed out that this not only operates as a specific and differential treatment mechanism for OECS member states, Haiti and Belize, but it ensured that certain industries, such as the wheat flour industry, deemed important for the industrial development of these countries, were “given temporary preferential treatment within the CARICOM Community”.
“I posit that the time has come for the CMA to explore, via the World Trade Organization’s compatible trade law mechanism, the preservation of some policy space to allow the wheat flour industry to develop in the OECS, but also for the wheat flour manufacturers in the MDCs of CARICOM to remain viable. The CMA must, therefore, look beyond the region for potential markets,” Mr. Sutherland maintained.
Delegates also heard that Government was supportive of such an initiative. The Minister noted that it was currently undertaking a study on the local manufacturing sector, seeking to rebuild the sector and to determine what policy interventions could be made to boost the sector’s contribution to GDP through product development and finding and penetrating export markets.
“The purpose is to preserve and expand employment levels and generate foreign exchange in manufacturing, and to make sure that ADM Barbados Mill Ltd. and the other manufacturers remain viable,” Mr. Sutherland stated.