by Swinburne Lestrade
I am not sure how many people noticed that it had been felled by Hurricane Maria; or were aware of its existence pre-Maria — but the bust is back. The restored bust of Cecil Rawle (1891-1938) is back in its place at the centre of the Goodwill Roundabout. Dominica-born of Trinidadian parents, lawyer Cecil Edgar Allan Rawle made his name as a “committed and energetic champion of West Indian self-government and West Indian integration”. In 1932, he organized, and was elected chairman of the historic West Indian Federal Conference in Dominica, a conference attended by representatives across the Region, that issued a call for self-determination and West Indian unity. That famous Dominica Conference spawned the British West Indies Federation (1957-1962) and in turn, the Caribbean Community and Common Market (CARICOM).
The Federation failed – and we continue to struggle with CARICOM. CARICOM, the concept, the mechanism, has been much reviewed, especially the implementation of its principles, agreements and decisions, (and we will be examining some of these reviews in this space in future articles). For now we focus on a trade dispute, (still unfolding as I write), between Dominica and Jamaica as regards the manufacture of, and trading in, soaps. To come to the point, Dominica should be happy and proud that Dominica Coconut Products Successors, (DCPS) has asserted its rights under the CARICOM Treaty and trading arrangements and has taken the fight to the CARICOM ministerial councils, a fight for fair play and adherence to the rules underpinning the CARICOM trading regime. In this fight DCP would have needed, and received, the support of Dominica’s Ministry of Trade in putting its case before the relevant regional ministerial council.
Thing is, Dominica, [and other “lesser developed countries, (LDCs), economies” under the CARICOM schema], almost by definition, has not had as large an opportunity to benefit from the CARICOM trading arrangements as have the relatively larger economies, i.e., Barbados, Guyana, Jamaica and Trinidad and Tobago. This consideration applies at the very councils where decisions are taken in respect of the workings of the trade regime, the requests for special consideration for the LDCs under these arrangements, and also the resolution of trade disputes. The capacity gap has been glaring – a lesser technical / human resource capacity to identify self-interest and to prepare professionally researched position papers to make the national case; and a lesser technical / human resource capability to make appropriate and effective representation at the regional level. At regional meetings, a Dominica (for example) might show up to a meeting with a delegation of one or two advisers to the minister, while a Jamaica, (for example), would have a delegation that would include a technical person for practically every item on the meeting’s agenda in which that country has an interest.
Dominica’s achievement on the soaps issue was a notable triumph of awareness of self-interest and determination to make that case forcibly where it mattered. It was a proud moment, good for the country and good for the integration movement. The case as we have gathered from the Jamaica newspapers, (it has proven difficult to garner information locally), was essentially that Dominica’s DCPS accused Jamaican soap manufacturers of unfair competition, in breach of the rules and regulations of the Revised Treaty of Chaguaramas, (the CARICOM Treaty). Dominica’s case was that soap manufacturers in Jamaica did not satisfy the CARICOM “rules of origin”, and therefore did not qualify for duty-free entry into CARICOM markets. Thus the competition that the Jamaican exporters provided to Dominica’s soaps, in CARICOM markets, was in breach of the rules and therefore unfair, and should not be allowed.
Failure to satisfy CARICOM’s rules of origin would mean Jamaica’s soap manufacturers having to face a 40 percent tariff in the CARICOM market, thus increasing the competitiveness of Dominica’s soaps which, since they satisfied the rules of origin, would qualify for duty-free entry into these markets.
To fully appreciate the case made by Dominica gets a little technical as it takes us into the process of soap manufacture, and we rely on the Jamaica Gleaner to elucidate. In summary, (as we understand it):
- In order to qualify for duty-free treatment in CARICOM markets, the products in question must be substantially produced in CARICOM; they must have certified CARICOM-origin status; the product must have a different tariff code from the ingredients used in the manufacture of the finished product.
- Animal fat and palm oil-based noodles are the core ingredients/raw materials used in the manufacture of soap bars, and DCPS is the sole CARICOM producer of these ingredients.
- The Jamaican soap producers source these raw materials from Indonesia, i.e., a non-CARICOM country, so that the finished product, (the soap bars), do not/should not qualify as a CARICOM product under the applicable rules, and should not be entitled to be exported duty-free to other CARICOM markets. Thus Dominica’s case was that these Jamaica-made soaps compete unfairly with the genuine CARICOM-origin soaps produced and exported by DCPS.
- DCPS’ contention is that “the Jamaicans are not engaged in manufacturing, but simply in the import and export of goods which have the same tariff classification as the main ingredients”.
- In December last year, DCPS won what the Jamaica Gleaner deemed to be “the first round” of that battle. Jamaican producers had referred the matter to the World Customs Organisation “which ruled that soap noodles and finished soap products were designated under the same tariff code and should be treated similarly in the application of import duties”. In other words, for tariff purposes, their finished soaps should face the same 40 percent tariff as the soap noodles from outside of the Region.
- If the Jamaican producers purchased their raw materials from DCPS, their soaps would then qualify as CARICOM-origin products and would have duty-free access to other CARICOM markets and would avoid the 40 percent tariff applied to non-CARICOM soaps.
The CARICOM Council on Trade ruled in favour of Dominica/DCPS, but the battle has not yet been won as we are now in the stage of implementation – the bane, the achilles heel of CARICOM’s effectiveness and efficacy. One Jamaica manufacturer has stated that “The soap manufacturers in Jamaica have no issue buying raw material from Dominica provided that the quality specifications can be met, and the price does not make them uncompetitive, vis-a-vis imports to the Region”. As I understand it, the Jamaicans are seeking to be satisfied on these grounds. We shall see how that pans out.
There is a sense among some in Jamaica that Jamaican businesses are being unfairly treated within the regional integration arrangements and they question the usefulness of CARICOM to Jamaican manufacturers – a long-standing complaint in Jamaica. They point to the consequential loss of jobs in Jamaica deriving from the loss of their CARICOM market. Others appear confident that they can more aggressively target their local and extra-regional markets to compensate for the possible loss of their CARICOM market.
As we celebrate DCP/DCPS and the contribution it has been making to Dominica over the years, in terms of employment generation, incomes and export earnings, it is useful to have insight into how the process works, and what it takes to succeed as an exporter especially in one of CARICOM’s LDCs. Our little soaps story has provided us with a teaching moment. It provides an insight into the workings of CARICOM and its role in policing the trade among its members. Congrats to DCPS and our Ministry of Trade for collaborating on taking the fight to Jamaica and standing their ground – it takes preparation and determination in the pursuit of a just but slippery cause. All of Dominica should be thankful and closely watching how the story continues to unfold. It is a matter of national interest.
Back in 1979, Black Stalin, in his song, Caribbean Man, urged the Region:
… we must push one common intention
Is for a better life in de Region
For we woman, and we children
Dat must be de ambition of de Caribbean man.
These words would have resonated with Cecil Rawle. He had in mind a higher level of integration than merely agreed trading arrangements and “functional cooperation” – but he would have been dismayed at how long even this process is taking.
About the author:
Swinburne Lestrade is a frustrated regionalist.