EXPORT AND IMPORT
POLICIES ASSESSMENT FOR
DOMINICAN REPUBLIC AND
THE CARIBBEAN REGION
EXECUTIVE SUMMARY
THIS PROJECT HAS BEEN FUNDED BY THE EU-ACP PARTNERSHIP PROGRAMME PRO€INVEST
This report has been prepared by the team of experts Agnes Cishek and Elka Scheker, based in Santo
Domingo, Dominican Republic, commissioned by the AIRD in the framework of the Pro€Invest project
“Strengthening of the AIRD -Dominican Republic Industrial Association, its sector associations and the
CAIC –Caribbean Association of Industry and Commerce to facilitate networking amongst them”.
This report was prepared with financial support from the European Union. Its contents are the sole responsibility of its authors and are in no way to be taken as reflecting the views of the the CAIC , AIRD,
amec, the Pro€Invest Programme or the European Union.
Index:
Acronyms
7
Executive Summary
1. Introduction
11
14
2. Overview Of Trade Development In The Caribbean Region
3. Regional Initiatives:
15
a. The Caribbean Free Trade Association (CARIFTA)
15
b. Chaguaramas Treaty and Chaguaramas Revised Treaty
c. CARICOM
14
15
15
d. CARICOM Bilateral Agreements
e. CARIFORUM
16
17
f. The Cotonou Agreement
17
g. The Caribbean Tourism Organization
h.Caribbean Development Bank
17
17
i. Caribbean Export Development Agency
j. Caribbean Basin Initiative (CBI)
17
17
k. Organization of Eastern Caribbean States (OECS)
18
4. CARIFORUM-EU Economic Partnership Agreement and its impact on
Caribbean Trade Development 19
5. The Caribbean Common Market Initiative
6. Countries´ Trade Policy Framework:
- Antigua and Barbuda
- Barbados
21
21
24
- Dominican Republic
- Jamaica
20
27
31
BUSINESS opportunities in
THE CARIBBEAN
6. a Trade Summary 46 and EUROPE
- Suriname
35
- Trinidad and Tobago
39
7. Trade Policy Benchmark: Spain
49
8. Policy Initiatives Towards Facilitation of Trade
9. Short Sea Shipping in the Caribbean
10. Logistics and Trade Indicators
11. Logistics and Port Structure
55
56
58
11 .a. Port Infrastructure in the Dominican Republic
11 .b. Port Infrastructure in Jamaica
53
60
62
11 .c. Port Infrastructure in Trinidad & Tobago
62
5
Index:
12. Ports with Greater Growth Potential
64
13. Routes between the Caribbean and the Barcelona Port
14. Airports and Ports in the Countries at Study
15. Major Trade Partner Countries
64
67
69
15 .a Major Trade Partners for Import and Export of the Countries with Highest Growth Potential
15.b Intra Caribbean Freight
71
15.c The Freight Ferry - Alternative Transportation
16. Conclusions
72
17. Website Links:
Trade Policy
72
74
74
Trade Facilitation
74
18. Bibliography
77
Annex A Regional Initiatives
Annex B Doing Business
78
81
Annex C Trade Indicators to Monitor
81
Digital Annexes
i. Import Policies Comparison Chart
ii. Export Policies Comparison Chart
iii. Trade Facilitation Data
6
Export and import policies assessment for dominican republic and the caribbean region
70
Acronyms:
ACP African, Caribbean, and Pacific Countries
AIRD Dominican Republic Industrial Association (Asociación de Industrias de la República Dominicana)
AMEC Spanish Multisector Business Association (Asociación Multisectorial de Empresas)
BIDC Barbados Investment and Development Corporation
BTI Barbados Tourism Investment Incorporated
CACMCentral American Common Market
CAIC Caribbean Association of Industry and Commerce
CARIBCAN Caribbean-Canada Free Trade Agreement
CARICOM Caribbean Community and Common Market
CARIFORUM CARICOM and the Dominican Republic
CARIFTA The Caribbean Free Trade Association
CBERA Caribbean Basin Economic Recovery Act
CBI Caribbean Basin Initiative
CCAA The Caribbean Central American Action
CDB Caribbean Development Bank
CET Caribbean Community Common External Tariff
CIC CARICOM Investment Code
CIF Cost, Insurance, Freight
CITES Convention of International Trade in Endangered Species
CNNC Dominican Republic’s National Commission for Trade Negotiations
CNZFE Dominican Republic’s Free Zones Council
CRNM Caribbean Regional Negotiating Machinery
ACP African, Caribbean, and Pacific Countries
AIRD Dominican Republic Industrial Association (Asociación de Industrias de la República Dominicana)
AMEC Spanish Multisector Business Association (Asociación Multisectorial de Empresas)
BIDC Barbados Investment and Development Corporation
BTI Barbados Tourism Investment Incorporated
CACMCentral American Common Market
7
Acronyms:
CAIC Caribbean Association of Industry and Commerce
CARIBCAN Caribbean-Canada Free Trade Agreement
CARICOM Caribbean Community and Common Market
CARIFORUM CARICOM and the Dominican Republic
CARIFTA The Caribbean Free Trade Association
CBERA Caribbean Basin Economic Recovery Act
CBI Caribbean Basin Initiative
CCAA The Caribbean Central American Action
CDB Caribbean Development Bank
CET Caribbean Community Common External Tariff
CIC CARICOM Investment Code
CIF Cost, Insurance, Freight
CITES Convention of International Trade in Endange red Species
CNNC Dominican Republic’s National Commission for Trade Negotiations
CNZFE Dominican Republic’s Free Zones Council
CRNM Caribbean Regional Negotiating Machinery
CROSQ CARICOM Regional Organization for Standards and Quality
DGA Dominican Republic’s Customs Directorate
DICOEX Dominican Republic’s Foreign Trade Directorate
DR Dominican Republic
DR-CAFTA Dominican Republic – Central American Free Trade Agreement with
the United States of America
DUA Single Customs Declaration for the Dominican Republic
EC European Community
EU European Union
ECCB Eastern Caribbean Central Bank
EDF European Development Fund
EPA CARIFORUM-EU Economic Partnership Agreement
EU European Union
FOB Freight On Board
8
Export and import policies assessment for dominican republic and the caribbean region
FTA Free Trade Agreement
FTAA Free Trade Agreement of the Americas
G7 The Group of 7: France, Italy, Germany, Japan, United Kingdom, Canada and
United States
GCT Jamaica’s VAT
HOPE II Haitian Hemispheric Opportunity through Partnership Encouragement Act
of 2008
IBC International Business Companies
IDB Inter-American Development Bank
ITBIS Dominican VAT
JAMPRO Jamaican Promotions Corporation
KKF Chamber of Commerce and Industry of Suriname
LDCs Least Developed Countries
LPI Logistics Performance Index
MDCs Middle Developed Countries
MFAFT Jamaica’s Ministry of Foreign Affairs and Foreign Trade
MFN Most Favored Nation
MIIC Jamaica’s Ministry of Industry, Investment and Commerce
MTI Suriname’s Ministry of Trade and Industry
NTP Jamaica’s 2001 New Trade Policy
OECD Organization for Economic Cooperation and Development
OECS Organization of Eastern Caribbean States
OTN Office of Trade Negotiations
R&D Research and Development
TT Trinidad and Tobago
TTCSI Trinidad and Tobago Coalition of Service Industries
TTMA Trinidad and Tobago Manufacturers Association
VAT Value Added Tax
WB World Bank
WEF World Economic Forum
WTO World Trade Organization
9
10
Export and import policies assessment for dominican republic and the caribbean region
EXECUTIVE SUMMARY
International trade has been widely recognized as one of the most important drivers of economic development. The last decades have seen
a remarkable liberalization of international barriers to trade, led in large part by the trade rounds of the WTO, as well as significant improvements in maritime transportation, freight containerization and use of information and communication technologies. This has resulted in the
reduction, in terms of time and cost, of all international commercial exchanges in the past years. Currently, more than a third of world trade
occurs within the 32 regional trading blocs ratified by the WTO, thus pointing the increasing tendency of commerce regionalization. CARICOM is one of such regional trading blocs.
Trade plays a critical role in the development of the economies across the Caribbean region. During the last decades, trade growth in the region has been supported by preferential treatment from the European and North American markets. Caribbean countries seeking to expand
their markets through the implementation of the trade agreements signed during the last decade have begun to look within their regions.
That is the case of the Dominican Republic, Trinidad and Tobago and Jamaica. They have recognized that strengthening regional integration
not only can increase their bargaining power at the global level, but also create opportunities for intra-regional trade while also opening a
channel for larger trade flows and economic growth.
Though CARICOM has been to date, the most successful integration scheme in the Caribbean, it has yet to bring together all member states
to a true integrated bloc. Among the most important challenges the Caribbean faces is the development of regional infrastructure and a
common trade facilitation process. There is a lack of commonality of regulations that affects the interest of investors to support the needed
spatial transformation in areas such as ICT, transport infrastructure and new transport services, thus negatively affecting regional productivity growth.
The purpose of this assessment report is to provide an understanding of imports and exports policies and structure of logistics sector in the
Caribbean region (namely in the countries of Dominican Republic, Trinidad and Tobago, Antigua & Barbuda, Suriname, and Jamaica) and
how both will contribute to competitiveness in international trade of participating countries.
The Caribbean region needs to review its policies and procedures as well as revise its focus on trade facilitation measures to avoid being left
out from the global market. Even more with the increased competition of countries with similar production profiles for the major markets of
the planet and the trends on transports and logistics costs.
The areas where common practices are seen and evident in CARICOM member states are especially in the application of the Caribbean Community Common External Tariff (CET) and in the adoption of the WTO Customs Valuation Agreement in regard to imports from countries with
whom there are no trade preferential treatment.
With regard to the development of export-oriented policies, it is clear that all countries have been employing efforts to promote, facilitate
and diversify their insertion in international markets. Most of these efforts are largely based in subsidies and free trade zone regimes that
grant fiscal incentives. Most of these subsidies are in violation of the WTO Agreement of Safeguards and Countervailing Measures (SCM
Agreement). The WTO General Council has accepted these regimes until 2015, posing a big challenge, in terms of time constraint, for these
countries to look for alternative ways to promote their productive sectors.
In contrast Spain has adapted well within the integration efforts that the European Union member countries have set forth. The EU has harmonized
all aspects of trade policy and it has set forth a comprehensive strategy that has been drafted and implemented by consensus of the member
states. In terms of import and export policies, there is a strong mandate and directive to follow EU rules and only in the areas where the integrated
policy does not establish any set rules, then can the national authorities implement individual policies.
This is the integrated effort that the Caribbean region needs in order to thrive in today’s business paradigm and take full advantage of the
trade preferences it currently holds. As a bloc they could integrate efforts, set forth specialization programs and offer as a whole a larger and
better export offer to the world.
11
It is imperative that to attract investment from the European Union, and to foster a more efficient intra-regional trade relationship many
efforts must be centered in the harmonization of procedures, tariffs, and policy framework at CARIFORUM level, not just at the CARICOM
action line. The inclusion and standardization of the same import/export processes is key for these small countries to become competitive in
today’s world, where the transfer of goods and services everyday is more expedited.
The objectives must be to achieve the formation of a functioning regional market by:
. Targeting the Regional Market through an effective regional trade policy and unification on tariffs and logistics services costs.
. Creating a Conducive Business Environment by reducing Caribbean legal and administrative barriers, such as restrictive labor market regulations and administrative requirements for businesses.
. Strengthening regional trade negotiating capacity to reduce vulnerability and focus on the strategic advantages of the region.
For the Caribbean region, development of trade facilitation has become a crucial competitive factor due to the reductions in trade barriers
that have lessened preferences and protections previously enjoyed by most of the countries.
The challenges that the Caribbean must address to increase competitiveness and its recognition as trading block must include:
. Increase private sector participation in ports;
. Reduce restrictions in maritime transport and encourage competition;
. Establish regional “hub ports” (through global networks, mergers/alliances and private
. sector participation) as a way of increasing transhipment;
. Others such as telematics, facilitation and international negotiations.
. Competing Regional Hub Ports
12
Export and import policies assessment for dominican republic and the caribbean region
1. INTRODUCTION
Trade plays a critical role in the development of the economies
across the Caribbean region. The Trade/GDP ratio for the
period 2000-2005 averaged 113%. During the last decades,
trade growth in the region has been supported by preferential
treatment from the European and North American markets. The
United States and Europe are the main markets of CARIFORUM
with Canada not far behind, especially in the Eastern Caribbean
States. Regional exports to the EU market increased from 15% of
total exports in 2006 to 20% in 2008.
Caribbean countries seeking to expand their markets through
the implementation of the trade agreements signed during the
last decade have begun to look within their regions. Dominican
Republic, Trinidad and Tobago, Jamaica, Barbados and to a lesser
extent Antigua and Barbuda, have recognized that strengthening
regional integration not only can increase their bargaining power
at the global level, but also create opportunities for intra-regional
trade while also opening a channel for larger trade flows and
economic growth.
The purpose of this assessment report is to provide an
understanding of imports and exports policies and structure of
logistics sector in the Caribbean region (namely in the countries
of Dominican Republic, Trinidad and Tobago, Antigua & Barbuda,
Suriname, and Jamaica), how these are shaping regional trade
and how they will contribute to competitiveness in international
trade of participating countries.
The sources of information herein include facts and data on trade
policies and economic development in the Caribbean region from
different studies and papers, interviews with custom officials
from the Dominican Republic, representatives of the Spanish
association AMEC and the Dominican association AIRD, internet
research on trade and trade facilitation, documentation on
logistics, service facilities and ports capacity from the Asociación
de Navieros of the Dominican Republic (ship-owners association).
The research on Trinidad and Tobago trade policies was enhanced
with the opinions and comments from the executives of the
business supporting organisations TTCSI and TTMA at the
meetings held in Trinidad and Tobago. Executives from JAMPRO
in Jamaica were also interviewed.
The data compiled along with the evolution of the trade structure
for each of the countries evaluated shows the different stages
in the structural, procedural and technological development of
each of the countries. While revealing the differences among
the countries within the region, the information also indicates
the actions that are being undertaken by some of the countries
in their commitment to increase their standing in international
trade as suppliers of logistic services and for the expansion of
exports.
The information contained in this report provides the beneficiaries,
their members and others with facts and figures that can be used
for:
. A better understanding of the countries´ markets and its trade
opportunities
. Knowledge of the diversity, availability and conditions of trade
facilitation services for logistics warehousing and distribution
centers.
. Identify improvements needed for the expansion of trade and
foreign investment within the region and with the international
community.
This report is centered in two components of the trade process:
Policies and Trade Facilitation. It begins with an overview of
the trade development in the region, analyzing thoroughly the
various integration initiatives, and then also the various import
and export policies that are respectively found in each of the
studied countries. It also maps out the trade agreements currently
implemented and how they have supported regional integration.
A special focus has been put to highlight the provisions on the
EU-CARIFORUM Economic Partnership Agreement in terms
of opening access to the European market, financial support
for the economic integration of the region, and the progressive
schedule for the region’s goods liberalization program that
Caribbean countries must work in as they move forward towards
an integrated and competitive trade structure. A detailed trade
profile has been elaborated for each of the countries at study
which includes information regarding the applicable trade policy
regime, the relevant public and private entities that have an
important role in economic development, the specific import and
export policies, and information on trade facilitation. Information
on the latter is further detailed in the trade logistics segment.
The trade facilitation section is centered in providing information
on the actual condition of these services in the region, mainly
regarding port logistics and maritime transportation facilities.
Comparison with Port of Barcelona in Spain as benchmarking is
included in all the segments of this component. There is also a
brief note on short sea shipping.
13
2. OVERVIEW OF TRADE DEVELOPMENT IN THE CARIBBEAN
REGION
International trade has become one of the most important
drivers of economic development, changing the map of the world
economy as we know it. Globalization has brought new dynamics
to the flow of trade between countries while promoting the
formation of trading blocks. Trade patterns have been changing
forcing countries to review, readapt and in some cases create
trade policies to become competitive and successfully position
themselves in the new economic environment.
The Caribbean Region has had a limited scope in the
implementation of the new trends in trade integration and
transport logistics. Statistics of the World Bank and World Trade
Organization point out that tariffs in the region have declined
from over 40% in the mid-1980s to about 10% in 2008, while
more than 57 regional integration initiatives have been subscribed
between countries and trading blocs since 1990.
There has been limited inter-regional trade due to the inability to
come up with a regional approach on setting common policies,
standardizing costs and establishing effective logistic systems
that impacts national production, imports and adequate services
for merchandise in transit. At the same time, strained advances
in the integration process have reduced the region´s share in
international and regional trade.
Among the causes for these shortcomings one can point
out the internal deadlocks found in the countries in regard to
their progress actions to a more integrated trade and policy
agenda. Nevertheless there is also limited improvement in trade
facilitation measures, along with core differences in the countries’
economies, and their sources of public income. Changes in the
international trade map have pressed many developing countries
to adjust their trade policies if they intend to be competitive.
Caribbean countries must take a proactive approach due to the
critical role trade plays in their economies.
A first step in the pathway for a regional trade platform is
recognizing the need of a friendly commercial environment
with a common platform for trade and trade facilitation that
is attractive to FDI and production development. The region
must look at countries that are already rethinking the value of
regional trading blocs and creating stronger incentives to deepen
integration. Recent studies also show that transport costs are a
key issue in determining geographical patterns of trade, affecting
production, industrial structures and income. In the case of the
Caribbean region, although transport costs are not the only reason
for a low trade level among the countries, these along with weak
trade policies and poor facilitation services are important factors
in the region’s poor trade development performance.
share that went from 15% of total exports in 2006 to 20% in 2008
and more than 23% in 2010 as a result of the EU-CARIFORUM
Economic Partnership Agreement.
The speed and swiftness of trade has had a direct impact in the
need of effective transportation systems, thus trade logistics has
become an important value-added service in global production.
Countries looking to have an active participation in the trade
arena must understand the need of an integrated approach on
trade and logistic services; manly due to the direct relationship
of rendering these services and the amount (in terms of volume
and value) of goods and services traded among countries.
Freight logistics, specialized infrastructure, and trade facilitation
measures have become increasingly important in reducing nontariff barriers, and transportation costs bring in benefits from
increased integration. For example, IDB data shows that a 10%
decrease in freight costs and tariffs could enhance bilateral
imports of the Caribbean by 46% and intraregional exports by
an average of 60%.
The growth of trade in Caribbean countries is closely tied up
to acting under a common framework of indicative regional
policies, which should be in tune with the actual global trends
that include: Commitment to an agenda for productive regional
integration and freight logistics, services and regulations that
facilitate public-private partnerships, improved services such
as customs management, information and communication
technologies (ICT) and security. Adequate support for logistic and
value chain management development in small and medium-size
enterprises must be geared up for the integration of an “axisbased” regional infrastructure development criteria and to give
priority to projects of greater regional impact.
The geographical location of the Caribbean presents a unique
opportunity for supplying hub facilities and logistic services for the
recurrent trade flow between the North and South hemisphere.
Out of the 17 CARIFORUM states only the Dominican Republic,
Trinidad and Tobago and Jamaica already have basic conditions
and are focusing on improving port and airport facilities and
logistics services to take advantage of their location and increase
their offer of trade logistics services. They also have been more
proactive in the implementation of trade policies to foster
production and competitiveness within their countries.
For many years the Caribbean external trade policy was anchored
on preferential access to the European and North American
markets, with more of half CARIFORUM exports going to the
United States and Canada markets. The EU has become an
increasingly important second export destination with a growing
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EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
3. REGIONAL INITIATIVES
The countries comprised in this study have been able to benefit
from the integration efforts that have taken place in terms of
harmonization of import and export policies.
The following is an exhaustive list of the several initiatives that
Caribbean states have engaged in to strengthen their potential.
3. a. The Caribbean Free Trade Association (CARIFTA)
It was formed on December 15th, 1965 by Antigua and Barbuda,
Barbados, Guyana, and Trinidad and Tobago. In1968 they were
joined by Dominica, Grenada, St Kitts-Nevis-Anguilla, Saint Lucia
and St Vincent and the Grenadines; and later in 1968 by Montserrat
and Jamaica. Finally, in 1971, Belize joined them.
In 1973, with the signing of the Chaguaramas Treaty, CARIFTA
became the Caribbean Community (CARICOM).
3.b. Chaguaramas Treaty and Chaguaramas Revised Treaty
It was signed on July 4th, 1973 at Trinidad & Tobago. This is one of
the main initiatives. It establishes the Caribbean Community and
Common Market, today better known as CARICOM.
Today, 15 countries have signed this treaty: Barbados, Guyana,
Jamaica, Trinidad &Tobago, Antigua and Barbuda, Suriname, the
Bahamas, Belize, Granada, Dominica, Haiti, Montserrat, Saint Kitts
& Nevis, Saint Lucia, and, St. Vincent & the Grenadines. Also, 5
countries are considered Associate Members: Anguilla, Bermuda,
British Virgin Islands, Cayman Islands, and Turks and Caicos Islands.
This treaty was revised and in 2001 creating the CARICOM Single
Market and Economy (CSME), although only 13 of the 15 Member
States signed the CSME (Antigua and Barbuda, Belize, Grenada,
Montserrat, St. Vincent and the Grenadines, Guyana, St. Kitts and
Nevis, Suriname, Barbados, Dominica, Jamaica, Saint Lucia, Trinidad
and Tobago).
The main objectives of the CSME are: full use of labor and full
exploitation of the other factors of production (natural resources
and capital); competitive production leading to greater variety and
quantity of products and services to trade with other countries.
These objectives will in turn provide improved standards of living
and work and sustained economic development.
3.c. CARICOM
The Caribbean Community and Common Market (CARICOM) was
established by the Chaguaramas Treaty, which was first signed by
Barbados, Jamaica, Guyana and Trinidad & Tobago. It came into
effect on August 1, 1973.
Later on other Caribbean States joined CARICOM. The actual
members include: Antigua and Barbuda, Belize, Grenada, Montserrat,
St. Vincent and the Grenadines, The Bahamas, Guyana, St. Kitts and
Nevis, Suriname, Barbados, Dominica, Jamaica, Saint Lucia, Trinidad
and Tobago, and Haiti.
Five States act as Associate Members: Anguilla, Bermuda, British
Virgin Islands, Cayman Islands and Turk and Caicos Islands.
Seven other States from Latin America and the Caribbean act
as observers: Mexico, Aruba, Colombia, Venezuela, Dominican
Republic, Netherlands Antilles and Puerto Rico.
Among its main goals are: the creation of a common market, the
integration of its economies, to coordinate the foreign policies of
the independent member countries, trade promotion and have a
strong cooperation policy.
CARICOM is mainly organized as follows:
. The Conference of Heads of Government
. The Community Council of Ministers
. The Council for Trade and Economic Development (COTED).
The Council for Foreign and Community Relations (COFCOR),.
The Council for Human and Social Development (COHSOD), the
Council for Finance and Planning (COFAP)
. Other Institutions are: CARICOM Regional Organization
for Standards and Quality (CROSQ), the Caribbean Regional
Negotiating Machinery, today named Office of Trade Negotiations
(OTN).
. Associate Institutions include the Caribbean Development Bank
(CDB)
Under the umbrella of working bodies, the CARICOM Secretariat
has the following entities:
i. CARICOM Regional Organization for Standards and Quality
It is the successor to the Caribbean Common Market Standards
Council (CCMSC), and supports the CARICOM mandate in the
expansion of intra-regional and extra-regional trade in goods and
services. It is located in Bridgetown, Barbados.
CROSQ is the regional centre for promoting efficiency and
competitive production in goods and services, through the process of
standardization and the verification of quality. CROSQ is mandated
to represent the interest of the region in international hemispheric
standards work, to promote the harmonization of metrology
systems and standards, and to increase the pace of development
of regional standards for the sustainable production of goods and
services in the CARICOM Single Market and Economy (CSME), and
the enhancement of social and economic development.
ii. CRNM - Caribbean Regional Negotiating Machinery
It was established in April, 1997.The Caribbean Regional Negotiating
Machinery assists its member countries to coordinate its trade
policy so to develop one negotiation strategy for the region. The
functions of the CRNM range from providing advise facilitating
the generation of national positions to leading the negotiations in
representation of member countries. At the Heads of Government
Meeting held in Belize in March 2009, the leaders of the region
took the decision of incorporating the CRNM, as a specialized unit,
into the CARICOM Secretariat.
During the Conference of Heads of Government of the Caribbean
Community (CARICOM) held in July, 2009, in Guyana, it was
decided to rename the CRNM as the Office of Trade Negotiations
(OTN).
15
3.d. CARICOM Bilateral Agreements
Free Trade Agreement with the Dominican Republic
It was signed on August 22nd, 2008. The Agreement between
CARICOM and the Dominican Republic is based on reciprocity
with the CARICOM MDCs and special provisions were negotiated
for the LDCs until the year 2005. It provides for the asymmetrical
application of the reciprocity principle as CARICOM LDCs were
not required to reciprocate treatment. The main objective is
to foster trade among the countries with the principles of the
World Trade Organization. This is the first free trade agreement
concluded by CARICOM.
Currently, trade and economic cooperation relations are covered
under a number of instruments, namely, the 1979 CARICOMCanada Trade and Economic Cooperation Agreement and its
Protocols, including the CARICOM-Canada 1998 Protocol on
Rum and the CARIBCAN Agreement.
Under this agreement, all goods except 3 lists of products are
eligible for Duty Free Entry when traded between the MDCs and
the Dominican Republic.
The exception lists are:
The first Round of the CARICOM-Canada Trade Negotiations
commenced on November 10, 2009. Building on the productive
November 2009 first round, a successful second round of
negotiations was held in March, 2010. Officials from both
sides have now held preliminary discussions on all issue areas.
Canadian and CARICOM officials are exploring possible dates for
the next round.
. Goods which shall be subject to phased reduction of Most
Favored Nation (MFN) rate of duty;
. Goods which shall be subject to Most Favored Nation (MFN)
rate of duty;
. List of selected agricultural products which shall be subject to
Special Trade Arrangements;
Partial Scope Agreement with Cuba
On July 5th, 2000, CARICOM and Cuba signed a Partial Scope
Trade and Economic Cooperation Agreement. Later it was
amended by a Protocol signed on June 15, 2001. The agreement
covers market access as well as cooperation in trade, tourism,
transportation, trade financing, investment and intellectual
property rights.
CARICOM-Colombia Agreement on Trade and Technical Cooperation
The Agreement on Trade and Technical Cooperation was signed on
July 24, 1994, between CARICOM and Colombia. The Agreement
began as a non-reciprocal agreement but had to provide for a
level of reciprocity to Colombia, after a period of 4 years, through
a Protocol amending the original Agreement, ratified May, 1998.
CARICOM- Costa Rica Free Trade Agreement
The CARICOM-Costa Rica FTA is the most recently concluded
bilateral agreement between CARICOM and a third country
within the Central Americas. It was signed on March 15, 2003.
CARICOM and Canadian Heads of Government agreed during
the Sixth Canada-CARICOM Summit in January 2001 in Jamaica
to begin exploratory work on a Free Trade Agreement. After
the exploratory phase was concluded negotiations formally
commenced on November 9, 2009.
Issue areas being discussed are Markets Access-Goods, Services,
Investment, Trade related issues.
CARIBCAN- CARICOM-Canada Agreement
CARIBCAN is a non-reciprocal preferential trade agreement,
signed between Canada and CARICOM on June 15, 1986,
that grants unilateral duty free access to eligible goods from
beneficiary countries in the English-speaking Caribbean up to
2011.
It is recognized, however, that current non-reciprocal preferential
programs such as CARIBCAN do not provide an adequate and
secure foundation on which to anchor the Region’s future trade
and economic relations with Canada and for bringing dynamism
to CARICOM export performance vis-à-vis Canada.
It should be noted first that, CARIBCAN’s relative value to
CARICOM has been reduced since it was first introduced in
1986 due to progressive market liberalization by Canada as a
result of bilateral trade agreements and/or unilateral initiatives.
Additionally, market liberalization undertaken in the context of
the Doha Development Agenda (DDA) negotiations will erode
whatever residual preferential margin exists under CARIBCAN for
CARICOM merchandise exports.
The Agreement provides for free trade or preferential access for a
wide range of products. Some sensitive products have been excluded.
A special list of products will be granted differentiated market access
between Costa Rica and each of the CARICOM MDC’s.
CARICOM-Venezuela Free Trade Agreement
The CARICOM-Venezuela Trade and Investment Agreement was
signed in October 1992 and became effective on January 1, 1993.
The Agreement is a one way preferential agreement concluded
under the facility for non-reciprocal partial scope agreements
available to members of the Latin American Integration
Association (LAIA).
CARICOM- Canada Free Trade Agreement
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EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
3.e. CARICOM
It was formally established in 1992. The Caribbean Forum of
African, Caribbean and Pacific States (CARIFORUM) is a grouping
of Caribbean States which are signatories to the Lome IV
Convention. CARIFORUM is comprised by 15 member countries,
which are, Antigua and Barbuda, The Bahamas, Barbados, Belize,
Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica,
St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines,
Suriname and Trinidad and Tobago. Today, all CARIFORUM
members are also members of CARICOM, except the Dominican
Republic. Cuba was granted Observer Status.
CARIFORUM monitored and coordinated the allocation of
resources out of the European Development Fund (EDF) for the
purpose of financing regional projects in the Caribbean Region
within the framework of the Lome IV Convention. Before this
Convention, the regional projects were developed under the
Lome Convention and then coordinated by the CARICOM
Secretariat.
3.f. The Cotonou Agreement
Is an agreement between the European Union and the ACP
countries. It was signed on June 23rd, 2000 in Cotonou, , by
78 ACP countries (except for Cuba) and the then 15 member
countries of the European Union. It was done for a 20 year
period from 2000 to 2020. It entered into force in April 2003
and revised for the first time in June, 2005. This revision entered
into effect on July 1st, 2008.
The three main aspects of its scope are development cooperation,
economic and trade cooperation, and the political dimension.
The agreement provides asymmetric and progressive opening
of trade in goods. It is expected that the CARIFORUM tariff
reduction will occur during a 25 year transition period, starting
this year.
The partnership is centered on the objective of reducing and
eventually eradicating poverty consistent with the objective
of sustainable development and the gradual integration of
the ACP countries into the world economy (Art. 1 of Cotonou
Agreement).
Within the context of the Lomé convention, trade cooperation
was based essentially on preferential tariffs. Under the Cotonou
Agreement, economic and trade cooperation consists of a more
complete set of arrangements. The EC and the ACP counties agreed
on an approach which aims to establish new trade agreements
leading to the liberalization of trade between the parties and
which includes cooperation in trade related areas, such as
competition policy, the protection of intellectual poverty rights,
standardization and certification, sanitary and phytosanitary
measures, respect for labor standards, and consumer policy. The
Agreement also includes provisions for ACP-EC cooperation in
international fora.
3.g The Caribbean Tourism Organization
Comprised of 32 countries. It promotes the Caribbean as a
touristic destination. Also, they develop studies and manage
statistics.
3.h Caribbean Development Bank
The CDB works in social and economic development programs
for the systematic reduction of poverty in their countries. It is a
financial institution which agreement was signed in October 18th,
1969 in Kingston, Jamaica. Its main purpose is to contribute in the
economic growth of its countries, having special consideration for
the less developed ones.
Members of CDB are either:
• states and territories of the Caribbean region or
•non-regional states, which are members of the United Nations
or any of its specialized agencies or of the International Atomic
Energy Agency.
Regional Members:
• Anguilla
• Antigua and Barbuda
• The Bahamas
• Barbados
• Belize
• British Virgin Islands
• Cayman Islands
• Dominica
• Grenada
• Guyana
• Haiti
• Jamaica
• Montserrat
• St. Kitts and Nevis
• St. Lucia
• St. Vincent and the Grenadines
• Trinidad and Tobago
• Turks and Caicos Islands
Other Regional Members:
• Colombia
• Mexico
• Venezuela
Non-Regional Members
• Canada
• People’s Republic of China
• Germany
• Italy
• United Kingdom
3. i. Caribbean Export Development Agency
It was established in 1996 by CARIFORUM as their trade promotion
agency and it is the only regional trade and investment promotion
agency in the ACP group. It focuses on 4 key areas: fostering
and enabling a trade and investment environment, enhancing
competitiveness, promoting investment and strengthening
institutional capacity and networking.
The main office is located in Barbados and a sub-regional office is
in the Dominican Republic.
3.j. Caribbean Basin Initiative (CBI)
The CBI was a unilateral and temporary United States program,
which aimed to provide several tariff and trade benefits to a few
17
Central American and Caribbean States. The trade programs now
collectively known as the Caribbean Basin Initiative (CBI) remain
vital elements in U.S. economic relations with Central American
and in the Caribbean States. The CBI is intended to facilitate
the economic development and export diversification of the
Caribbean Basin economies.
Initially launched in 1983, through the Caribbean Basin Economic
Recovery Act (CBERA), and substantially expanded in 2000
through the U.S.-Caribbean Basin Trade Partnership Act (CBTPA),
the CBI currently provides beneficiary countries with duty-free
access to the U.S. market for most goods.
The CBTPA entered into force on October 1, 2000, and continues
in effect until September 30, 2020. However, these preferences
are likely to be replaced by bilateral free trade agreements.
There are currently 18 CBERA beneficiary countries:
• Antigua and Barbuda
• Aruba
• The Bahamas
• Barbados
• Belize
• British Virgin Islands
• Dominica
• Grenada
• Guyana
• Haiti
• Jamaica
• Montserrat
• Netherlands Antilles
• Panama
• St. Kitts and Nevis
• St. Lucia
• St. Vincent and the Grenadines
• Trinidad and Tobago
• Eight of these 18 are also beneficiaries under CBTPA:
• Barbados
• Belize
• Guyana
• Haiti
• Jamaica
• Panama
• St. Lucia
• Trinidad and Tobago
A Central Secretariat located on Morne Fortune, Castries, Saint
Lucia, administers the OECS. The Secretariat is headed by the
Director General who is responsible to the Authority. Over the
years several subsidiary and autonomous institutions have been
created.
The Islands share a single currency, the Eastern Caribbean Dollar
($2.70 ECD = 1 USD). The operation of the currency is overseen
by the Eastern Caribbean Central Bank, the monetary authority
for the seven OECS governments and the government of Anguilla
(The British Virgin Islands uses the US Dollar as their de facto
currency).
The Islands also share a common Supreme Court: The Eastern
Caribbean Supreme Court, with its two divisions, the High Court
and the Court of Appeal. The Supreme Court is headed by the
Chief Justice. High Court judges are based in each Member State,
but the judges of the Court of Appeal are resident in Saint Lucia
and travel to each territory to hear appeals from the High Court.
Final appeals go to the Privy Council in the UK.
3.k. Organization of Eastern Caribbean States (OECS)
The OECS is an intergovernmental organization, created on 18
June 1981, with the Treaty of Basseterre, dedicated to economic
harmonization and integration, protection of human and legal
rights, and the encouragement of good governance between
its signatory countries. It also performs the role of spreading
responsibility and liability in the event of natural disaster, such
as a hurricane.
Its Member States are Anguilla, Antigua, British Virgin Islands,
Dominica, Grenada, Montserrat and St. Vincent and the
Grenadines.
18
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
4. CARIFORUM-EU ECONOMIC PARTNERSHIP AGREEMENT
AND ITS IMPACT ON CARIBBEAN TRADE DEVELOPMENT
The globalization of the supply chain and intra-industry trade,
fueled by increased trading of intermediate and final goods, have
reached unprecedented levels, with increasing opportunities for
developing countries to take on ever more active roles in the global
economy. At the same time, scale economies in transport, advances
in infrastructure and transport services, containerization, further
streamlined processes, and the production of manufactured goods
are changing the landscape of the world economy.
Trade patterns have shifted, with increasing flows between
neighboring countries and trading blocs with similar factor
endowments. Caribbean regional integration process took hold in
1973 with the Treaty of Chaguaramas, which laid the foundation
for the establishment of the Caribbean Community (CARICOM)
from where economic integration activities in the region evolve.
Regional integration was later enlarged with CARIFORUM, which
was established in 1992. CARIFORUM was the platform for grouping
all countries in the ACP-EU Cotonou Partnership Agreement (i.e.
the CARICOM countries and the Dominican Republic) under a
single body.
Currently the CARIFORUM market is comprised of approximately
26 million people with around 10 million in the Dominican Republic
and a similar figure in Haiti. Among the Caribbean countries DR,
TT and Jamaica are popularly called “the big three” for their trade
developments. In 2005 these three along with Bahamas accounted
for 83% of the total income generation of the CARIFORUM
countries.
In 2008 the EU-CARIFORUM EPA was concluded, opening more
opportunities and facilities for Caribbean countries to access
the European market. The EPA has expanded regional trade
and provides a channel for active regional participation for the
Caribbean countries with a platform to advance CARIFORUM
competitiveness, promote productive capacity and innovation in
new products and production systems
One of EPA’s focus areas in regard to regional groupings has been
geared towards the regional integration of the CARIFORUM countries
with the inclusion of tools for the creation and/or strengthening
of regional regimes in competition policy, a common logistics
framework, government procurement, services and investment.
It also includes support from international cooperating partners
and development agencies in order to cope with the challenges
linked to the implementation of the agreement. EPA´s goods
liberalization was programmed in an asymmetric and progressive
schedule allowing time for the modernization and improvement of
the Caribbean countries trade structure and productive capacities.
The reduction of tariffs in CARIFORUM countries has just started in
2011. CARIFORUM markets should start opening their markets to
EU goods removing tariffs on 61% of EU exports in 10 years, 83%
in 15 years, before reaching a total of 87% in 25 years
Meanwhile the CARIFORUM countries products have had
immediate access to the European markets with a free duty
and quota regime. The mandate of CARIFORUM has been to
manage and coordinate policy dialogue between the Caribbean
region and the EU, to promote integration and cooperation in the
Caribbean and to coordinate the allocation of resources for the
implementation of Regional Indicative Programs financed by the
European Development Fund
EU-CARIFORUM EPA MAIN TRADE OBJECTIVES
• Reducing and eradicating poverty through a trade partnership
• Promoting regional integration, economic cooperation and good governance
• Ensuring the gradual integration of the CARIFORUM countries into the world economy
• Improving the CARIFORUM countries capacity in trade policy and trade related issues
• Promoting economic growth, increasing investment and improving private sector capacity and competitiveness in CARIFORUM
• Strengthening CARIFORUM-EU trade relations.
19
Preferential and Regional
Trade
and/or Investment
Agreements
Areasin
of the
Coverage
of Trade Agreements in
Areas
of Coverage
of Trade
Agreements
Region
the Region
Subject
X
DRCAFTA
X
CARIFORUM
-UE
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
CA-RD
CARICOM
Panam‡
Market Access
X
X
Rules of Origin
Trade Facilitation
Sanitary and Phytosanitary
Measures.
X
X
X
X
X
Technical Barriers
Trade Protection
X
X
Double Taxation
E-commerce
X
Services
Investments
X
X
X
X
X
X
X
X
Intellectual Property
Government Procurement
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Communications
Labor
Environment
Competitiveness
Arbitration
Financial Services
X
X
X
X
X
X
Source: DR Ministry of Industry and Commerce
5. THE
CARIBBEAN SINGLE MARKET ECONOMY
CARICOM Single Market and Economy (CSME), which requires
the coordination of the regional trade policy and participation
in bilateral trade negotiations with third countries as a regional
grouping under the guidance of the CARICOM Office of Trade
Negotiations (OTN). CSME is intended to create one market among
CARICOM members. Key elements are common trade policy and
external tariffs, free circulation of goods and right of establishment
in any member state without restrictions.
The CARICOM Single Market and Economy (CSME) is geared to
promote and sustain export opportunities and attract foreign
investment by creating a single market among the participating
member states. Most of its objectives are also included in the
EU-CARIFORUM EPA, such as to promote full use of labor (full
employment) and to maximize production and exploitation of
the region’s natural resources and capital. The CSME also hopes
to improve competitive production and stimulate production of a
greater variety and quantity of products and services, to maximize
trade with other countries.
These objectives are intended to promote sustained economic
development and improve standards of living and work. A
Caribbean Single Economy is scheduled to be phased in over the
period 2008–20015, which, among other things, will look at the
20
adoption of a common currency and common economic policies.
All CARICOM member states, with the exception of Haiti and the
Bahamas, have formally joined the region’s single market.
The Single Market goal is to create a seamless economic space
for the free movement of goods and services, capital, labor and
the right to establishment. These objectives go along with the
EPA-CARIFORUM stipulations and coincide with the trend of
international trade. Proponents of the CSME believe the creation
of a single market and economic space will enhance the region’s
ability to face the obstacles of globalization and increasing trade
liberalization.
The CSME is expected to provide the region with a unique
opportunity to prepare for more efficient and competitive
production and trade within a wider global environment, while
capitalizing on synergies for production and trade within our own
commercial market. In many ways, it is the region’s dress rehearsal
for globalization!
As lofty as these ideals may be, CARICOM has advanced in its
implementation of the first component, although there are
important outstanding issues, including the implementation of the
Regional Development Fund which was instituted as a key element
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
in complementing the establishment and implementation
of the Single Market, by providing financial and technical
assistance to Disadvantaged Countries, Sectors and Regions
of the Community. Issues relating to electronic commerce,
free circulation of third party goods, the treatment of goods in
free zones and similar jurisdictions as well as contingent rights
are outstanding, but form part of a built-in agenda for further
negotiations.
The Single Economy, for its part, is scheduled for 2015, a change
from the initial target date of 2008. The Single Economy will involve
the harmonization and coordination of various policies (including
investment and incentives) and convergence in monetary, fiscal and
economic policy. Among these will be the introduction of a single
currency with a single currency authority. The Single Economy is
expected to ultimately be the final stage of monetary union for
CARICOM.
6. COUNTRIES´ TRADE POLICY FRAMEWORK
6.1. Antigua and Barbuda
Trade Policy Regime
Antigua and Barbuda is an independent state that belongs to
the Organization of Eastern Caribbean States (OECS) and since
then they have taken steps to liberalize trade, including the
elimination of import quotas and the reduction of their use of
non-automatic licensing. They have adopted legislative and
institutional improvements that facilitate trade, including in
various service activities. Also they have taken steps to strengthen
the institutional and legal framework in areas like sanitary and
phytosanitary measures, government procurement, competition
policy and intellectual property protection in order to comply with
their multilateral commitments.
There is an increasing recognition in Antigua and Barbuda and the
other OECS members of the importance of trade, and that among
them there is the potential of economic reform including trade
liberalization to advance wider economic objectives. Antigua’s
trade policy formulation and implementation is multi-tiered, given
that it takes place at the national, OECS, and CARICOM levels. There
has been a great trade policy directive from within to coordinate
with other OECS members to establish an economic union among
them; notwithstanding that, other trade-related developments
have been driven by CARICOM, including the establishment of a
regional standards body, and a CARICOM competition commission.
Implementation of multilateral commitments has been done at a
slow pace but this is due to significant human resource limitations.
Due to their participation in the Eastern Caribbean Currency Union,
Antigua and Barbuda have no independent national monetary
policy. Since 1976, the Eastern Caribbean Central Bank (ECCB)
has been responsible for monetary and foreign exchange policy,
keeping their common currency, the EC dollar, pegged to the U.S.
dollar. In contrast, fiscal policy is conducted in an independent
manner by each OECS Member. Attempts have been made to
harmonize fiscal policies through fiscal benchmarks; and Antigua
and the other OECS members are seeking to comply with agreed
benchmarks by 2020.
The principal agency responsible for trade-policy formulation and
implementation is the International Trade Division (ITD) of the
Ministry of Foreign Affairs. The ITD handles important elements
of trade policy, supervising or participating in trade negotiations,
as well as monitoring and facilitating implementation of various
trade agreements. The Minister with responsibility for Trade
provides broad political direction for trade policy, which is refined
at the technical level, in some cases after consultation with private
sector stakeholders. Consultations may occur directly or through
other Ministries in specially arranged consultation sessions. The
Minister reviews proposals submitted by technical staff and returns
them for amendment. Finalized trade policy proposals are then
passed on to Cabinet for approval. Once approved, the Ministry
of Foreign Affairs takes charge of monitoring implementation. The
Ministry also has responsibility for carrying out periodic reviews
and assessment of trade policy. As much as possible this is done in
consultation with the private sector and other ministries.
Economic and trade policy formulation and implementation are
also influenced by a number of departments of the Ministry of
Finance, including the Customs and Excise Division, the Budget
Office, the Economic Policy and Planning Unit, and a number of
related agencies, including the Antigua and Barbuda Investment
Authority, the Bureau of Standards, and the Department of Industry
and Commerce. In addition to these, the Department of Industry
and Commerce has responsibility for domestic commercial policy,
and the Ministry of Agriculture, Lands, Marine Resources and AgroIndustries, the Ministry of Justice and the office of the Registrar of
Trademarks, Copyrights and Intellectual Property, all play a part. A
working group made up of stakeholders of the main Ministries also
deals with trade issues.
The thrust of Antigua and Barbuda’s foreign direct investment
policy is to encourage investment by offering attractive conditions,
including fiscal and other incentives. With one exception,
foreign investment in Antigua and Barbuda is not subject to any
restrictions, and foreign investors receive national treatment. The
only restriction on foreign investment is a requirement to obtain
an Alien Landholders License for non-national investors seeking
to purchase property for residential and commercial purposes.
Licenses are granted subject to submitting an application to
Cabinet and the payment of requisite license fees, which amount
to 5% of the value of the property purchased.
No areas are reserved for domestic investors, and 100% foreign
ownership is permitted. In general terms, there are no restrictions
on the repatriation of dividends: consent for repatriation is granted
automatically once any applicable taxes have been paid. Local
borrowings by non-nationals are subject to a 3% stamp tax
(including nationals of other CARICOM countries).
21
Tourism is one of the key revenue earning sectors for Antigua and
Barbuda and one of the most important areas driving foreign direct
investment in the country.
The Government has developed facilities for cruise ships such as
access to duty free shopping and entertainment. A Cruise Ship
Complex was build at the St. John’s Harbour and an additional pier
was created to facilitate the docking of four mega ships.
Internet gaming companies are significant contributors to Antigua
and Barbuda’s economy in terms of GDP and employment. Antigua
and Barbuda has enacted a considerable body of regulations that
represent a comprehensive approach to the supervision of the
remote gaming sector. The oversight of all aspects of remote
gaming is the responsibility of the Directorate of Gaming, which is
a division of the FSRC.
Fiscal incentives are regulated by the Fiscal Incentives Act of
1974 (Cap 172, Vol. 4 of the revised (1992) Laws of Antigua
and Barbuda). The length of tax holidays granted to investors
depends on the calculation of value added in the local economy;
companies benefiting under the Act may also be exempted
from exchange control regulations. Normally, corporation tax is
imposed at a rate of 30% on profits for incorporated companies.
All other businesses pay tax at a rate of 25%. Dividends from
resident companies are not subject to withholding tax, and
capital gains are not subject to taxation; however, certain
overseas payments, including management fees, are subject to
withholding tax.
Antigua and Barbuda has signed double taxation agreements
with the United Kingdom and Germany ; the agreement with
Germany is not in force. There is also a double taxation treaty
with Canada and an investment and double taxation treaty with
the United States. Antigua and Barbuda has not signed bilateral
investment treaties with any other countries. Antigua and
Barbuda is party to the CARICOM Double Taxation Agreement.
In 2006, Antigua and Barbuda became a member of the
Multilateral Investment Guarantee Agency (MIGA).
Antigua and Barbuda is a founding member of CARICOM.
Through progressive revision of the original Treaty of
Chaguaramas, which established the Community, CARICOM
is seeking to create the basis for the establishment of the
CARICOM Single Market and Economy. Under the revised
Treaty, Antigua and Barbuda is regarded as a “less developed
country” or LDC.
Antigua and Barbuda pursues many trade policy objectives
through CARICOM, which facilitates the pooling of technical
resources in trade policy development and implementation.
Through its membership in CARICOM, Antigua and Barbuda
has signed trade agreements with Columbia, Cuba, and the
Dominican Republic, and has concluded trade negotiations
between CARIFORUM (a negotiating partnership involving
CARICOM and the Dominican Republic) and the European
Union for an Economic Partnership Agreement in 2007.
Antigua and Barbuda is also a founding member of the OECS,
and enjoys a high level of cooperation on trade policy matters
with other OECS-WTO Members, in negotiations within and
outside the WTO.
22
Antigua and Barbuda’s exports are granted preferential access to
the EC market, under the Revised Cotonou Agreement between the
ACP and the EC, and to the Canadian market, through CARIBCAN.
Antigua and Barbuda is also a beneficiary under the U.S. Caribbean
Basin Initiative (CBI). Exports of a number of Antigua and Barbuda’s
products are eligible for the Generalized System of Preferences
(GSP) schemes of Australia, Canada, the EC, Japan, New Zealand,
and Switzerland. The range of products varies according to each
country’s scheme. Antigua and Barbuda’s exports were removed
from the U.S. GSP scheme in March 2004.
Imports
The Customs (Control and Management) Act No. 7 of 1993 governs
customs procedures. All imports require a formal entry certificate
or warrant, and may be cleared by the importer or by a customs
broker. Documents required by Customs include an invoice, a bill
of lading or airway bill, an import license when required, and a
certificate of origin for CARICOM goods. Customs decisions may
be appealed to the Comptroller of Customs. Importers are not
required to register, and it is not necessary to use the services of
a customs broker. Antigua and Barbuda is not a member of the
World Customs Organization.
Pre-shipment inspection is not used. Inspection of goods is based
on the customs officer’s risk assessment, but the authorities do
not maintain statistics on the percentage of shipments inspected.
Importers known to have engaged in violations in the past are
subject to 100% inspection.
The Second Schedule of the Customs Control and Management
Act of 1993 governs the valuation process. Under the Act, the
transaction value must be used as a first valuation method: it
is defined as the price actually paid or payable for the goods
when sold for export to Antigua and Barbuda. In a sale between
related persons, the transaction value is accepted if the importer
demonstrates that it closely approximates the transaction value
of identical goods where the transaction is between non-related
parties, or the customs value of identical or similar goods.
Under the Act customs valuation may not be based on: (a) the selling
price of goods produced in Antigua and Barbuda; (b) a system that
provides for the acceptance of the higher of two alternative values;
(c) the price of goods on the exporting country’s market; (d) the
cost of production, other than computed values determined for
identical or similar goods; (e) the price of the goods for export to
a country other than Antigua and Barbuda; (f) minimum customs
values; or (g) arbitrary or fictitious values. The customs value
of imported goods may not include: charges for construction,
assembly, maintenance or technical assistance, undertaken after
importation or the cost of transport after importation.
The Second Schedule of the Customs Control and Management
Act stipulates that “the customs value may be determined using
reasonable means consistent with the principles and general
provisions of the Schedule”. Reference prices may be used if
there is doubt regarding value, or for further investigation by the
Tax Compliance Unit of the Ministry of Finance. These prices are
used to identify possible under-invoicing, and can be applied in
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
the determination of the customs value, if none of the methods
specified in the Second Schedule can be used. Reference prices
based on international lists for customs valuation are generally
used
Antigua and Barbuda has applied the CARICOM Common External
Tariff (CET) since 1 January 1994. CET changes occur at CARICOM
level, but ultimate authority for tariff determination rests with
Parliament following a Cabinet initiative. Exceptions to the CET
are agreed between CARICOM members and must be applied by
the Community Council. All rates are ad valorem. There are no
seasonal tariffs; tariff quotas are not used.
A customs service tax (CST) of up to 10% is applied on all imports,
including those from other CARICOM countries. The Antigua and
Barbuda Customs Tariff schedule is based on the Harmonized
Commodity Description and Coding System (2002) and comprises
6,413 tariff lines (Table III.1). Duty-free treatment is accorded to
10.2% of tariff lines; this percentage is considerably lower than for
other OECS countries. Some 70% of all tariff lines are subject to
rates between 0 and 10%, 52% of all tariff lines subject to a rate
of 5%. Some 28% of tariff lines are subject to international peaks,
while 4.4% of lines are subject to domestic peaks.
Antigua and Barbuda has applied the CARICOM Common External
Tariff (CET) since 1 January 1994. CET changes occur at CARICOM
level, but ultimate authority for tariff determination rests with
Parliament following a Cabinet initiative. Exceptions to the CET
are agreed between CARICOM members and must be applied by
the Community Council. All rates are ad valorem. There are no
seasonal tariffs; tariff quotas are not used. A customs service tax
(CST) of up to 10% is applied on all imports, including those from
other CARICOM countries.
Imports of certain products are restricted, mainly for health and
safety reasons, and require a permit or sanitary/phytosanitary
certificate. The Chief Medical Officer or the Chief Veterinary
Officer must authorize the import of any herb or plant or any
part of any herb or plant for use as medicine or drug by man or
animals, or which man or animals, may use as medicine or drug.
Import restrictions also apply to: pharmaceutical products;
substances used to manufacture drugs; firearms; and ammunition.
Imports of firearms, fireworks, and arms and ammunition require
a license from the Commissioner of Police prior to importation, in
accordance with Act No. 18 (Cap 310) of 1975. Imports of any
mechanical game, device, or appliance, that can be used to play
at any game of chance for money is restricted under the Customs
(Control and Management) Act of 1993; the same Act restricts the
import of tear gas and any ingredient that may produce it; or any
article that bears a design in imitation of any currency or bank note
or coin in current use in Antigua and Barbuda or elsewhere, except
expressly authorized by the Comptroller of Customs and Excise.
Imports of certain restricted pesticides require approval from the
Pesticides Control Board.
The External Trade (Import Prohibition) Order 2001 prohibits the
import of certain goods without a license. The requirement does
not apply to some of these goods when imported from CARICOM
or OECS member countries (Second Schedule), while others may
be imported without a license only from other OECS countries
(Third Schedule).
There is no licensing fee or administrative charge, and no deposit
or advance payment is required for the issuance of a licenses. In
practice, licenses are often requested and issued upon the arrival
of the goods. A license is valid, in most cases, for one month from
the date of issue, and the validity can be extended upon request.
Licenses are not transferable between importers; there is no penalty
for the non-use of a license. Licenses are required on a seasonal
basis for imports of certain agricultural products (e.g., onions and
cabbages when the local market is glutted), and are granted by the
Ministry of Agriculture.
Exports
Up to five export documents are required: an export declaration; bill
of lading or airway bill; invoice; certificate of origin (for preferential
trade as needed); and phytosanitary certificate (when required).
The country taxes exports of certain fish products and customs
requires the presentation of shipment documents on exports. The
Central Marketing Corporation (CMC) a state owned agency that
also imports vegetables such as broccoli, carrots and tomatoes
and is a primary importer of rice, sugar and eggs manages trading.
The same entity control and participates as a major importer of
agricultural inputs such as seeds, fertilisers, chemicals (pesticides,
herbicides), irrigation products, shade cloths, and spray pumps.
The institution is not obligated to purchase produce brought in by
farmers and does not subsidise agriculture in any form.
Antigua and Barbuda applies export taxes on lobsters (EC$0.10/
lb) and fish (EC$0.05/lb). The legal basis for this is the Export
Duty Act of 1941, Cap 162. In its schedule, the Act mentions that
export duties may also be applied on: commercially pure barters
(EC$1/ton); clean cotton lint (EC$0.04/lb.); molasses (EC$0.60/100
gallons), and sugar (EC$6/ton.).
Exports of wild birds are prohibited, as well as exports of any live
or dead wildlife or parts, in accordance with the CITES. There are
no controls on domestic sales or exports of fruit and vegetables,
other than the inspection, packing, and certification requirements
contained in the Exportation of Fruit Act of 1939. There are no
goods subject to export licensing.
Antigua and Barbuda and the other OECS countries, together
with eight other WTO Members, made a proposal in early 2006
that would extend export subsidies to 2018. In the view of these
countries, export subsidies are necessary because these countries
are “particularly vulnerable and unable to fully and better integrate
into the multilateral trading system and benefit from the positive
aspects of international liberalization.” In July 2007, the General
Council decided to extend the date for the dismantlement of
export subsidies to end 2015.
The Fiscal Incentives Act grants tax benefits to enterprises exporting
part of their production and not enjoying a tax holiday or duty-free
imports of raw materials and capital goods. A longer maximum
period of tax holiday (15 years) is granted to enclave enterprises
exporting all of their production.
23
Free Trade and Processing Zone Act No. 12 of 1994 provides for
(i) exemption from customs duty and other taxes on imports
of machinery, equipment, spare parts, and items needed to
construct and operate facilities within the FTPZ; (ii) exemption
from custom duty and other taxes on the imports of goods to be
incorporated in the products produced or assembled within the
FTPZ; (iii) exemption from income and other taxes of any kind
other than social security, medical benefits, and the education
levy on the earnings of any person employed in any industrial
or commercial activity within the FTPZ; (iv) exemption from
taxes on exports out of Antigua and Barbuda from the FTPZ; (v)
exemption from taxes of any kind on the repatriation of profits
earned in the zone; and (vi) exemption from government levies
and taxes in respect of any industrial or commercial activity
Companies require a license to operate in the free zone.
License and registration are available only to corporations,
regardless of where they are incorporated, or a branch or unit
of such corporation. The decision to grant a license is based on
considerations such as: the level of investment; the project’s
capacity to generate employment; generation of foreign
exchange; technological adaptability and transfer possibilities;
and environmental impact. Exporters may make use of the
insurance and export credit guarantee facilities provided by the
ECCB Export Credit Guarantee Scheme covering political and
commercial risks. Exporters may also receive export promotion
support from the OECS Export Development Unit.
6.2. Barbados
Foreign Affairs, Foreign Trade and International Business advises
the Government on all trade policy matters and has responsibility
for negotiating trade agreements and coordinating their
implementation. In particular, the Ministry’s Foreign Trade Division
formulates and oversees Barbados’ foreign trade policy. The
Division develops foreign trade policy in consultation with other
Ministries, the private sector, and trade unions.
Trade Policy Regime
Barbados is an original Member of the WTO, within which it has
advocated binding and enhancing special and differential treatment
for developing countries and for the recognition of the special
status and needs of small, vulnerable, developing economies.
Barbados formulates and implements its trade policy within
the context of its participation in the Caribbean Community
and Common Market (CARICOM). CARICOM is in the process
of consolidating a single market and economy. Through its
CARICOM membership, Barbados maintains preferential trade
agreements with Colombia, Costa Rica, Cuba, the Dominican
Republic, and Venezuela. Barbados’s exports have also benefited
from preferential market access under non-reciprocal preferential
trade arrangements offered by a number of developed countries.
Barbados’ investment regime is generally open to foreign investors;
CARICOM citizens and companies are guaranteed the same
treatment as domestic investors. Barbados maintains in force
eight bilateral investment treaties offering national treatment to
foreign investors. However, investment in activities such as certain
ground transport and food retail services is reserved for locally
domiciled enterprises, as are tour operator services. In addition,
although Barbados allows 100% foreign ownership, restrictions
may be applied to share transfers in the case of foreign investors.
The stated aims of Barbados’ trade policy are: (i) to secure market
access for Barbadian exports of goods and services; (ii) to encourage
the growth and development of the country’s productive sector;
(iii) to allow imports of goods and services in a way that would
not undermine the quality of life or increase the cost of living;
and (iv) to support other government initiatives for economic
growth and development and services. Barbados considers trade
agreements as vehicles to obtain increased market access for its
goods and services, at the multilateral, regional and bilateral levels.
To this end, it deems of utmost importance its participation in the
WTO and the CARICOM, complementing this with bilateral trade
agreements.
A number of agencies participate in the formulation and
implementation of trade policy in Barbados. The Ministry of
24
There is no specific legislation in Barbados with respect to foreign
investment. The responsibility for foreign investment policy in
Barbados is shared between the Ministry of Foreign Affairs, Foreign
Trade and International Business. The Barbados Government
created Invest Barbados in 2007 to assist the country to become
more responsive in a competitive international environment.
Invest Barbados is now responsible for attracting and sustaining
international investment for Barbados; developing the export
potential of the indigenous services sector; and helping to develop
and manage the Barbados Brand. Prior to the creation of Invest
Barbados, the Barbados Investment Development Corporation
(BIDC) was responsible for handling all investment issues. The
Barbados Tourism Investment Incorporated (BTI) also participates
in policy formulation. The BIDC and Invest Barbados also provide
advisory services and other assistance to companies looking to
establish businesses in Barbados.
The Government’s general policy with respect to attracting foreign
investment is to offer a favorable environment and incentives
schemes; in general, foreign investors receive the same treatment
as domestic investors. Barbados’ legislation does not contain
specific references to foreign investment restrictions, nor does it
explicitly guarantee market access or national treatment to foreign
investors, except for CARICOM nationals and companies.
Some general restrictions to foreign investment are in place.
Citizens of Barbados as part of Government policy to reserve some
services for locals must own tour operators and travel agents.
As part of the CARICOM Single Market and Economy (CSME)
the concept of Barbadian ownership is now expanded to include
CARICOM nationals. Although foreign investment is generally
not subject to restrictions, according to one report, investment in
activities such as certain ground transport and food retail services
is reserved for locally domiciled firms, as are services from tour
operators. Supplies of water and of postal services are wholly
Government owned and operated. Also, although Barbados allows
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
100% foreign ownership, restrictions may be applied to share
transfers in the case of foreign investors. Private investment in
broadcasting, banking, international business, and insurance is
subject to prior government approval in the form of licenses.
except on fish and fish products. Agricultural products are bound
at rates of at least 100%, with other products bound at rates of at
least 70%. Barbados also bound other duties and charges, at 70%
or higher.
Barbados has double taxation avoidance agreements with other
CARICOM countries by virtue of the Revised Treaty of Chaguaramas.
It has agreements for the avoidance of double income tax taxation
with the United Kingdom (subscribed in 1970), Canada (1980),
United States (1984, second Protocol signed in 2004), Finland
(1989), Norway (1990 and 2004), Sweden (1991), Venezuela
(1998), China (1999), Cuba (1999), Malta (2001), Mauritius (2004),
Botswana (2005), the Netherlands (2005), Austria (2007), Ghana
(2008), and Mexico (2008) . A tax agreement with Switzerland,
which pre-dates independence (1954), is an extension of a U.K.
agreement. The main differences among the treaties relate to the
rates of withholding tax on dividends, royalties, and interest.
As a result of past reforms, Barbados’s import procedures are
relatively simple; all importers must be registered and the average
time for imports to clear customs is two days when agencies other
than customs are involved. Barbados uses the transaction value as
the basis for customs valuation. Barbados requires import licenses
for a range of products, with different licensing regimes applying to
imports from CARICOM and other countries.
Bilateral investment promotion and protection treaties (BITs)
are in place with the United Kingdom (1993), Germany (1994),
Venezuela (1994), Italy (1995), Switzerland (1995), Canada (1996),
Cuba (1996), China (1998), Mauritius (2005), and Ghana (2008).
The Barbados Arbitration Act (1976) and the Foreign Arbitral
Awards Act (1980) contain provisions for arbitration of investment
disputes. Foreign national investors receive the same protection as
local investors and, in case of dispute related to an investment; they
can resort to the same procedures as national investors. Barbados
is a member of the International Center for the Settlement of
Investment Disputes (ICSID), and of most of the conventions
and model laws emanating from the work of the United Nations
Commission on International Trade Law. Barbados is also a
member of the Multilateral Investment Guarantee Agency.
Barbados is a beneficiary of the Generalized System of Preferences
(GSP) of: Australia, Canada, the European Union, Japan, New
Zealand, Norway, Russia, and Switzerland. Barbados was removed
from the U.S. GSP list of beneficiaries in 2006, as its per capita
income was considered too high. Barbados does not take part in
the Global System of Trade Preferences.
Barbados’ exports enjoyed preferential access to the EC market
under the African, Caribbean, and Pacific European Union
Partnership Agreement (Cotonou Agreement), signed in June 2000
and with duration of 20 years. The Cotonou Agreement called for
negotiations for economic partnership agreements (EPAs) aimed at
establishing the timetable for the substantial liberalization of trade
between the parties, compatible with WTO rules. To this end, the
CARIFORUM-EC negotiations for an EPA were officially launched in
Kingston in April 2004. The negotiations concluded in December
2007 when the EPA Agreement was initialed in Barbados on 16
December 2007. The EPA is of indefinite duration, and is legally
binding, thus having its own institutional structure of governance.
Tariffs are the main instrument of border protection in Barbados.
It applies the CARICOM Common External Tariff (CET) with
exceptions. A range of tariff exemptions granted to local producers
further increases effective tariff protection. Barbados’ average
applied tariff on agricultural products (33.7%) is much higher
than on other goods (12.8%). Barbados has bound all of its tariffs
The proceeds of a levy on cotton exports are distributed among
producers; no other export taxes are applied. No other export
restrictions are applied for economic reasons. Exports are still
promoted via a wide array of fiscal and other incentives programs
and for this Barbados has requested and obtained the extension
provided on the WTO’s Subsidies and Countervailing Measures
Agreement. Benefits take mostly the form of tax holidays. In
addition to export-support programs, producers of goods and
services may benefit from tax breaks or other forms of assistance.
Imports
The main legislation governing customs procedures is the Customs
Act (Cap. 66) of 1962 and the Customs Regulations of 1963,
as amended. The Barbados Customs and Excise Department is
responsible for customs procedures.
Imports can be cleared by the importer or by a licensed broker.
Importers must be registered with the Customs Department.
No registration fees are charged. Import declarations (Barbados
Customs Goods Declaration Form C63) must be accompanied by
up to seven documents: a commercial invoice; a carriers bill of
lading or airway bill; a declaration of value form (C60) for goods
valued over BDS$2,500; a certificate of origin for CARICOM goods;
an import license if required; and a health and sanitary certificate
if required. A packing list may be required by customs when goods
are physically examined.
The standard VAT rate applied to most goods and services is 15%;
and it is applied on the c.i.f. customs value plus the sum of import
duties and taxes. Some items are subject to concessional rates and
others are zero-rated; exemptions and waivers also apply.
Legislation governing customs valuation is contained in the
Customs Act, Cap. 66. The Second Schedule to the Act contains the
rules for determining customs value. These follow the sequence laid
out in the WTO rules on customs valuation. The use of minimum
values is prohibited.
Applications for import licenses must be made in advance of
importation, and are granted within ten days. There are no
administrative charges levied, and it appears that documentary
requirements are minimal. Licenses are valid for up to three
months, and are renewable. If licenses are refused, applicants will
be informed of the reasons for refusal, and could appeal to the
Director, Permanent Secretary or Minister within the Ministry of
Trade, Industry and Commerce, or to seek redress in a Civil Court.
25
Barbados’ tariff schedule is based on the Harmonized Commodity
Description and Coding System. The tariff, as applied in December
2007, comprised 6,890 tariff lines at the eleven-digit level.
Barbados levies customs duties on the c.i.f. value of imports. The
vast majority of tariff rates are ad valorem; specific rates apply on
47 lines, which correspond mostly to alcoholic beverages.
Exports
For exports, typical export documentation consists of: a customs
declaration form, commercial invoice, a certificate of origin for
exports under trade preferences, a central bank form, a bill of
lading, a shipping instruction form, and an export declaration
form. In all cases, the Central Bank Exchange Control Form must
be taken for verification by the Entry Processing office of the port
at which the goods are being shipped. Customs uses a three-lane
system (green, yellow and red lanes). A fourth lane, the blue lane,
is used for verification. Processing of other declarations is carried
out online and does not require submission of any documents to
Customs unless the export has been designated “yellow” or “red
lane” by Customs. In the case of yellow-lane or red-lane designated
exports, all the relevant documents must be presented at the Entry
Processing office of the port at which the goods are being shipped.
Exporters are not required to register, unless they wish to export
under trade preferences. The Certification Service at the Barbados
Investment and Development Corporation (BIDC) delivers
certificates of origin that allow exporters to benefit from trade
preferences with the FTA’s Barbados is signatory to.
As mentioned before, Barbados applies no taxes, charges or levies
on exports, other than a levy on cotton exports of BDS$0.17
per pound. The proceeds of this levy go to the Barbados Cotton
Growers Association.
Barbados manages a number of incentives programs targeted
solely or partly at promoting exports. These are: the Fiscal
Incentive Programs; Export Allowance; Research and Development
Allowance; International Business Incentives; and Societies With
Restricted Liability. The WTO General Council decided to extend
the date for the dismantlement of export subsidies to end 2015.
The Fiscal Incentives Program is aimed at stimulating greater levels
of production of selected products required for domestic use and in
demand extra-regionally, as well as use of raw materials or skills in
Barbados. The incentives under the program are provided under the
authority of the Fiscal Incentives Act of 1974 and are administered
by the BIDC. Under the Act, approved enterprises are granted an 11
to 15-year tax holiday for corporation tax and customs duties, and
the 15% VAT. Relief from customs duty is on all imports of plant,
equipment, machinery, spare parts, raw materials and components
thereof required by the approved enterprise in the manufacture
of an approved product, where such articles are not available in
CARICOM.
Under the Fiscal Incentives Act, companies registered in Barbados
may qualify for benefits provided they satisfy specific criteria and
are granted approved enterprise status, producing an approved
product. The tax holiday period under the Act depends on the
26
enterprise classification, which is a direct function of the local
value added generated: (a) Group I enterprises, with local value
added of 50% and over of ex-factory sales of the product, receive
up to 15 years; (b) Group II, 25-50%, up to 13 years; (c) Group
III, 10-25%, up to 11 years; (d) enclave industries (producing only
for export outside CARICOM), up to 15 years. A fifth group, the
highly capital-intensive industries, defined as those in which there
is investment of not less than US$25 million, are eligible for a tax
holiday of up to 15 years irrespective of their local value added.
Under the Export Allowance program, enterprises that export to a
non-CARICOM country and do not obtain benefits under the Fiscal
Incentives Act are entitled to a rebate of income or corporation
tax on the export profits of the business. Allowances are provided
under the authority of the Income Tax Act and are administered by
the Commissioner of Inland Revenue.
The rebate is based on the percentage of export profits to total
profits; the reduction ranges from 35% to 93% of the tax normally
payable on profits at the standard corporate tax rate. In this respect,
the lowering of corporate tax rates has been reducing the scope of
the export subsidies granted. In computing the tax payable for
any income year an allowance is granted against the tax payable
on the taxable income. Businesses entitled to this allowance may
also claim a 40% investment allowance instead of the general
initial 20% allowance. Similarly, companies that manufacture
and refine sugar or manufacture products from clay or limestone
for the domestic and export markets are also entitled to a 40%
investment allowance.
Under the Research and Development Allowance program,
allowances are provided (under the authority of the Income Tax
Act) to businesses that export to a country outside the CARICOM
and that pay for market R&D for the purpose of promoting export
sales. A business is entitled to deduct from taxable income an
amount equal to 150% of its actual expenditure on promoting the
development of export sales; the Commissioner of Inland Revenue
administers benefits.
The International Business Incentives (IBI) program provides
incentives in the form of tax rebates to international or “offshore”
companies registered as international business companies (IBCs).
IBCs must sell all their production abroad. The benefits are provided
under the authority of the International Business Companies. The
IBI program also provides incentives for Societies with Restricted
Liability (SRLs), which must sell their production abroad. The
International Business Division of the Ministry of Foreign Affairs,
Foreign Trade and International Business and the Commissioner of
Inland Revenue administers the IBI program.
IBCs are subject to a 1-2.5% corporate tax rate on net profits
instead of the statutory 25% rate. Taxes paid to a foreign country
may be credited against tax payable in Barbados provided that
this does not reduce the tax payable in Barbados to less than 1%
of profits or gains in any income year. There are no withholding
taxes on dividends, royalties, management fees, interest payments,
and other fees paid by IBCs to non-residents of Barbados or to
another IBC. IBCs are exempt from exchange control restrictions,
and may import free of customs duty, VAT, and other like duties,
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
all equipment, machinery, raw materials, goods, components and
articles necessary to carry on their international business. The IBC
Act makes provision for a guaranteed period of concessions of 15
years.
6.3. Dominican Republic
Trade Policy Regime
iThe specific objectives of Dominican trade policy are to make the
economy more efficient and competitive, reduce protection and
any aspect of the tariff structure that is unfavorable to exports, and
at the same time foster regional economic cooperation. Foreign
trade policy-making and trade negotiations are the responsibility
of the Commission for National Trade Negotiations, chaired by the
Ministry of Foreign Affairs, while the Ministry of Industry and Trade
has prime responsibility for administering trade agreements.
The Dominican Republic is a founding Member of the WTO,
and is participating actively in the Doha Development Round
negotiations, from which it expects to obtain practical benefits,
particularly in the agriculture and industrial sectors, and on trade
facilitation and trade rules.
As part of its international integration strategy, the Dominican
Republic has negotiated bilateral and regional trade agreements. It
concluded negotiation for a Partial Scope Agreement with Panama,
the Free Trade Agreement between the Dominican Republic,
Central America and the United States (DR-CAFTA), and the
Economic Partnership Agreement between the European Union
and CARIFORUM (CARICOM and the Dominican Republic).
The Dominican foreign investment regime allows foreign nationals
to invest in the vast majority of economic sectors. Exceptions
include activities affecting public health and the environment, and
those in which there are laws and regulations governing particular
sectors. There are limits on the foreign private investment share in
air transport and broadcasting; and foreign governments are not
allowed to invest in mining, or in oil drilling and prospecting.
Trade policy formulation is vested in the Comisión Nacional de
Negociaciones Comerciales – CNNC (National Commission for
Trade Negotiations), established under Decree No. 74-97 and
chaired by the Ministry of Foreign Affairs.
Bilateral, sub-regional or multilateral trade negotiations are
handled by the CNNC, while trade agreements are administered
by the Ministry of Industry and Trade acting through the Dirección
de Comercio Exterior y Administración de Tratados Comerciales
Internacionales – DICOEX (Directorate of Foreign Trade and
Administration of International Trade Agreements). The latter is
responsible for ensuring that agreed commitments are fulfilled, and
for resolving any difficulties encountered by Dominican producers
in accessing the markets of signatory countries and those faced by
foreign producers in accessing the Dominican market.
With regard to the implementation of trade agreements, the
Centro de Exportaciones e Inversión – CEI-RD (Dominican Republic
Export and Investment Center) is responsible for the promotion
and diversification of Dominican exports, and for providing
technical assistance to exporters and investors in dealing with
the various preferential agreements and programs. The Consejo
Nacional de Zonas Francas de Exportación – CNZFE (National
Council for Free Export Zones) is responsible for evaluating free
zone policy and participating in negotiations to reach agreements
on the conditions under which such zones operate.
The 1995 Foreign Investment Law (Law No. 16-95) allows foreign
nationals to invest in all sectors of the economy other than in
the following cases: exceptions imposed by laws and regulations
governing particular sectors; the disposal and elimination of toxic,
hazardous or radioactive waste not produced in the Dominican
Republic; the production of materials and equipment directly
related to national defense and security; and activities affecting
public health and the country’s environmental equilibrium. In
relation to the latter, there is no predetermined list of activities that
are not permitted, and that foreign investment in this domain is
governed by the provisions of the General Law on the Environment
and Natural Resources (No. 64-00).
Foreign investors do not need a local partner to invest in the
Dominican Republic, and their investments are not restricted in
terms of participation in an enterprise’s capital, except for a few
sectors such as air transport and broadcasting.
In 2003, Law No. 98-03 was passed establishing the Centro de
Exportación e Inversión de la República Dominicana – CEI-RD
(Dominican Republic Export and Investment Center) as the official
agency responsible for promoting national and international
investments in the country.
The changes introduced by Law No. 98-03 have been incorporated
in the Foreign Investment Law and in the new Implementing
Regulations (No. 214-04) pertaining to the registration of foreign
investment, promulgated in March 2004. Within 180 days of making
an investment, the foreign enterprise or investor must apply for
registration with the CEI-RD and submit the information needed to
issue the registration certificate. Once the necessary information
has been received, the CEI-RD has 15 working days to process it
and issue the certificate. Although registration is mandatory and
necessary for the purposes of statistical data, there are no sanctions
for non-compliance. Foreign investments in free zones are registered
with the CNZFE, which must notify the CEI-RD.
Foreign investors may remit abroad the total amount of the capital
invested, together with net annual profits and benefits, without
prior Central Bank authorization provided that the corresponding
taxes are paid. They may also repatriate payments relating
to technical service contracts that establish fees in respect of
technology transfer, and/or contracts for the local manufacture of
foreign brands, which include royalty payment clauses, provided
that such contracts and the amounts or procedures of the
payments involved have been previously approved by the CEI RD.
With the aim of providing legal protection for foreign investment
and encouraging FDI flows, the Dominican Republic has signed
mutual investment promotion and protection agreements with
several of its economic partners, most of which came into force
during the period under review. As of 2008, the Dominican
27
Republic had agreements in force with Argentina, Chile, Taiwan,
Ecuador , Finland, France, Italy, Morocco, the Netherlands, Panama,
the Republic of Korea, Spain, and Switzerland.
In addition, the Dominican Republic has adopted provisions on
investment in the framework of free trade agreements with the
Caribbean Community, the Central American Common Market, and
the Free Trade Agreement between the United States, the Central
American Countries and the Dominican Republic (DR-CAFTA).
The Dominican Republic is a member of the Multilateral Investment
Guarantee Agency (MIGA) and of the Overseas Private Investment
Corporation (OPIC). In March 2000, it signed the Convention on the
Settlement of Investment Disputes between States and Nationals of
Other States. It has also ratified the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, which entered into force
in July 2002; and the Inter-American Convention on International
Commercial Arbitration. In order to prevent double taxation, the
Dominican Republic has an agreement in force with Canada.
In April 1998, the Dominican Republic concluded a free trade
agreement with the countries of the Central American Common
Market (CACM), consisting of Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua. The agreement was approved by the
Dominican Congress in March 2000 and entered into force in
October 2001. It includes disciplines governing trade in goods and
services, investments, intellectual property, competition policy,
government procurement, exceptions, and dispute settlement.
The agreement establishes cross-border free trade for most
products. Exceptions to duty-free treatment include vegetable
oils, which face a tariff of 15 per cent; a number of petroleum
products for which a tariff reduction schedule has been established;
and a group of products excluded from the liberalization, including
alcoholic beverages, tobacco, beans, garlic, onions, rice, wheat
flour, coffee, sugar, chicken and powdered milk. The market access
conditions established in the agreement between the Dominican
Republic and Central America were incorporated as a special regime
in an annex to the DR-CAFTA.
The Dominican Republic signed a free trade agreement with the
countries of the Caribbean Community (CARICOM) in August
1998. This was ratified by the Dominican Congress in January 2000
and entered into force on December 2001. Trade with Haiti is not
covered, since that country was not a member of CARICOM when
the agreement was signed.
The agreement establishes commitments for the elimination of
tariffs and non-tariff barriers on merchandise trade; rules of origin;
sanitary and phytosanitary measures; technical barriers to trade; a
commitment to negotiate the progressive liberalization of trade in
services; liberalization of capital movements; and the protection
and promotion of investments, among other disciplines.
In July 1985, the Dominican Republic signed a Partial Scope
Agreement with Panama, which was ratified by Congress in February
1987. The agreement did not enter into force until November
2003, once the Joint Permanent Commission responsible for
negotiating the lists of products had finalized the implementing
regulations.
28
The Dominican Republic agreed to allow duty-free importation
of 101 Panamanian products, while Panama granted the same
treatment to 103 Dominican products. Products benefiting
from duty-free status include 29 goods manufactured in free
zones. The Implementing Regulations also contain provisions for
the determination, certification and verification of the origin of
merchandise, as well as disciplines on trade facilitation, cooperation
and exchange of trade information, freedom of transit, and dispute
settlement.
The DR-CAFTA was signed on 5 August 2004 by the Dominican
Republic, five Central American countries and the United States.
The agreement was passed into Law in the Dominican Republic on
9 September 2005 and entered into force on 1 March 2007.
The DR-CAFTA lays the foundations for creating a free trade zone
and contains 22 chapters with their respective annexes. These deal
with national treatment and market access for goods (with special
provisions on agricultural products, textiles and clothing); rules
of origin and corresponding procedures; customs administration;
sanitary and phytosanitary measures; technical barriers to trade;
trade protection; government procurement; investment; crossborder trade in services; financial services; telecommunications;
electronic commerce; intellectual property; transparency;
administration of the agreement; dispute settlement; exceptions;
and final provisions. The treaty also contains chapters on labor and
environmental issues.
The DR-CAFTA is applicable multilaterally, thus the vast majority
of the mutual obligations are identical for all parties. Nonetheless,
there are certain obligations, such as tariff quotas, that are applied
bilaterally between the United States and each of the Central
American countries or the Dominican Republic.
In general, most industrial products and consumer goods became
tariff free when the DR CAFTA entered into force. Tariffs on other
products will be eliminated over periods of five to ten years, while
agricultural products have longer tariff reduction periods (15 to 20
years). In the case of trade with United States, the Dominican
Republic agreed to grant duty-free status for 76 per cent of its
tariff lines (roughly 74 per cent of the value of its imports from the
United States in 2002) when the agreement entered into force.
In the case of trade between the Dominican Republic and each
Central American country, the multilateral tariff reduction program
is applied, except for a number of excluded goods (beer, alcohol,
tobacco, sugar, coffee and other agricultural products) or goods
subject to tariff reduction commitments previously agreed upon
in the FTA between the Dominican Republic and the Central
American countries, which have been incorporated in the DRCAFTA. In practice, a Dominican or Central American importer
can choose between two preferential regimes, provided that the
corresponding rule of origin is fulfilled: either the multilateral
tariff reduction program, or else the program contained in the
FTA between the Dominican Republic and Central America. In
addition, certain provisions on financial services and government
procurement apply only between the Dominican Republic and its
Central American counterparts.
As a member of CARIFORUM, the Dominican Republic participated
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
since 2004 in the negotiation of the Economic Partnership
Agreement (EPA) between the European Union and several
Caribbean States. Like other regional agreements of this type,
the EPA exists to replace the Cotonou Agreement between the
European Union and the countries of Africa, the Caribbean and the
Pacific (ACP).
Negotiations between the EU and CARIFORUM were concluded in
December 2007. Unlike its predecessor, the EPA aims to gradually
establish a free trade zone based on reciprocity among the parties.
In addition to eliminating tariffs, the EPA establishes disciplines in
several areas, including safeguards and trade remedies; technical
barriers to trade; services; investment; intellectual property; and
government procurement; as well as provisions on technical and
financial assistance.
The CARIFORUM countries agreed to eliminate tariffs on roughly
83 per cent of their imports from the European Union during the
first 15 years of the EPA. Although they may keep tariffs for a tenyear period on the products due to be liberalized, they must start
lowering tariffs no later than the seventh year after the agreement
enters into force. The same flexibility applies to other import taxes
and charges. The Dominican Republic agreed to grant CARICOM
countries the same treatment as it grants to the European Union;
in return, the CARICOM countries will grant the same treatment
to the Dominican Republic. The more advanced CARIFORUM
countries, such as the Dominican Republic, on average will allow
free access to service providers from the European Union with
respect to 75 per cent of its services sector.
While reducing trade protection, the country has also taken
important steps towards enhancing competitiveness with the
elimination of the tariffs applied to a considerable number of
inputs and capital goods and more than 3,804 MFN tariff lines with
a zero rate.
There is a high interest in becoming a regional strategic centre. Since
2002 the country has been taking steps towards that direction that
include the introduction of the Single Customs Declaration (DUA),
electronic transmission of the declaration and other documents to
the Directorate-General of Customs (DGA); electronic payment of
taxes; reduced clearance times; the introduction of post-shipment
inspection of goods; and the establishment and start-up of a
regional customs training centre with the support of the World
Customs Organization (WCO).
Imports
The Dominican Republic has adopted several measures to
streamline customs procedures, facilitate trade and make it more
predictable. These include the elimination of consular invoices,
introduction of the Declaración Única Aduanera – DUA (Single
Customs Declaration), electronic transmission of the declaration
and other documents to the customs services, electronic payment
of taxes, reduction of the time required for clearance and
certification of ports.
In the Dominican Republic, customs procedures are based on the
Customs Law (Law No. 3489) of 12 February of 1953 , Laws Nos.
226-06 and 227-06 of 21 June 2006, which give autonomy to
the Dirección General de Aduanas – DGA (Directorate-General
of Customs) and the Dirección General de Impuestos Internos
– DGII (Directorate-General of Taxes), respectively, and the Free
Zones Law No. 8-90 of 15 January 1990 and its implementing
regulations (Decree No. 366 97) of 29 August 1997. The customs
legal framework also includes other legal instruments such as the
Tariff Reform Law (No. 146-00), the Monetary and Financial Law
(No. 183-02), Tax Reform Law No. 557-05, the Law on Industrial
Competitiveness and Innovation (No. 392-07), together with
several decrees and resolutions governing specific aspects of
customs procedures and/or implementing the customs provisions
in the trade agreements signed by the Dominican Republic.
The DGA is the government body responsible for facilitating and
supervising the Dominican Republic’s international trade. Its
tasks include collecting foreign trade-related taxes, controlling tax
evasion and illegal trade, and helping to build up national security,
health and environmental protection mechanisms.
Importers are not subject to any special compulsory registration in
the Dominican Republic. Nevertheless, all companies and natural
persons, including importers, must be registered with the Registro
Nacional de Contribuyentes – RNC (National Taxpayers Register),
kept by the DGII.
A declaration must be submitted to customs in order to import
goods. In September 2007, the DUA was introduced and will
definitively replace the former import declaration and single export
declaration forms once the process is complete. The DUA allows
taxpayers to determine their customs tax obligations themselves,
to send this information to customs electronically and also to make
the corresponding payments electronically. The new form is also
intended to facilitate statistical control of foreign trade operations
and the exchange of information with other customs offices.
The DUA must be accompanied by the commercial invoice, the
transport documents (bill of lading if the goods are transported by
sea or air waybill if they arrive by air), together with a certificate
of origin for preferential imports. In addition, depending on the
product in question, an import license or authorization has to be
submitted together with the relevant phytosanitary or animal
health certificates.
Imports are subject to inspection of documentation or physical
inspection depending on the importer’s risk profile. Once the
corresponding import taxes and duties have been paid, the goods
are cleared. Law No. 226-06 lays down a maximum period of one
day for clearance. If the goods are not cleared within one day for
reasons attributable to the customs office, the importer does not
have to pay the fee for customs services.
The entry into force of the Customs Valuation Regulations (Decree
No. 667-01 in the Dominican Republic has applied a valuation
system based on the WTO Agreement. Under these Regulations,
the value of imported goods is the transaction value, meaning
the price paid or payable for the goods. The transaction value is
applied on a c.i.f. basis both for imports under the MFN regime and
preferential imports and is used for over 90 per cent of imports. The
remainders are subject to review and adjustment of the declared
29
value by the customs authority for a number of different reasons.
The Dominican Republic has a system of “test values” for assessing
the value of used goods, based on estimates made by the customs
authorities taking into account various sources of information and
pursuant to Decree No. 667-01. In the case of used motor vehicles,
there is a “special value” mechanism based on an interpretation
of the World Customs Organization’s Technical Committee on
Customs Valuation, which leaves it up to each country to determine
when a vehicle should be considered used.
The customs authorities have the power to carry out post-entry
inspections in order to verify the information contained in the
customs declaration. A posteriori control of the value applies to
selected imports on the basis of a risk profile.
Pursuant to its DR-CAFTA commitments, the Dominican Republic
issues advance rulings in writing on customs valuation criteria
applicable to specific operations. It is planned to extend the binding
nature of advance rulings to all imports irrespective of their origin.
In addition to tariffs, special fees for customs services must be paid
on imports of goods. Both domestic and imported goods are subject
to the Impuesto sobre la Transferencia de Bienes Industrializados y
Servicios – ITBIS (Tax on the Transfer of Industrialized Goods and
Services) and the Impuesto Selectivo al Consumo – ISC (Selective
Consumption Tax).
The customs service fee was introduced by Law No. 226-06, which
gave the DGA autonomy, in order to support its financing. Law
No. 424-06 (amending Law No. 226-06) provides that the customs
service fees applied by the DGA must be specific, non-ad valorem,
and must not serve to protect domestic goods indirectly or
represent a levy on imports for tax purposes. Presidential Decree
No. 627-06 regulates the fees that can be levied for customs
services; these depend on the units of weight and volume and are
paid in national currency at the official exchange rate in effect at
the time the customs declaration is submitted.
In the Dominican Republic, the value added tax called the ITBIS
applies to the domestic sale and import of goods and services, with
some exceptions and it is of 16%. As regards imports, the taxable
base is the c.i.f. value of the goods plus the customs duty and other
levies payable on imports. For domestic products, the tax is applied
on the net selling price, plus auxiliary services provided by the seller
such as transport, packaging, freight or financing interest, less the
rebates and discounts given.
The Dominican Republic prohibits the import of some products in
order to protect human and animal health and to preserve plants, as
well as for environmental reasons, in accordance with its domestic
legislation or international commitments. The import prohibitions
apply equally to all its trading partners. Law No. 4-07 of January
2007 prohibits the import of used motor vehicles more than five
years old and heavy goods vehicles with a capacity exceeding 5
tons and over 15 years old. Law No. 4-07 also prohibits the import
of used electrical household appliances.
Law No. 218 of 28 May 1984 prohibits the import of waste of
human, animal or industrial origin, while Law No. 64-00 of 18
30
August 2000 on the Environment and Natural Resources bans that
of toxic waste. Law No. 458 of 3 January 1973 prohibits the import
of used clothing for reasons of public health. Law No. 50-88 of
30 May 1988 prohibits the import of narcotics. Law No. 4990 of
26 August 1958 prohibits the import of conifers for phytosanitary
reasons.
The import of some products is regulated by import licenses in
order to protect public security, the environment, flora, fauna and
public health. For products and by-products of plant or animal
origin, import licenses or “authorizations” are issued by the Ministry
of Agriculture and must be accompanied by a phytosanitary or
animal health “no-objection permit.
Exports
All export transactions, including those from free zones, require
the submission of a single export form for which the CEI-RD was
responsible in collaboration with the DGA, but since April 2011
now DGA solely manages it through the DUA. The information
to be entered on the form includes the identity of the exporter,
the consignee, the carriers and, where applicable, the customs
agent, together with a description of the goods (tariff classification,
quantity, weight and f.o.b. value in United States dollars). The form
must be accompanied by the commercial invoice, the transport
documents, a sanitary, phytosanitary and/or animal health
certificate, whichever applies, and a certificate of origin for goods
subject to preferential agreements or international conventions.
There is no compulsory registration of exporters. Nevertheless,
pursuant to Law No. 84-99 on boosting and promoting exports,
exporters wishing to benefit from the incentives afforded by this
Law must request their classification and an exporter’s registration
license from the CEI-RD.
Pursuant to the General Law on Health (No. 42-01), sanitary
registration with the Ministry of Public Health is required for
exporters of medicines, cosmetics, and personal hygiene products.
Likewise, under Decree No. 334-07 of July 2007, persons exporting
scrap metal, scrap iron and other metallic waste must be registered
with the CEI-RD if they are Dominican exporters and with the
National Council of Free Export Zones if they are companies
operating in such zones. The purpose of registration is to ensure
that these products are exported legally. Exporters seeking refund
of the ITBIS paid on raw materials and inputs incorporated in the
products they export must be registered with the DGII of the
Ministry of Finance.
In the Dominican Republic, the export of some products can be
prohibited for environmental, public health or food safety reasons.
Although exporters’ licenses have been abolished, some products
are subject to special export licenses or certificates.
In order to protect public health and the environment, the
Dominican Republic prohibits the export of some products,
including human blood and blood products (Law No. 56-1974),
amber in its natural state (Law No. 65-1967), certain types of
wood (Decrees Nos. 988, 728 and 4257), and sand, gravel and soil
suitable for cultivation (Law No. 64-00).
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Pursuant to Decree No. 377-92 of 18 December 1992, export
licenses as such were abolished. Nevertheless, the export of some
products requires a special authorization, license or certificate from
certain institutions, which in the majority of cases are issued in
order to comply with requirements in the countries of destination.
- The simplified compensation for customs levies allows exporters
to obtain a check to the nominee or a tax compensation coupon
for an amount of up to 3 per cent of the f.o.b. value of the goods
exported, although it may not exceed the value of the customs
duty paid.
The Dominican Republic has notified the WTO that the tariff and
tax concessions granted under the Free Zones Law include export
subsidies and has undertaken to eliminate these by 2015 at the
latest. In 2007, the Dominican Republic allowed companies in free
zones to export to the Dominican Republic products made by certain
industries such as textiles, clothing and footwear, and extended
some of the tax benefits given in the free zones to companies in
these industries in the territory of the Dominican Republic. Law No.
392-07 on Industrial Competitiveness and Industrial Innovation,
enacted at the end of 2007, gives tax facilities to other exporting
companies established in the Dominican Republic.
- The temporary admission for inward processing regime allows
suspension of the payment of tariffs and the ITBIS on products
imported for processing and re-export (within 18 months),
including products from free zones.
Companies operating in free zones are given customs and tax
incentives. These include total exemption from the following taxes:
tariffs and other levies on the import of raw materials, inputs and
equipment used for the establishment and operation of such
companies; VAT and Income Taxes; the tax on the incorporation of
companies; property transfer tax; municipal taxes and other special
charges. The exemptions are given for a period of 20 years in free
zones situated in border regions and for 15 years in free zones in
the rest of the country; both periods may be extended.
In addition to tax incentives, Law No. 8-90 contains provisions to
facilitate customs procedures in companies set up in free zones.
For example, it provides for a customs office to be set up in each
free zone and establishes a customs sub-directorate, as well as a
special core of customs guards, whose services are solely available
to companies in the free zones.
Subject to authorization from the National Council for Free Export
Zones (CNZFE), companies in free zones may export up to 20
per cent of their output to Dominican customs territory provided
that they pay the tariffs and taxes applicable to similar imports.
Likewise, they may sell up to 100 per cent of their output on the
domestic market if the goods and services have at least 25 per cent
national content or are not produced in the Dominican Republic,
subject to payment of the corresponding tariffs and taxes. Import
duties are calculated by the DGA and the tax assessment base does
not take into account the domestic components and value added
utilized in the production of the goods in question.
In order to eliminate the anti-export bias caused by the payment
of tariffs and other levies on inputs incorporated into products
for export, Law No. 84-99 of 6 August 1999 on boosting and
promoting exports and its implementing regulations (Decree No.
213-00 of 22 May 2000) establish three mechanisms to promote
exports by companies located outside free zones:
- The return of customs duties and levies provides for the
refund of tariffs and other levies paid on imports of raw
materials, intermediate goods, inputs, containers, labels and
packaging as long as they have been incorporated in goods
for export.
The CEI-RD administers the three mechanisms in cooperation with
the DGA.
6.4 Jamaica
Trade Policy Regime
Jamaica’s trade policy is mainly implemented within the CARICOM
framework; Jamaica is closely involved in the process of regional
trade integration with the on going implementation of the
Caribbean Single Market and Economy (CSME) and, through its
participation in CARICOM, implements a number of preferential
trade agreements with regional neighbors.
Like its Caribbean neighbors, Jamaica has pursued unilateral
preferential access to its main markets in Europe and North
America. Under the Cotonou Agreement, Caribbean countries
received unilateral preferential access to the EU for traditional
agricultural exports. Similarly, the region continued to enjoy
unilateral preferential access to the United States, and preferential
access to the Canadian market through CARIBCAN, which extends
duty-free treatment to nearly all qualifying imports from Caribbean
countries. However, Jamaica, and the Caribbean countries in
general, are now in the process of redefining relations with their
main trading partners through the recently signed Economic
Partnership Agreement (EPA) with the EU.
Mainly general regional trade policies in the context of CARICOM,
relevant aspects of the National Industrial Policy, and the 2001
New Trade Policy (NTP) have guided trade policy. The NTP sets as
its main objectives diversification of exports, facilitation of market
penetration, and reduction of the ratio of imports to exports.
The formulation and implementation of Jamaica’s foreign trade
policy remains mainly under the authority of the Ministry of Foreign
Affairs and Foreign Trade (MFAFT), which coordinates trade policy
matters and is responsible for bilateral, regional, and multilateral
trade and investment negotiations. It handles the coordination of
WTO matters, deals with CARICOM trade policy and negotiations
and with all matters related to EPA issues. The MFAFT leads the
process of collaboration with partner ministries and agencies in the
cabinet level International Relations and Trade Committee.
The Ministry of Industry, Investment and Commerce (MIIC),
established in 2007, assumed responsibility for several subject
areas assigned to the former Ministry of Industry, Technology,
Energy, and Commerce, including: import and export licensing,
31
patents, anti dumping, standards, intellectual property, free
zone development, and administration of the Fair Competition
Act. MIIC encompasses: the Bureau of Standards, the Anti
dumping and Subsidies Commission, Fair Trading Commission,
Jamaica Intellectual Property Office, Jamaica National Agency
for Accreditation, and Jamaica Promotions Corporation (formerly
Jamaica Trade and Invest).
At the regional level, Jamaica coordinates trade and economic
policy with other CARICOM countries. In order to improve
negotiating capacity, CARICOM Heads of Government established
the Caribbean Regional Negotiating Machinery (CRNM) in 1997 to
develop, coordinate and execute an overall negotiating strategy for
various external negotiations in which the region was involved. In
2009, the CRNM was incorporated into the CARICOM Secretariat
as a specialized department and renamed the Office of Trade
Negotiations (OTN). The OTN has extended responsibility for the
coordination, development, and execution of negotiating strategies
for all CARICOM external trade negotiations, including at the
multilateral level, the inter regional level with the European Union,
and bilateral agreements between CARICOM and Canada, Costa
Rica, the Dominican Republic, and others.
Virtually all of Jamaica’s trade policy is formulated and
implemented within the context of CARICOM. Jamaica is a
founding member of the Caribbean Community (CARICOM) Treaty
signed in 1973. Through its membership of CARICOM, Jamaica has
signed preferential free trade agreements with Colombia, Cuba, the
Dominican Republic, Costa Rica, and Venezuela.
Jamaica’s exports enjoy preferential access to the EU market
under the Economic Partnership Agreement between the EU and
CARIFORUM of December 2007. Jamaica enjoys preferential
access to the U.S. market under the Caribbean Basin Initiative (CBI),
the collective name for U.S. trade preferences for the Caribbean
and Central American region. The United States upgraded the
CBI through the Caribbean Basin Trade Partnership Act (CBTPA) of
2000, which provided additional preferential access. In 2009, the
United States requested, and was granted, an extension of the WTO
waiver for the Caribbean Basin Economic Recovery Act (CBERA) (as
amended) up to end December 2014. The CBTPA provides NAFTA
equivalent tariff treatment for certain items previously excluded
from duty free treatment under the CBI programmed (footwear,
canned tuna, petroleum products, watches and watch parts,
among others). To benefit, at least 35% of the product’s value
must have originated in Jamaica or another CBTPA beneficiary; or
this percentage can be reduced to at least 20%, if not less than
15% of the product originated in the United States or Puerto Rico.
Jamaica’s exports to the United States under CBI preferences grew
by 35% in 2008, to US$320 million, mainly due to the strength of
fuel grade ethanol exports. Over 90% of Jamaica’s exports to the
United States take place under the CBI.
At present, there is no specific legislation on foreign investment
in Jamaica and so the tax benefits provided through various laws
are accessible to both local and foreign firms. Tax holidays are
available for investments in free zone enterprises, certain industrial
enterprises, tourism projects, and agricultural activities, and there
are duty exemptions on many inputs for approved investment.
32
The Government encourages foreign investment as a source of
development and has no policies or regulations that reserve certain
sectors exclusively for Jamaicans. Jamaica applies the principle of
national treatment to foreign investors. It has no performance
requirements, except on companies with free zone status, which
must export at least 85% of their output. Foreign firms are allowed
to participate in government financed or subsidized R&D programs
on a national treatment basis. Jamaica’s privatization program is
open to participation by foreign investors.
Local laws do not distinguish between local and foreign investors.
Under the Jamaican Companies Act, investors are required either to
establish a local company or to register a branch office of a foreign
owned enterprise. Branches of companies incorporated abroad
must also register with the Registrar of Companies if they intend to
operate in Jamaica. The Companies Act, which entered into effect
in February 2005, allows foreign companies to hold land without
registering in Jamaica. There are no laws or regulations requiring
firms to adopt articles of incorporation or association that limit or
prohibit foreign investment, participation or control.
New investment projects in Jamaica are facilitated by the
Government’s investment promotion agency, Jamaica Promotions
Corporation (JAMPRO), which will provide an one stop facility for
processing the relevant documents and simplifying bureaucracy.
JAMPRO facilitates investment by helping firms in accessing the
necessary licenses, permits, and incentives, as well as providing after
care services to the investment projects. Investors are granted the
relevant government incentives, following due diligence reviews
and if eligibility criteria are met.
While Jamaica has not developed a national investment code, there
have been undertakings at the regional level. Jamaica supports,
in principle, the establishment of a regional investment code.
The CARICOM Secretariat has taken steps towards establishing
the CARICOM Investment Code (CIC). The purpose of the Code
is to help to facilitate the establishment of a Community wide
investment policy by creating a framework for the designation
of CARICOM as a single investment space. Specifically, the
Code seeks to establish common standards of treatment of non
CARICOM investors.
Jamaica has negotiated 17 bilateral investment treaties (BITs),
16 of which are in force, including with the United Kingdom,
Germany, Switzerland, China, Cuba, the United States, Indonesia,
and Korea. The latest BIT, with Kuwait in 2009, has not yet been
ratified. Foreign investors are generally granted national and MFN
treatment, subject to the rules of their BITs.
Jamaica has concluded 13 double taxation agreements (with
Canada, CARICOM, China, Denmark, France, Germany, Israel,
Italy, Norway, Sweden, Switzerland, the United Kingdom, and the
United States). In addition, an agreement signed with Spain in
2008 entered into force in 2009. The Government uses tax treaties
primarily to promote capital inflow and expand foreign trade. By
the treaty mechanism, it seeks to ensure as far as possible that
the tax burden in Jamaica will be no greater than in the foreign
investor’s country of residence. It also tries to ensure that tax
sparing provisions are used to recognize special tax incentives
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
granted to promote investment on the island.
Tariffs and other duties and charges remain Jamaica’s main trade
policy instrument. The Government generates a substantial share
of its central revenue from taxes and charges on imports, which are
seen as critical in the light of the country’s structural fiscal deficit.
International trade taxes have averaged between 27% and 28%
of total tax revenues during the review period with the general
consumption tax on imports and customs duties accounting for
most of the revenue. Jamaica’s tariffs are based on CARICOM’s
CET; they are relatively high, and have increased in the past few
years. The average MFN tariff was 9.4% in 2010, up from 8.6% in
2004.
Jamaica does not apply quantitative restrictions on imports, but
non automatic licenses are needed for certain imports, particularly
motor vehicles and some agricultural products. Customs valuation
procedures currently follow the WTO Agreement, except for used
motor vehicles, cycles and equipment. Valuation problems seem to
persist, mainly due to under invoicing. Jamaica has been adopting
technical regulations, which it is in the process of harmonizing with
other CARICOM members.
Jamaica applies a wide range of production and incentive schemes,
including export incentives. The majority of these schemes
include tax concessions and duty free access for imports of inputs
and capital goods. Jamaica has four programs containing export
subsidies (the Export Industry Encouragement Act (EIEA), Industrial
Incentives (Factory Construction) Act, Foreign Sales Corporation
Act, and Jamaica Export Free Zones Act). As the other countries in
this assessment, Jamaica is now expected to eliminate its export
subsidies by end 2015.
Imports
The Customs Act and Regulations govern the Jamaica Customs
Department, part of the Ministry of Finance and the Public Service.
The documents required for the importation of goods include a
supplier invoice, certificate of origin, bill of lading, airway bill and
other shipping documents, a declaration of value, and an import
license and/or permit, if necessary (certain products may also
require phytosanitary certification). When goods arrive in Jamaica,
the relevant documents are submitted to the Customs authorities.
Duties must be paid before the goods may be cleared into the
country. The importer may also be required to present a tax
compliance certificate, a Business Enterprise Number (BENO), and
a Taxpayer Registration Number (TRN).
Imports for US$3,000 f.o.b. or under may be cleared directly by
the importer using Customs entry form C78X. Imports exceeding
US$3,000 f.o.b. must be cleared using form C87; and imports for
US$5,000 f.o.b. and over should use form C87 along with a licensed
customs broker (who must be a Jamaican resident). Customs’
main goal is to maximize border protection with a range of tools
to foster voluntary compliance. Under the Selected Importation
Inspection System (SIIS), now called the Authorized Economic
Operator (AEO) system, importers without a record of customs
violations are allowed to import without inspection, but may
undergo random examination.
In 2003, Jamaica began to apply the WTO Customs Valuation
Agreement and to use the WTO definition of transaction value.
Valuation problems, however, still appear to be serious. An
Internal Review committee is in place to assess the justification
for valuation decisions. Senior officials from outside the valuation
unit are placed on the Committee to ensure transparency.
Jamaica operates a Common External Tariff (CET) along with other
trading partners of the Caribbean Community (CARICOM). Goods
imported from third countries are subject to the duties listed in
the CET but goods imported from CARICOM countries and are
certified to be of CARICOM origin do not generally attract these
import duties.
Imports from other CARICOM countries are admitted duty free
if they meet the rules of origin criteria, although the CARICOM
Treaty allows a few national exceptions (Schedule I) to this dutyfree entry. Specified imports from other countries with which
CARICOM has entered into FTAs are also admitted duty free.
Imports from other CARICOM countries of products that are on
Jamaica’s list of exceptions are subject to the CET.
All imports entering Jamaica are subject to a basic stamp duty of
J$5 on goods up to a c.i.f. value of J$5,500, and J$100 above that
level. These specific charges diminish in importance with the size
of the import transaction.
An additional stamp duty (ASD) is payable on certain items,
such as chicken and most chicken parts, meats and some meat
products, some aluminum products, alcoholic beverages, and
tobacco products. ASD rates are generally defined implicitly, as
the legislation generally lists only aggregate duties (i.e. the rate
actually applied at the border, and that is equal to the additional
stamp duty applied to the c.i.f. value of imports increased by the
customs duty). The aggregate duties (tariff plus ASD) based on
the Stamp Duty Act ranges from 65% to 260% for products that
attract additional stamp duty.
While Jamaica does not apply container fees on containers
imported or exported, or port security fees, it imposes a number
of fees that contribute to the cost for providing specific services.
A Customs User Fee (CUF), is charged at a rate of 2% on the c.i.f.
value of goods being imported, except for those exempted (e.g.
raw materials and capital goods). Customs Regulation has been
amended and a CUF of 5% is imposed on specific petroleum
products. Further, a Standard Compliance Fee (SCF) of 0.3% of
the c.i.f. value is collected on behalf of the Bureau of Standards,
on most food products, tobacco products, chemicals, some textiles
and apparel, and most industrial products. An import (C78) entry
processing fee is payable at J$600 to J$6,000. The Environmental
Levy is set at 0.5% of the c.i.f. value of all imports; these fees were
intended to be used for the management of all types of waste that
pose a threat to the environment.
With respect to these charges, which are a significant revenue
earner for Jamaica and most CARICOM countries, the EPA provides
for a standstill, together with a phase-out starting seven years after
signature with complete elimination within ten years (i.e. by 2018).
This also helps CARIFORUM protect its revenue base while the EPA
33
calls for EU for the implementation of tax reform.
In addition to these various duties and fees, Jamaica charges other
taxes that apply also on domestic production (if any). The most
prominent is the general consumption tax (GCT), which is effectively
a value-added tax. The GCT is levied on domestically produced
goods and services when the good or service is supplied; for imports
of goods, it is collected at the point of entry; and for services, it is
levied (through the self assessed system) when the provider raises
an invoice for payment. The taxable base for the GCT on imported
goods is the c.i.f. value, inclusive of the CET, ASD and SCT; the base
for imported services is the sum charged for the services.
The standard rate of GCT is 17.5%; it was raised on 1 January 2010
from 16.5%, pursuant to amendment of Section 4(1)(a) of the
GCT Act. Also, effective from the same date, commercial importers
must pay an additional five percentage points of GCT at the port
of entry, which increases the GCT rate to 22.5% for these imported
taxable goods. Exceptions include petroleum products (as outlined
in the second schedule under the GCT Act), goods that are zero
rated or exempt under the Act, and goods designated capital
goods by the Customs Act. Import prohibitions are applied for
health, security, moral or environmental considerations, or under
international conventions.
Import licensing is covered by the Trade Act (1955) and
administered by the Trade Board Limited, under the Ministry of
Industry, Investment, and Commerce. The licensing system is to
monitor imports that could have an impact on the environment,
health, and security in Jamaica and is not intended to restrict
the quantity or value of imports. Items that currently require an
import license include concentrated milk and cream, fireworks, and
certain motor vehicles and parts. The Trade Board is responsible for
granting licenses ; licenses must be obtained before importation.
Import licensing on industrial products is automatic. Enterprises
that operate in the export free zones or that benefit from single
entity free zone status are not subject to import licensing.
The Trade Board issues import licenses for items that require close
monitoring, with motor vehicle imports accounting for the bulk
of import license applications. Import license applications are
generally processed within 24 hours, subject to the payment of
receipt and processing fees, and are valid for the financial year in
which they are granted. However, the validity can be extended. For
some products, such as refined sugar and milk powder, licenses are
valid for six months.
Exports
Exporters must be registered with the Jamaica Promotions
Corporation (JAMPRO). To register, a company must submit
a copy of its certificate of incorporation or of the certificate of
business name, and the taxpayer registration number. Additional
document requirements depend on the product to be exported.
Jamaica applies no taxes, charges or levies on exports. The General
Consumption Tax rate is zero.
Goods generally prohibited for export are listed in the Customs Act
34
and refer mainly to arms, ammunition, and naval stores; and spirits
and wines. In addition, exports of shells and some live animals are
prohibited under international conventions.
Certain items are subject to export licensing, including crocodiles,
crocodile eggs, bird eggs, sugar, lignum vitae, and log wood, as well
as live animals and shells subject to the Convention of International
Trade in Endangered Species (CITES), administered by the National
Resources Conservation Authority (NRCA) in Jamaica. For other
products, licenses are required for control and monitoring and for
protection of heritage, as required by the Trade Act.
Licenses for sugar exports are granted according to availability
under the guaranteed quota allocations. An export license is still
required from the Coconut Board to export coconuts. Export
licenses are granted at no charge.
The Trade Board Limited is responsible for issuing export licenses
for specific items, the exportation of which may impact negatively
on the environmental, social and economic conditions of the
country, or in keeping with international obligations. The Trade
Board also deals with issuing certificates of origin for Jamaican
products exported under various preferential trade agreements and
with monitoring imports and exports of specified commodities, as
required by the Ministry of Industry, Investment and Commerce.
Jamaica maintains four incentive schemes that encourage exports,
contained in the following Acts: the Export Industry Encouragement
Act (EIEA); Industrial Incentives (Factory Construction) Act; Foreign
Sales Corporation Act, and the Jamaica Export Free Zones Act.
The Ministry of Industry, Investment and Commerce, which is
responsible for the administration of the four programs, notified in
writing in April 2008 that the programs will not be provided beyond
31 December 2015, as set out in the WTO General Council Decision
affecting all other export subsidies schemes in the Caribbean.
The Export Industry Encouragement Act was established as an
incentive framework to encourage investment and growth in
export manufacturing industries. Any company registered or
incorporated in Jamaica and whose products are exclusively for sale
to hard currency markets outside of CARICOM is eligible for a tax
holiday on profits earned from the manufacture of the approved
product, as well as duty-free importation of raw material and
capital goods for use in the production process. Partial exporters
(companies exporting less than 100% of output) are entitled to an
export allowance that may be deducted from taxable income with
the level of tax relief linked to exports. Tax and duty benefits are
allowed for up to ten years. This remains an important incentive
program for manufacturing companies wishing to export to third
country markets.
Under the Industrial Incentives (Factory Construction) Act, which
provides a subsidy to facilitate and encourage the construction
of factories in Jamaica, an approved builder is entitled to: duty
free importation of items or articles for factory construction; enter
into an agreement with a recognized enterprise for the lease of the
factory; relief from income tax for 15 years in respect of income
from the lease of the factory or from profits made upon its sale.
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
However there are very few beneficiaries under the program.
6.5. Suriname
The Foreign Sales Corporation Act is a legislative framework for
the operation of FSCs in Jamaica. The purpose of the subsidy
is to attract foreign investment and to promote Jamaica as an
attractive FSC location. FSCs are exempt from Jamaican Corporate
Income Tax on their foreign trade income, as long as they remain
designated, and are entitled to import into Jamaica equipment,
material, and machinery free of all import duties.
Export free zones (EFZs), one of the main instruments for export
promotion in Jamaica, are geographically delimited areas run by
a single body, offering incentives such as duty free importing and
streamlined customs procedures to enterprises which physically
located inside the zone. Jamaica has a number of active industrial
park/free trade zones: the Kingston Free Zone, the Montego Bay
Free Zone, Garmex, Portmore Informatives, and Cazoumar. All
zones, except the Cazoumar Free Zone, are government owned and
managed. The Government is presently looking for investors with
the objective of establishing a large logistical centre including a
free zone (Caymanas Economic Zone) located adjacent to Kingston
and to shipping and transshipment services provided by the Port of
Kingston. The business entities to be housed in the zone will be
drawn from key growth areas such information communications
technologies (ICT), manufacturing and agri processing, and the
creative industries. Plans also include the establishment of an
aerodrome, a research institute, business incubation centers, and
a science park to establish a platform for a knowledge driven
economy.
Trade Policy Regime
The 1982 Jamaica Export Free Zones Act provides an incentive
and regulatory framework for the operation of free zones, to
encourage investment, exports, and foreign exchange earnings and
to create employment opportunities. Before an enterprise can
take advantage of the concessions available under this Act, it has
to be registered or incorporated in Jamaica under the Companies
Act, export at least 85% of its production outside the CARICOM
area in the case of a manufacturing company, or 100% in the case
of a non manufacturing company, conduct all transactions in U.S.
currency, and be located within the free zone area.
Under the Act, investors are allowed to operate outside Jamaican
Customs, solely with foreign exchange, in activities such as
warehousing and storing, manufacturing, redistribution, processing,
refining, assembling, packaging, and service operations (e.g.,
insurance, banking, and professional services). Incentives offered
include a 100% tax holiday in perpetuity, no import licensing
requirements, and exemption from customs duties on capital
goods, raw materials, construction materials, and office equipment.
Manufacturing free zone companies are allowed to sell 15% of
production on the local market pursuant to a 1996 policy decision.
Jamaica’s comprehensive set of incentive schemes, which are
accessible to local and foreign industries, focus on selected sectors
of the economy and are the dominant feature of Jamaican industrial
policy. Most incentives are exemptions from import duties and GCT,
and various forms of tax holidays, depending on the sector. Some
non fiscal investment incentives are available in Jamaica, for example
the Development Bank of Jamaica (DBJ) provides financing for
investment projects under concessionary conditions.
Suriname’s trade policy is influenced by its participation in the
Caribbean Community (CARICOM) and the WTO. Suriname’s
limited human, technical, and financial resources, however, have
hindered such participation. These constraints have also hindered
Suriname’s active involvement in trade negotiations at the
hemispheric level.
Suriname joined CARICOM in 1995 and became a full member of
the group’s common market in 1996. Suriname’s negotiations in
the FTAA and with the European Union were as part of CARICOM.
Regarding the status of international agreements in the
Surinamese domestic legal order, the Constitution provides, firstly,
that provisions of international agreements that may be binding
on all persons by virtue of their content shall become binding after
the publication of the agreement in question; and, secondly, that
legal regulations in force in Suriname shall not be applicable if such
application is in conflict with provisions of international agreements
that bind all persons. The rule that such provisions take precedence
over inconsistent domestic legislation applies even when domestic
legislation post-dates the international agreement.
Suriname’s trade policy is formulated within the context of
its membership both of the CARICOM and the WTO, as well as
existing and planned trade arrangements with countries in Europe
and the Americas. Limited institutional capacity has traditionally
hindered Suriname designing and implementing trade policy and
conducting negotiations.
Suriname’s trade policy has undergone significant changes over the
past few years. Following the country’s independence in 1975, and
until the restoration of civilian governments in the early 1990s,
successive governments pursued inward-looking, isolationist
development policies centered on a strong belief in economic selfsufficiency. Suriname began to adopt some measures to open its
economy in the mid 1990s, particularly through the unification of
the exchange rate and the introduction of a new tariff schedule in
1994, the adoption of CARICOM’s CET and other trade regulations
following its accession to the group in 1995, and the abolition of
licensing for economic purposes in 1999.
The government states that one of its principal trade policy
objectives is to continue the liberalization of trade and transport
in order to enhance efficiency and reduce costs through increased
competition. The cornerstone of Suriname’s trade policy is the
establishment of a trade and investment climate that is transparent,
stable, and as liberal as possible while preserving the interests
of the Surinamese economy and its business sector. Another
objective is to assist the Surinamese business sector in exploring
new export markets, particularly by making more active use of the
country’s embassies. The same section observes that Suriname’s
exports, particularly bauxite, rice, and shrimp, have been affected
by declining world market prices for raw materials and that with
respect to bananas Suriname is faced with a loss of preferential
treatment in traditional export markets.
35
No single ministry or government agency in Suriname is solely
responsible for trade policy formulation. The coordinating entity is
usually the Ministry of Trade and Industry (MTI), which is also the
main body for the design of, and decision-making related to trade
policies. Traditionally, the MTI performed mainly an administrative
role in relation to the administration of trade licenses. More
recently, this role has shifted to more policy-related tasks. Apart
from managing, monitoring, and coordinating Suriname’s external
trade relations, the MTI is charged with creating an enabling
environment for exports and other functions such as dissemination
of information. The division of responsibilities within the Ministry
now focuses on thematic areas through which there is a horizontal
consideration of subjects in the different trade organizations and
negotiations in which Suriname participates.
As a member of CARICOM, Suriname is committed to a regionally
coordinated external trade policy for the group. The MTI therefore
coordinates closely with the relevant regional agencies on trade
policy matters, including the Caribbean Regional Negotiating
Machinery (RNM).
The Ministry of Foreign Affairs plays a secondary role in foreign
trade matters, although it has traditionally taken the lead in matters
related to the WTO. In contrast to the MTI, which focuses on the
economic and technical side of trade matters and is responsible for
trade and investment agreements, the Ministry of Foreign Affairs
works primarily with the political and diplomatic elements of
Suriname’s various trade agreements.
The Ministry of Agriculture, Animal Husbandry and Fisheries
(MAAHF) has been involved in various issues in the formulation
of trade policy concerning agricultural products, mostly in the
context of international negotiations. Concerning sanitary and
phytosanitary measures, the MAAHF maintains coordination with
the Ministry of Health.
For all trade issues, the MTI also coordinates with the Ministry of
Finance. The Ministry of Finance has direct involvement in trade
and investment matters through its Directorate of Taxation, which
is divided into direct and indirect taxes. The controller of Customs
is responsible for the enforcement of customs legislation, as well
as cross-border movements, the harmonized system, customs
valuation procedures, and rules of origin.
Outside CARICOM, Suriname’s involvement in international
agreements relating to foreign investment is limited. Suriname
is not a party to any bilateral investment treaty. An agreement
with Indonesia on the furthering and protection of investments
was signed in November 1995 but has not entered into force.
Suriname concluded an investment incentive agreement in 1993
with the United States and an agreement on Council of Suriname
and the United States for Trade and Investments of 8 October
1993, but these agreements have not been ratified. Suriname
maintains regular consultations with Brazil to explore the
possibility of increasing bilateral trade and investment flows and
communication infrastructure.
Suriname is a party to the Convention establishing the Multilateral
Investment Guarantee Agency (MIGA Convention) , but not to the
Convention on the Settlement of Investment Disputes between
36
States and Nationals of other States (ICSID Convention).
Suriname joined CARICOM on 4 July 1995 and became a full
member of the group’s common market in January 1996. The
Revised Treaty of Chaguaramas establishing the Caribbean
Community was ratified and enacted by Suriname into domestic
law in 2003.
Suriname has implemented CARICOM’s common external tariff
(CET). The CET applies in principle to all extra-CARICOM imports,
although Article 32 of the Treaty allows the reduction or suspension
of the CET in cases where a good is not produced in sufficient
quantity within CARICOM to meet demand. National exceptions
to the CET are also allowed.
According to Article IV of the Revised Treaty of Chaguaramas,
Suriname is classified as a more developed country (MDC)
within CARICOM. As an MDC, Suriname is not afforded special
consideration either within CARICOM or when CARICOM
negotiates trade arrangements with third parties. However, while
CARICOM negotiates trade agreements as a bloc, each State
submits a separate tariff schedule for sensitive goods, a mechanism
through which a country like Suriname may address any special
need for concessions in particular sectors. No special provisions
have been reported for Suriname in trade agreements negotiated
between CARICOM and other countries.
Suriname has taken major steps to eliminate non-tariff barriers to
trade. Until 1999, an opaque, highly discretionary, non-automatic
licensing system was in place, which applied to all imports (and
exports) and was used to ration foreign exchange and shield
domestic producers from external competition. Since then, all
imports and exports except those contained in a negative list
are free from non-tariff restrictions. An automatic registration
requirement for imports and exports not contained in the negative
list is maintained for data collection purposes. Overall, the further
streamlining of customs procedures seems feasible, and would
reduce transaction costs.
All exports are subject to two fees amounting to 0.6% of their
value, except in the case of bauxite, for which the fees are 2.1%.
Suriname maintains export taxes on raw and roughly processed
timber. Exporters of mineral-related products, including petroleum
and alumina, must surrender their foreign exchange proceeds to
the Central Bank. Given that they must do so at an exchange
rate lower than the rate used by commercial banks, the surrender
requirements can be considered the equivalent of export taxes. In
an effort to promote investment, Suriname maintains duty and
other tax exemptions for a wide variety of imports, including raw
materials, semi-manufactured goods, and packing materials used
as inputs in certain sectors, regardless of whether the goods thus
produced are exported or consumed domestically.
Imports
The Customs Regulations of 1908, last amended in 1995, govern
customs procedures in Suriname. The Ministry of Finance, through
its Directorate of Taxes, is responsible for formulating customs
policy in Suriname. The Inspectorate of Customs and Excise, also
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
attached to the Ministry of Finance, is responsible for executing
that policy.
methods, which must be used in the order prescribed by the
Customs Valuation Agreement.
The involvement of a customs agent for carrying out customs
procedures is optional in Suriname. Anyone wishing to import
goods for commercial purposes, however, must be registered
with the Chamber of Commerce and Industry of Suriname (KKF).
Registration is automatic upon request. To register, importers must
submit to the KKF two passport photos, a birth certificate, and a
declaration of Surinamese nationality, or permanent residency
permit in the case of foreign importers. Importers must also obtain
a registration number from the Inspectorate of Customs and Excise,
for which they must submit a copy of their registration with the
KKF and their tax identification number issued by the Directorate
of Taxes of the Ministry of Finance.
The Tariff Import Duties Law explicitly prohibits the use of
minimum values to determine customs value. To identify possible
cases of under-valuation, the Inspectorate of Customs and Excise
uses reference prices, determined on the basis of the prices of past
shipments of identical or similar goods.
To clear goods through customs, importers need to fill in and sign
the international trade transaction form for goods and services (IT
form) and the single administrative document (ED form). The IT
form specifies the method and total amount of payment for the
imported goods.
All imports are subject to a consent fee of 1.5%. A statistical fee
of 0.5% is levied on all imports except those of bauxite companies,
which are subject to a statistical fee of 2%. These fees are assessed
on the c.i.f. value of imports. They are applied to imports from
all sources, including other CARICOM members. Adding the tariff
to other taxes levied exclusively on imports (excluding those by
bauxite companies), the average import duty applied in Suriname
was some 13% in early 2004.
The importer must submit the remaining three copies of the IT
form to the Inspectorate of Customs and Excise, together with the
single administrative document (ED form), the commercial invoice,
bill of lading or airway bill, and the packing list. Before submitting
the ED form to the Inspectorate of Customs and Excise, importers
must have the form stamped at the Ministry of Trade and Industry
in Paramaribo.
The information that must appear on the ED form includes: name
and address of the importer, consignor and consignee; requested
customs regime; port of entry; transport document number; country
of consignment and origin; mode of transport; name, number,
and place of registration of the vehicle, vessel or aircraft used to
transport the goods; number and type of packages containing the
goods; terms of delivery of the goods; description of the goods,
including their net mass and tariff classification; f.o.b. value and
duty base; and applicable duties and taxes. The importer must also
include on the ED form the name of the local bank through which
payment for the goods was made, the method of payment, and the
number issued by the bank handling the payment.
For goods that appear on the ‘negative’ list, importers must also
submit form H-03. A certificate of origin and a CARICOM invoice
must accompany goods that enter Suriname under CARICOM’s
free-trade regime.
Decisions by customs officials can be appealed, first to the Head of
the Inspectorate of Customs and Excise and then to the Director
of Taxes. The law establishes an appellate body for the review of
customs-related disputes. Customs-related disputes can also be
brought before the national courts.
Suriname’s legislation on customs valuation is contained in the
Tariff Import Duties Law. The value used for duty purposes is the
c.i.f. value of imports, which must be based on the transaction
value. When the transaction value cannot be used as a basis for
customs valuation, the Law lays down five alternative valuation
On joining CARICOM in 1995, Suriname introduced a nomenclature
for the classification of goods based on the Harmonized
Commodity Description and Coding System (HS) 1992. Suriname’s
tariff comprises 5,291 lines at the eight-digit level. All applied rates
are ad valorem. The simple average applied MFN tariff rate as at
April 2004 was 11.1% with a coefficient of variation of 0.9.
Tariff protection for the agriculture sector, is almost twice as high
as the protection for the non-agricultural sector. The average
applied MFN tariff rates in the two sectors were 18.6% and 9.5%,
respectively.
Suriname’s tariff schedule is based on CARICOM’s common
external tariff (CET). Based on the Law on Turnover Tax 1997,
Suriname applies a turnover tax to most domestically produced
and imported goods and services. The basic rate of the tax is 10%
for goods and 8% for services. A rate of 0% applies to some 50
products listed in Annex II of the Law. A rate of 25% applies to
some “luxury” goods.
The turnover tax is levied once in the production-distribution chain,
at the point of sale by the manufacturer. According to Article 14
of the Law on Turnover Tax, the turnover tax applied to imports
is assessed on the basis of the c.i.f. customs value plus all other
applicable duties and charges including customs duties.
Suriname also applies excise taxes on spirits, beer, non-alcoholic
beverages, and cigarettes and tobacco. The applied rates are: 45%
on spirits, 30% on beer, 10% on non-alcoholic beverages, and 100%
on cigarettes and tobacco. The excise tax on imports is applied on
the c.i.f. customs value plus all other duties except turnover tax.
In September 1999, Suriname introduced a new system of trade
controls under which all products could be freely imported unless
otherwise specified in a negative list. The Law on the Movement of
Goods, which entered into force in October 2003, incorporates this
approach by declaring imports of goods into Suriname free of nontariff restrictions except to protect “public order, public morality,
state security, public safety, international law and order, the health
and life of persons, animals or plants, the environment, national
artistic possessions and industrial and commercial property”.
37
Licensing and certification requirements are applied regardless
of the origin of the goods. Licenses are issued by the Ministry of
Trade and Industry, sometimes on the advice of the Ministries of
Health, Natural Resources, or Agriculture, Animal Husbandry and
Fisheries. Depending on the product, certificates are issued either
by a national government agency other than the Ministry of Trade
and Industry or by the country in which the product originated.
Importers are eligible for a license as long as they fulfill the relevant
requirements. Applications for licenses must be submitted to the
Import, Export, and Foreign Exchange Control Department of the
Ministry of Trade and Industry, which must process the license
within 15 days. Licenses are valid for three months and are not
transferable.
A license may be issued with conditions attached. Whenever a
license is denied, the Permanent Secretary of the Ministry of Trade
and Industry must notify the applicant of the reasons for the denial.
The applicant may lodge a written objection with the Permanent
Secretary. If the applicant is not satisfied with the response of
the Permanent Secretary, the applicant may lodge an appeal with
the Minister, whose decision can be appealed before the President.
The Minister and President each have one month to reach their
decisions.
A license may be revoked if the data provided in the application are
found to be incorrect or incomplete. A license may also be revoked if
the Permanent Secretary of the Ministry of Trade and Industry finds
that there is “serious cause thereto”. The legislation to implement
the latter provision has yet to be adopted. Revocations must be
notified in writing to the applicant and must be substantiated.
Imports (and exports) that are not subject to licensing or certification
must be registered with the Ministry of Trade and Industry. This is
done by obtaining a stamp on the customs documentation from the
Ministry of Trade and Industry in Paramaribo. This is an automatic
registration requirement maintained for data collection purposes.
According to private sector representatives, this requirement
results in significant delays.
Exports
Anyone who exports goods from Suriname for commercial purposes
must be registered with the Chamber of Commerce and Industry
(KKF) and the Inspectorate of Customs and Excise. In both cases,
exporters need to fulfill the same requirements as importers. The
involvement of a customs broker to carry out customs procedures
is optional.
The following documents are required to export goods from
Suriname: international trade transaction form for goods and
services (IT form), single administrative document (ED form),
commercial invoice, bill of lading or airway bill, and packing list.
Exporters must also obtain licenses or certificates of origin for
certain goods. The KKF is responsible for issuing certificates of
origin for exports to CARICOM; the Inspectorate for Customs and
Excise is responsible for issuing all other certificates of origin.
Before exports can be cleared through customs, exporters need to
38
have their ED form stamped at the Ministry of Trade and Industry in
Paramaribo. Exporters must present the IT Form and the invoice to
the local commercial bank that handles the payment for the goods
exported. The bank records a transaction number on the IT form
and sends one copy to the Central Bank. All export documents are
then presented to and processed by the Inspectorate of Customs
and Excise. The Inspectorate of Customs and Excise sends a copy of
the processed IT form to the Central Bank. All exports are subject
to physical inspection.
All exports are subject to a consent fee of 0.1%. A statistical fee
of 0.5% applies to exports of all products except bauxite, which
is subject to a statistical fee of 2%. These fees are assessed on
the f.o.b. value of exports and are applied regardless of their
destination. Suriname applies additional taxes on exports of raw
and roughly processed timber. Rates are expressed as ad valorem
rates of minimum f.o.b. values determined by the Government.
In the mining sector the export surrender requirement is applied
differently to the state-owned oil company and to the bauxite
companies. The state oil company must sell all its export earnings
to the Central Bank at the official exchange rate while the bauxite
companies must surrender the amount of foreign exchange needed
to meet their expenses for local supplies and wages.
Export licenses are required irrespective of destination. Exporters
are eligible for an export license as long as they fulfill the relevant
requirements. The Import, Export, and Foreign Exchange Control
Department of the Ministry of Trade and Industry is responsible for
processing applications for and issuing export licenses. On average,
licenses are processed within one day; they are valid for three
months and cannot be transferred. A license may be issued with
conditions attached. The remedies available to applicants denied
export licenses are the same as for importers. Export certificates
are issued for products for which the importing country requires a
certificate.
Companies that invest at least US$100,000 in capital goods can
benefit from a deduction from taxable profit of a fictitious interest
if the investment is financed by liquid funds owned by the investor.
The rate of the deduction is 10% for companies that export at least
80% of their output or 6% for companies that do not meet the
export requirement. Under Chapter IV of the Tariff Import Duties
Law 1996, the Minister of Finance is authorized to exempt a wide
range of imports from customs duties.
Schemes to promote exports or to provide finance, insurance or
guarantees appear to be limited in number and in magnitude. As
part of its trade promotion activities, the Suriname Chamber of
Commerce and Industry conducts promotion activities outside
Suriname; it also publishes a directory of exporters and importers,
and maintains a library. Suriname’s business associations are
increasingly involved in export promotion activities, in particular
through the dissemination of information to their members.
The Suriname Trade Promotion Organization (STPO) was
established in 1996 with funding from the Caribbean Export
Development Agency and the European Union to provide general
information, technical assistance, and marketing support to
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Surinamese exporting firms. The STPO is no longer operational due
to lack of funding.
6.6. Trinidad and Tobago
Trade Policy Regime
Suriname enjoys preferential access to the EU market under the
EPA agreement that CARIFORUM has with the European Union.
Suriname is a beneficiary of the Generalized System of Preference
schemes of Belarus, Bulgaria, Canada, Czech Republic, European
Union, Hungary, Japan, New Zealand, Norway, Russia, Switzerland,
and the United States.
The Investment Law 2001 authorizes the Minister of Finance to
grant fiscal and non-fiscal incentives for new investments and for
the expansion of existing investments. Investments in the following
activities are eligible for incentives: agriculture, cattle breeding,
fishery, aquaculture, mining, forestry, tourism (except casinos),
industry, trade, construction, services, and transport. Investments
in excess of US$50 million in the exploration and exploitation of
bauxite, hydrocarbons, gold, and radioactive minerals may benefit
from additional incentives.
Chapter IV of the Tariff Import Duties Law 1996 grants the Minister
of Finance broad authority to exempt any import from customs
duties. Specifically, the Law identifies a wide range of situations
in which the Minister of Finance is authorized to grant import
duty exemptions, including with respect to the importation of:
raw materials used in production in Suriname; goods that will be
exported from Suriname following repair, assembly, adaptation or
transformation; goods exported from Suriname and assembled,
repaired or adapted abroad; packing materials re-imported after
having been used for the export of goods from Suriname or
imported for use in the export of goods from Suriname; containers
and means of transport used in the export of goods from Suriname;
goods used in public works financed with funds from foreign
governments; goods exported from Suriname that have not
undergone any adaptation abroad; goods that are imported for
re-export without processing or adaptation in Suriname.
In the majority of cases, the Tariff Import Duties Law stipulates that
duty exemptions may be granted in accordance with the rules and
subject to conditions and limitations to be defined. Suriname has
adopted two instruments that make most of the duty exemptions
under the Tariff Import Duties Law operationally effective: the Raw
Materials Decision and S.B. 1998 No. 60.
The Raw Materials Decision provides for full exemption from
import duties on raw materials, semi-manufactured goods,
and packing materials used by enterprises in certain sectors of
economic activity, including industry, agriculture, horticulture,
fishery, foodstuffs, and soft drinks. This exemption is available
regardless of whether the finished goods produced in Suriname
are exported or domestically consumed. Goods exempted from
import duty pursuant to the Tariff Import Duties Law 1996 are
also exempt from indirect taxes.
Trinidad and Tobago is a leading member of CARICOM. It
implements the Revised Treaty of Chaguaramas, which covers
trade policy, services, consumer protection, competition policy,
transport policy, and agricultural policy, and forms the legal basis
for the establishment of the CARICOM Single Market and Economy
(CSME).
Through its participation in CARICOM, Trinidad and Tobago
has concluded preferential trade agreements with Venezuela,
Colombia, the Dominican Republic, Cuba, and Costa Rica. Trinidad
and Tobago’s exports also benefit from preferential market access
under non-reciprocal preferential trade arrangements offered by a
number of developed countries, such as the Generalized System
of Preferences, the Caribbean Basin Initiative, the Economic
Partnership Agreement between CARIFORUM and the European
Union and CARIBCAN.
Trinidad and Tobago’s investment regime is generally open to
foreign investors. CARICOM citizens and companies are guaranteed
the same treatment as domestic investors; in addition, Trinidad and
Tobago has signed a series of bilateral investment treaties offering
national treatment to foreign investors. Also, approval is required
for the acquisition by foreigners of commercial and residential land
over a certain limit, and foreign investors wishing to own more
than 30% of the share capital of a local public company must
obtain a license.
The overall trade policy objective is to position Trinidad and Tobago
as a manufacturing base and the commercial, trans-shipment, and
financial hub of the Western Hemisphere. To achieve their overall
trade policy objective, there is emphasis on expanding Trinidad
and Tobago’s trade frontiers, ensuring a supportive tax regime for
the re-tooling of industry, lowering the cost of doing business in
Trinidad and Tobago, promoting investment in human capital, and
improving overall economic efficiency.
Trinidad and Tobago’s trade policy is based on diversifying the
economy by facilitating the expansion of the non-oil manufacturing
sectors through the provision of enabling policy legislation and the
negotiation of trade agreements with third countries.
Trade policy is formulated in the context of Trinidad and Tobago’s
participation in the Caribbean Community and Common Market
(CARICOM),
The Government’s main development goal is for Trinidad and Tobago
to attain developed-country status by 2020; to this end, it launched
the Vision 2020 Planning Exercise in 2002. The strategic focus of
the Exercise is on promoting a high level of human development
and standard of living. Underpinning the thrust towards Vision
2020 is the intention to leverage the revenues derived from the
energy sector and other sectors to create conditions for long-term
sustainable growth and development. A Vision 2020 Planning
Committee was established to direct the planning exercise and
prepare a National Strategic Development Plan.
39
The Ministry of Trade and Industry has overall responsibility
for trade policy formulation and implementation. Its goal is to
develop policies and strategies to promote trade and investment
and to facilitate industrial development. Some of the Ministry’s
specific trade objectives include the negotiation and management
of Trinidad and Tobago’s participation in trade and economic
arrangements, fostering commercial relations with trading partners,
and enhancing export competitiveness. The Ministry of Trade and
Industry has responsibility for WTO matters.
The Standing Advisory Committee on Trade and Related Matters,
headed by the private sector, advises the Minister of Trade and
Industry on trade policy formulation. The Technical Coordinating
Committee, headed by the Permanent Secretary of the Ministry of
Trade and Industry, and comprising representatives from the public
and private sectors and civil society, advises the Minister of Trade
and Industry on trade policy issues taking the national perspective
into account.
The Trade Promotion and Development Department of the Ministry
of Trade and Industry has the task of coordinating Trinidad and
Tobago’s position in regional and international trade agreements
and negotiations. The Industrial Development and Inward
Investment Unit of the Ministry is responsible for formulating,
monitoring, and evaluating policies and for implementing
recommendations and plans relating to industrial development
and investment promotion.
The Ministry of Trade and Industry works closely with other
institutions such as the Tourism and Industrial Development
Company (TIDCO), established in May 1995 as the national
promotional agency for investment and tourism. TIDCO is a
conduit for the implementation of trade policy and provides
feedback in the formulation of trade policy.
The Ministry of Finance is ultimately responsible for tariff and
customs administration, as well as for other taxation and fiscal
incentives issues. The Customs Administration is responsible for
policy implementation at the border and works closely with the
Ministry of Trade and Industry. The Ministry of Agriculture, Land
and Marine Resources is responsible for agricultural policy and for
issuing sanitary and phytosanitary permits. The Ministry of Energy
and Energy Industries (MEEI) is responsible for administration,
regulation, and policy formulation relating to the hydrocarbons
sector. The MEEI is responsible for granting concessions, licenses,
and contracts for the conduct of petroleum operations. The
Ministry of Foreign Affairs provides input for the political dimension
of trade agreements.
An important element of Trinidad and Tobago’s trade and
development policy is to encourage domestic investment and
attract foreign investment. The Government’s policy of attracting
foreign investment has resulted in a number of large investments
in the hydrocarbons sector and related industries.
Foreign Investment Act, 1990, governs the foreign investment
regime. Following an amendment to the Foreign Investment Act
in early 2005, foreign investors are understood to be those other
than from CARICOM origin. The only activities legally closed to
foreign investment are water production and distribution, and
40
postal services, although the latter are currently being operated
under concession by a foreign firm.
Restrictions to foreign investment are in place in a few cases
and national treatment is not automatically extended to foreign
investors. Under the Foreign Investment Act, approval is required
for the acquisition by foreign investors of commercial and
residential land over a certain limit (five acres for business and one
acre for residential purposes). Also, although a foreign investor is
permitted to own 100% of the share capital in a private company,
the investor must notify the Minister of Finance prior to making
the investment; foreign investors who wish to own more than 30%
of the share capital of a local public company must obtain a license.
Under the Companies Act, a foreign investor may purchase shares
in a local corporation, incorporate or set up a branch office in
Trinidad and Tobago, or form a joint venture or partnership with a
local entity, subject to the provisions and limitations of the Foreign
Investment Act. Branches or foreign companies that establish a
place of business in Trinidad and Tobago are required to register
within 14 days of their establishment.
There are no legal performance requirements for investors but,
through negotiated incentives, the Government encourages
projects that generate employment and foreign exchange, provide
training and/or technology transfer, increase exports, and have
local content
In some cases, incentives are made available only if the company is
locally owned: this is the case for approved property development
companies in the construction sector, which are granted an
allowance against their taxable income of 15% of construction
costs, and of approved small companies, which may benefit from
a reduction in their income tax rate, from 30% to 15%. There are
no restrictions on repatriation of capital, profits, dividends, interest,
distributions or gains on investment.
Trinidad and Tobago is a signatory to the ICSID Convention and
the Multilateral Investment Guarantee Agency (MIGA). Trinidad
and Tobago has entered into Bilateral Investment Treaties (BITS)
with Canada, China, Cuba, France, South Korea, Spain, the United
Kingdom, and the United States. All these agreements have been
ratified by Trinidad and Tobago. These BITs generally provide for
national treatment, and contain dispute settlement procedures.
They have also concluded negotiations with Germany and Mexico,
but these have not been ratified. The BIT with the United States
explicitly prohibits mandatory performance requirements as a
condition for investment.
Trinidad and Tobago is one of the 15 member States of the
Caribbean Community and Common Market (CARICOM). Trinidad
and Tobago has the largest economy within CARICOM, accounting
for about 30% of its GDP and over 50% of exports. Trinidad
and Tobago is one of the five more developed countries (MDCs),
together with Barbados, Guyana, Jamaica, and Suriname; all other
member states are “less developed countries” (LDCs).
Trinidad and Tobago’s products are eligible for the GSP schemes
of Australia, Canada, the European Union, Japan, New Zealand,
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Russia, Switzerland, and the United States. Trinidad and Tobago is
one of the 43 countries that has ratified the Global System of Trade
Preferences (GSTP); however, it did not participate in the exchange
of tariff concessions in the second round of negotiations. Trinidad
and Tobago does not grant any preferences under the GSTP, nor
has it received any in recent years.
Trinidad and Tobago has bound its whole tariff schedule in the WTO.
This increases the predictability of the trade regime, although the
gap between applied and bound rates is wide. The bound rate
for almost all agricultural goods is 100%, while most industrial
products have been bound at 50%, with certain exceptions bound
at 70%.
A limited number of products require export licenses, including
goods benefiting from domestic support measures. A tax credit
granted to export firms was eliminated in 2000. However, other
forms of support remain for extra-CARICOM exports, including
assistance to enter new markets and for industries producing
exclusively for export to countries outside the CARICOM region.
A free-trade zone regime is in place to attract export-oriented
investment. Trinidad and Tobago applies a range of incentives to
promote investment, including duty concessions, tax exemptions
and holidays, loss write-offs, and training support. In certain cases,
the length of tax holidays depends on the degree of local value
added. Sector-specific investment incentives are also available.
Trinidad has two important ports: Port of Spain and Point Lisas.
Facilities at Port of Spain have been upgraded in the last years but
the country position as a distribution center for other island states
still creates logistics congestions. The country wants to become a
shipping services center, and financial hub in the Americas. Trinidad
and Tobago seeks both to capitalize on its location to act as a
regional transshipment and trading center and to transform it into
an international financial services centre.
The main legislation affecting trade is encompassed in the Customs
Act. Merchandise trade is also regulated via the Imports and Exports
Control Regulations. There are also numerous provisions in a
variety of laws that relate to trade matters. These laws include the
Miscellaneous Taxes Act, which is the underlying legislation for the
imposition of surcharges, or the Animal (Diseases and Importation)
Act incorporating regulations governing the import of animal
products. Much of the legislation affecting trade in both goods
and services is under review including the Foreign Investment Act
of 1990 and the Fiscal Incentives Act of 1985. Other pieces of
legislation have also been revamped to conform to international
obligations, such as the Standards Act 18 of 1997, or the legislation
for antidumping and intellectual property.
The government has progressed in the direction of trade
liberalization to foster development of the non-oil manufacturing
sector driven by export-led growth. The authorities have identified
many areas where improvements are still needed:
. The streamlining of bureaucratic procedures;
. The removal of temporary import surcharges on agricultural
products;
. A competition policy to regulate restrictive business practices in
the domestic market;
. The development of international standards on imported goods;
. The adoption of international environmental standards.
Regulatory measures include the establishment of a petrochemical
licence and the creation of a more transparent gas pricing structure,
critical to petrochemical production and the industries consuming
large quantities of fuel. Trinidad and Tobago grants at least MFN
treatment to all its trading partners.
Policy makers aim to upgrade investment incentives, provide a
neutral package of investment incentives across business sectors,
remove disincentives to investment and attract investment for
export-oriented production targeted towards markets with which
it has negotiated free-trade agreements.
While no sectors are closed to foreign investment, approval
is required for the acquisition of commercial and residential
land over a certain minimum as well as for request for licenses.
For certain activities both nationals and non-nationals require
licenses. Approvals are granted by the Ministry of Energy for
drilling or mining activities, by the Ministry of Trade and Industry
for certain commercial activities, and by the Central Bank for the
establishment of a bank or other commercial institutions.
Imports
The main customs regulations are contained in the Customs Act,
Chapter 78:01. The documents required for imports customs
clearance are: a bill of lading, airway bill, or carrier’s certificate;
a commercial invoice; an import declaration (C82), in which
the importer must specify whether the consignment is free or
dutiable; a certificate of origin if any preference is being claimed;
and a license, permit or sanitary or phytosanitary certificate, when
required. These documents are filed along with an import entry
form, in which the importer indicates the tariff classification and
pays any estimated duty and processing fee. A surety bond may
also be required containing various conditions, including provision
for payment of any increased duty that may later be found to
be due. The purpose of this bond is to speed up procedures for
perishable goods. When all the information required has been
obtained and processed, a final determination of duty is made;
this is known as the liquidation of the entry. At this time, duties
paid in excess are returned and any underpayment of duties billed.
Importers must operate through licensed customs brokers in the
case of commercial transactions.
All imports from other CARICOM members enter Trinidad and
Tobago duty free if they meet rules of origin criteria. Trinidad and
Tobago has signed agreements to grant tariff preferences to groups
of products from Colombia, Costa Rica, Cuba, and the Dominican
Republic.
A number of products included on a negative list are subject to
automatic or non-automatic import licensing requirements, mainly
for sanitary, health or safety reasons. Non-automatic licensing is
applied to some MFN imports, while automatic licensing applies
to imports from CARICOM countries. Standards may be declared
voluntary or compulsory (technical regulations), at the discretion
41
of the Trinidad and Tobago Bureau of Standards, following
recommendations by technical committees. Compliance with
technical regulations is monitored only for some products because
of resource constraints.
Not all imported goods are inspected; the authorities determine
in which cases inspections will be conducted. Goods are selected
for inspection depending on the importer, type and value of goods,
origin of the goods, and whether any other Government agency
needs to inspect them. Goods originating in Trinidad and Tobago’s
traditional trading partners are subject to less scrutiny than goods
from “new” trading partners. Similarly, goods subject to lower rates
of duty are subject to less scrutiny than goods subject to high rates.
Roughly two thirds of all merchandise is inspected at the port
of entry. In simple cases, involving small shipments or certain
classes of goods, such as bulk shipments, examination of the
goods may take place in situ, after which the goods are released
to the importer. For other shipments, representative packages
of the merchandise may be retained by Customs for appraisal
or classification purposes and the remainder of the shipment
released. If deemed necessary, a customs laboratory to determine
proper classification and appraisal may analyze goods. Duties and
processing fees are not paid on warehoused merchandise until the
goods are withdrawn for consumption. Storage fees are paid to the
warehouse proprietor by the importer.
Importers may appeal a customs decision within 90 days after
the date of liquidation or other decision. They may protest the
decision and secure administrative review on site, further appeal to
the Comptroller of Customs and Excise and, failing agreement, may
have recourse to the Tax Appeal Board. Importers may also initiate
judicial reviews, through the High Court.
CARICOM rules of origin are based on the Harmonized System
of tariff classification and are spelled out in Article 14 of the
Treaty establishing the CARICOM. Goods are granted Common
Market origin if they have been: (a) wholly produced within
CARICOM; or (b) produced within CARICOM wholly or partly from
materials imported from third countries, provided a substantial
transformation has taken place within CARICOM.
The current legislation dealing with customs valuation is contained
in paragraph 23 of the Customs Act, Chapter 78:01, as well as in Act
No. 34 of 1996, which follows the WTO Agreement on Customs
Valuation (CVA), and Act No. 6 of 1991. The Valuations Branch in
the Department of Customs and Excise of the Ministry of Finance
checks the values of certain sensitive imports; roughly half of all
cargo is examined for valuation purposes. According to Act 6 of
1993, the Comptroller may, within one year of entry, adjust the
value accepted by an officer at the date of entry if it has been
found to be incorrect. Complaints regarding valuation may be
addressed to the Tax Appeal Board.
The Valuations Branch in the Department of Customs and Excise
of the Ministry of Finance checks the values of certain sensitive
imports; roughly half of all cargo is examined for valuation purposes.
The determination of the customs value in Trinidad and Tobago
42
follows the methods and orders defined in the CVA. Trinidad
and Tobago does not use minimum prices for customs valuation
purposes. However, in case of doubt, suspected fraudulent invoices,
and of failure to present invoices, reference price lists or guidelines
may be used to verify values.
Tariff rates are established and may be changed by the Cabinet,
taking into account Trinidad and Tobago’s international agreements,
particularly CARICOM. Proposals for changes in the tariff structure
may come from the private sector or from ministries, but in
practice, proposals for tariff changes occur at CARICOM level.
Trinidad and Tobago applies import surcharges on a limited number
of agricultural products, mainly poultry and sugar, at rates of 40%
and 86% (poultry) and 60% and 75% (sugar). The system of
import surcharges was introduced in 1990 under the Miscellaneous
Taxes Act to provide protection, on a temporary basis, for locally
produced goods in the period of transition to complete tariffication
of the trade regime, but remained in place after the process was
completed. The rates are applied in addition to any tariff.
Trinidad and Tobago has applied the CARICOM Common External
Tariff (CET) since 1 January 1991. The tariff schedule is based
on the Harmonized Commodity Description and Coding System
of 2002 and incorporates Phase IV of the CET’s calendar of
reductions, including the national exceptions to the CET. CET rates
for industrial products range between 0 and 20%, while rates for
agricultural goods range between 0 and 40%.
Trinidad and Tobago has bound all of its tariffs in the WTO, through
Uruguay Round and pre-Uruguay Round commitments. All
bindings are ad valorem. The average bound tariff is 57.2%; the
average bound rates are 89.9% for agricultural products and 50.8%
for non-agricultural products.
Several incentive schemes, general or sector-specific, provide for
duty relief, mainly to imports of inputs, capitals goods, machinery
and equipment. Tariff concessions are mainly used in exportoriented industries or as investment incentives under legislation
including Section 56 of the Customs Act, the Free Zones Act of
1988, the Tourism Development Act, and the Fiscal Incentives Act
of 1979.
Under section 56 of the Customs Act, import duty concessions may
be granted through a Resolution, by the House of Representatives,
for a specified period, to approved enterprises for approved projects.
The concessions may apply to any class of goods as specified in the
Resolution for use by any specified person for any specified purpose
during a period fixed by the Minister, but not later than the date
prescribed in the Resolution as the last day on which the exemption
is operative. Currently, however, the concessions apply only to
equipment, material and supplies imported for use in offshore
petroleum exploration and petroleum operations, and to goods
included in the List of Conditional Duty Exemptions to the CET.
Concessions under section 56 for equipment, material and
supplies imported for use in offshore petroleum exploration and
petroleum operations were initially introduced by Resolution of 13
March 1970, and have been extended thereafter through various
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Resolutions.
Section 56 of the Customs Act is the legal basis for the application
of the List of Conditional Duty Exemptions to the CET in Trinidad
and Tobago, which includes goods that may be admitted at a rate
lower than that set in the CET, when imported for the purposes
stated in the List. In the case of Trinidad and Tobago, this applies
mostly to non-competing inputs and capital goods, which are
subject to a CET rate of 5% but are actually imported duty free
or at 2.5%.
Goods included in the List of Items Ineligible for Duty Exemption
to the CET may not be exempted (in whole or in part) from duty
where they are imported for use in industry, agriculture, fisheries,
forestry, and mining. The List includes items produced in CARICOM
countries in quantities considered adequate to justify the application
of tariff protection (safeguard clause), and includes a wide range of
products, mostly agricultural goods, textiles and clothing products,
footwear, toiletries, and some electrical appliances. These items
may only be eligible for exemption from duty if they are imported
“for other approved purposes” according to Section XI of the List of
Conditional Duty Exemptions, and provided they have been made
available as gifts or on a concessionary basis.
Other duties and taxes applied on imports include the valueadded tax, for imports from all sources, and a common market rate
of duty for certain imports from CARICOM countries only, as a
replacement for the tariff.
The VAT is applied on most goods and services at a rate of 15%, as
per the VAT Act, No. 37 of 1989, as amended. The VAT on imports
is levied on the c.i.f. value plus import duties and taxes. A number
of products and services are zero-rated or exempt from the VAT.
Zero-rated goods include: consumer staples like rice, flour, pasta,
bread, margarine, milk and milk products, and toilet paper, as
well as any unprocessed food for human or animal consumption;
natural gas, crude oil, agricultural chemicals and equipment;
medicines; airplanes and ships supplied to the State; books; and
steel-band instruments. Sugar, coffee, cocoa, and orange juice were
declared zero-rated by the Value-Added Tax Order, 2004. Services
including educational, medical, private transport, real estate, hotel
accommodation for more than thirty days, and most financial
services are exempt from the VAT, although financial services are
subject to a transaction tax of 15%.
A common market rate of duty is levied on certain imports
from CARICOM countries and the local production of alcoholic
beverages, tobacco, and petroleum products. The products subject
to the common market rate of duty are the same as those subject
to excise tax. The common market rate of duty and excise duties
are an alternative source of revenue to the tariffs applied on the
MFN imports of these products. The common market rate of duty
and excise duties on beer and wine are set lower than the MFN
tariff on these goods. However, excise duties on beverages of
higher alcohol content may be higher than MFN tariffs, depending
on alcohol volume. In the case of tobacco and petroleum products
the comparison is more difficult because the tariff is ad valorem,
while excise duties and duties applied on CARICOM imports are
specific.
The Customs Act allows the President to impose any absolute or
conditional import prohibition by Executive Order. However, the
President has not imposed any such prohibition during the period
under review. Specific import prohibitions, which are listed in
Section 45 of the Customs Act, include: trademarked goods unless
accompanied by a definite indication of the country in which the
goods were made or produced; goods prohibited under the Animal
Diseases and Importation Act; counterfeit coins and stamps; arms
and ammunition; toy guns resembling firearms; indecent or obscene
articles or matter; coin-operated mechanical games; camouflage
material; rat poison containing arsenic; saccharin, except to
licensed pharmacists and members of the Medical Board; brandy
and rum not meeting alcoholic volume or packaging specifications;
spirits and wines in general not meeting packaging specifications;
extracts, essences and other concentrations of tobacco, except
under certain conditions; tobacco products in general, not meeting
certain packaging conditions; unrefined sugar not manufactured
in Trinidad and Tobago, except with permission from the President;
and left-hand drive vehicles, except those destined for specific
uses. The reasons for these prohibitions include moral issues (e.g.
obscene prints), security (e.g. arms and ammunition), prevention
of diseases (e.g. importation of animals) and curbing smuggling
(importation of alcoholic beverages and tobacco products). They
also note that some of these prohibitions were proclaimed as
early as 1931 and that the time seems opportune to revise each
prohibition and maintain on the list those products relevant to
current trading trends.
Trinidad and Tobago maintains a Negative List including goods
subject to licensing requirements. The licensing system is a statutory
requirement, published as Legal Notice No. 69 of 1999: Notice to
Importers No. 1 of 1999, which amended Legal Notice No. 103:
Notice to Importers No. 1 of 1997 and Legal Notice No. 180: Notice
to Importers No. 1 of 1998. The import licensing system is regulated
by the Imports and Exports Control Regulations 1941, which is
scheduled as part of the Trade Ordinance No. 19 of 1958.
Licenses can be automatic and non-automatic. The licensing
system is applied on an MFN basis with the exception of oils
and fats. Import licensing is used for statistical purposes. Nonautomatic licensing is used to administer import restrictions
maintained pursuant to bilateral/regional trade agreements,
environmental concerns, national security, health concerns, and
under the Montreal Protocol.
The Licensing Unit of the Ministry of Trade and Industry is
responsible for administering the Import and Export Negative
Lists. The Import and Export Section of the Licensing Unit is
responsible for conducting investigations, submitting reports, and
issuing import and export licenses in respect of goods subject to
import/export control. The Examination Section has responsibility
for the examination of all customs documents for Negative Lists
requirements. Although applications for import licenses must be
addressed to the Ministry of Trade and Industry, depending on the
area, they must be passed on to other administrative bodies for
recommendations.
Application for a license must be made at least one week in
advance of importation. The law stipulates that licenses must be
43
obtained before goods arrive in the country and applicants are
encouraged to comply. However, where goods arrive without a
license, the importer may apply for one upon arrival. A license may
be granted immediately on request in instances where goods arrive
without the prior knowledge of the applicant. Applications must
contain information with respect to the importer, the supplier, the
country of origin/shipment, the end use of the items imported, and
a detailed description of the items and their cost. There have been
no import license fees since July 2000.
License applications may be made at any time of year; a license
is valid to the end of the year in which it was issued, unless
otherwise stated. The validity can be extended if the applicant so
requests, however extension is not automatic. There is no penalty
for the non-utilization of a license or a portion of it. Licenses are
not transferable between importers. Conditions are attached
to licenses authorizing the importation of used right-hand drive
motor vehicles. Importers must enter into a standardized sales
contract with the buyer and provide for a standardized warranty
and an undertaking to source and supply the required replacement
parts within the warranty period. Also, vehicles must be structurally
and mechanically sound and not more than four years old at the
time of importation; they must be accompanied by a Certificate of
Cancellation of Registration from the country of origin, providing
the exact age and mileage of the vehicle, and the engine and chassis
numbers; they must not be fitted with a diesel engine and must use
ozone-friendly refrigerants in their air conditioning system.
A second licensing system, the Minister’s license or Duty Relief
System, is applied for duty-free imports of raw material inputs and
intermediate goods for use by approved manufacturing industries
benefiting from concessions under the Fiscal Incentive Act Chapter
85:01, or under Section 56 of the Customs Act. Licenses are granted
for one year, per shipment, or for a certain amount of imports, and
must be presented to customs upon importation for the goods to
be granted duty-free entry.
and that there is no other understanding between the exporter and
the importer about the purchase price. Approval time is between
two and three weeks, and a fee of TT$30 is payable. Exports of
some goods also require an export license.
Exports to countries or areas where preferences are granted require
additional documents. For exports to CARICOM countries a
certificate of origin is required, as well as a CARICOM-area invoice.
To benefit from the provisions of the Fiscal Incentives Act, exports of
manufactures require approval from the Certification Division of the
Tourism and Industrial Development Company of Trinidad and Tobago.
Exports to the United States or other countries of locally produced
goods benefiting from the Generalized System of Preferences
(GSP) require a CARICOM invoice and a GSP Form. Exports to the
European Union of goods produced locally require a EUR I Form
(certificate of origin). Preferential exports to Venezuela, Colombia,
Canada, and the Dominican Republic require an attestation from
TIDCO’s Certification Department verifying that the goods are
manufactured locally, as well as a CARICOM area invoice, and a
certificate of origin.
Trinidad and Tobago levies no export taxes on goods. A number
of products require export licenses from the Ministry of Trade
and Industry. These products are included in the Export Negative
List. Although applications for an export license must be sent to
the Ministry of Trade and Industry, a prior recommendation is
also required from the organization responsible for safeguarding
and monitoring the supply of the goods subject to licensing.
Export licenses are granted within two working days of lodging an
application. They are not automatic.
The Finance Act No. 3 of 1994 Section 25(d) makes provision for a
deduction of 150% of promotional expenses wholly or exclusively
incurred for creating or promoting expansion into foreign markets
(non-CARICOM) of exports of building industry services, goods and
agricultural produce shipped in commercial quantities. The Fiscal
Incentives Act has provisions on incentives to enclave industries.
Exports
All required documents must be taken to Customs for approval,
which takes between one and three days. The approved documents,
a copy of the shipping or airway bill and a bill of lading are then
taken to the shipping agent for confirmation of shipment time and
date. The bill of lading is processed and information of shipment
put on ship’s manifest. The original approved shipping or airway bill
plus two copies are then taken to the Customs Shipping Officer at
the port of loading.
In accordance with Section 40 (Part IV) of the Customs Act, under
the temporary entry regime, importers may obtain authorization
for temporary admission for a period of three months. The
importer is required to present to customs all regular import
documents upon the arrival of the merchandise, and to deposit
a bond corresponding to 100% of the customs duty and value
added. This deposit is refunded when the merchandise leaves
Trinidad and Tobago. Duty drawback is granted under Section 50 of
the Customs Act. Claims can be made in respect of customs duty
(including additional stamp duty) paid on imported inputs for the
manufacture of exports. Part XI of the Customs Act specifies the
regulations and products on which duty drawback is payable; for
example, tobacco used for manufacture, steel used for steel drums,
cloth for shorts, materials for shoes, hats, brooms. The time limit
for claiming duty drawback is one year from the date of export. In
general, use of the drawback system is limited.
Values shown in an invoice often have to be confirmed by a
certificate of value signed by the exporter, stating that the invoice
contains a true and full statement of the price paid for the goods
Since 1993, exporters have also been eligible for a rebate,
amounting to 1.5% of the value of export sales, which is valid for
the reduction of duty payable on future imports. The legal basis is
Exporters must present Customs Declaration Form C82, which
must be prepared and authorized by a licensed customs broker.
Other required documents include a dock receipt (sea cargo) or tally
sheet (air cargo), bill of lading or airway bill, dispatch form, cargo
integrity form (port), invoices, a consignee number assignment,
and any required certificate or permit.
44
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Section 56E the Customs Act (Chapter 78:01); there is no restriction
with respect to the products that may be imported.
As part of Trinidad of Tobago’s policy to promote exports, the
Government maintains free-trade zones to attract export-oriented
investment in manufacturing, international trading, and service
export operations. Given that the Government does not view their
free-trade zone regime and their Fiscal Incentives Act as prohibited
subsidies pursuant to the WTO Agreement on Safeguards and
Countervailing Measures, Trinidad and Tobago did not request an
extension of the transition period in Article 27.4 this agreement.
The administration and operation of free zones is governed by the
Trinidad and Tobago Free Zones Act of 1988, as amended in 1995
and 1997, though Free zone activities commenced in 1993. Under
the Act, an approved free-zone enterprise may benefit from the
following incentives: exemption from customs duty on the import
of goods into the free zone; exemption from income tax; exemption
from corporation tax; exemption from business levy; exemption
from withholding taxes on remittance of profits, dividends and other
distributions; and exemption from land and building taxes on land,
buildings, improvements to buildings, plant and machinery in the
free zone. Free zone enterprises are not subject to import and export
licensing requirements. Benefits are granted for an indefinite period.
Free zone enterprises must comply with all regulations and laws of
Trinidad and Tobago except as specifically varied or exempted by the
Free Zones Act; they are therefore subject to the relevant technical
regulations and labor laws.
must maintain separate accounts including particulars of materials
and goods imported, exported, and used in manufacture within the
free zones.
The Export-Import Bank of Trinidad and Tobago Limited
(EXIMBANK) provides financing and insurance to exporters. The
EXIMBANK is wholly owned by the Government and is the only
official export credit agency in the country; it emerged in November
1997 out of what was formerly the Trinidad and Tobago Export
Credit Insurance Company Limited (EXCICO). An Amendment
to the Financial Institutions Act (FIA) allows the EXIMBANK to
conduct the business of a confirming and acceptance house, a
finance company, and to engage in financial services.
The EXIMBANK operates on a profit-seeking basis and acts as
a commercial institution. Operations are funded mainly by the
EXIMBANK’s own financial resources, mostly profits from trading
operations and fees, and by various lines of credit provided by major
financial institutions, both local and regional. Institutional support
is also provided, through a government guarantee under the
Guarantee of Loans (Companies) Act in respect of the settlement
of all claims due and payable by EXIMBANK. The EXIMBANK offers
a number of export-oriented financial products, including preshipment financing, pre-shipment guarantees, and post-shipment
financing.
Activities that may be carried out in a free zone are prescribed
in the First Schedule of the Free Zones Act. These include:
warehousing and storage; manufacturing operations; transshipment operations; loading and unloading; export and import;
service operations including banking, insurance, and professional
services; packaging and shipping; assembling; processing, refining,
purifying and mixing; and merchandising, including international
trading of products. Primary petroleum and natural gas projects
do not qualify for free-zone approval. There is an investment limit
of US$50 million; projects beyond this limit are not eligible for
free-zone status, although these activities may be carried out in
a free zone. Banking and insurance activities carried out in a free
zone are subject to the Financial Institutions Act and Insurance Act,
respectively.
The Trinidad and Tobago Free Zones Company Ltd., established under
the Free Zones Act, regulates activities in free zones. Applications
to operate in a free zone must be made to and approved by the
Free Zones Company; recommendations for designation of new
free zones are made by the Free Zones Company to the Minister of
Trade and Industry. The basic approval criteria are creation of jobs,
access to overseas markets, new investment, and the development
of skills. Free-zone projects may be 100% foreign owned or joint
ventures with local investors.
Enterprises approved to carry out a free zone activity in a free
zone are not allowed to carry out other activities in the customs
territory of Trinidad and Tobago. Approved free zone enterprises
may be permitted to sell up to 20% of goods in the customs
territory of Trinidad and Tobago. Approved free zone enterprises
45
6.7. Trade Summary
46
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EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
7. Trade Policy Benchmark: Spain
Trade Policy Regime
Trade plays a significant role in Spain’s economy, accounting for
more than half of its GDP. The nation has, however, had a trade
deficit persistently over the past few years, which stood at $77.5
billion in 2009. Spain’s weak trade scenario is attributable to several
factors, predominantly the nation’s increasing reliance on imported
petrol and decreased market competitiveness. Additionally, the
steady decline of Spain exports is also attributed to the strength
of the euro, since it was adopted by Spain for international trade,
which has made Spanish exports more expensive.
As a standing member of the European Union, it formulates its
trade policy objectives and goal as a bloc. The EU’s main decisionmaking bodies remain: the Council of the European Union
(commonly called the Council) , the European Parliament, and the
Commission of the European Communities (commonly called the
Commission or European Commission). The Commission is the
executive body of the EC. In this capacity, it, inter alia, proposes
legislation to the European Parliament and the Council; implements
EC policies and the budget; enforces EC law (together with the
Court of Justice); coordinates economic policies among Member
States; and negotiates international agreements, including trade
and cooperation agreements. The European Parliament, currently
composed of 785 deputies, exercises supervision over all EC
institutions, and shares with the Council the power to legislate and
approve the EC budget.
Under the Treaty on the European Union (also referred to as the
Maastricht Treaty), the EC is based essentially on three pillars. The
first pillar pursues integration under the Treaties establishing the
European Community; it also deals with matters formerly covered
by the European Coal and Steel Community (23 July 1952 to 23 July
2002), and the European Atomic Energy Community. It addresses:
citizenship of the European Union; freedom of movement; and
the Economic and Monetary Union. The second and third pillars of
integration, introduced in 1993 by the EU Treaty, address foreign
and security policies, and justice and home affairs, respectively. The
Treaty of Nice, which entered into force on 1 February 2003, aims
to adapt the European institutions to the arrival of new members.
The European Central Bank (ECB) and the European Investment
Bank (EIB) are the EC’s financial bodies. For the 16 EC Member
States that have introduced the euro, the ECB frames and
implements the monetary policy, conducts foreign exchange
operations, and manages the payment system. The EIB lends
money for projects of European interest, such as rail and road links,
airports, and environmental schemes. It also provides credit for
investment by small businesses.
Spain is a member of the WTO, yet it’s participation is largely
construed to the participation of the European Union as a bloc.
The EC is an original Member of the WTO in its own right; each
of its Member States is also a WTO Member. The EC grants at
least MFN treatment to all trading partners. The WTO evaluates
in the Trade Policy Review (TPR) Mechanism as the European
Union as one bloc, thus no TPR has been issued solely for Spain.
The EC’s trade policy is formulated and implemented by means
of two types of legislation. Under primary legislation, i.e. treaties
and other agreements of similar status, the EC concludes and
implements the Common Commercial Policy (CCP), including
international agreements. The CCP covers trade in goods, all
aspects of trade in services, and commercial aspects of intellectual
property as extended under the Nice Treaty. Other issues, partially
covered by the CCP, include indirect taxation, standards and other
technical regulations, community patents, and enforcement of
intellectual property rights. The non-harmonization of some traderelated measures (including in these areas) and implementation
challenges for harmonized legislation somewhat hinder trade
amongst Member States. The secondary legislation comprises:
regulations (with general application) that are binding and directly
applicable in all Member States; directives (requiring transposition
into national law and practice); decisions (binding upon their
addressees); and recommendations and opinions, which are based
on treaties but do not have binding force.
The Ministry of Industry, Tourism, and Commerce through Secretary
of State of Foreign Trade is the appointed government entity that
represents Spain in the European Commission. The Secretary of
State of Foreign Trade coordinates all actions within the framework
of the Spanish government that deal with policy making with
the EU. This Secretary maintains the necessary relations with all
entities that belong to the General State Administration, and those
autonomous and local entities. It also coordinates all cooperation
actions that the Spanish government channels at an international
level. Pursuant to Royal Decree 260/1986, which creates a
permanent representation of the Spanish government towards
the European Commission, the Secretary of State of Foreign Trade
gives official instructions to the Ambassador Representative.
There is also an Inter-ministerial Commission for the WTO
Negotiations presided by the Secretary of State of Foreign Trade,
and it coordinates with all other related Ministries regarding
respective aspects for the ongoing WTO negotiations, through the
EU.
The Consultative Secretariat for Trade Negotiations is also part of
the Secretary of State of Foreign Trade, and it fosters the Exchange
of information between different social agents, economic
stakeholders, academic sector and private entities in regard to the
adoption, development and execution of Spain’s Trade Policy.
Thus Spain’s participation in trade policy formulation and trade
negotiation is through the EU. Before it commences negotiations
on international agreements, the Commission must have prior
authorization from the Council. Moreover, Parliament must either
be consulted or give its assent for the conclusion of agreements
that are beyond the scope of the CCP, including Association and
Cooperation Agreements. Other agreements requiring approval,
including by the Member States individually, are those that go
beyond the Community’s powers as conferred by the Treaty of
Nice, or what is necessary for the achievement of Community
objectives. With an enlarged EC, the approval requirements of both
the Community and Member States may be lengthy. There has
been a call for most decisions to be taken by qualified majority
voting.
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Since 1999, the Commission has been holding a regular dialogue
with civil society with a view to making its trade policy formulation
more transparent and participative. Organizations involved include
business associations, chambers of commerce, trade unions, and
other non-governmental organizations. The Commission uses exante trade sustainability impact assessments (SIAs) to analyze the
economic, environmental, and social impact of trade agreements,
in the EC itself and in its trading partners. They are designed to
help inform decision-makers, and contribute to the transparency
of trade policy by taking into account the views of stakeholders in
the EC and partner countries. As a result of Trade SIAs, which are
carried out by independent consultants, measures may be proposed
to enhance positive effects and prevent/mitigate negative effects,
both trade and non-trade-related. Trade SIAs are also carried out
for the Doha Round negotiations.
In particular, the EC’s trade policy seeks to promote the interests
of Spain and all its other member states in open markets, the
progressive abolition or lowering of obstacles to international trade,
and clear regulatory frameworks. It also aims to contribute to
sustainable development in the context of the WTO negotiations
and by integrating more countries in world trade. In addition, the
EC seeks to defend values on democracy, rule of law, environment,
social rights, public services, cultural diversity, and food security.
These objectives are to be achieved at the multilateral, bilateral,
and unilateral levels. At the multilateral level, the EC prioritizes the
liberalization of its trade regime in the framework of the WTO. The
rationale for its bilateral agreements includes: trade expansion and
rule making (“WTO +”); promotion of sustainable development,
including at the regional level; and neighborhood policy. Specific
trade policy measures vis-à-vis third countries and regional areas,
and unilateral measures are taken in the interests of development
or political stability in line with Spain and the political priorities of
the EC as a whole.
Through the EC Single Market Policy, Spain seeks to improve
the free movement of goods, services, capital, and labor within
the Community, via a wide range of regulatory measures and
actions. Also through the EC, Spain continued to build upon its
wide network of preferential trade agreements (PTAs) with both
developed and developing countries. It considers its PTAs as part of
a broader policy of promoting multilateralism. Thus, a significant
number of its negotiations are with, or encourage creation of,
regional groupings. These include the MERCOSUR; the Gulf States;
the Association of Southeast Asian Nations; Economic Partnership
Agreements (EPAs) with the African, Caribbean and Pacific (ACP)
countries; and the Euro-Mediterranean free-trade area.
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the EC’s efforts to negotiate economic partnership agreements
(EPAs) with the African, Caribbean and Pacific (ACP) countries. The
negotiations replaced the unilateral preferences granted under the
Cotonou Agreement by bilateral preferences granted under EPAs.
EPAs are based on four main pillars: (i) partnership, entailing rights
and obligations for both sides; (ii) regional integration, taking into
account existing integration initiatives; (iii) development, taking
account of the economic, social, and environmental constraints of
ACP countries; and (iv) link to the WTO, with a view to facilitating
the gradual integration of ACP countries into the world economy.
Specifically, the agreements provide for progressive liberalization of
trade in both goods and services, and address other trade related
issues. Development concerns are reflected through flexibility
vis-à-vis depth of liberalization, its asymmetry, length of transition
periods, trade coverage and exceptions, and through EC support
measures.
The Cotonou trade preferences expired on 31 December 2007.
By that time, negotiations were concluded on an EPA with the
Caribbean region, as well as a series of interim agreements with
the other ACP regions. While the EPA with the Caribbean region
covers trade in goods and services, as well as other trade-related
issues, the interim agreements were negotiated with a view
to establishing a secure legal framework for trade in goods and
preventing trade disruption.
Foreign investment in Spain is currently regulated by Royal Decree
(R.D.) 664/1999, of 23 April, on foreign investment and by Royal
Decree 876/2001, of 20 July, on the legal framework governing
companies offering investment services. The new rules are designed
to adapt Spanish domestic law to the rules on the freedom of
movement of capital contained in Articles 73 B et seq. of the
Treaty on European Union. The owners of foreign investments
in Spain may be persons not resident in Spain and private legal
entities with their head offices abroad. Foreign investment in
Spain and its settlement is deregulated, though this deregulation
may be suspended in the following circumstances: (i) The Council
of Minister may decide the suspension of general deregulation
measures in the event that the investments affect activities related
to the exercise of public power, public order, security and public
health. In this case it is necessary to request prior administrative
authorization. (ii) Activities directly related to National Defense
require prior administrative authorization in addition to coming
under special conditions.(iii) There are also special conditions that
affect foreign investment in Spain in matters of air transport, radio,
minerals, mineral raw materials of strategic interest and mining
rights, television, gambling and telecommunications.
The EC’s preferential trade agreements have so far resulted in free
trade in non-agricultural goods, and limited liberalization of trade
in agricultural goods for Spain; some also cover trade in services.
Some of the EC’s reciprocal preferential arrangements consist of
both bilateral and multilateral aspects, and in almost all cases,
liberalization is asymmetrical, with the EC’s partners liberalizing at
a slower pace than the EC, and over different transition periods to
reflect country and regional needs.
Foreign investments in Spain and their settlement must be
declared to the Register of Investments of the Ministry of Economy
and Finance, for administrative, statistical or economic purposes,
with the exception of investments derived from territories or
countries considered to be tax havens, that must be previously
declared, except, in so far as is relevant here, when the investments
have been made in tradable securities previously issued or offered
publicly in an official secondary market. A special Stock Exchange
registry is not required.
Since September 2002, Spain has been actively participating in
Spain has signed 71 Bilateral Investment Treaties with Albania,
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Algeria, Argentina, Armenia, Azerbaijan, Belorussia, Bolivia, BosniaHerzegovina, Bulgaria, Colombia, South Korea, Costa Rica, Croatia,
Cuba, Czech Republic, Chile, China, Ecuador, Egypt, El Salvador,
Slovakia, Slovenia, Estonia, Philippines, Gabon, Georgia, Guatemala,
Equatorial Guinea, Honduras, Hungary, India, Indonesia, Iran,
Jamaica, Jordan, Kazakhstan, Kirghizstan, Kuwait, Lebanon, Libya,
Lithuania, Macedonia, Malaysia, Morocco, Mexico, Moldavia,
Montenegro, Namibia, Nicaragua, Nigeria, Pakistan, Panama,
Paraguay, Peru, Poland, Dominican Republic, Rumania, Russia,
Serbia, Syria, South Africa, Tajikistan, Trinidad and Tobago, Tunisia,
Turkmenistan, Turkey, Ukraine, Uruguay, Uzbekistan, Venezuela.
Import prohibitions and surveillance are maintained on, inter alia,
security, technical, sanitary, phytosanitary, and environmental
grounds and are coordinated by the EC. The EC also controls/
restricts trade under treaties and international conventions to
which it is a signatory. Import licenses are required where products
are subject to quantitative restrictions, tariff quotas, and safeguard
measures or for import monitoring and surveillance purposes.
Imports
The Customs Code (CC) and its implementing provisions continue
to govern the EC’s customs procedures thus it is utilized by Spain.
The CC applies uniformly throughout the customs territory of
the Community to imports and exports of goods. According to
the CC, goods brought into the customs territory can be placed
under various customs regimes. A customs declaration is required
except for goods to be placed into a free zone or free warehouses.
The customs declaration must, under normal procedures, be
made in writing or through a data processing technique and
consist of the Single Administrative Document, accompanied by
pertinent/required documents (e.g. invoices, certificates of origin,
health certificates, certificates of conformity and authenticity).
Automatic import licenses, required for statistical purposes for
certain, mainly agricultural products, must be submitted with the
import declaration
The EC Customs Code, which is binding on all Member States and
takes precedence over any conflicting national law, provides the
basis for achieving uniformity in customs matters; the Code and
its implementing provisions lay down the rights and obligations of
the customs authorities. Spanish customs legislation applies only
where there is no EC regulation or in cases where the EC law allows
for further specificity at the national level.
The EC 2008 tariff nomenclature, known as the Combined
Nomenclature, is based on the 2007 HS System. The EC’s 2008
common tariff contains 9,699 lines at the eight-digit level. The
EC continues to apply several types of tariff: ad valorem rates,
which are the most widely used (89.9%); followed by specific
(6.5%); compound (2.9%); alternate duties with a minimum and
a maximum (0.8%); and “per range tariffs”, which vary according
to given c.i.f. “entry price” ranges (0.6%). In addition, seasonal
tariffs apply to certain products, mainly agricultural goods. Some
agricultural products are also subject to tariff quotas. Ad valorem
tariffs are applied on the c.i.f. customs value.
The Common Customs Code provides for the possibility of granting
preferential tariffs unilaterally, or on a reciprocal basis, through
trade agreements. Under its preferential trade agreements (PTAs),
the EC grants, on a reciprocal basis, duty-free access to imports
of nearly all non-agricultural goods (with some exceptions, e.g.
textiles and aluminum products); and various tariff preferences
(including preferential tariff quotas) on selected agricultural
products. Tariff preferences are also provided under the EC’s nonreciprocal preferential arrangements.
Under the new rules on the place of supply of services, as of
1 January 2010 business-to-business supply of services will
be taxed where the customer is situated, rather than where
the supplier is located; for business-to-consumer supply, the
place of taxation will continue to be where the supplier is
established. However, exceptions apply to reflect the principle
of taxation at the place of consumption. Also as of 1 January
2010, the procedure for reimbursement of VAT, incurred by EC
businesses in Member States where they are not established,
will be replaced by a new fully electronic procedure, to facilitate
quicker refund. Businesses will be paid interest if Member
States are late in making refunds. Spain comes under the EU
VAT regime, and is part of the European Union single market
economy. VAT Directives are issued by the EU, which lay out
the principles of the VAT regime to be adopted by the member
states. These Directives take precedent over the local legislation.
The Spanish VAT law is contained within the General Tax Code.
It is administered by the Agencia de Administración Tributaria
(the Spanish Revenue or AEAT). The standard VAT rate in Spain is
18% (from July 2010). There is a reduced rate of 8% (from July
2010) for: passenger transport; hotel and restaurant services;
and other. There is also a 4% VAT rate for: food and drink; goods
from chemists; construction work; and some newspapers.
The EC legislation allows for reimbursement of VAT incurred by
businesses established in another Member State or outside the
EC given the differences in the rate amongst the Member States.
In addition, in order to preserve Member States’ VAT receipts in
the country of consumption, rather than of sale, several special
schemes continue to apply under the EC VAT system, to sales
to consumers in another Member State. These include: intraEC sales of new means of transport, distance selling, supplies to
non-taxable legal persons (e.g., government departments) and
exempt taxable persons (e.g. small shopkeepers). However, some
of these exceptions apply as long as the transaction remains below
a threshold defined by each Member State, subject to certain
limits set out in EC legislation. Zero-rated goods and services vary
according to Member country.
Imports and domestic supplies of certain goods for a specific purpose
are exempt from VAT (e.g. goods for fuelling and provisioning of
fighting ships; the repair, maintenance, charter and hire of certain
vessels; the supply of goods for fuelling and provisioning aircraft
used by airlines on international routes). Imports of, inter alia,
tobacco, alcoholic drinks, perfumes for personal use by travelers
entering the EC are exempt from VAT within certain limits. In the
case of tobacco products, VAT and duty exemptions are subject
to two different limits: the higher limit applies to air travelers;
and Member States may choose which limit to apply to all other
travelers.
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The customs code of the EC provides for customs duty relief on
account of special circumstances; on re-imported Community
goods; on products taken from the sea by Member State vessels;
and on goods re-exported after inward processing under the
drawback scheme, or goods re-exported because they are defective,
or do not comply with the terms of the contract. Also under the
CC, customs duties are suspended under various customs regimes,
including: external transit; customs warehousing; inward processing;
temporary importation; and free zones and free warehouses. The
recently approved customs code (Modernized Customs Code)
does not envisage substantial changes to these exemptions and
concessions. The main change will be the elimination of the
drawback system. VAT and excise duty exemptions and refunds
are also possible (section (iii)(a) above). The EC is a signatory to the
Convention on Temporary Admission; hence goods imported under
temporary admission are exempted from VAT.
The EC had transposed the rules set out in the WTO Customs
Valuation Agreement directly into its customs legislation. In 2006,
a new simplified procedure for the valuation of certain fresh fruit
and vegetables imported in consignment was introduced. The
Modernized Customs Code does not provide for any significant
changes to EC customs valuation rules, which remain in line with
those of the WTO Agreement, but should result in a simplification
of procedures as all customs formalities will be computerized.
Customs valuation matters at EC level are addressed by the
Valuation Section of the Customs Code Committee. Its tasks
include examination of valuation issues, and it deals in particular
with Member States’ interpretations of the EC’s customs valuation
rules to ensure uniformity of treatment. It seeks to ensure a
common approach to amendments of the customs valuation rules;
prepared guidelines to the customs valuation rules; and prepares
a common EC position in the WTO and the World Customs
Organization (WCO).
In the EC, customs value is important not only for the calculation of
customs duties, but also for the imposition of the VAT on imported
goods, for the calculation of some tariff quotas that are contingent
upon value where quotas are set in value for certain goods, and
where appropriate for determining origin.
Imports prohibitions and surveillance are maintained on, inter
alia, security, technical, sanitary, phytosanitary, and environmental
grounds. The EC also controls/restricts trade under treaties and
international conventions to which it is a signatory. The EC is a
member of the Kimberley Process and applies import prohibitions,
according to origin on rough diamonds.
Import licenses are required for products subject to quantitative
restrictions, safeguard measures or for import monitoring and
surveillance. Product coverage is defined in the EC legislation.
The system cannot be abolished without legislative approval;
regulations generally contain provisions relating to the duration
and expiry of the licensing regime.
The import licenses are not subject to fees and are not transferable;
they constitute an authorization and have a fixed period of validity.
There is no penalty for non-utilization of an import license or
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portion of it. However, when a security is required for a license
covering agricultural products, the security is forfeited in whole or
in part if imports do not take place, or are only partly carried out.
Import licenses for textile products subject to import quotas are
not limited to domestic producers of like goods. They are issued
annually on a “first-come, first-served” basis. An import license
is issued upon presentation of an export license issued by the
exporting country; license applications must be presented on
specific dates. The licenses are issued within a maximum of five
working days of presentation (by the importer) of the original
corresponding export license. The import license is valid for six
months.
Import surveillance applies to certain textiles, steel products, and to
agricultural products including cereals, rice, sugar, olive oil and table
olives, milk products, beef and veal, fresh fruit and vegetables, processed
fruit and vegetables, bananas and ethyl alcohol of agricultural origin.
These products are subject to automatic licenses for statistical
purposes, and to improve control of the origin of the products.
A double-checking system is in place for imports of certain textile
and steel products: the license application procedure requires, inter
alia, an export license issued by the authorities of the country of
origin. The EC applies a dual licensing arrangement to imports of
certain steel products from Russia and Kazakhstan. Hence, to obtain
an import license in any of the Member states, the corresponding
export document issued by the competent authorities of the
exporting country must be provided.
Exports
All Community goods intended for export are to be placed under
the export procedures. Community goods declared for export are
subject to customs supervision from the time of the acceptance of
the customs declaration until they leave the customs territory of
the Community. The electronic export declaration requires the use
of the data included in the Single Administrative Document (SAD),
as well as other documents, including the certificate of origin
necessary for preferential treatment in importing countries (when
applicable), and licenses for products covered by the Common
Agriculture Policy (CAP). Amendments have been introduced
mainly to improve security. Traders must provide Customs with
advance information on goods taken out of the EC territory.
In general, the EC does not apply taxes, charges or levies on exports.
Export levies may be imposed if the EC price falls below worldmarket level to ensure that a regular supply of goods remains
within the EC; in practice, these are rare.
Export restrictions are allowed on grounds of public morality,
the protection of health and life of humans, animals and plants,
and national cultural treasures. The restrictions are under the
competence of both the Commission and Member States. The
regimes also provide for measures to prevent a critical situation
arising from a shortage of essential products.
An export authorization or license is required for the export of
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
cultural goods and certain products under the CAP, and for the
control of exports of dual-use items and technology according to
provisions set out in Regulation 1334/2000. A license is compulsory
for the exportation of cultural goods outside the customs territory
of the Community to ensure uniform checks on exports of certain
cultural objects.
Export licenses are required to export goods covered by the CAP
from the EC. If an export license is required, it must be presented at
the time of exportation. The procedure to applying for a CAP export
license is similar to that used for import licenses. The export license
is required in order to claim a refund on agricultural goods eligible for
export subsidies and for exporting sugar, cereals, and rice.
The EC provides export subsidies through various programs: export
refunds, sales of stocks, and producer financing. The Common
Agricultural Policy provides for the possibility of granting export
refunds. The purpose of export refunds is to cover the difference
between Community prices and international trade prices in order
to enable exports to be effected at international trade prices. The
refund is the same for the whole EC; a differential may be applied
according to destination or time (months of delivery). The amount
of the refund is fixed periodically by the Commission; it is paid to
the exporter.
The EC provides assistance to promote agricultural products and
food on the internal market and in third countries. This includes
public relations, promotional or publicity campaigns, participation
in events and fairs, in particular, those that highlight the advantages
of consuming EC products, especially in terms of quality, hygiene,
food safety, nutrition, labeling, animal welfare or environmental
friendliness of their production. The EC finances this assistance
with an annual budget of approximately €50 million, to an amount
not exceeding 50% of the total cost of the approved program;
the remainder is financed by the professional/inter-branch
organizations that proposed the program and by the Member
States where the products originate.
7. Policy Initiatives Towards Facilitation of Trade
The incorporation of specific measures oriented toward
transportation in trade facilitation has become a key policy
initiative to enhance future gains from trade. Activities include both
services provided by the state and the flow of freight internally and
externally.
Developing countries such as the Caribbean region have much
to gain given the high transaction costs of their trading patterns.
Trade facilitation measures focusing on customs procedures and
regulatory environments can lead to improved controls, reduced
administrative costs, and increased cooperation between the
public and private sectors even when applying these measures
implies costs.
Firms in the Caribbean countries witness delays in inventory
holdings, an area of particular concern for countries that rely
on exports of bulky natural resources with short shelf live, thus
development of a growing trade flow requires the continued
improvement of key processes regarding the development and
harmonization of border crossings and the reduction of time and
procedures.
A renewed focus on trade facilitation measures has become of
increasing importance to the region’s trade agenda as traditional
trade restrictions have been substantially reduced and trade
benefits have not been fully realized. Furthermore, through
increased coordination and harmonization of customs and border
procedures, trade facilitation supports efforts toward increased
regional integration.
The region’s infrastructure network in general and transport
infrastructure in particular have suffered from chronic
underinvestment. Restrictions of investment capital have
also contributed to the underdevelopment of small- and
medium-size enterprises (SMEs) as providers of logistics
services. Land transportation services, mostly trucking and
logistics operators, have had limited expansion and remain
relatively weak performers in the logistics chain, with room
to improve and modernize the industry. Another limitation
on the logistics performance of SMEs is their inability to
exploit economies of scale and substantial institutional
roadblocks.
8.a. Logistics Management Performance of SMEs
Caribbean SMEs are a major source of employment creation.
Export oriented SMEs in the Caribbean region show an inferior
logistics performance with larger costs by two times higher
than big companies. The main limitations to competitiveness
of SMEs include: Disadvantage in volume (shipments
are sporadic and in many cases do not fill up a truck or a
container), difficulty in valuing the importance of managing
inventory costs. Lack of policies supporting private-sector
development and increase the competitiveness of clusters,
public capacity-building to structure projects and regulate
services.
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Since the 1980s, several factors have modified the structure of trade logistics with the implementation of a more integrated system. The
factors that have shaped the current facilitation services have been the result of changes in trade trends such as an international system
based on:
• a pull-type supply based on actual demand;
• frequent transportation of smaller lots;
• a flow of materials without buffers, where synchronization is imperative;
• real-time massive flow of data, essential to the coordination and control of flows;
•distribution networks with few levels and large distribution centers operating as regional hubs;
•outsourcing of logistics
•globalization of markets (suppliers and customers);
•reverse logistics (unsold goods, containers, defective products, recycling);
•concern for green logistics.
According to the freight type, logistics can also take on very distinctive characteristics:
• general freight logistics, which includes the movement of containers, pallets, small parcels, express services, vehicles, large loads, etc.;
• cold chain logistics for fruits, food, and perishables;
• large dry and liquid bulk logistics, with vehicles and facilities specific to the transportation and storage of minerals, cereals, oil products,
liquid fuels, sugar, juices, forest products, etc
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EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
1. Short sea shipping in the Caribbean
The geographical layout of the Caribbean region drives its
participation in global trade upon a functioning maritime
transport system. Availability and frequency of maritime transport
facilities among the islands along with the high cost of providing
maritime services within the region inhibits growth and economic
development thus limiting regional trade and foreign direct
investments. The region has failed to anticipate the speed of the
global production and the interactions of markets in the production
process, neglecting to build sufficient regional transportation
infrastructure to push trade exchanges.
Ocean transportation is crucial for the competitiveness of
Caribbean countries and the improvement of flow of goods and
services shipping goods by ship can be more efficient and costeffective than air transportation, especially due to the short
distances within the countries in the region.
Most Caribbean countries have very open economies and depend
heavily on foreign trade with heavy imports of consumer goods.
Raw materials local production and unfinished parts for the
assembly industry must also be purchased from other countries.
The cost of transportation services bears an increasing importance
to the competitiveness, development and economic integration of
the Caribbean.
Intraregional trade is limited due to inefficient transportation
affecting the expansion and creation of industries and services of
other economic sectors. Maritime services are scarcely regulated
and freely programmed by an “industry” that lacks organization,
offers little service and less security for its customers as well as for
its people.
The small volume of Caribbean trade is unattractive segment for
investment thus the available fleet is aged and with limited features
for specialized cargo. Ships dues at the major trans shipment
terminals are usually high for their levels of business. At the same
time the volume of business they offer may not be very attractive
to the major terminal operators.
Cost of transport is also affected by trade imbalances; high
distribution and transhipment charges; diseconomies of scale
when negotiating freight rates with shipping conferences; lack of
reliable and regular shipping services and general inefficiencies in
port operations. Freight rates are high and services frequencies and
times are in general unsatisfactory. It is more expensive to ship
goods between the regions than with the United States.
Jamaica. These economies have the production capacity to export
their goods and the port facilities for transhipment services from
big carriers to feeders.
Main transhipment ports in the region are: Haina and Caucedo in
Dominican Republic, Port Lisas in Trinidad and Tobago and KCT
Kingston Container Terminal in Jamaica
Even these ports should look at how to effectively address the
need for connector shipping services and feeder services from the
transhipment ports to final destinations. Furthermore, establishing
a common fleet of main line services, connector services and feeder
services with programmed routes and ports, rather than the current
confusion of roles can reduce cost of transportation. In terms of
security regulations the International Maritime Organization has
developed the Caribbean Cargo Ships Safety Code and the Small
Commercial Vessels Code for ships trading in the region.
A benchmark to look at is Europe with its short sea shipping at the
forefront of the EU’s transportation policy. This service accounts for
about 40% of all freight moved in Europe. In the case of the United
States, short sea services are common means for transportation of
goods and people in New York’s port inland distribution network
and the states around the Mississippi river. For these communities,
the shipping service has the advantage of fuel savings, reduction on
highway and rail congestion, decrease of air pollution, and overall
cost savings to the shipper and the entire logistics chain.
Short sea shipping is addressed by Chapter VI of the Revised
Treaty that establishes the development of an air and maritime
transport sector along with a Caribbean transportation policy for
the consolidation of the Single Market and Economy in CARICOM.
To catch up with the current trade dynamics policy makers at
CARIFORUM and industry players must “fast track” certain actions
and regulations, namely:
. A regional transport policy to generate growth, jobs and
sustainability.
. Incentives to promote the development of regionally-owned
shipping
. The harmonization of shipping legislation
. Free movement of skilled persons categories to include marine
pilots and seafarers
. Review of transport laws to even up access to cargo
. Eliminate restrictive legislative and administrative practices.
Restrictive practices and differences in management regulations
such as restrictions against the nationality of seamen, work
permits for vessel crews, custom brokerage services, discriminatory
licensing requirements for foreign vessels and closed ship registry
are hurdles that must be dealt with before a merchant marine
system is adequately organized.
Short see shipping services, with their weaknesses in regulations,
are offered by Dominican Republic, Trinidad and Tobago and
55
2. Logistics and trade indicators
The following Logistics and Trade Indicators are recommended
to be closely monitored by the AIRD Documentation Center
as a measurement of policy implementation success and
cohesiveness in the region.
For regulatory framework initiatives the following indicators
should be closely monitored:
Doing Business
The goal of this World Bank evaluation is to provide an objective
basis for understanding and improving the regulatory environment
for business in each of the countries, regions and around the
world, over time. A fundamental premise of Doing Business is that
economic activity requires good rules for an adequate functioning
of the public institutions and the private sector.
Economies are ranked on their ease of doing business, from 1 –
183. A high ranking on the ease of doing business index means
the regulatory environment is more conducive to the starting
and operation of a local firm. This index averages the country’s
percentile rankings on 9 topics, made up of a variety of indicators,
giving equal weight to each topic. The rankings for all economies
are benchmarked to June 2010.
Doing Business Ranking 2009-2011
Economy
Antigua and
Barbuda
Jamaica
Dominican
Republic
Year
2011
2010
2009
2011
64
56
72
61
25
21
81
18
47
2010
2009
2011
2010
79
18
47
91
86
137
105
89
90
97
95
74
63
161
160
171
173
2009
2011
Trinidad and
2010
Tobago
2009
Suriname
Ease of
Starting Dealing with
Trading
Closing
Doing
Registering Getting Protecting Paying
Enforcing
a
Construction
Across
a
Business
Property
Credit Investors Taxes
Contracts
Business
Permits
Borders
Business
Rank
2011
2010
2009
123
116
100
109
No avilable data
106
89
28
27
132
126
63
58
73
72
66
65
74
174
104
128
24
123
87
No avilable data
114
72
113
69
No avilable data
73
173
105
126
23
59
57
76
68
40
40
84
85
145
146
85
82
171
32
170
30
No avilable data
20
20
91
90
51
53
169
169
183
183
94
91
168
138
181
168
135
180
No avilable data
34
33
101
102
178
178
146
149
World Economic Forum’s Global Competitiveness Index
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the
World Economic Forum by Sala-i-Martin and first introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a
comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are:
institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market
efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and
innovation.
LOGISTICS PERFORMANCE INDEX
The World Bank’s Logistics Performance Index (LPI) looks at how
countries perform in six of the areas considered to have an impact
on trade facilitation:
• Efficiency of the customs clearance process.
The LPI is based on a survey of international freight forwarders
for 150 countries who provided feedback on their perceptions of
several logistics attributes of the countries in which they operate
and with which they trade. The LPI is expressed through a score
(from 1 to 5) and a ranking (from 1 to 150), according to the
position held by an individual country within the group.
• Quality of trade and transport-related infrastructure.
• Ease of arranging competitively priced shipments.
• Competence and quality of logistics services.
• Ability to track and trace consignments.
• Frequency with which shipments reach the consignee within the
scheduled or expected time.
56
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Logistics Performance Index 2010
COUNTRY
ANTIGUA
DOMINICAN REPUBLIC
JAMAICA
SURINAME
TRINIDAD & TOBAGO
SPAIN (benchmark)
RANKING
SCORE
Not available
Not available
65
108
2.82
2.53
Not available
Not available
Not available
Not available
25
3.63
Liner Shipping Connectivity Index
The LSCI measures the level of integration of countries into the liner-shipping network. The index includes 163 countries and is based on
five (5) items:
• Number of ships
• Container carrying capacity in 20 foot units (TEUs)
• Number of shipping companies
• Number of shipping services
• Maximum ship size
Liner Shipping Connectivity Index in the Caribbean
COUNTRY
DOMINICAN REPUBLIC
JAMAICA
LSCI
20.09
18.23
RANK
48
52
TRINIDAD AND TOBAGO
SURINAME
ANTIGUA & BARBUDA
12.88
4.26
3.82
68
126
136
World Economic Forum: Infrastructure Quality Gap Index
Infrastructure Quality Gap Index developed by the WEF in 2007, which covers three key sectors of logistics: ports, airports, and roads.
The Global Enabling Trade Report of the World Economic Forum identifies the obstacles that each country has with international trade,
including logistics obstacles. It takes into account 10 pillars, which allowed the development of four subindices, summarized into a single
index called the Enabling Trade Index 2008
57
3. Logistics and port structure
Some important facts of the logistic industry:
. Currently less than 25 shipping agencies control 60% of the
global cargo.
. Containerized cargo has become the preferred form of
transportation, especially after 9/11 and initiatives such as
the C-TPAT, CSI, the recommendations of the Framework for
Security of the World Customs Organization.
. Free trade agreements favors trade facilitation services for
containerized cargo for security control of the cargo.
. Freight rates in Latin American and the Caribbean are at least
40% higher than rates in U.S. and Europe as a direct result of port
and airport infrastructure. The Age of Productivity: Transforming
Economies from its Foundation”, published by the IDB in 2010.
The general trend in maritime transport in the Caribbean can be
summarised as follows:
. Maritime transport is particularly important to Caribbean
countries. The unit costs for maritime transport in the Caribbean
are higher than the world average; these higher costs have a
direct negative impact on trade, foreign investment and revenue
generation.
. Higher costs are due, among other things, to comparative
disadvantages linked to the particular realities of island States,
trade imbalances, economies of scale and the difficulties of
creating competition among ports.
Among the five countries at study only Trinidad and Tobago,
Dominican Republic and Jamaica have the infrastructure
capacity for the volumes of cargo in the Caribbean region.
This capacity does not include trade facilitation services such
as warehousing and others, which differ considerably within
the countries. Development or completion of adequate port
logistics facilities should be the next stage on the formation
of a competitive logistics service infrastructure within the
region.
In the case of cargo, it is well known that less than 25 shipping
agencies control 60% of the global cargo and that the previous
trend of containerized cargo has become practically the classic
form of transportation, especially after 9/11 and initiatives
such as the C-TPAT, CSI, the recommendations of the
Framework for Security of the World Customs Organization,
and of course the signed free trade agreements, that insist on
trade facilitation without detriment to the security control of
the cargo.
According to the book “The Age of Productivity: Transforming
Economies from its Foundation”, published by the IDB in 2010,
when comparing rates among Latin American countries with
those paid between U.S. and Europe, freight rates have an
increase of 40%, and this is directly related to port and airport
infrastructures.
It is very important to concentrate in the certifications of the
ports of those aforementioned countries that have greater
potential, precisely because of the fact that if it is not a safe
harbor, the sea routes of the largest shipping companies (using
smaller vessels to reach the ports with less draft) could not dock
without consequences in its range of reliability in the security
chain.
Meanwhile the Caribbean continues to be the destination more
booked for tourism ships with an infrastructure for mass and
individual tourism being developed in parallel with services such
as tourism land transportation, development of commercial
malls, cultural activities, guides, restaurants, etc.
Logistics cost as percentage of trade
Process
Orders, customer services
Inventory management
Transport and distribution
Warehousing
Procurement
TOTAL
Cost (%)
2.0
5.0
5.3
2.5
2.3
17.1
58
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
The following table indicates the drafts of the main ports
of CARIFORUM, showing the capacity of receiving ships
of a certain size. This possibility increases not only the
productivity measured by the number of TEU containers
received, but also produces scale economies in the carriers,
with an impact in their prices and giving a greater importance
to the alliances between several shipping companies in the
world, that became the key to overcome the latest oil crisis
when they merged routes with a single operator in a figure
called co-loading .
Maximum drafts in Cariforum countries
Country
Meters
Feet
Antigua & Barbuda
7.9
26
Barbados
9.6
31.4
Belize
8.53
27.9
Dominica
9.14
29.9
R’ o Haina Port
10.06
34.7
Dominican Rep. Caucedo
14.5
47.56
Jamaica
16
53,28
Granada
8.5
27.8
Guyana
8.2
26.8
Haiti
9.76
32
Saint Lucia
8.53 /
10.36
28 a 34
Saint Vincent and the
Grenadines
9.1
29.85
Suriname
7.1
23.29
Trinidad & Tobago
12
39.36
Aruba
9.75
31.98
French Guyana
8.2
26.9
Guadalupe & Martinique
8
26.24
Dominican Rep.
For this analysis, the key is to identify the capacity of the
ports in the Caribbean in terms of mobilization of the TEUs.
The following table shows the evolution and in some cases
the increase in quantity.
It is important to remember that the needs to tend to PostPanama and Super-Post Panama ships of 6,000 to 8,000
TEUs, respectively, are at least the following:
It is important to note that the Caribbean ports have shown
an interesting growth and the busiest ports are investing in
their development.
The following table was done maintaining the Caribbean
Ports Ranking compared with those of Latin America. The
ranking was maintained and the corresponding position
should be read in basis 100.
• Line berth: 750m (two berths).
• Draft of the dock and canal: 15/16 meters.
• Width of the dock: more than 400 meters.
59
Port ranking according to quantity of Teus recived
Port efficiency depends on several factors. There are of
course more indicators of the financial and operational
type to measure whether a port is or is not efficient,
different from those generally expected: security
certifications, management, cold storages, and the
capacity of providing services with an adequate staff and
equipment, for example:
• Towing
• Racing
• Cranes
• Infrastructure
• Information Technology
• Certifications
• Loading and unloading (containerized and loose)
11.a Port Infrastructure in the Dominican Republic
The Dominican Republic has had a development, especially in the CAUCEDO port, of great significance in the past 3 years.
Its infrastructure, as shown in table below, has an important capability that can and is expanding.
Port ranking according to quantity of Teus recived
INSTALLATIONS
DP WORLD
RIO HAINA
Draft
13,3 m
10,4 m
TEUS Capacity of Docks
40.000
12.000
Containers in Yard in Hectares
50
25
Loose Cargo
NO
YES
Loose cargo Tons
N/A
6.729.882
TEU per year average
908.279
2.777.971
TM per year average
8.244.524
8.944.527
NO
YES
RD $10,00 PLUS 2 for MT for
loose
general
cargo
in
container RD$6,25 2 for MT
for solid and liquid bulk cargo
RD $10,00 PLUS 2 for MT for
loose
general
cargo
in
container RD$6,25 2 for MT
for solid and liquid bulk cargo
5 Post Panamax
3 Panamax
14
0
Terminal for solid and liquid bulk
cargo
Price MT in DR cargo Apordom
Cranes (Panamax and Post
Panamax)
60
Yard Cranes (RTG« S)
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Mobile Harbour Cranes
2
0
Cranes (Panamax and Post
Panamax)
5 Post Panamax
3 Panamax
Yard Cranes (RTG« S)
14
0
Mobile Harbour Cranes
2
0
Reachstackers
6
42
Yard Trucks
66
28
Entry rails
12
2
Field and Door Schedule
24/7
24/7*
Customs schedule
24/7
24/7*
Sanitary agencies schedule
24/7
24/7*
Immigration schedule
24/7
24/7*
Security agencies schedule
24/7
24/7*
There are several internal and external studies that address the
recommendation of increased investments, especially in the port
of Haina, in order to position the country as an important Hub in
the Caribbean with more features to compete.
It is also necessary to indicate the flow of these two major ports
in some countries of CARIFORUM and to Barcelona, as it is one
of the objectives of this study.
Shipping agencies that have Dominican ports in their routes and other
Cariforum countries
Exit Port
From DR to
Haina Port
Caucedo Port
Shipping Agency
Shipping Agency
CMA CGM (weekly)
TROPICAL SHIPPING (weekly)
BERNUTH LINES (weekly)
EVERGREEN (weekly)
Barbados
TROPICAL SHIPPING (weekly)
Guyana
HOEGH AUTOLINERS (biweekly)
EVERGREEN (weekly)
CMA CGM (biweekly)
EVERGREEN (weekly)
HAMBURG SUD (every 10 days)
CMA CGM (weekly)
Jamaica
SEABORD MARINE (weekly)
ZIM (weekly)
CMA CGM (weekly)
TROPICAL SHIPPING (weekly)
Saint Lucia
BERNUTH LINES (weekly)
CMA CGM (weekly)
TROPICAL SHIPPING (weekly)
HOEGH AUTOLINERS (biweekly)
EVERGREEN (weekly)
Trinidad & Tobago
CSAV (weekly)
BERNUTH LINES (weekly)
61
11.b Port Infrastructure in Jamaica
The two major commercial ports are the port of Kingston, which is divided into three terminals that together have the
capacity for 2.8 million TEUs, and the one in Montego Bay. Both share the same administration.
Port infraestructure of Jamaica
TERMINALS
MONTEGO BAY
North terminal
West terminal
South terminal
535 metres of berth
475 metres of berth
1,300 metres of berth
A 2694 m2 cruise ship
terminal
47 hectares of yard space
for stacking containers;
Extension of 65
hectares of container
yard
5 post-Panamax
gantry cranes
Approximately 427
metres of berth
4 super-Post Panamax
ship-to-shore gantry cranes
4 Super-PostPanamax ship-toshore gantry cranes
(delivered, and
commissioned into
service
6 super post-Panamax
ship-to-shore gantry
cranes
1.2 hectares of yard
space for container
storage
82 hectares (25
unpaved) of container
storage space
1858 m2 warehouse
Source
www.portjam.com
The KCT Kingston Container Terminal, the port operator of Jamaica, in its expansion phase now has a total of 13 cranes
and the works of the expansion has increased its capacity to 1.5 million TEUs per year. The port equipment is shown in the
following table.
Infraestructure of ports managed by KCT
EQUIPMENT
19 Ship-to-Shore Gantry Cranes including
4 Super Post Panamax Cranes
742 reefer outlets (440/480v, Universal Type)
with stand-by
73 straddle carriers
22 yard tractors
24 trailer trains
30 yard trailers
4 train tractors
3 mobile cranes for hire
5 forklifts
2,400 HP tugboats
30 stevedoring chassis
14 empty stackers
Source www.portjam.com
The infrastructure of the port of Eight Rivers has been added, which has two facilities for cruises and handling of bulk cargo,
especially sugar.
The port of Kingston has a strategic alliance with Kingston Free Zone Logistics Centre Ltd., which began operations in 2006.
11.c Port Infrastructure in Trinidad and Tobago
It has capacity for container ships, cruises and ferry, port and draft of 8.5 to 8 meters. Some docks of minor drafts are also
eligible for boats of less capacity.
This port also offers different storage facilities due to its position of transshipment port for islands of lower consumption.
Table 7 lists these services.
62
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Infraestructure of port Spain-Trinidad & Tobago
Shed 2
FACILITY NAME
TYPE OF STORAGE
Customs Warehouse
Shed 3
General Cargo
Shed 4
Breakbulk Cargo
Shed 7
Empty Reefer Containers
Shed 9
L.C.L. Cargo
Shed 10
Barrel Shop
Empty Container Park 1
Empty Import, Export & Transshipment Ctrs.
(Opposite Shed 9)
Empty Container Park 2
Empty Import, Export & Transshipment Ctrs.
(Opposite Berth 5)
Container Storage Yard
(Opposite Berth 7)
Reefer Yard
Reefer Containers
Roll on/Roll off Car Park
Foreign Used Cars
New Vehicle Car Park
New Cars
The next chart shows the type of ships that also can dock in Port of Spain.
This terminal is under study to consider proposals for investments in infrastructure and more equipment, to broaden its
services.
Equipment in port Spain-Trinidad & Tobago
Type
UNITS
CAPACITY
Ship To Shore Gantry Cranes
(PACECO). Rail-mounted, Panamax
sized Cranes.
Ship To Shore Gantry Cane
(LIEBHERR). Rail-mounted, Post
Panamax sized Crane
2
Rubber-tyred yard gantry cranes
10
40 tons
Mobile Harbour Crane (GOTTWALD)
1
- 50 long tons, Twin lift (with Spreader bar).
- 40 long tons (with Spreader bar).
- 45 long tons- (with Hook beam)
1
- 40 tons single lift (with Spreader bar).
- 50 long tons, Twin lift (with Spreader bar).
- 61 long tons (with hook beam).
- 40 long tons single lift (with Spreader bar).
FCM Linkbelt Mobile Crane #04
Demag Mobile Crane #01
FMC Linkbelt mobile crane
Reach Stackers (three row, four
stacking)
Empty Container Handlers (five
stacking)
Empty Container Handlers (Six
stacking)
Full Container Handlers (five
stacking)
Speedloader
1
1
- 100 long tons (with hook beam @ 11 meters to 24
meters).
100 tons (with hook beam @ 22 feet).
100 tons
2
30 tons
high
6
45 tons
high
6
8.9 tons
high
3
8.9 tons
high
2
27.56 tons
1
40 tons
Tractor Trucks
40
60 tons
Trailers
6
20 feet
Trailers
31
40 feet
Trailers
13
45 feet
Forklifts
27
3,000 kg
Paper Roll Handlers
3
3.6 tons
Top Lifters
2
24 tons
Container Lifts
8
9 tons
63
4. Ports with greater growth potential
The ports of the islands lack economies of scale and the greater the
amount carried the lower the fixed costs of operation. The cargo
admitted to the islands by far exceeds the cargo coming out of
them. This phenomenon of lack of return, plus the fact that the
vessels are smaller, generates costs of up to 30% for MT compared
with Latin America ports that have a greater development.
Thus, it is clear that Jamaica, Dominican Republic and Trinidad
and Tobago, due to its draft and infrastructure, have a
comparative advantage with the rest of the islands that have to
face single operating costs.
Along with that, only these three countries have the capacity to
compete among each other, because they have more than one
port that compete for efficiency and reinvest in their infrastructure.
As to the smaller islands, the situation reverts negatively on
their costs, because having less or no internal competition, a
major distortion in the rates can certainly be created.
It’s accurate to describe that as the statistics in the rankings
have already determined, the three countries in which the study
emphasizes have ports with a greater traffic. The infrastructure
described is sufficient according to the current volumes (with
the exception of Trinidad and Tobago and Caucedo DR) to
justify the sums that are invested preparing for the expansion
that can be expected in the following years.
In terms of port efficiency, indicators often do not measure the
response time in mobilizing units of transportation or cargo.
It is still needed an effective coordination among authorities
to reform a single inspection, in the case it is required by any
customs authority or other authorities.
In the case of tourism, the characteristics of cruises
operating the routes in the region do not have a problem
with docking or remaining on the periphery of the routes.
The sustained and determined growth in the traffic of these
cruises suggests that their infrastructure, even though can
be improved, has been more developed than the loading
ports industry.
5. Routes between the Caribbean and the Barcelona port
The table below shows the shipping lines and frequency of routes between the Caribbean and Barcelona. In the first box, the data
shows the lines with routes from Barcelona to the Caribbean, and in the other, Caribbean routes to Barcelona
Operators and transit frequency between Barcelona and the Caribbean
LINE
SHIP-OWNER
DR
frequency
MED PACIFIC
SERVICE
MEDCAN
MEDITERRANEOCARIBE (JS)
HAPAGLLOYD,A.G. (*)
MELFI MARINE
CORP, S.A (*)
MARFRET
SHIPPING LINES
(*)
12 days
Jamaica
Trinidad
& Tobago
Barbados
Saint
Kitts and
Nevis
frequency
frequency
Frequency
Frequency
Weekly
Weekly
12 days
10 days
weekly
CMA CGM (*)
CCNI- CIA
CHILENA NAV.
INTERN. (*)
MEDSAP
CSAV CIA
SUDAMERICANA
VAPORES (*)
MED/US GULF
MEDITERRANEA
N SHIPPING CO
(*)
biweekly
biweekly
weekly
weekly
Source:
www.portdebarcelona.es
64
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
13.a Shipping Agencies from the Caribbean to Barcelona
The following tables illustrate the shipping agencies that provide service among the top five Caribbean ports of departure to
Barcelona.
We must stress that although there are shipping agencies with service to certain ports of arrival, they do not provide freight
export services precisely because transit time is not competitive, in which case a company that imports and exports between the
European Union and the Caribbean will likely use a transportation line for import and another one export.
Shipping Agencies That Provide Service Between The
Caribbean And Barcelona
Kingston to Barcelona - 14 days of transit
From Montego To Barcelona - 14 Days Of Transit
65
Port Spain To Barcelona - 13 Days Of Transit
Caucedo To Barcelona - 14 Days Of Transit
Haina To Barcelona - 13 Days Of Transit
Source:
www.searates.com
66
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
6. Airports And Ports In The Countries At Study
Airports
There are two classifications of airports, international and local. There are airports with paved runways.
The airports mentioned are of both types: international and local. It should be noted that according to the Traffic Report ACId -LAC 2010,
the airport of Punta Cana in the Dominican Republic is within the top 10 in revenue of more than 4 million passengers.
Table 10 below details the information of the most important airports in the countries of the study, and the airlines that fly to those
markets.
Airports and airlines operating in the countries at study
Country
Airports
Airlines
Antigua: V.C. Bird
International Airport (ANU),
American Airlines, LIAT, Delta, Air Canada, American
Antigua & Barbuda
Barbuda: Barbuda Airport
(BBQ)
Suriname
Zanderij, International
Airport Johan Adolf
Pengel(PBM/SMJP)
Trinidad & Tobago
Port of Spain Airport, Crown
Point Airport
Airlines, BMI British Airways, Condor, US Airways,
Virgin Atlantic
Caribbean Airlines Insel Air, KLM, Meta Linhas Aereas,
Buel Wing Airline, Caricom Airways Gumari, Surinam
Airways
Condor , American Airlines, Continental
Santo Domingo
Herrera
Punta Cana
Dominican
Republic
Puerto Plata
La Romana
Condor , American Airlines, Delta, US Airways, Jet
Blue, WestJet, British Airways, Caribbean Airlines
JetaFly, Thomson Flights, Flythomascook Arke Fly ,Ait
Turks and Caicos Air Berlin, Continental, Air Canada
Air tran, Air caribe, Martinair, Lan Argentina, Dutch
Antilles Express, Transaerero., Iberia, LIAT, KLM, Tulfi,
Spirit, Aeroflot, Air Italy, Air Europa, Blu. Express, USA
3000, Aserca Airlines, Swiss, Alitalia, TACA, Avianca,
Lan, Gol, Sun Country, Cubana, XL Airways
Santiago
Barahona
Montego Bay Airport
Jamaica
Norman Manley Airport
Condor , American Airlines, Delta, US Airways, Jet
Blue, WestJet, British Airways, Caribbean Airlines
JetaFly, Thomson Flights, Flythomascook, Arke Fly, Ait
Turks and Caicos, Air beerlin Cayman Continental, Air
Canada, Air tran, Virgin Atlantic, Air Jamaica
Source:
OACI, IATA
Ports
In the Caribbean there are different types of ports:
1. For all types of cargo (some ports only receive containerized cargo and others receive bulk cargo and containerized).
2. For bulk or special products (oil, grains, sugar, etc.).
3. Transshipment ports.
Comparing the types 1 and 2 with type 3, in the first ones the congestion on the mobilization of cargo for customs clearance for import
and export plus transshipment operations can be much more expensive than type 3.
67
The types of services provided in terms of maritime freight transport have been divided, with the purpose of classifying them for research
in ECLAC, in four categories as follows:
Type of service
Transportation
islands
Characteristics
between
Small vessels without a fixed line
Transportation
duration
of
short
To connect the islands with the Dominican Republic, Panama,
Jamaica and ports of the United States, normally.
Transportation
duration
of
long
For cargo transportation to Europe, Asia and North America,
mainly.
Transshipment transportation
To cross the region (it is a common route for shipping agencies)
with cargo not originating or coming from the Caribbean.
In the case of the Caribbean, the inter-island transport is often provided by Ferry, such as the one operating between the Dominican
Republic and Puerto Rico or between the islands as Trinidad, St. Lucia, Grenada and Barbados.
The most important ports in terms of volume according to the indicators used by international organizations bias dramatically the
determination of which are the largest volume ports in Latin America, as we shall see later in this study.
Most important ports in the countries at study
Country
Antigua & Barbuda
Suriname
MOST IMPORTANT PORTS
Saint John« s
Paramaribo
Wageningen
Port-of-Spain
Trinidad & Tobago
Scarborough
Point Lisas
Point Fortin
Discovery Bay (Port Rhoades)
Kingston
Montego Bay
Jamaica
Port Esquivel
Rocky Point
Port Antonio
Port Kaiser
Caucedo
Haina Occidental
Boca Chica
Puerto Plata
Manzanillo
Haina Oriental
Dominican Republic
Romana
Samana
San Pedro de Macoris
Santo Domingo
Azua
Barahona
Cabo Rojo
68
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
7. Major Trade Partner Countries
In the latest Economic Survey of Latin America and the Caribbean 2009-2010 published by ECLAC in July 2010 major trading partners in
Latin America and the Caribbean, by region of the world, are North America and the European Union. The following charts illustrate this
statement.
Chart 1
Percentage distribution of exports destinies in Latin American and the Caribbean 2009-2010
55% of the destinations of exports go to the two trading partners that are the greatest source of cooperation for the development of the
countries of the study: the United States and the European Union. 18% however, are directed to Latin America.
Chart 2
Percentage distribution of import destinies in Latin American and the Caribbean 2009-2010
46% of the origins of imports come also from the United States and the European Union. These two countries, whose economic
contributions are strategic, are the two greatest import trading partners. 20% come from Latin America, and 25% from Asia, which makes
it as important in terms of percentage as the United States in the weight chart.
69
15.a Major Trade Partners for Import and Export of the Countries with Highest Growth Potential
The following tables list the main trade partners of imports and exports in the period 2009-2010
JAMAICA
Import trading partners
United States
Latin America and the Caribbean
LAIA
Andean Group
European Union
China
Asia
MERCOSUR
Japan
Export trading partners
United States
European Union
Latin America and the Caribbean
Japan
China
Asia
LAIA
CACM
Andean Group
CACM
MERCOSUR
Source:
ECLAC
TRINIDAD AND TOBAGO
Import trading partners
Export trading partners
United States
United States
Latin America and the Caribbean
Latin America and the Caribbean
LAIA
European Union
European Union
LAIA
Andean Group
MERCOSUR
MERCOSUR
Asia
Asia
Andean Group
Japan
CACM
China
Japan
CACM
China
Source:
ECLAC
DOMINICAN REPUBLIC
Import trading partners
Export trading partners
United States
United States
Latin America and the Caribbean
Latin America and the Caribbean
LAIA
European Union
Andean Group
LAIA
China
CACM
European Union
Japan
MERCOSUR
Andean Group
CACM
Asia
Asia
MERCOSUR
Japan
China
Source: ECLAC
Freight structure during the first quarter of 2011 to and from Barcelona by type: refrigerated or dry.
ORIGIN BARCELONA
DESTINATION
70
DRY 40
REEFER
JAMAICA
$ 3.860,00
$ 6.356,00
TRINIDAD & TOBAGO
$ 3.961,00
$ 7.383,00
DOMINICAN REPUBLIC
$ 3.541,00
$ 7.378,00
Source: Maersk Line, Sea Freight, APL.
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
DESTINATION BARCELONA
ORIGIN
DRY 40
REEFER
JAMAICA
$ 4.455,00
$ 8.134,00
TRINIDAD & TOBAGO
$ 4.878,00
$ 8.921,00
DOMINICAN REPUBLIC
$ 3.866,00
$ 8.104,00
Source: Maersk Line, Sea Freight, APL.
15.b Intra Caribbean Freight
Freight within the islands is, in proportion to the distance, less expensive. So are the prices they are trading on most products.
The phenomenon of prices cannot be seen only in line with the distance but also with port costs in Europe, in euros, and those
from the Caribbean in dollars.
The average transit time between the ports of the three countries of the study is of 7 to 8 days.
Comm: General Cargo (Not dangerous) DRY Container
POL: Rio Haina, Dominican Republic/ POD: Port of Spain,
Trinidad & Tobago
FEU*
Basic Freight
$ 1.000,00
Bunker Surcharges
$ 130,00
Origin THC
$
75,00
Carrier Security Fee
$
8,00
Destination THC
$ 130,00
Documentation Fee *
* In case that B/L will be printed @ Santo Domingo,
Dominican Republic
*Forty Equipment Unit
$
30,00
$ 1.373,00
COMM: Refrigerated Cargo Reefer Container
POL: Rio Haina, Dominican Republic/ POD: Port of Spain,
Trinidad & Tobago
FEU*
Basic Freight
$2.600,00
Bunker Surcharges
$ 130,00
Origin THC
$
75,00
Carrier Security Fee
$
8,00
Destination THC
$ 130,00
Documentation Fee *
* In case that B/L will be printed @ Santo Domingo,
Dominican Republic
*Forty Equipment Unit
$
30,00
$2.973,00
71
15.c The Freight Ferry - Alternative Transportation
In various forums it has been estimated that a producer that sends 1 or 2 containers per month to a destination, can pay rates with
an increase of 50% compared to a product that sends 50 containers per year.
In the Dominican Republic, it is expected that the Santo Domingo Ferry transport between 1000 and 1100 containers per year, also
using the nave for loose cargo. This may be an alternative to relieve financial costs, especially for small producers.
Currently, there is a Ferry connecting the islands of Barbados, Saint Lucia, Grenada and St. Vincent, and Trinidad and Tobago with a
daily service, but it is concentrated in passengers and cargo of little volume.
From the point of view of smaller cargo volume it is an interesting project, but it is concentrated in small loose cargo and more
concentrated in the transportation of passengers, between 260 and 300 seats per trip. In sum, the burden remains expensive
because, although this service is daily, the capacity is quite limited for use in trade in goods.
8. CONCLUSIONS
International trade is an important driver of economic
development; increasing countries´ economic output achieved in
large part through export-led growth strategies. Correspondingly,
countries searching to expand their markets have also begun to
look within their regions. Though CARICOM has been to date, the
most successful integration scheme in the Caribbean, it has yet to
bring together all member states to a true integrated bloc.
Among the most important challenges the Caribbean faces is
the development of regional infrastructure and a common trade
facilitation process. There is a lack of commonality of regulations
that affects the interest of investors to support the needed spatial
transformation in areas such as ICT, transport infrastructure
and new transport services, thus negatively affecting regional
productivity growth. There must be a review of trade policies,
national and regional, as well as the logistics procedures in order
to boost the competitiveness of the countries in particular and the
region as a whole
Regional initiatives on trade integration and development of the
region must be addressed with an agenda for the expansion of
productive integration, and intra-regional logistics services must
support both national and sub national organizations in order to
fully achieve the economies of agglomeration necessary to reap
the most benefits from these costly reforms.
Private-sector reasoning should influence state-led integration.
Deepening regional ties is important to the process, as are the
costs of non-trade issues in regional development integration, such
as transportation infrastructure.
The Caribbean region needs to review its policies and procedures as
well as revise its focus on trade facilitation measures to avoid being
left out from the global market. Even more with the increased
competition of countries with similar production profiles for the
major markets of the planet and the trends on transports and
logistics costs. These trade facilitation measures include physical
infrastructure, regulatory frameworks, logistics planning, ICT and
review of international trade procedures.
With regard to the Dominican Republic, the efforts at integration
72
look even direr, given the language barrier, and reluctance in
opening Caribbean markets to Dominican exports. This is mainly
due to the fear that smaller Caribbean economies will not be able
to compete with the somewhat dynamic Dominican economy.
This is in part what has slowed down the implementation of the
EPA between CARIFORUM and European Union.
The areas where common practices are seen and evident in
CARICOM member states, especially in the application of the
Caribbean Community Common External Tariff (CET) and in the
adoption of the WTO Customs Valuation Agreement in regard to
imports from countries with whom there are no trade preferential
treatment.
In regard to the development of export-oriented policies, it is clear
that all countries have been employing efforts to promote, facilitate
and diversify their insertion in international markets. Most of these
efforts are largely based in the issuance of subsidies and free
zone regimes that grant major incentives. Most of these subsidies
are in direct violation of the WTO Agreement of Safeguards and
Countervailing Measures (SCM Agreement). The WTO General
Council has accepted these regimes until 2015, posing a big
challenge, in terms of time constraint, for these countries to look
for alternative ways to promote their productive sectors.
The More Developed Countries in CARICOM, such as Barbados,
Jamaica and Trinidad and Tobago have implemented incentive
programs that foster the creation of offshore companies, thus
ensuring a steady inflow of foreign capital.
In contrast Spain has adapted well within the integration efforts
that the European Union/Communities have set forth. The EU
has harmonized all aspects of trade policy and it has set forth a
comprehensive strategy that has been drafted and implemented
by consensus of the member states. In terms of import and export
policies, there is a strong mandate and directive to follow EU
rules and only in the areas where the integrated policy does not
establish any set rules, then can the national authorities implement
individual policies.
This is the integrated effort that the Caribbean region needs in
order to thrive in today’s business paradigm and take full advantage
of the trade preferences it currently holds. As a bloc they could
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
integrate efforts, set forth specialization programs and offer as a
whole a larger and better export offer to the world.
It is imperative that to attract investment from the European Union,
and to foster a more efficient intra-regional trade relationship
many efforts must be centered in the harmonization of procedures,
tariffs, and policy framework at CARIFORUM level, not just at the
CARICOM action line. The inclusion and standardization of the
same import/export processes is key for these small countries to
become competitive in today’s world, where the transfer of goods
and services everyday is more expedited.
Infrastructure improvements, along with a skilled and educated
work force, have been identified as the crucial factors for investors
in the Caribbean. There is a need of training programs to increase
the number of skilled workers in the region if the Caribbean
countries want to increase competitiveness and have a dynamic
participation in the international trade arena.
The objectives must be to achieve the formation of a functioning
regional market through:
. Targeting the Regional Market through an effective regional trade
policy and unification on tariffs and logistics services costs.
. Creating a Conducive Business Environment by reducing Caribbean
legal and administrative barriers, such as restrictive labor market
regulations and administrative requirements for businesses.
. Strengthening regional trade negotiating capacity to reduce
vulnerability and focus on the strategic advantages of the region.
.
Trade facilitation is the next step after countries have already
introduced their product and services to foreign markets. Favorable
market access can have a short lifespan without an efficient set of
mechanisms for transporting goods to international markets. There
is little value in market access without the ability to maintain a
flow of supplies to those markets.
For the Caribbean region, development of trade facilitation has
become a crucial competitive factor due to the reductions in trade
barriers that have lessened preferences and protections previously
enjoyed by most of the countries.
Reports from the World Bank find that the greatest efficiency
gain to international transport in the region would come through
liberalization of transport services and the reduction of government
support. The report notes that transport liberalization in other
countries has significantly reduced fares and increased volume,
benefiting both business and tourism.
Airline liberalization and rationalization of airline routes have also
been cited as sources for lowering costs for leisure and business
travel, and increasing the efficiency of business in the region,
similar to the gains realized from rationalization of waterborne
shipping routes. This is particularly important for transportation of
perishable goods and other goods requiring fast transport.
In terms of logistics and trade facilitation there are no direct
transportation services between the smaller Caribbean islands and
the European Union or the United States, due to their drafts
and infrastructure. At the same time, the small ports don’t
compete between them because there are few port operators,
the operation is very expensive for the little demand of services,
and the return of investments is slow and uncertain at a medium
term.
There are maritime routes that go only to unload. This makes
the negotiation prices of the freight rates more expensive. The
transshipments, despite being the logistics solution, raise the
final costs that are added to the final price of the product on the
market. Freight outside the Caribbean is lower than rates inter
Caribbean, in proportion to the distance and transit time. This is
an effect of the frequencies of arrival, departure and the volume
of cargo transported by the ships.
There are only three ports were the return of investments
can be more accelerated due to their infrastructure and draft:
Dominican Republic, Jamaica and Trinidad and Tobago. These three
ports currently compete among them to be the entry point to
CARIFORUM.
The products these countries export among them and to third
countries are very similar. All the countries have a negative trade
balance.
Freight costs have a negative impact (increase) on the unit value
of a product, for example the transportation of fresh produce
must be done by air and the rates make the final product more
expensive.
There is an inverse relationship between the freight paid on
goods transported in a container and the volume or quantity
of such goods, or else: At greater quantity transported, less
the freight per unit. Similarly, this relationship applies in the
ports, at a greater volume of cargo incoming or outgoing, the
fixed costs are diluted among more units and the earnings
increase.
A decisive factor is that the volume of cargo and the quantity of
containers or diverse units of transportation must be constant
so that the port has no idle time, given that it damages the
equipment, discourages investment and causes losses in the short
term.
In sum, the challenges that the Caribbean must address for the
competitiveness of its countries and its recognition as trading
block must include:
. Increase private sector participation in ports;
. Reduce restrictions in maritime transport and encourage competition;
. Establish regional “hub ports” (through global networks, mergers/
alliances and private
. Sector participation) as a way of increasing transshipment;
. Others such as telematics, facilitation and international negotiations.
. Competing Regional Hub Ports
73
9. WEBSIDE LINKS
Links Trade Facilitation
Port Information
• www.jacustoms.gov.jm/
• www.portjam.com
• www.oas.org/cip/
• www.hit.com.do
• www.patnt.com
• www.barbadosport.com/
index.php?option=com_content&view=article&id=96&Itemid=97
• www.cia.gov
• www.caucedo.com
Regional Trade Information
• http://www.eclac.cl/
• www.caricom.org/
jsp/single_market/single_market_index.jsp?menu=csme
• www.caricom.org/jsp/pressreleases/pres01_07.jsp
• www.cei-rd.gov.do/reportes_estadisticos.asp
• www.comtrade.un.org
Customs Information
• www.dga.gov.do
• www.finance.gov.tt
• www.revenuegy.org/
• www.customs.gov.lc
Maritime Rates
• www.searates.com
• www.maerskline.com
• www.apl.dom
Airport Information
• www.icao.int
• www.IATA.com
Links Trade Policy
Links Trade Policy
Site
http://www.wto.org
http://www.antigua-barbuda.com
http://www.sice.oas.org
74
Description
This is the official website for
the World Trade Organization.
In this website all notifications
made to the WTO from the
country members are posted,
as well everything related to
the particular subject matters
that are dealt by this
international regulating entity.
Trade related statistics and
informative reports on flows,
dispute settlements and
adopted measures can also be
found on the search basis of
per country or per sector.
This is the official website for
the High Commission of
Antigua and Barbuda where all
political, trade, investment
information is posted. This
website serves as the official
vessel where authorities
promote the opportunity and
advantages the country has to
offer in a busines related
framework.
This the official website for the
Organization of American
State's Foreign Trade
Information System which
centralizes information on
trade policy in the Americas.
Here are compiled the full texts
of trade agreements in force
for OAS Member States, new
and ongoing trade policy
developments, information on
national trade-related
legislation, links to
international, regional and
national sources of trade policy
information.
Documents Found
Trade Policy Review for:
Organization of Eastern
Caribbean States,
Barbados, Dominican
Republic, Jamaica,
Suriname, Trinidad and
Tobago; and Spain. Also
varios notifications from
the countries in the study
as well General Council
decisions that affect
them.
Tax information and
breakdown, investment
incentives, tourism
reports.
Lists of BITs signed by:
Antigua & Barbuda,
Barbados, Dominican
Republic, Jamaica,
Suriname, Trinidad and
Tobago. Also here you
can find the text for
CARIFORUM-EU EPA
and DR-CAFTA
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
http://www.thecommonwealth.org
http://www.ustr.gov
http://www.investbarbados.org
http://www.bidc.com
This is the official website for
the Commonwealt Secretariat.
Here once can obtain countryspecific and issue-specific
information regarding all of the
54 member States. This
website countains all the
reports of the Heads of
Government Decisions as well
as all the relevat business and
political information of each
member State.
This is the official website for
the United States Trade
Representative. This portal has
information on all trade related
information that is pertinent to
the United States of America. It
contains information regarding
all FTAs, BITs, and preferential
treatment programs that the
United States has launched
and is party to.
This is the official website for
Invest Barbados Agency which
is the formal government entity
that serves as the Investment
Promotion Agency for the
Government of Barbados.
Here information on the
various investment
opportunities that are available
in Barbados can be found as
well as the incentives offered
within the country.
This is the official website for
the Barbados Investment &
Development Corporation
promotes the establishment of
business enterprises in
Barbados and provides
information in the different
incentives that are available for
the industrial and commercial
sectors.
Information on the
agreements Antigua and
Barbuda was party to.
Information regarding the
Caribbean Basin Initiative
and the subsequent
ammendments/extension
s to the program.
Export and Import
incentives in Barbados
Fiscal incentives and
trade benefit
mechanisms in Barbados
http://europa.eu.int
http://customs.gov.bb
This is the official website for
European Union though its
information is coordinated by
the Communications
Department of the European
Commission. All information
regaring the political, trade,
and social aspects of all the
members States of the
European Union can be found
in this website. All information
regarding the Cotonou and the
subsequent EPAs can be
found here
This is the official website for
the Barbados Customs and
Excise Department. All
import/export legislation in
contained in this portal as well
the different information
regarding ports, and other
affairs that this department
deals with.
This is the official website for
the Dominican Republic Export
and Investment Center (CEI-
Official Text of the
Cotonou Agreement, and
CARIFORUM-EU EPA.
Information regarding
Trade Policy from Spain
and the EU as a block.
Notification that are
applicable to all member
States regarding Trade
Policy.
Information on export and
import licenses from
Barbados are available.
75
http://www.cei-rd.gov.do
http://www.dga.gov.do
the different information
regarding ports, and other
affairs that this department
deals with.
This is the official website for
the Dominican Republic Export
and Investment Center (CEIRD) which is the Investment
Promotion Agency for the
Dominican government. In this
website everything regarding
export promotion (statistics
and legislation) and investment
attraction can be found here.
Also available is a database of
all trade and investment
agreements that are in force
for the Dominican Republic
This is the official website for
the Dominican Republic
Customs Directorate where
information regarding customs
legislation, import/export
statistics and information
regarding licenses
Barbados are available.
Law 16-65, Law 84-99,
BITs signed by the
Dominican Republic, and
information regarding
export promotion
incentives
Law 3489 regarding
Customs.
http://www.cnzfe.gov.do
This is the website for the
National Export Free Zone
Council of the Dominican
Republic. This webiste
contains statistical information
on all free zone companies,
and operators in the country as
well as legislative and
regulatory information.
Law 8-90 regarding Free
Zones. Information
regarding what is need to
set up a free zone and
their benefits
http://www.miic.gov.jm
This is the official webiste for the Ministry
of Industry, Investment and Commerce. In
this website all information regarding trade
legislation can be found as well as
procedural information for the issuance of
permits and import/licenses. Also more
information is offered in term of
government procurement and various
trade policy governing issues.
Information on the relevant entities
that were in charge of the issuance
of export and import licenses
http://www.tradeboard.gov.jm
This is the official website for the
Trade Board of the Ministry of
Industry, Investment and
Commerce in Jamaica which
provides information regarding the
step needed to export and/or
import merchandise to /from
Jamaica. Also this webiste serves
as the communication channel for
authorities to publish regulatory
decisions that affect trade.
Steps need to obtain an
import license and an export
license.
http://www.jamaicatradeandinvest.org
http://chamber.sr.net
This is the website for Jamaica
Promotions Corporation which is
the official investment promotion
agency for the country. All
information regarding investment
opportunities and export
promotion can be found in this
website. Also this website
provides detailed information on
the different incentives that are
available in Jamaica for foreign
entities.
This is the official website for the
Chamber of Commerce and
Industry of Suriname which
entrusted to it by law:
implementation of economic
legislation, provision of trade
information and representation of
the interests of regional trade and
industry.
Export Incentives offered in
Jamaica, and Foreign Direct
Investment information.
Information regarding
regulatory framework of
export licenses.
76
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
http://www.tradeind.gov.tt
http://www.tdc.co.tt
http://www.mic.gob.do
http://www.caricom.org
http://www.weforum.org
http://www.doingbusiness.org
This is the official website for
Ministry of Trade and Industry
where all the legislation and
statistical information regarding
Trade is contained. All
agreements that have been
subscribed by Trinidad and
Tobago are provided in this
website as well the sectoral laws
that offer incentives.
This is the webiste for the Tourism
Development Company Limited
(TDC) whch is a state enterprise
of the Government of the Republic
of Trinidad and Tobago,
mandated to develop and market
Trinidad and Tobago's tourism
product and improve the local
tourism sector.
This is the official website for
Minitry of Industry and Commerce
for the Dominican Republic. All
information regarding internal and
foreign commerce is contained in
terms of legislation and policy
documents.
This is the official website for the
Caribbean Community Secretariat
where all information on regionwide initiatives are posted. All
regional initiatives are contained
here and decisions from the
Council of Ministers.
This is the World Economic
Forum webiste where information
regarding various economic and
social indicators are found from all
the countries in the world. The
WEF is heavily focused in the
competitiveness of countries and
issues a yearly ranking on the
Global Competitiveness Index
This is the webiste provided by
the World Bank Group for their
yearly report called Doing
Business. This report focuses on
10 indicators that are all related to
the operation of a business in a
country. The average of all of
these rankings gives the overall
Ease of Doing Business Index
which is computed by the World
Bank
Incentives provided in
sectoral laws for investment
and export.
Investment incentives
offered in Trinidad and
Tobago.
DR-CAFTA and
CARIFORUM-EU EPA
Texts
Information regarding the
EPA Implementation Unit
and statistics provided from
the Office of Trade
Negotiations.
Ranking in the Global
Competitiveness Index for
all the countries contained
in this study.
Ranking in all indicators for
the countries of this study.
10. BIBLIOGRAPHY
• Connecting to Compete: Trade Logistics in the Global Economy,
2010
• Review of Maritime Transport, Unctad Conference on Trade and
Development, Geneva, 2005
• Caribbean Maritime Economic Security Program, May 2009,
Caribbean Central American Action
• The Impact of the Caribbean Basin Economic Recovery
Act, Nineteenth Report 2007-2008, U.S. International Trade
Commission, September 2009
• Doing Business 2009, Caribbean States
• Maritme sectors and ports in the Caribbean: the case of CARICOM
countries, Ricardo J. Sanchez, Gordon Wilmsmeier, CEPAL, June
2009
• Freight Logistics in Latin America and the Caribbean: An Agenda to
Improve Performance, José A. Barbero, Inter-American Development
Bank, 2010
• A Concept Paper for the Preparation of Strategic Plan on Maritime
Transport Services for the Caricom Single Market and Economy
• Trade Logistics and Regional Integration in Latin America and the
Caribbean, Pablo Guerrero, Krista Lucenti, and Sebastián Galarza,
August 2010, ADBInstitute
• Analysis of the importance of general agreement on tariffs and
trade (GATT) and its contribution to
• international trade, Kossi Ayenagbo, Josphert Ngui Kimatu, Zhang
Jing, Sidime Nountenin and
• Wang Rongcheng, January 2011
• Review of Maritime Transport, 2005, United Nations
• Development of a Network of Freight Logistics Observatory in
Latin America and the Caribbean, Rodolfo Huici, January 2011
• Aid- for-Trade Strategy in Latin America and the Caribbean, IDB
Technical Note, 2009
• Documents and paper from the Caribbean Shipping Association
77
• Freight Logistics in Latin America and the Caribbean: an agenda to
improve performance, IADB,2010
• Índice de Conectividad Marítima Regular de la UNCTAD, Gerardo
Polo
• Trade Policy Review Reports for: Antigua, Dominican Republic,
Jamaica, Surinam and Trinidad & Tobago, WTO
• Trade at a Glance, World Trade Indicators 2009/2010, WTO
• Global Competitive Index, WEF
• Guía Logística de la República Dominicana, USAID, September 2005
ANNEX A
Regional Initiatives
Regional Initiatives
Initiative
The Caribbean
Free Trade
Association
(CARIFTA)
Caribbean
Community and
Common Market
(CARICOM)
CARICOM
Single Market
and Economy
(CSME)
CARICOM
Single Market
and Economy
(CSME)
Instrument
Dickenson Bay
Agreement
Chaguaramas
Treaty
Chaguaramas
Revised Treaty
Chaguaramas
Revised Treaty
CARICOM- DR
Free Trade
Agreement
Signature
date
Scope
Participating Countries
15-Dec-65
It was intended to encourage
balanced development of the
Region by increasing, diversifying
and liberalising trade, while
ensuring fair competition.
Antigua and Barbuda, Barbados,
Guyana, and Trinidad and Tobago;
Dominica, Grenada, St Kitts-NevisAnguilla, Saint Lucia and St
Vincent and the Grenadines
(1968), Montserrat and Jamaica;
and Belize (1971)
4-Jul-73
Its main goal is the creation of a
common market, the integration of
its economies, to coordinate the
foreign policies of the independent
member countries, trade promotion
and a strong cooperation policy.
The Community instrument
addresses issues such as
economy, foreign policy
coordination and funtional
cooperation. The Common Market
Annex addressed economic
integration issues, particularly those
related to trade arrangements.
Barbados, Guyana, Jamaica,
Trinidad &Tobago, Antigua and
Barbuda, Suriname, the Bahamas,
Belize, Granada, Dominica, Haiti,
Montserrat, Saint Kitts & Nevis,
Saint Lucia, and, St. Vincent & the
Grenadines. Also, 5 countries are
considered Associate Members:
Anguila, Bermuda, British Virgin
Islands, Caymand Islands, Turks
and Caicos Islands
6-Jul-01
The main objectives of the CSME
are: full use of labour and full
exploitation of the other factors of
production (natural resources and
capital); competitive production
leading to greater variety and
quantitu of products and services to
trade with other countries. This
objectives will in turn provide
improved standards of living and
work and sustained economic
development.
Antigua and Barbuda, Belize,
Grenada, Montserrat, St. Vincent
and the Grenadines, Guyana, St.
Kitts and Nevis, Suriname,
Barbados, Dominica, Jamaica,
Saint Lucia, Trinidad and Tobago
6-Jul-01
The main objectives of the CSME
are: full use of labour and full
exploitation of the other factors of
production (natural resources and
capital); competitive production
leading to greater variety and
quantitu of products and services to
trade with other countries. This
objectives will in turn provide
improved standards of living and
work and sustained economic
development.
Antigua and Barbuda, Belize,
Grenada, Montserrat, St. Vincent
and the Grenadines, Guyana, St.
Kitts and Nevis, Suriname,
Barbados, Dominica, Jamaica,
Saint Lucia, Trinidad and Tobago
22-Aug-08
The main objective is to foster trade
among the countries with the
principles of the World Trade
Organization. Under this
agreement, all goods except 3 lists
of products are eligible for Duty
Free Entry when traded between
the MDCs and the Dominican
Republic.
CARICOM States and the
Dominican Republic
78
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
CARICOM
Single Market
and Economy
(CSME)
CARICOM
Single Market
and Economy
(CSME)
Chaguaramas
Revised Treaty
6-Jul-01
CARICOM- DR
Free Trade
Agreement
22-Aug-08
Chaguaramas
Revised Treaty
6-Jul-01
The main objectives of the CSME
are: full use of labour and full
exploitation of the other factors of
production (natural resources and
capital); competitive production
leading to greater variety and
quantitu of products and services to
trade with other countries. This
objectives will in turn provide
improved standards of living and
work and sustained economic
development.
The main objective is to foster trade
among the countries with the
principles of the World Trade
Organization. Under this
agreement, all goods except 3 lists
of products are eligible for Duty
Free Entry when traded between
the MDCs and the Dominican
Republic.
The main objectives of the CSME
are: full use of labour and full
exploitation of the other factors of
production (natural resources and
capital); competitive production
leading to greater variety and
quantitu of products and services to
trade with other countries. This
objectives will in turn provide
improved standards of living and
work and sustained economic
development.
Antigua and Barbuda, Belize,
Grenada, Montserrat, St. Vincent
and the Grenadines, Guyana, St.
Kitts and Nevis, Suriname,
Barbados, Dominica, Jamaica,
Saint Lucia, Trinidad and Tobago
CARICOM States and the
Dominican Republic
Antigua and Barbuda, Belize,
Grenada, Montserrat, St. Vincent
and the Grenadines, Guyana, St.
Kitts and Nevis, Suriname,
Barbados, Dominica, Jamaica,
Saint Lucia, Trinidad and Tobago
CARICOM-Colombia
Agreement on Trade
and Technical
Cooperation as
amended by its
Protocol
CARICOM-Costa
Rica FTA
CARICOMVenezuela FTA
24-Jul-94
The Agreement behas as a non recirpocal
agreement but had to provide for a level of
reciprocity to Colombia after a period of 4
years, through a Protocol amending the
original Agreement, ratified May, 1998.
CARICOM States and Colombia
15-Mar-03
The most recently concluded bilateral
agreement between CARICOM and a third
country within the Central Americas. The
Agreement provides for free trade or
preferential access for a wide range of
products. Some sensitive products have
been excluded. A special list of products
will be granted differentiated market acces
between Costa Rica and each of the
CARICOM MDC's
CARICOM States and Costa Rica
13-Oct-92
The Agreement is a one way preferential
agreement concluded under the facility for
non-reciprocal partial scope agreements
available to members of the Latin
American Integration Association (LAIA)
CARICOM States and Venezuela
CARIFORUM
Conotu
Agreement
Lome IV
Convention
1992
CARIFORUM monitored and
coordinated the allocation of
resources out of the European
Development Fund (EDF) for the
purpose of financing regional
projects in the Caribbean Region
within the framework of the Lome
IV Convention
Antigua and Barbuda, The
Bahamas, Barbados, Belize,
Dominica, Dominican Republic,
Grenada, Guyana, Haiti, Jamaica,
St. Kitts and Nevis, Saint Lucia, St.
Vincent and the Grenadines,
Suriname and Trinidad and Tobago
23-Jun-00
The three main aspects of its scope
are development cooperation,
economic and trade cooperation,
and the political dimension.
The agreement provides
asymmetric and progressive
opening of trade in goods. It is
expected that the CARIFORUM
tariff reduction will occur during a
25 year transition period, starting
this year.
European Union and ACP
Countries (except for Cuba)
79
The Caribbean
Tourism
Organization
Merger
Agreement of the
CTA and the
CTRC
Caribbean
Development
Bank
Agreement
establishing the
CDB
Caribbean
Export
Development
Agency
Agreement
establishing the
Caribbean Export
Development
Agency
Caribbean Basin
Initiative
Caribbean Basin
Economic
Recovery Act
(CBERA) and the
U.S.-Caribbean
Basin Trade
Partnership Act
(CBTPA)
It promotes the Caribbean as a
touristic destination.
Anguilla, Antigua, Aruba, The
Bahamas, Barbados, Belize,
Bermuda, Bonaire, British Virgin
Islands, Cayman Islands, Cuba,
Curacao, Dominica, Dominican
Republic, Grenada, Guadeloupe,
Guyana, Haiti, Jamaica,
Martinique, Montserrat, Puerto
Rico, St. Barts, St. Eustatius, St.
Kitts, Nevis, Saint Lucia, St.
Maarten, St. Martin, St. Vincent
and the Grenadines, Suriname,
Trinidad and Tobago, Turks and
Caicos Islands, USVI, Venezuela
18-Oct-69
The CDB works in social and
economic development programs
for the systematic reduction of
poverty in their countries. It is a
financial institution whose main
purpose is to contribute in the
economic growth of its countries,
having special consideration for the
less developed ones.
Regional Members: Anquilla,
Antigua and Barbuda, The
Bahamas, Barbados, Belize, British
Virgin Islands, Cayman Islands,
Dominica, Grenada, Guyana, Haiti,
Jamaica, Montserrat, St. Kitts and
Nevis, St. Lucia, St. Vincent and
the Grenadines, Trinidad and
Tobago, Turks and Caicos Islands.
Other Regional Members:
Colombia, Mexico, Venezuela.
Non-Regional Members: Canada,
People's Republic of China,
Germany, Italy, United Kingdom
25-Nov-95
It was established by CARIFORUM
as their trade promotion agency. It
focuses on 4 key areas: fostering
and enabling a trade and
investment environment, enhancing
competitiveness, promoting
investment and strengthening
institutional capacity and
networking.
Members of CARIFORUM
1983/2000
respectively
The CBI is intended to facilitate the
economic development and export
diversification of the Caribbean
Basin economies.
Antigua and Barbuda, Aruba, The
Bahamas, Barbados, Belize, British
Virgin Islands, Dominica, Grenada,
Guyana, Haiti, Jamaica,
Montserrat, Netherland Antilles,
Panama, St. Kitts and Nevis, St.
Lucia, St. Vincent and the
Grenadines, Trinidad and Tobago.
18-Jun-81
Its an intergovernmental
organization dedicated to economic
harmonization and integration,
protection of human and legal
rights, and the encouragment of
good governance between
countries.
Anguilla, Antigua, British Virgin
Islands, Dominica, Grenada,
Montserrat, St. Vincent and the
Grenadines
1989
OECS
Treaty of
Basseterre
80
EXPORT AND IMPORT POlICIES ASSESSMENT FOR DOMINICAN REPUBlIC AND THE CARIBBEAN REGION
Annex B
Doing Business
Doing Business Ranking 2009-2011
Economy
Year
Antigua and
Barbuda
Jamaica
Ease of
Doing
Business
Rank
Suriname
Registering
Property
Getting
Credit
Protecting
Investors
Paying
Taxes
Trading
Across
Borders
Enforcing
Contracts
Closing
a
Business
2011
64
72
25
123
116
28
132
63
73
66
56
61
21
100
109
No avilable data
27
126
58
72
65
81
79
18
18
47
47
106
123
89
87
No avilable data
74
73
174
173
104
105
128
126
24
23
91
86
137
105
89
90
114
113
72
69
No avilable data
59
57
76
68
40
40
84
85
145
146
97
95
74
63
85
82
171
170
32
30
No avilable data
20
20
91
90
51
53
169
169
183
183
2011
2010
2009
2011
Trinidad and
Tobago
Dealing with
Construction
Permits
2010
2009
2011
2010
2009
2011
2010
2009
Dominican
Republic
Starting
a
Business
2010
2009
161
171
94
168
138
181
34
101
178
146
160
173
91
168
135
No avilable data
180
33
102
178
149
** Economies are ranked on their ease of doing business, from 1
Ð 183. A high ranking on the ease of doing business index
means the regulatory environment is more conducive to the
starting and operation of a local firm. This index averages the
country's percentile rankings on 9 topics, made up of a variety of
indicators, giving equal weight to each topic. The rankings for all
economies are benchmarked to June 2010.
Annex C
Trade Indicators to Monitor
Specific Nominal Indicators to Monitor Regulatory Framework Efficiency and Ease of Trade Days to Start a Business Days Needed to Export a
Merchandise
Source: Doing Business Report
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
Spain
2009 2010 2011
21
21
21
72
8
694
43
47
19
8
694
43
47
22
8
694
43
47
19
8
694
43
47
19
8
694
43
47
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
Spain
2007 2008
13
19
17
21
25
14
9
12
21
25
14
9
2009 2010 2011
15
15
15
9
21
25
14
9
Days Needed to Import a Merchandise
Source: Doing Business Report
Source: Doing Business Report
2007 2008
8
8
9
6
13
9
10
9
6
13
9
10
2009 2010 2011
8
8
8
8
6
13
9
10
8
6
13
9
10
8
6
13
9
10
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
Spain
2007 2008
15
19
17
22
25
43
10
13
22
25
43
10
9
21
25
14
9
10
22
25
43
10
10
22
25
43
10
Documents needed to Import a Merchandise
Source: Doing Business Report
Source: Doing Business Report
Spain
2007 2008
5
5
2009 2010 2011
5
5
5
7
6
8
5
6
6
8
5
6
6
8
5
6
6
8
5
6
6
8
5
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
6
6
6
6
6
Spain
2007 2008
5
5
9
21
25
14
9
2009 2010 2011
15
15
15
Documents needed to Export a Merchandise
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
Source: Doing Business Report
2007 2008
21
21
Number of Procedures to Start a Business
Antigua and Barbuda
Barbados
Dominican Republic
Jamaica
Suriname
Trinidad and Tobago
Spain
10
22
25
43
10
2009 2010 2011
5
5
5
10
6
7
6
7
6
7
6
7
6
7
6
7
6
7
6
7
6
7
6
8
8
8
8
7
81
WITH THE TECHNICAL AND FINANCIAL SUPPORT OF PRO€INVEST
PRO€INVEST is a programme of the Group of ACP States and the European Commission for the promotion of investment
and technology transfers in ACP countries. Its management has been entrusted to a management unit within the Centre
for the Development of Enterprise (CDE) under the supervision of EuropeAid Cooperation Office of the European Commission (EuropeAid).