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World Trade Organization |
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WT/TPR/S/190 | |
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(07-4027) |
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Trade Policy Review Body |
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TRADE POLICY REVIEW Overview Report by the Secretariat OECS-WTO MEMBERS |
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This report, prepared for the second Trade Policy Review of the OECS-WTO Members, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from the OECS Members on their trade policies and practices under review: Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines. Individual reports for each of these Members are contained in separate documents in the same series WT/TPR/S/190 with suffixes ATG, DMA, GRD, KNA, LCA and VCT Any technical questions arising from this report may be addressed to Mr. Angelo Silvy (tel. 022 739 5249), Ms. Document WT/TPR/G/190 contains the policy statement submitted by the OECS-WTO Members. |
Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on the OECS-WTO Members.
CONTENTS
Page
SUMMARY OBSERVATIONS v
(1) Economic Environment v
(2) Trade and Investment Policy Framework vi
(3) Market Access for Goods vii
(4) Export Measures viii
(5) Other Measures Affecting Trade viii
(6) Sectoral Policies viii
I. Economic environment 1
(1) Structure of The Economy, Output, and Employment 1
(2) Fiscal Policy 3
(3) Monetary and Exchange Rate Policy 4
(4) Balance of Payments, Trade and Investment Flows 5
(5) Outlook 6
II. trade and investment policy framework 7
(1) General Constitutional and Legal Framework 7
(2) Trade Policy Objectives and Formulation 7
(3) Foreign Investment Regime 8
(4) International Relations 8
(i) World Trade Organization 8
(ii) Regional agreements 11
(iii) Other preferential agreements and arrangements 13
(5) Aid for Trade and Technical Assistance 15
III. trade policies and practices by measure 19
(1) Measures Directly Affecting Imports 19
(i) Customs procedures, documentation, and registration 19
(ii) Customs valuation 21
(iii) Rules of origin 21
(iv) Tariffs, other duties and taxes 21
(v) Other levies and charges 26
(vi) Import prohibitions, restrictions, and licensing 26
(vii) Contingency measures 28
(viii) Technical regulations and standards 29
(ix) Sanitary and phytosanitary measures 30
(2) Measures Directly Affecting Exports 31
(i) Documentation, export taxes, and restrictions 31
(ii) Export subsidies, financing, support, and promotion 32
Page
(3) Measures Affecting Production and Trade 33
(i) Legal framework for business and taxation 33
(ii) Incentives and assistance 33
(iii) Competition policy and regulatory issues 34
(iv) Government procurement 36
(v) Intellectual property rights 36
IV. trade policies by sector 38
(1) Agriculture 38
(2) Manufacturing 39
(3) Services 39
(i) GATS commitments 39
(ii) Telecommunications 41
(iii) Financial services 43
(iv) Air transport 45
(v) Maritime transport 46
(vi) Tourism 47
(vii) Professional services 48
(viii) Other offshore services 49
REFERENCES 51
CHARTS
I. ECONOMIC ENVIRONMENT
I.1 Eastern
II. TRADE AND INVESTMENT POLICY FRAMEWORK
II.1 Aid for trade support, 2001-06 16
TABLES
II. TRADE AND INVESTMENT POLICY FRAMEWORK
II.1 Notifications to the WTO, January 2001 to March 2007 9
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 Comparative procedures and expenses for imports, 2006 20
III.2 OECS summary tariff analysis 22
III.3 Customs services charges, 2007 23
III.4 Changes to trade-related tax regimes, as at May 2007 26
III.5 OECS Members' standards bureaux 29
III.6 Comparative procedures and expenses for exports, 2006 31
III.7 Marketing boards or similar arrangements in place over the 2001-07 period 35
III.8 Intellectual property rights legislation enacted since the Uruguay Round 37
III.9 Membership in international instruments on intellectual property rights 38
IV. TRADE POLICIES BY SECTOR
IV.1 Sectors in which GATS specific commitments were made 40
1.
2. OECS-WTO Members have continued to move away from agriculture to services, activities in which they seem to enjoy a comparative advantage. Nevertheless, their narrow production base make them vulnerable to external shocks, a problem magnified by their relatively fragile fiscal positions. The latter could be addressed in part by reducing the numerous incentives still granted to selected activities, some contingent upon exportation. Such rationalization would also reduce transaction costs, improve resource allocation and help ensure the sustainability of economic growth.
(1) Economic Environment
3. The economies of the OECS-WTO Members grew at an average collective real rate of 3.4% during 2001-06. Services are by far the main economic activity, their share of GDP having increased to just over 80% in 2005. Tourism is the major single economic activity. Goods producing sectors have continued to lose GDP share.
4. The OECS-WTO Members are small: in 2006, their combined GDP was some US$3.8 billion and their total population some 550,000 persons, resulting in an average per capita income about US$6,900 (ranging from US$4,450 in
5. Due to their participation in the Eastern Caribbean Currency Union, OECS-WTO Members 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. Inflation has in general been low in recent years, with an annual average of some 2% over the 2001-06 period.
6. In contrast, fiscal policy is conducted in an independent manner by each OECS-WTO Member. Attempt have been made to harmonize fiscal policies through fiscal benchmarks; OECS‑WTO Members are seeking to comply with agreed benchmarks by 2020. Fiscal policy has generally been geared at obtaining an operational surplus and, to this end, steps have been taken to address fiscal imbalances. The current account situation has shifted from a deficit to a surplus in 2005 and 2006. However, with capital expenditure rising steadily, the overall deficit has increased to some 4.2% of GDP in 2006.
7. Despite its reduction, to some 103% of GDP in 2006, public debt remains high and represents a significant constraint to fiscal policy. Because fiscal policy is, in practice, the only macroeconomic instrument the national authorities have available to influence output and employment, the high public debt limits the authorities' ability to use a countercyclical fiscal stance to reduce the impact of external shocks.
8. The economies of the OECS-WTO Members are characterized by a recurrent shortage of savings over investment, which has required substantial capital inflows to finance deficits in the external current accounts. This has contributed to an increase in the external debt in most OECS-WTO Members, although overall OECS external public debt declined in 2005, to some 58% of GDP mainly on account of debt forgiveness for
9. The external current account registers is in deficit in all OECS-WTO Members, with the combined deficit reaching almost 22% of regional GDP in 2006. The merchandise trade balance is structurally negative, with a deficit of some 39% of GDP in 2005. In contrast, the surplus in the services balance was around some 20% of GDP in 2006.
10. Trade in goods and services plays a vital role in the economies of the OECS-WTO Members, representing some 123% of their aggregate GDP in 2005; total imports and exports account for some 71% and 52%, respectively, of aggregate GDP. Growth in merchandise exports has been weak over the 2001-05 period, on account of high labour costs and transportation constraints, an erosion of preferences, the effect of natural disasters, and the closure of the sugar industry in St. Kitts. The OECS-WTO Members' main trading partners are the United States, the European Union (particularly the United Kingdom), Trinidad and Tobago, Barbados, and Canada. Merchandise trade among OECS-WTO Members accounts for less than 10% of total trade.
(2) Trade and Investment Policy Framework
11. OECS-WTO Members see trade as a crucial element in their development, and there is increasing recognition among them of the potential of economic reform including trade liberalization to advance wider economic objectives. Trade policy formulation and implementation in OECS-WTO Members takes place at the national, OECS, and CARICOM levels. Since their last Review, trade policy coordination among OECS-WTO Members has increased, and they have taken a decision to establish an economic union. Other trade-related developments have been driven by CARICOM, including the establishment of a regional standards body, and a CARICOM competition commission.
12. Participation in multilateral negotiations has focused on ensuring that WTO rules contain flexibilities to take account of their small size and development needs. Nearly all OECS-WTO Members have increased the number of their notifications, although most continue experiencing difficulties in this area. In the area of dispute settlement,
13. The administration of trade policy within and among OECS-WTO Members is subject to significant human resource limitations, contributing to a slow pace of implementation of multilateral commitments and, in general, to reform among OECS-WTO Members. Thus the importance of the higher degree of regional cooperation in the formulation of trade policy among the OECS-WTO Members that has been achieved during the period under review. Further deepening this coordination and establishing regional institutions to deal with trade policy issues would bring additional gains, including an enhanced participation in the multilateral trading system.
14. The OECS-WTO Members have benefited from a range of technical assistance projects during the period under review. OECS-WTO Members regard Aid for Trade as an important initiative to deal with adjustment costs associated with trade liberalization and economic reforms, and with improving production and supply capacity. Within Aid for Trade activities, the OECS-WTO Members place emphasis on the identification of infrastructural needs to improve delivery of goods and services, and on receiving support to pursue economic diversification. They also stress that Aid for Trade should be additional to present commitments.
(3) Market Access for Goods
15. The OECS-WTO Members continue to rely heavily on foreign trade taxes, mainly tariffs, customs service charges, environmental charges and consumption or other taxes on imports for revenue collection. In 2006, taxes collected on international trade represented just over 51% of tax revenue in the OECS Members as a whole. However, most OECS-WTO Members have undertaken reforms aimed at decreasing dependence on trade taxes.
16. The OECS-WTO Members apply CARICOM's Common External Tariff (CET) with exceptions. Although the average tariff per se has fallen from 11.9% in 2001 to 10.9% in 2006, overall import duties (tariffs plus customs service charges) have increased slightly in recent years, due to higher customs service charge rates. The unweighted average import duty among all OECS countries was some 16.4% in 2007, up from 16.1% at the time of their previous review. Individual national averages range from 14.9% to 20.7% because of the allowances CARICOM makes for tariff reductions, and national exceptions to the CET. The OECS average import duty for agricultural products (WTO definition) is 23.7%, considerably higher than that for non-agricultural products (14%).
17. Tariffs alone generally go up to 20% for industrial products and 40% for agricultural goods. In a few cases, however, tariffs on goods that have been subject to tariffication exceed 100%, while tariffs on motor vehicles hovering around 45-70%. All OECS Members bound at least 99% of their tariffs lines upon acceding to the WTO. In
18. Customs service charges (CSC) range from 3% ad valorem in
19. Since their last review, OECS-WTO Members have engaged in a process of tariffication of the quantitative restrictions maintained on a number of products (beer and aerated beverages, curry, pasta, among others).
20. OECS-WTO Members have continued to computerize and simplify customs procedures. They now use the transaction value for customs valuation except for
21. Import licensing continues to be widely used by all six countries for their trade with third countries. Although most import licences are granted automatically, and their scope was reduced during the period under review, non-automatic licences are still used in every OECS country except
22. Independent standards bodies function in each of the OECS-WTO Members. Technical regulations and standards are generally adapted from international standards, and little in the way of testing or certification is done in the OECS region due to institutional constraints. None of the OECS-WTO Members have in place any formal procedures for the notification of trading partners when SPS measures are put in place.
(4) Export Measures
23. With a few exceptions, the OECS-WTO Members do not use export-licensing. Only
24. Production for export may benefit from tax incentives. All six countries have notified the WTO Committee on Subsidies and Countervailing Measures of their Fiscal Incentives Acts as providing export subsidies. WTO's General Council granted the OECS-WTO Members and other Members an extension to end 2015 for the dismantlement of export subsidies. In
(5) Other Measures Affecting Trade
25. In addition to export subsidies, OECS-WTO Members continue to rely heavily on tax incentives to promote foreign investment. Incentives provide relief from the payment of, among others, consumption, stamp and import taxes and duties on the importation of raw materials and capital goods. The duration of benefits is in some cases related to local value added, although the authorities have noted that in practice this is rarely the case.
26. The fiscal cost of incentive programmes appears to be high, and their cost effectiveness has been questioned in a number of studies. In recent years, some OECS-WTO Members have undertaken to reform various aspects of those programmes, for example by freezing the granting of tax holidays or setting up new administrative arrangements to enhance transparency. Continuing the reassessment of incentive programmes with a view to their possible rationalization could contribute to greater transparency and efficiency in their use, and make a contribution to addressing the persistently fragile fiscal situation of OECS-WTO Members.
27. None of the OECS-WTO Members are parties to the WTO Agreement on Government Procurement. In practice, OECS-WTO Members seem to employ both public and selective tendering, and select bids with the lowest price. However, in some OECS-WTO Members there are no legislated guidelines defining these or other aspect of the selection process. Enhancing the regulatory and legal framework for public procurement could contribute to a more transparent and efficient use of public funds.
28. Progress has been made with respect to the enactment of new intellectual property legislation but none of the OECS-WTO Members has completed this process to fully reflect the TRIPS Agreement. Putting in place the required institutions has also proved difficult.
(6) Sectoral Policies
29. Agriculture has continued to lose GDP share, reflecting in particular the contraction of the banana and sugar industries; the sugar industry in
30. OECS-WTO Members have service-oriented economies. Overall, tourism-related industries are the most important economic activities, followed by offshore financial and other services. The services sectors of OECS-WTO Members are in practice generally open to trade and foreign investment, but these countries have made few GATS commitments. Three OECS countries made commitments under the Fourth Protocol (on basic telecommunications) but none made commitments under the Fifth Protocol (on financial services).
31. In telecommunications, except for
32. All OECS Members operate both domestic and off-shore financial services. All six countries have been taking steps to consolidate regulation of financial services under a single authority at the national level, excluding domestic banks. The latter have been subject for some time to a uniform legislation and are regulated by the ECCB; uniform legislation for domestic insurance is at an advanced stage of drafting. Full foreign ownership is permitted in insurance and
banking services. There has been considerable regulatory and legislative reform in all OECS Members following on from the G7 Financial Action Task Force's report on the state of money laundering in various offshore centres.
33. Air transport policy is formulated at the OECS level by the Civil Aviation Regulatory Board. Most airlines operating in the sub-region are incorporated in
34. All OECS Members offer fiscal incentives for hotel development, including customs duty and corporate income tax exemptions.
35. OECS-WTO Members have different regimes with respect to professional services: in some Members there are laws to regulate specific professional service providers, and in others professional services are totally unregulated. Efforts are being made to harmonize legislation at the CARICOM level.
I. Economic environment
(1) Structure of The Economy, Output, and Employment
1. The six Organization of Eastern Caribbean States (OECS) WTO Members,
Chart I.1: Eastern Caribbean States
· In 2006, the average per capita income of the six OECS-WTO Members was about US$6,900 (at market prices); it ranged from US$4,450 in
· Services are by far the main economic activity in OECS-WTO Members, accounting for over 80% of GDP (at factor cost) in 2005. Tourism is the major single economic activity, with hotels and restaurants accounting for some 9.3% of GDP across the six countries. However, including its direct and indirect effects, tourism's contribution to GDP may be much higher.[2] Other important services areas are transport, wholesale trade, financial services, and telecommunications, which represented 12.0%, 12.2%, 11.0% and 7.4%, respectively, of the OECS GDP in 2005. Construction activities accounted for some 13.5% of GDP in 2005, propelled by infrastructure projects by the various Governments, by tourism developments, and by construction in preparation for the 2007 Cricket World Cup.
· The traditional sectors, in particular agriculture, have continued to lose share of GDP during the period under review: for the OECS as a group, agriculture represented 5.5% of GDP in 2005, down from 7% in 2000 (Chapter IV(1)).[3] The contribution of manufacturing to GDP declined from 5.6% in 2000 to 5.2% in 2005 (Chapters III(3)(ii) and IV(2)).
· The OECS countries achieved an average growth rate of some 3.4% over 2001-06. After a period of weak growth in 2001-02, aggravated by the reduction in the production and exportation of bananas and the effect of the 11 September attacks in the
· Gross capital formation expanded faster than GDP over 2001-05 owing mainly to growth in the construction sector and to hotel development. However, the low return from investment might be due to the high cost of capital, and despite the widespread policy of tax incentives (Chapter III(3)(ii)); moreover, real output changes and public investment do not seem to have stimulated private domestic investment decisions.[6]
· There are no current official data on unemployment for most OECS Members: the figure for both
· The small size of OECS-WTO Members makes them vulnerable to diseconomies of scale, including in the provision of government services. Wages and salaries of central government employees represented some 12.7% of GDP in 2005, ranging from 11.3% in
(2) Fiscal Policy
· Fiscal policy is conducted independently by each OECS country, under the responsibility of the respective Ministry of Finance, and is the main macroeconomic policy instrument used by the national authorities to influence output and employment fluctuations, given the monetary arrangements of the currency union.
· OECS-WTO Members have taken steps in the last few years to address fiscal imbalances. The consolidated fiscal accounts of OECS countries are characterized by a current account surplus and a large capital account deficit. The consolidated fiscal operations of the OECS-WTO Members central governments resulted in an overall deficit of EC$449 million (excluding debt forgiven in Antigua and Barbuda) in 2006, or some 4.2% of GDP, up from an overall fiscal deficit of 2.9% of GDP in 2005. Overall, the current account shifted from a deficit in each year during 2001-04 to a small surplus in 2005, and a larger surplus (1.8% of GDP) in 2006, reflecting stronger growth in revenue. Capital expenditure has been rising steadily, consistent with an expansion of capital projects starting in 2005.
· OECS-WTO Members continue to rely heavily on foreign trade taxes, mainly customs duties and charges and consumption taxes on imports for revenue collection. In 2006, taxes collected on international trade represented some 12.8% of GDP and 50.9% of tax revenue in the OECS Members as a whole. The main single source of tax revenue is the consumption tax (21.6% of tax revenue), followed by tariffs (14.9%), and the customs service charge (9.6%):
· Medium-term strategies in the various OECS countries are aimed at increasing the current fiscal surplus, since the capital account is likely to continue to post a deficit as a result of large-scale investment projects, generally financed through grants, concessional loans, and borrowing from third countries and banks. To this end, efforts are under way in several OECS countries in the form of fiscal reform.
· OECS countries have also been making efforts to harmonize their fiscal policies. As the fiscal benchmarks introduced in 1998 did not lead to fiscal convergence by the target date of 2007, a new system of benchmarks was approved by the ECCB's Monetary Council in July 2006. The new system of benchmarks established a compliance date of 2020.[8] The benchmarks include: a gross public and publicly guaranteed debt/GDP ratio of less than 60%; and a primary balance of the public sector consistent with achieving and maintaining the target by 2020. The enforcement of the new system would be maintained through peer review in the Monetary Council.
· The OECS countries as a group face a substantial debt burden. Despite a sharp decline in 2005, mainly due to a debt write-off provided to
(3) Monetary and Exchange Rate Policy
· All OECS-WTO Members are members of the Eastern Caribbean Currency Union (ECCU).[9] The Eastern Caribbean Central Bank (ECCB), based in St. Kitts, is the monetary authority for the ECCU. The ECCB has been responsible for monetary and foreign exchange policy for the whole ECCU area since 1976, first as the East Caribbean Currency Authority (ECCA), then as the East Caribbean Central Bank, from 1980. Pursuant to the ECCB Agreement Act of 1983, the ECCB has responsibility for monetary, credit, and exchange rate policy under a regime of joint sovereignty. The ECCB's Monetary Council, comprising a Minister from each of the OECS countries, is the main decision-making body; as members of the Monetary Council, ministers represent the currency union and not their respective countries. The ECCB Agreement Act identifies monetary stability, money and capital market development, and real sector development as the objectives to be attained, in that order. The Act stipulates that foreign exchange must cover at least 60% of monetary liabilities, but the ECCB has been keeping a cover close to 100% (96.5% in 2005).
· The exchange rate parity may be modified only by unanimous decision of the Monetary Council and the ECCB's Board of Directors. Monetary stability has been pursued through a fixed exchange rate regime, which pegs the EC dollar to the U.S. dollar at a rate of EC$2.70 per US$1. Movements in the EC dollar real effective exchange rate are related largely to changes in the value of the U.S. dollar vis-à-vis other major currencies. The EC dollar depreciated in real effective terms by some 10% between 2001 and 2006. The nominal peg has remained unchanged since 1976.
· The money supply is virtually endogenous due to the existence of a quasi-currency board. Limits are imposed on credits to member governments: the ECCB's holding of treasury bills of a certain government may not exceed 10% of a government's current revenue for the current year, while holdings of other government securities may not exceed 15% of the currency in circulation and other demand liabilities. Also, temporary advances to a government in any financial year may not exceed 5% of that government's average annual current revenue in the preceding three years, and holdings of bonds issued by development finance corporations may not exceed 2.5% of the average annual government current revenue over the preceding three years. The ECCB operates a regional market for government securities of the ECCU member states. The Regional Governments Securities Market (RGSM), established in November 2002 and regulated by the Eastern Caribbean Securities Regulatory Commission (ECSRC), currently issues two types of securities with varying maturities: treasury bills and bonds.[10]
· During 2001-05, broad money (M2) in the OECS region grew by an average of 7.5% a year, nearly twice the rate of growth of nominal GDP; M2 growth accelerated in 2006, to 11.6%. Domestic credit increased at an annual rate of some 4.8%, resulting in a sharp increase in the net foreign assets of the banking system over the period.[11] Nominal interest rates declined over 2001-06, with prime lending rates of between 8.5% and 12% in both 2005 and 2006. Real interest rates also declined, to a range of some 5.7-9.2% for prime lending rates.
· Consumer price inflation remained subdued between 2001-03, but started to accelerate in 2004; the average CPI increase was slightly below 2% during 2001-05, for the OECS as a whole, and some 2.8% in 2006. However, inflation varies across countries: it has been particularly low in
· Since 2005, OECS Members have not maintained exchange controls on capital and non-trade current transactions. The EC$250,000 limit on foreign-exchange purchases without approval from the respective Minister of Finance, was eliminated in that year.
(4) Balance of Payments, Trade and Investment Flows
· The current account of the balance of payments of the OECS Members posts a sizeable and increasing deficit, which reached some 22% of GDP in 2006. The deficit is primarily caused by the large trade imbalance, equivalent to some 39% of GDP in 2006. Merchandise imports for the six OECS-WTO Members totalled EC$5 billion in 2006, compared with exports of some EC$650 million. Each individual country posts a trade deficit. The net foreign assets of the ECCB reached EC$1,872 million (some US$693 million) in 2006.
· Each OECS-WTO Member posts a services surplus. However, despite a widening services balance surplus, the current account deficit in all except
· Some two thirds of imports are manufactured goods. The main import items are machinery and transport equipment, followed by chemicals, semi-manufactures, and other consumer goods.
· The main export products vary by country but are mainly agricultural products: bananas are the main export product in
· Current account deficits have been financed by capital inflows; the overall surplus in the capital and financial account reached 26.1% of GDP in 2006, up from 18.2% in 2001. The surplus reflects mainly foreign direct investment and official concessional assistance, including grants and also external borrowing.
· The large financing needs have contributed over the years to an increase in the external debt in most OECS countries. The external public debt declined to some 57.9% of GDP in 2005, from 69.7% in 2004, mostly on account of debt forgiveness for
· The OECS countries' main trading partners are the United States, the EC, particularly the United Kingdom, Trinidad and Tobago, Barbados, and Canada, which together account for around two thirds of imports and exports. Trade with other CARICOM Members has increased during the period under review, reaching almost 20% of total trade in 2005, partly on account of larger oil imports from
· Foreign direct investment inflows in the OECS area totalled EC$5.9 billion (US$2.2 billion) in the 2001-05 period. The main single area for investments has been tourism (in particular hotels and resorts). Manufacturing was also an important area, where investment has been in detergents, soaps, and light electronics.
(5) Outlook
· The IMF forecasts GDP growth of 4.4% for 2007 for the OECS countries, with growth supported by the implementation of major infrastructural projects in most countries. Construction and tourism are expected to continue to be the most dynamic sectors. An overall fiscal deficit of 2.3% of GDP is anticipated. The current account of the balance of payments in all countries is likely to remain under pressure, as imports expand significantly as growth accelerates, while exports lag behind. The overall current account deficit is estimated to be around 20% of GDP.
II. trade and investment policy framework
(1) General Constitutional and Legal Framework
· The constitutional and legal systems of the six OECS-WTO Members under review (the OECS Members) demonstrate considerable homogeneity. All six countries share similar procedures for enacting legislation and judicial provisions, among others. All adopted the "
· The homogeneity of legal systems has given rise to important institutional synergies. For instance, the similarities of OECS Members' legal systems enables legislation drafted for one jurisdiction to be adopted in another without undue difficulty. In many cases, model legislation is drafted for all members at once and may be adopted later with relevant modifications by national legislatures, this promotes efficiency and savings in a number of areas where resource limitations would make legislative action costly. An example is the establishment of the Eastern Caribbean Telecommunications Authority (ECTEL)[14] and the enactment of domestic Telecommunications Acts in each ECTEL member state (Chapter IV of the national reports). Another example is the revised Uniform Banking Acts which are identical in each state.
· OECS Members have been successful in establishing regional institutions for specific purposes. Examples are the Eastern Caribbean Court of Appeal (ECCA), the Eastern Caribbean Central Bank, and the Eastern Caribbean Civil Aviation Authority. The existence of the ECCA, in particular, is only possible because of the high degree of harmonization of the legal systems of the countries involved. Such harmonization also creates potential synergies for the implementation of WTO obligations, as well as opportunities for the development of new trade supporting institutions.
(2) Trade Policy Objectives and Formulation
· OECS Members' trade policy objectives are multifaceted. OECS Members see trade as a crucial element in their development; there is an increasing recognition of the potential of trade liberalization to advance wider economic objectives, so that economic reforms occasioned by various commitments are increasingly viewed as a necessary and desirable process. Simultaneously, they have argued that WTO rules need to be flexible enough to take account of their development needs and that appropriate mechanisms should be available for "small vulnerable economies" to support, where necessary, the adjustment required as a result of trade liberalization. As part of advancing these wider objectives, OECS Members have attempted to increase their participation in trade-related negotiations generally, and have sought trade-related technical assistance in order to achieve this.[15] The major negotiating focus has been to secure, wherever possible, flexibility in negotiated rules in order to mitigate possible negative consequences from what may be onerous commitments. Accordingly, OECS Members have uniformly emphasized the need for special and differential treatment; the need to safeguard long-standing preferences; the need for them to avoid deep cuts in tariffs; and where relevant, the need to secure an appropriate development package in trade negotiations.
· The OECS Members' international trade commitments can be viewed in terms of three concentric circles. At the core is duty-free treatment among OECS partners. The middle circle encompasses duty-free trade with other CARICOM members, with some exceptions. In relation to third countries, OECS members, as part of CARICOM, have adopted, in stages, the CARICOM Common Market and Common External Tariff. The outer ring comprises multilateral commitments including tariff bindings and other obligations covered by the WTO Agreements. The establishment of the Economic Partnership Agreement (EPA) with the European Union as part of CARIFORUM would create another circle of preferential commitments between the existing middle and outer circles (see section (4)(iii) below).
· Although there has been some activity during the review period in trade arrangements between the OECS Members[16], which is expected to deepen through the OECS Economic Union, the main focus of trade policy implementation and development has been CARICOM integration. WTO membership and the EPAs received the major part of resources.[17]
· The core administration of OECS Members' trade policy is on two main levels. At the national level, each country participates directly in trade negotiations and consultations as and when resources allow; at the same time policy is coordinated or harmonized through the OECS Secretariat (see section (4)(ii)(a) below).
(3) Foreign Investment Regime
· OECS Members' foreign investment regime has not changed during the review period. With some minor exceptions, foreign investment receives national treatment in all OECS Members. The only restriction generally relates to requirements for obtaining alien landholding licences. The rationale for this restriction is related to limitations in land availability for commercial purposes, and the need to rationalize land use and enable nationals to afford property while avoiding speculation by foreign nationals. Licences are subject to satisfactory applications to national Cabinet of Ministers and the payment of requisite fees. However, licences are not required in a number of cases, such as investment in sectors considered of priority for the country, or where the purchase does not exceed a certain threshold.
(4) International Relations
(i) World Trade Organization
· Prior to
· OECS Members have been more active in the WTO since their previous Review, including in terms of giving effect to their WTO obligations. All six states have undertaken legislative reforms in intellectual property;
· Most OECS Members have made efforts to improve their notification records. Differences in levels of implementation and notifications may be attributable to differences between the countries' technical or human resources.
Table II.1
Notifications to the WTO, January 2001 to March 2007
|
Agreement |
Antigua & Barbuda |
|
|
|
|
St. Vincent & the |
|
Agreement on Agriculture | ||||||
|
Articles 10 |
None |
None |
None |
None |
None |
None |
|
Article 18.2 |
None |
None |
None |
None |
None |
None |
|
|
None |
None |
None |
None |
Yes |
None |
|
Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping Agreement) | ||||||
|
Article 16.4 |
None |
None |
None |
None |
None |
None |
|
Article 16.5 |
None |
None |
None |
None |
None |
None |
|
Article 18.5 |
Yes |
None |
Yes |
None |
None |
None |
|
Agreement on Implementation of Article VII of the GATT 1994 (Agreement on Customs Valuation) | ||||||
|
Annex III para. 1 |
None |
None |
None |
None |
None |
None |
|
Article 22.2 |
None |
None |
None |
None |
None |
None |
|
Agreement on Import Licensing Procedures | ||||||
|
Articles 1.4 |
None |
None |
Yes |
None |
Yes |
None |
|
Article 5 |
None |
None |
None |
None |
Yes |
None |
|
Article 7.3 |
None |
Yes |
None |
None |
Yes |
None |
|
Article 8.2 |
None |
None |
Yes |
None |
Yes |
None |
|
Agreement on Safeguards | ||||||
|
Article 12.6 |
None |
None |
None |
None |
None |
None |
|
Agreement on Subsidies and Countervailing Measures | ||||||
|
Article 25.1 GATT 1994 |
Yes |
Yes |
Yes |
None |
Yes |
None |
|
Article 18.5 |
None |
None |
Yes |
None |
None |
None |
|
Article 25.11 |
None |
None |
None |
None |
None |
None |
|
Article 25.12 |
None |
None |
None |
None |
None |
None |
|
Article 32.6 |
None |
None |
Yes |
None |
None |
None |
|
Article 27.4 |
Yes |
Yes |
Yes |
None |
Yes |
Yes |
|
Agreement on Technical Barriers to Trade | ||||||
|
Article 2.9 |
None |
None |
None |
None |
None |
None |
|
Article 10.6 |
None |
Yes |
Yes |
None |
Yes |
None |
|
Agreement on the Application of Sanitary and Phytosanitary Measures | ||||||
|
|
Yes |
None |
None |
None |
None |
Yes |
|
Agreement on Trade-Related Aspects of Intellectual Property Rights | ||||||
|
Article 3.1 |
None |
None |
None |
None |
None |
None |
|
Article 63.2 |
Yes |
None |
Yes |
None |
Yes |
None |
|
Agreement on Trade-Related Investment Measures | ||||||
|
Article 5.1 |
None |
None |
None |
None |
None |
None |
|
General Agreement on Trade in Services | ||||||
|
GATS Article III:4, |
None |
None |
None |
None |
None |
None |
|
GATS Article V:7(a) |
Yes |
Yes |
Yes |
None |
Yes |
Yes |
Note: Yes = At least one notification has been made; None = No notification has been made.
Source: WTO Secretariat.
· OECS-WTO Members made limited commitments in their GATS Schedules.
·
· Together with some other WTO Members, the six OECS Members have supported a proposal to extend the time limit to use export subsidies until 2018, under Article 24.7 of the Agreement on Subsidies and Countervailing Measures.[21] They have also adopted common negotiating positions on the issue of "small vulnerable economies" generally, together with other members of CARICOM, in pushing for flexibilities in the DDA. The six have also advocated the adoption of flexibilities and the recognition of principles of non-reciprocity in NAMA, and have highlighted the need for the negotiations to take account of the consequences of preference erosion for the region. The OECS Members are also attempting to seek flexibility in the negotiations on fisheries to preserve their ability to offer subsidies aimed at promoting diversification and development of the fisheries sector.
· With assistance from the European Communities, the OECS-WTO Members established a technical mission in
· The establishment of the technical mission in
· Notwithstanding the establishment of the mission, improvements in negotiation performance and the rate of implementation continue to require additional technical support at the domestic level. The mission's success in improving OECS Member engagement in the multilateral system suggests opportunities for deepening cooperation through the establishment of other trade-related institutions focused on the OECS. A new draft economic treaty anticipates this development as trade policy has been identified as one of the areas for centralized competence for decision making. In this context, strengthening the capacity of the Secretariat to provide technical advice and assistance to OECS Members may help to improve performance at the national levels. The authorities, however, indicated that substantial external assistance would be required to enable the realization of this intent.
· Recent developments at the WTO highlight the potential value of pooling available regional resources. The Committee on Trade and Development (CTD) recommended in October 2006 that small, vulnerable economies should be allowed to use regional institutions to implement obligations in the areas of SPS, TBT, and TRIPS[24]; the recommendation was agreed by the General Council on
(ii) Regional agreements
(a) OECS
· The OECS was created by the Treaty of Basseterre, and came into being in 1981. The main objective of the OECS is to promote cooperation and economic integration between the member states:
· The OECS Secretariat, based in
· OECS states cooperate in a number of respects, in areas as wide ranging as health, education, culture, justice, and telecommunications.[28] Until now, trade arrangements between the member states have been governed primarily by CARICOM membership. However, OECS Governments took a decision in June 2006 to formally establish an economic union.[29] The draft economic union treaty provides a foundation for closer cooperation on certain governance related matters, while another pillar of the treaty focuses on deepening economic integration. This integration is expressly geared to complement integration efforts already taking place at the CARICOM level.
· Institutionally, administration of trade policy within and among OECS Members is still subject to human resource limitations. Generally, the international trade departments of OECS Members tend to be limited to
(b) CARICOM and other regional arrangements
· All six OECS-WTO Members are founding members of the Caribbean Community and Common Market (CARICOM), established by the Treaty of Chagaramus in 1973. In 1989 the CARICOM Heads of Government decided to revise the treaty to create the CARICOM Single Market and Economy (CSME), intended to create a single economic space within which there would be free movement of goods, services, capital, and CARICOM nationals between Member States. The revision of the Treaty was completed in 2000 and all six OECS-WTO Members have enacted domestic legislation giving effect to the CSME. Since 1991, all CARICOM member states have sought to implement a Common External Tariff (CET), through a phased process (see section III(1)(iv) below).[30]
· The Conference of Heads of Government is the highest decision-making body and final authority of CARICOM. A number of ministerial councils deal with policy in different areas. The Council for Trade and Economic Development (COTED), representing membership of trade and development ministers from all Member States, is responsible for the promotion of trade and economic development in CARICOM, and is among the organization's most influential institutions. The Council for Foreign and Community Relations (COFCOR) is responsible for relations between CARICOM, international organizations, and third countries, while the Council for Finance and Planning (COFAP) is responsible for monetary policy coordination.[31]
· Since 1997, CARICOM has worked through the Caribbean Regional Negotiating Machinery (CRNM) to coordinate information and strategy in external trade negotiations, including in the WTO.
· During the period under review, the OECS Members' major developments in trade have been driven essentially by CARICOM membership. In April 2005, CARICOM governments inaugurated the Caribbean Court of Justice (CCJ) in Trinidad and Tobago, a sui generis court with an original and exclusive jurisdiction for interpreting provisions of the Revised Treaty of CARICOM, as well as an appellate jurisdiction for municipal appeals from CARICOM states that choose to substitute the jurisdiction with the London based Privy Council with that of the CCJ. In its original jurisdiction, all Member States are obligated by Treaty to recognize and give effect to the jurisdiction of the Court.[32]
· In 2003, the "Jagdeo Initiative" outlined a strategy for implementing the Regional Transformation Programme in Agriculture, which had originally been announced in 1996. The original programme was designed in part to develop a regional programme to improve the agricultural sector in CARICOM countries.[33] The Initiative sought to identify the constraints on agricultural production and specify practical strategies for overcoming the same. CARICOM has also deepened trade-related cooperation at a technical level with the establishment of the CARICOM Regional Organization for Standards and Quality (CROSQ). Of the six OECS-WTO Members, only
· CARICOM Member States also took a decision in 2004 to establish a Community Competition Commission (CCC) to be headquartered in
· All OECS countries are members of the Association of Caribbean States (ACS), a forum for economic and trade policy coordination at the regional level comprising 25
(iii) Other preferential agreements and arrangements
· CARICOM has signed bilateral trade agreements with
· The CARICOM-Cuba Agreement, signed on
· The OECS Members also benefit from the Caribbean Basin Initiative, and CARIBCAN, both of which are non-reciprocal and unilateral. OECS members are also party to the ACP-EC Revised Cotonou Agreement.
· Under the Caribbean Basin Initiative (CBI), in effect since 1984, OECS countries are eligible for duty-free access to the
· Under CARIBCAN, in force since 1986, exports originating in the OECS and other CARICOM countries are granted duty-free treatment by
· The combined impact of the CBI/CBTPA and CARIBCAN on OECS exports to the
· OECS Members' exports are granted preferential access to the EC market under the ACP-EC Revised Cotonou Agreement (which replaced the Fourth Lomé Convention). Under this agreement, the principal beneficiaries among OECS-WTO Members have been Dominica, Grenada, St. Lucia, and St. Vincent and the Grenadines, which were traditional suppliers of bananas to the EC, and in particular, the United Kingdom, and St. Kitts and Nevis, which was a traditional supplier of sugar. However, the successive Lomé and later Cotonou Agreements have had relatively little impact on other exports from OECS countries.[39]
· OECS Members are also beneficiaries of the European Development Fund (EDF) and STABEX Fund programmes. The EDF is tied to the EC's attempt to promote a coherent development strategy in the sub-region.[40] Funds allocated under the EDF have been used to support projects in education and in health. Under the Ninth EDF (2000-07), OECS Members were allocated approximately €26 million for various projects.
· Under the STABEX programme, the EC provided compensation for losses in export earnings on certain agricultural products on which certain OECS Members were dependent, in part as a result of obligations under the Lomé IV Convention.[41] Initially, STABEX funds were used mostly for restructuring the banana industry; however, in the later programmes, allocations were mainly for agricultural and economic diversification and social and community development. The EC phased out the STABEX mechanism gradually in the run up to 2000.
· OECS Members have been engaged in negotiations as part of CARIFORUM (CARICOM plus the
· CARICOM has also been exploring the possibility of concluding an FTA with
(5) Aid for Trade and Technical Assistance
· Despite having benefited from a range of technical assistance projects on trade policy since their last Review in 2001, OECS-WTO Members continue to face significant human resource and technical challenges that limit their responsiveness at the multilateral level and have an effect on the pace of implementation of their WTO obligations. New obligations for implementation arising out of the DDA may give rise to further challenges for already stretched limited resources. The present review reveals a number of areas where support from the international community could assist in achieving greater integration of OECS Members into the global economy and the multilateral trading system.
· During the period under review, OECS Members benefited from technical assistance from a number of organizations: (a) the WTO provided a range of Geneva-based and regional trade policy courses, which have trained an estimated 40 CARICOM officials since 1999; (b) the Organization of American States cooperated with the University of the West Indies to build capacity in the OECS by offering a graduate degree to nationals of the region in international trade policy; (c) the Commonwealth Secretariat provided technical assistance through training of regional officials, conducting trade-related studies, as well as examining prospects for attracting trade-related investment to the region; (d) the Canadian International Development Agency provided technical and financial resources to the states through the establishment of the OECS Trade Policy Project and examined the feasibility of a trade negotiation support unit; (e) the Inter-American Development Bank assisted CARICOM countries in implementation of WTO agreements; (f) the EC provided short-term technical assistance in key trade-related disciplines, as well as funding for the establishment of the OECS Technical Mission in Geneva; (g) the United States Agency for International Development provided assistance to fund SPS-related officials from the region to attending SPS Committee meetings in Geneva; and (h) the Agency for International Trade Information and Cooperation provided funding and assistance in preparations for the Trade Policy Review of the OECS. The organization also provided assistance to the OECS Members in developing proposals on aid for trade, in preparation for eventual discussions with donors and other international agencies.
· Although OECS Members have received technical assistance and aid for trade from some international partners during the review period, analysis reveals that such aid has been of relatively low value and has varied widely between OECS countries. Based on OECD and WTO data, the average level of aid to OECS Members globally between 2001-05 was under US$17 million annually, with contributions ranging from less than US$0.5 million in 2001 to around US$32 million in 2004.
· Aid for trade support, by WTO Task Force categories: (a) trade policy and regulations, (b) trade development, and (c) infrastructure, show erratic annual allocations, with the major share of contributions split between infrastructure and trade development over 2001-06 (Chart II.1). The largest contribution for infrastructure, which occurred in 2005, accounted for an estimated US$27 million out of total aid donations of approximately US$29 million. Support for trade policy and regulations, where OECS Members have substantial needs, have been limited throughout the period. The major donors to OECS Members during the period under review were:
· Aid for trade contributions also vary considerably between OECS Members, and the value is relatively small, and declining in some cases. Of the six members,
· In
·
· OECS-WTO Members regard AFT as being important in the context of dealing with adjustment costs associated with trade liberalization and economic reforms, and with improving production and supply capacity. The authorities indicated that they regarded assistance provided prior to the
· OECS-WTO Members participated in the Task Force on Aid For Trade (AFT), which submitted its report and recommendations in July 2006.[49] This report identified broad categories for intervention: (1) policy reform; (2) infrastructural development; (3) adjustment to cushion the effects of trade liberalization; (4) alleviation of supply-side constraints; and (5) other trade related needs. Under these broad headings OECS Members have identified preliminary areas for support.
· Under the policy support heading, OECS-WTO Members have requested technical assistance for: (i) tax reform, statistical trade-data collection and analysis; (ii) adoption and implementation of best practice standards legislation; and (iii) identification of WTO-compliant tax reward systems to promote production. Under support for infrastructure development, they have requested support for, inter alia: (i) development of alternative energy generation and distribution; (ii) upgrading and expansion of sea and airports; (iii) establishment of regional standards organizations. Under adjustment support, OECS Members have flagged the need for: (i) support for economic reforms; (ii) financial contributions to assist with re-education and re-deployment of workers in certain industries; and (iii) worker severance or compensation schemes. In the area of supply side support, they have identified a need for assistance with: (i) agricultural diversification measures; (ii) services diversification and promotion; (iii) increasing market-research capacity; (iv) development of national export strategy plans; (v) access to new technologies for firms; and (vi) promotion of ICTs to assist small and medium enterprises.
· OECS Members have received funding from the EC to support the OECS Technical Mission in
· In the area of trade policy and regulations, OECS Members continue to require technical assistance to reach the number of trade experts in the region, and facilitate the establishment of relevant institutions to improve WTO compliance. The following areas may require particular efforts in one or more OECS Members:
- Customs valuation. Notwithstanding improvements in implementation of WTO obligations during the period under review, OECS Members could still benefit from a review of related legislation and technical expertise aimed at harmonized implementation. OECS Members continue to show some divergence in customs valuation practices. OECS Members could also benefit from technical assistance to improve investigative capacity in light of problems with under-valuation in some countries (Chapter III);
- Competition law and policy. Although some OECS Members have adopted competition legislation during the period under review, they may benefit from training on administration of competition legislation and from assistance to establish national and regional competition authorities;
- Import licensing. OECS Members apply similar import licensing regimes, with modifications. However, not all of them have notified their regimes to the WTO. Some of the regimes are not fully applied since they were linked to quantitative restrictions that are no longer in place. OECS Members could benefit from assistance to reform their licensing regimes, and to train local officials;
- Technical barriers to trade, and sanitary and phytosanitary measures. OECS Members could benefit considerably from technical assistance aimed at helping to pool available regional resources and the establishment of appropriate regional institutions with responsibility for dealing with technical barriers to trade and sanitary and phytosanitary measures. Although OECS Members have made considerable progress with the establishment of national standards bodies during the review period, assistance to establish regional institutions would promote savings through the centralization of authority for these two areas. Officials of national standards bodies could also benefit from technical assistance to improve their training, monitoring, and surveillance capacity, and performance in the area of notifications in both TBT and SPS matters. The implementation of the SPS agreement, would also be enhanced through the centralization of technical expertise among OECS Members in a regional institution. Most OECS countries do not maintain inventories of SPS measures or any statistical information on the number of measures adopted at any point in time for example. Assistance to help establish regional testing and laboratory facilities would be beneficial and more cost efficient than establishing national bodies in each OECS Member;
- Agriculture. OECS Members would benefit from technical assistance for training on the Agreement on Agriculture, and to increase negotiating capacity through the training of local experts;
- Trade Related Intellectual Property Rights. OECS Members have shown a mixed performance in the implementation of the TRIPS Agreement since the last review. None of the OECS-WTO Members has enacted all the legislation necessary to be fully compliant with the Agreement, although some are close. The major obstacle to implementation is a lack of administrative capacity in a number of IPR-related areas. Additional training on TRIPS and on administration of intellectual property legislation, including the establishment of bodies to deal with IPR issues, and enforcement issues would be beneficial for all OECS Members;
- Services. All OECS Members require sustained further training on GATS, with specific reference to scheduling. Targeted WTO training to strengthen negotiating capacity in services would also be beneficial;
- Trade remedies. OECS Members would profit from assistance with the establishment of regional institutions to facilitate joint implementation of the agreements on Anti-Dumping, Safeguards, and Subsidies and Countervailing Measures, including training for experts and negotiators in the area;
- Subsidies. All OECS Members have notified incentives programmes as providing export subsidies, and currently benefit from the phase-out extension granted under Article 27.4 of the SCM Agreement. Hence, training on subsidies for regional officials would be useful, with particular focus on revising current incentives programmes; and
- WTO trade policy and other courses. OECS Members have benefited from technical training through Geneva-based and regional trade policy courses during the review period. More specialized courses are needed urgently, to consolidate expertise and to promote specialized knowledge and local mastery of specific WTO related issues.
III. trade policies and practices by measure
(1) Measures Directly Affecting Imports
(i) Customs procedures, documentation, and registration
· Customs procedures differ to some extent among the OECS-WTO Members. In five of the six, importers are not required to register. The exception is
· None of the OECS countries require preshipment inspection, neither do they require importers to use customs brokers.
· The number of documents required for imports ranges from two to five, plus any documents required for imports under preferential treatment, subject to licensing, or other special cases (Table III.1). The time involved in importing a container ranges from 13 to 20 days, as estimated by the World Bank (Table III.1). This is partly linked to the OECS Members' geographical location and the fact that transport services are not always frequent partly due to the smallness of the markets. Once goods are landed, it normally requires one to two days to clear customs in most countries, although the authorities in
Table III.1
Comparative procedures and expenses for imports, 2006
|
|
ATG |
DMA |
GRD |
KNA |
LCA |
VCT |
|
Documents required for all imports (excluding documents required for preferential imports, licensed goods, etc.) |
2 |
3 |
5 |
5 |
4 |
5 |
|
Time for import (days) |
15 |
17 |
20 |
13 |
19 |
13 |
Source: Data on import documents are from the national chapters. Data on the import time and cost are from World Bank Doing Business online information. Viewed at: http://www.doingbusiness.org/ExploreTopics/TradingAcross Borders.
· Five OECS-WTO Members use the Automated System for Customs Data (ASYCUDA) to process customs entries. The exception is
· A decision to subject a particular shipment to physical inspection is generally based upon a risk assessment that takes into account such factors as the type of product imported, the country of origin, and the customs agency’s experience with the shipper. The overall level of physical inspection ranges from 5% in
· Reform efforts are under way in most OECS countries’ customs services. Technical and financial assistance is being sought in
(ii) Customs valuation
·
· The transaction value is used for the great majority of imports in most OECS countries. For example, it accounts for an estimated 80-85% of shipments in
· Under-invoicing and other forms of customs fraud remain a problem in several countries: motor vehicles are a problem area; the authorities have noted that importers often declare false engine sizes or undervalue the goods. In
(iii) Rules of origin
·
· The OECS countries all use the rules of origin introduced by CARICOM in 1998. Duty-free treatment is accorded to CARICOM goods satisfying origin requirements only if they are shipped from other member states. All CARICOM members were expected to implement on
(iv) Tariffs, other duties and taxes
(a) MFN applied tariff structure
· The CARICOM common external tariff (CET), which entered into effect on
Table III.2
OECS summary tariff analysis
(Per cent)
|
|
OECS unweighted average |
|
|
|
|
St. Kitts & |
St. Vincent & the |
|
Total |
10.9 |
10.7 |
12.2 |
11.2 |
10.0 |
10.3 |
10.9 |
|
HS 01-24 |
20.0 |
17.7 |
27.6 |
20.3 |
19.2 |
14.6 |
20.5 |
|
HS 25-97 |
9.0 |
9.3 |
8.9 |
9.3 |
8.0 |
9.4 |
9.0 |
|
By WTO category |
|
|
|
|
|
|
|
|
WTO Agriculture |
18.2 |
16.2 |
25.8 |
18.2 |
16.7 |
14.2 |
18.0 |
|
Animals and products thereof |
17.9 |
19.1 |
19.0 |
22.1 |
14.5 |
15.1 |
17.7 |
|
Dairy products |
6.6 |
6.3 |
6.3 |
6.7 |
6.3 |
7.5 |
6.7 |
|
Coffee and tea, cocoa, sugar etc. |
18.2 |
16.6 |
22.1 |
17.9 |
17.1 |
17.6 |
17.9 |
|
Cut flowers, plants |
9.5 |
7.9 |
8.9 |
10.6 |
8.8 |
9.0 |
11.7 |
|
Fruit and vegetables |
24.9 |
23.8 |
31.9 |
25.3 |
25.4 |
17.2 |
25.7 |
|
Grains |
15.4 |
15.0 |
15.0 |
15.0 |
15.0 |
14.5 |
17.8 |
|
Oil seeds, fats and oils and their products |
16.2 |
15.8 |
16.5 |
16.6 |
16.7 |
13.6 |
17.7 |
|
Beverages and spirits |
31.9 |
19.0 |
80.3 |
24.0 |
24.1 |
21.6 |
22.1 |
|
Tobacco |
23.8 |
21.0 |
31.5 |
26.0 |
19.5 |
19.0 |
26.0 |
|
Other agricultural products n.e.s. |
4.8 |
3.9 |
4.2 |
5.8 |
4.2 |
4.3 |
6.5 |
|
WTO Non-agriculture (incl. petroleum) |
9.5 |
9.7 |
9.5 |
9.8 |
8.6 |
9.6 |
9.6 |
|
WTO Non-agriculture (excl. petroleum) |
9.5 |
9.7 |
9.6 |
9.8 |
8.6 |
9.6 |
9.6 |
|
Fish and fishery products |
23.1 |
19.5 |
26.6 |
25.7 |
26.9 |
10.9 |
29.0 |
|
Mineral products, precious stones and metals |
8.9 |
8.9 |
9.0 |
9.8 |
8.1 |
8.6 |
9.1 |
|
Metals |
6.2 |
6.7 |
6.1 |
7.1 |
4.3 |
6.6 |
6.6 |
|
Chemicals and photographic supplies |
7.6 |
7.3 |
10.0 |
7.4 |
7.1 |
6.6 |
7.0 |
|
Leather, rubber, footwear and travel goods |
10.4 |
10.2 |
9.0 |
10.7 |
11.1 |
10.5 |
10.7 |
|
Wood, pulp, paper and furniture |
9.5 |
9.3 |
9.1 |
9.7 |
8.4 |
10.6 |
9.6 |
|
Textile and clothing |
11.7 |
11.6 |
10.6 |
11.7 |
12.3 |
12.5 |
11.6 |
|
Transport equipment |
10.6 |
12.5 |
9.7 |
9.9 |
8.5 |
12.5 |
10.3 |
|
Non-electric machinery |
5.4 |
6.9 |
3.9 |
6.6 |
2.8 |
5.9 |
6.4 |
|
Electric machinery |
9.8 |
10.3 |
9.5 |
9.8 |
7.5 |
12.1 |
9.8 |
|
Non-agriculture articles n.e.s. |
13.7 |
13.8 |
13.4 |
13.5 |
12.5 |
15.3 |
13.5 |
|
Petroleum |
7.5 |
7.5 |
5.6 |
9.4 |
6.9 |
8.1 |
7.3 |
|
|
|
|
|
|
|
| |
|
Average tariff on all imports, 2001 |
11.9 |
14.5 |
13.1 |
11.2 |
10.1 |
11.5 |
10.9 |
|
Customs Service Charge (CSC), 2001 |
4.2 |
5.0 |
2.0 |
5.0 |
4.0 |
5.0 |
4.0 |
|
Average tariff on all imports plus CSC, 2001 |
16.1 |
19.5 |
15.1 |
16.2 |
14.1 |
16.5 |
14.9 |
|
CSC, 2006 |
5.5 |
10.0 |
3.0 |
5.0 |
5.0 |
6.0 |
4.0 |
|
Average tariff on all imports plus CSC, 2006 |
16.4 |
20.7 |
15.2 |
16.2 |
15.0 |
16.3 |
14.9 |
|
Change in average tariff, 2001-06 |
-1.0 |
-3.8 |
-0.9 |
― |
-0.1 |
-1.2 |
― |
|
Change in average tariff plus CSC, 2001-06 |
+0.3 |
+1.2 |
+0.1 |
― |
+0.9 |
-0.2 |
― |
― No change.
a The CSC in
Source: WTO Secretariat estimates, based on data provided by the respective OECS authorities.
· The OECS countries do not use seasonal tariffs except on Irish potatoes imported into
· While all OECS countries have identical applied rates for many products, overall border taxes on imports may differ widely across countries. This is because they all have tariff exemption schemes for specific shipments, enterprises, or products, meaning that products may be dutiable for one importer but duty-free for another, depending on its final use.
· All OECS Members apply additional charges on most or all imports. The most important is the customs service charge (Table III.3). The CSC ranges from a low of 3% in
Table III.3
Customs services charges, 2007
|
Country |
Tax |
Rate |
Scope |
Binding in the WTO |
|
|
Customs service tax |
10% |
All imports |
Left blank |
|
|
Customs service charge |
3% |
All imports |
Left blank |
|
|
Customs service charge |
5% |
All imports save for Government, the flour mill, and telephone companies and domestic manufacturing |
Left blank |
|
|
Customs service charge |
5% |
All imports |
Left blank |
|
|
Customs service charge |
6% |
All imports |
Bound |
|
|
Customs service charge |
4% |
All imports except imports of the St. Vincent Banana Growers Association, Canouan Resorts Development Ltd, and Otley Hall Development enclave industries |
Left blank |
Source. WTO Secretariat, based on information provided by the authorities.
· For the OECS region as a whole, the combined tariff and CSC rose from 16.1% to 16.4% during the review period. Although the OECS average tariff fell from 11.9% in 2001 to 10.9% in 2006 (Table III.2), that reduction was more than counterbalanced by increases in the CSC in most of the Members. Taking into account both the tariff and the CSC, Antigua and Barbuda and St. Kitts and Nevis were the only OECS countries to reduce their import duties during the review period, mainly on account of their adoption of Phase IV and III of the CET schedule of reductions, respectively (see below).
· Some applied tariffs declined during the review period in some OECS Members, generally due to domestic reasons. In
· Article 83 of the Revised CARICOM Treaty allows for the reduction or suspension of the CET when a good is not produced in sufficient quantities within the CARICOM area to meet demand. Subject to approval by COTED, exceptions to the CET are agreed between CARICOM members, and each country maintains a List of Conditional Duty Exemptions to the CET. CARICOM members may maintain tariffs at rates below the CET, provided that they do not violate the CARICOM List of Items Ineligible for Duty Exemption. The list includes goods produced in the CARICOM market in quantities considered adequate to justify the application of tariff protection, and also states the purposes for which the goods may be admitted into the importing member State free of import duty or at a rate lower than the CET; these approved principles are generally used in industry, agriculture, fisheries, forestry, and mining. Each CARICOM country may also maintain exceptions to the CET included in the Lists A, B, C, and D. CARICOM members have greater flexibility in the tariffs applied to the items included in List A (e.g., foodstuffs) and List C (e.g., spirits, beer, tobacco, firearms, motor vehicles, some electrical appliances, and jewellery and precious stones), such that the rates applied by each country are listed individually. In general, the rates applied to items in List A are lower than the CET, while the rates applied to items in List C are higher.
· CARICOM members implemented the CET on a four-phase schedule. The fourth and final phase was to have been reached on
(b) Bound MFN tariffs
· The OECS countries do not have unified tariff bindings in the WTO. While the separate national schedules are broadly similar, they vary considerably at the level of individual items and sectors. That variance is demonstrated both by the wide range in average bound tariffs (58.2-76.5%), as well as the differences on some individual products and sectors.
· All six countries bound agricultural tariffs at a ceiling rate of 100%, with some exceptions. Exceptions were generally bound higher than 100% in
· The applied rates for a few products in
·
· Although each OECS country applies other duties and charges to imports, only St. Kitts and Nevis bound other duties and charges in the WTO, at a general rate of 18% (3% CSC and 15% consumption tax), with a number of exceptions. Other OECS Members left blank the "other duties and charges" column in their WTO schedules. This has been interpreted by a WTO panel to be equivalent to a binding at a level "zero".[52]
(c) Tariff and tax concessions
· All of the OECS countries use some form of fiscal incentives (section III)(3)(ii) below), which generally provide, inter alia, for tax and tariff concessions. In addition, various schemes provide tariff concessions for supplies and/or capital goods imported by or on behalf of producers in certain sectors. Among the beneficiaries of these schemes are farmers in general (
· In
· In all OECS countries, imports destined for government institutions are not subject to import duties; diplomatic missions and international organizations are granted similar treatment. Hospitals, relief organizations, and other charitable institutions are also eligible for duty-free treatment.
· Concessions can also be designed to meet specific, temporary needs: Grenada offered temporary duty-free concessions for the post-hurricane rebuilding efforts in 2004-05, and some countries granted temporary duty-free treatment for various sectors that needed to expand capacity prior to the Cricket World Cup in 2007 (e.g., hotels).
· Statistics on the number and value of concessions are not available in most OECS countries. Two exceptions to this are
· The World Bank has noted that tariff and tax concessions are only required or demanded because of the high tariffs and other trade-related service charges imposed by the OECS countries.[53] The authorities have, however, indicated that tariff and tax concessions are essential to attract investment in OECS Members. Notwithstanding, some steps are being taken towards reform. In
(d) Tariff preferences
· Duty-free access is granted in all OECS countries to imports from other CARICOM countries, provided they meet the CARICOM rules of origin criteria. No preferences are granted on imports from non-CARICOM countries. The CARICOM preferences do not include the customs service charges, but do cover some other taxes. In
(v) Other levies and charges
· Numerous changes have been made during the review period in the other levies and charges imposed on imports and domestic products (Table III.4). The most significant structural changes have been in the creation of new value-added taxes (VATs) and sales or excise taxes. These reforms have been inspired, in part, by the expectation that negotiated tariff reductions will need to be compensated by increases in revenue from other sources.
Table III.4
Changes to trade-related tax regimes, as at May 2007
|
|
|
|
|
|
|
|
|
Customs service charge |
Increased |
No change |
No change |
Increased |
Increased |
No change |
|
Value-Added Tax |
n.a. |
Created |
Pending |
n.a. |
n.a. |
Created |
|
Consumption taxes |
Repealed |
Repealed |
Repeal pending |
Increased |
Reduced |
Repealed |
|
Environmental taxes |
Created |
Increased |
No change |
Increased |
Changed |
No change |
|
Sales or excise taxes |
One created, one pending |
One repealed, one created |
Increased |
Created |
No change |
Created |
n.a. Not applicable.
Source: National reports.
·
· Excise taxes are also evolving in the region.
· All OECS countries have some form of taxation aimed at reducing environmental problems. These typically include taxes on beverage containers, as well as levies (either specific or ad valorem) on environmentally sensitive items such as automobiles, tyres, batteries, electric heaters, and air conditioners. Most Members’ environmental taxes apply only to certain goods, but in
(vi) Import prohibitions, restrictions, and licensing
· Licences may also be required for the importation of goods that appear to be restricted largely or entirely for economic reasons, such as the protection of infant industries or when there is no local production of the item in question, to reduce the national import bill. In
· Import-licensing schemes can also be tied to regional integration, (for example products covered by Article 164 of the Revised CARICOM Treaty), such that some products are subject to licensing only when imported from outside the CARICOM region or, in some cases, from outside the OECS sub region. For example,
·
· At the time of their last Review, the OECS countries applied non-automatic licensing on products subject to quantitative restrictions under Article 56 of the CARICOM Treaty. In 2006, CARICOM took a decision, pursuant to Article 164 (Promotion of Industrial Development) of the Revised CARICOM Treaty, to replace non-automatic import licensing with tariffs. The main intended beneficiaries under the decision were OECS Members who qualify as LDCs in the CARICOM context. Article 164 also allows less developed CARICOM countries to petition COTED to suspend Community origin treatment to certain products and to apply tariff rates higher than the CET.[54] In January 2006, it was agreed by COTED that tariff rates could be increased on goods for which Article 164 may be applied. It was further agreed that this decision would be reviewed in the first instance, after a period of five years. As at mid 2007, the resulting tariffs had not, however, been invoked by any OECS Member state and OECS countries were in the process of deciding whether and how to impose the higher rates. Instead, the rates provided in the CET were being applied. In some cases, like in
· The authorities in OECS countries state that most licences, other than those imposed for health and safety reasons, are granted automatically, and in many cases are applied for and received at the time of importation; in
· Non-automatic licences are used in every OECS country, except
· In addition to restricting imports of certain products, some OECS Members impose either licensing or prohibitions on imports from certain countries. Laws are still on the books to restrict imports from
(vii) Contingency measures
(a) Anti-dumping and countervailing measures
· During the review period, none of the OECS countries has initiated any investigations nor imposed any anti-dumping or countervailing measures. None has a body devoted to the implementation of anti-dumping or countervailing laws.
·
· Anti-dumping and countervailing duty laws have not been amended to reflect the Uruguay Round Agreements. The legal basis for anti-dumping and countervailing measure legislation is in national laws dating from 1959-1964. The Revised CARICOM Treaty provides the basis for adopting anti-dumping measures but only against imports from other CARICOM members. A model CARICOM anti-dumping law is under active consideration in some OECS countries.
(b) Safeguards
· No OECS country has national safeguards legislation. However, CARICOM rules permit the use of safeguards, and less developed countries (including the OECS countries) may invoke the special provisions in Chapter 7 of the Revised Treaty of Chaguaramas, in particular Articles 150 which replaced Articles 28 and 29 of the original Treaty. Article 150 (Safeguard Measures) entitles a country defined as a disadvantaged country (all OECS Members) to limit imports of goods from other CARICOM member for up to three years, and to take such other measures as COTED may authorize.
· OECS countries did not avail themselves of the safeguard provisions of the WTO Agreement on Agriculture or Textiles and Clothing.
(viii) Technical regulations and standards
· Each of the OECS countries has its own bureau of standards (Table III.5).
Table III.5
OECS Members' standards bureaux
|
Institution |
|
|
|
|
|
|
|
Year established |
1987 |
2000 |
1989 |
1998 |
1990 |
1998 |
|
Activities, 2001-06 |
|
|
|
|
|
|
|
Standard adopted |
8 |
26 |
38 |
n.a. |
21 |
35 |
|
Tech. regs. adopted |
0 |
11 |
13 |
n.a. |
6 |
6 |
|
WTO notifications |
0 |
10 |
12 |
0 |
45 |
0 |
|
Functions |
|
|
|
|
|
|
|
Develop standards |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
|
Certification |
No |
No |
Yes |
Yes |
Yes |
Nog |
|
Conformity assess. |
No |
Nog |
Yes |
n.a. |
Yes |
n.a. |
|
Market surveillance |
No |
Nog |
Yes |
n.a. |
Yes |
n.a. |
|
Metrology |
Yes |
Nog |
Yes |
n.a. |
Yes |
n.a. |
n.a. Not applicable
a Ministry of Finance and Economy.
b Ministry of Foreign Affairs, Trade and Marketing.
c Ministry of Trade and Industry.
d Ministry of Foreign Affairs, International Trade, Industry, Commerce and Consumer Affairs.
e Ministry of Trade, Industry, and Commerce.
f Ministry of Telecommunications, Science Technology and Industry.
g Although the function is not currently performed by the institution, there are plans to do so in the future.
Source: Information provided by the authorities.
· Each of the six OECS Members maintains an inventory of technical regulations or conformity assessment procedures in force, but only three made notifications of technical regulations to the WTO during the review period (Table III.5).
· The structure and responsibilities of the bureaus of standards, and the procedures by which standards and technical regulations are adopted, are very similar in all OECS countries. Technical regulations are referred to as either compulsory or mandatory standards, and are developed in essentially the same manner as standards. The process begins when a need is identified, and a proposal is developed. OECS countries generally favour the use of international standards (preferably CARICOM standards) as the basis for their technical regulations. A draft specification is developed and discussed by a technical committee, then submitted to the Standards Council; a period of public comments (e.g., 60 days) is allowed. Following the receipt and review of comments, the standard may be amended and reconsidered by the Standards Council. Technical regulations, are notified to the WTO prior to implementation of the measure, with 60 days for circulation and comments. In some countries, the Ministry of Legal Affairs may also be asked to comment on legal matters. The relevant minister publishes the technical regulation or standard in the Government Gazette.
· Only
· Testing and inspection activities are restricted by the limited resources available to the standards bureaux, but a regional accreditation programme for laboratories is under consideration. In
·
(ix) Sanitary and phytosanitary measures
·
· OECS countries generally do not maintain inventories of the SPS measures adopted, and the authorities could not provide statistics on the number adopted during the review period.
· Document inspection as well as any product sampling is generally carried out at the border. However, there are few or no domestic facilities available to conduct tests of any samples. These often need to be sent for testing to another country in the region (e.g.,
· In general, imports of plants and unprocessed products must be accompanied by a phytosanitary certificate issued by the exporting country. Imports of live plants and all unprocessed plant products and commodities, and non-commercial untreated seeds are generally subject to quarantine regulations, and imports of soil or products containing soil are prohibited. Import licences may also be required for imports of live animals or their products.
· Some OECS countries are considering legislative reforms in the area of SPS. In addition to a CARICOM model law on animal disease and importation, national legislative reforms are under active consideration in
2. In
· Most OECS countries do not have any laws or rules that deal explicitly with the import and sale of genetically modified organisms (GMOs) or animals fed hormones (or their products). However, a draft Plant Protection Act under consideration in
· All of the OECS countries are members of Codex Alimentarius, but not of the World Organization for Animal Health. They are all contracting parties to the International Plant Protection Convention (IPPC): only
(2) Measures Directly Affecting Exports
(i) Documentation, export taxes, and restrictions
· The OECS countries generally require two or three documents for all exports, and may require additional documents for items on which preferences are claimed or that are subject to licensing (Table III.6). World Bank data shows that there are differences in the amount of time required for export.
Table III.6
Comparative procedures and expenses for exports, 2006
|
|
ATG |
DMA |
GRD |
KNA |
LCA |
VCT |
|
Documents required for all exports (additional documents are required for preferences, licensed goods, etc.) |
3 |
2 |
3 |
2 |
3 |
3 |
|
Time for export (days) |
13 |
11 |
19 |
11 |
9 |
15 |
Source: Data on documents from the national reports. Data on the time and cost to export are from World Bank Doing Business online information. Viewed at: http://www.doingbusiness.org/ExploreTopics/TradingAcrossBorders.
· The main export restrictions are based on CITES standards: all OECS Members ban exports of wild birds and wildlife. Exports of narcotics and drugs are prohibited or subject to licensing in several countries, as are exports of goods bearing the country’s coat of arms or flag.
· The OECS Members generally do not use export-licensing. The exceptions include vegetables, monkeys, and several types of seafood in
· The only taxes or levies on exports are as follows:
(ii) Export subsidies, financing, support, and promotion
· The OECS-WTO Members have similar fiscal incentives acts, which provide for, among other things, exemptions from income tax on export profits (see also section (3)(ii) below). Each country has notified its Fiscal Incentives Act to the WTO Committee on Subsidies and Countervailing Measures, as well as any free-trade zones, where they exist, as providing export subsidies. The Committee has agreed to continue until
· The OECS countries, together with eight other WTO Members, made a proposal in early 2006 that would extend export subsidies to 2018.[56] In the view of these countries, export subsidies are necessary because they consider themselves to be "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 fro the dismantlement of export subsidies to end 2015. Members benefiting from the extension must take, from
·
·
· Under
· The standard corporate tax rate in
· OECS countries do not have national programmes for export credit, insurance or guarantees. Manufacturing exporters may make use of the export insurance facilities provided by the Eastern Caribbean Central Bank (ECCB), covering political and commercial risks. The ECCB also provides preshipment financing, allowing the exporter to obtain direct financing at competitive rates for purchases of raw materials and other working capital needs against confirmed export orders. In addition, the ECCB provides post-shipment financing, allowing exporters to convert trade receivables into cash to enhance working capital. The ECCB may, alternatively, provide guarantees to commercial banks for advances made to exporters of non-traditional manufactured goods through the ECCB Export Credit Guarantee Scheme, although the authorities have indicated that this is used infrequently; only a few companies from
· Exporters may also receive export promotion support from the OECS Export Development Unit. Some OECS countries are in the process of establishing or reforming their export- and investment-promotion agencies.
(3) Measures Affecting Production and Trade
(i) Legal framework for business and taxation
· Foreign or local individuals may establish: sole proprietorships; partnerships; corporations; joint ventures; and branches of foreign corporations. Businesses are generally required to obtain an annual business licence.
· Corporate tax rates have converged somewhat during the review period, following the reduction of rates in some countries. The rate is 37.5% in
· According to a World Bank study comparing the business climate across 175 countries, all of the OECS countries are more business-friendly than the median country, with St. Lucia ranked 27th. Among the separate items taken into account in the study, the OECS countries do best on dealing with licences;
· The six OECS Members are among the 41 countries and other jurisdictions that the OECD identified in 2000 as "tax havens". In early 2002 each of them signed a letter of commitment with the OECD on transparency and the exchange of information, and were thus removed from the uncooperative list. Some OECS Members have enacted laws and/or established financial intelligence units in order to comply with these commitments.
(ii) Incentives and assistance
· All OECS-WTO Members maintain similar incentives schemes, under a Fiscal Incentives Act, that provide for duty-free imports, tax holidays, and the like for certain investments. The laws stem from an original effort to harmonize the various national incentives schemes that CARICOM countries offered to industry. With some variations, they all provide for tax holidays and other benefits that are, by statute, calibrated to the size of the investment and the activity. While the incentives laws generally make benefits contingent upon local value-added, officials in some OECS countries noted that these considerations have never played a part in the actual decisions regarding the granting, duration, and level of concessions. Rather, these decisions are based on the anticipated gains in employment, economic diversification, and investment in disadvantaged areas. Benefits also vary according to the export content.
· The effectiveness of the incentives schemes used by the OECS Members and other countries has been questioned in a number of studies. According to a recent World Bank study, the various incentives schemes may serve to distort the returns to investment across activities, sectors and enterprises leading to less efficient resource allocation; the study also noted that, when applied in a discretionary manner, they create uncertainty among investors and open the door for rentseeking. The analysis also found that incentives have not resulted in the expected job creation and income generation but, on the contrary, have consumed public resources that could have been used to raise the quality of the broader investment climate.[57]
· The IMF has also questioned the efficacy of tax incentives to spur investment and growth; in particular, because the region's share in world FDI has been declining. An IMF report notes that tax holidays can have pernicious effects, such as eroding tax bases, forcing higher tax burdens on non-favoured sectors, and squeezing resources available for social and infrastructure expenditures contributing to debt build up, with negative implications for fiscal sustainability and growth. The same study estimates the average annual revenue forgone from concessions at between 10-16% of regional GDP over 2000-03.[58]
· The OECS Member's authorities have a more nuanced view with respect to the effectiveness of investment schemes. In their view, incentives of the sort included in the Fiscal Incentives Act and in tourism legislation are vital to attract foreign capital. In several countries, however, initiatives have been undertaken to reform various aspects of the schemes. The most significant changes have been made in
· The authorities in
(iii) Competition policy and regulatory issues
(a) Competition policy
· The small size of the OECS markets contributes to economic concentration. It is therefore important to be able to enforce competition. However, only two of the OECS countries have taken steps (albeit incomplete), towards establishing a competition law and an administering authority.
· In
· The integration progress for competition policy is under way: it has produced a model CARICOM competition law and a proposal that the OECS countries establish a subregional competition authority. Chapter VIII of the CARICOM Treaty, which provides for harmonized competition legislation in CARICOM members. There is currently a draft agreement to establish an OECS competition authority and draft harmonized competition bills for enactment by OECS members. Once it enters into force, it is expected that the member states will create national competition authorities to deal with domestic competition issues, while the CARICOM authority will deal with issues at the regional level.
(b) Price controls
·
(c) State-owned enterprises, marketing boards, and privatization
·
· Marketing boards in operation in all OECS-WTO Members, exercise exclusive powers, primarily in the agricultural field (Table III.7). Some institutions have gone out of business during the period of this review: the St. Kitts Sugar Manufacturing Corporation, was the sole de jure producer and exporter of sugar until its closure in 2005. The former St. Vincent and the Grenadines Marketing Corporation had a monopoly on the importation of edible oils and fats, sugar in bulk, and (until 2000) bulk rice, but its functions were revised and transferred in 2003-06 to National Properties Limited and the Agricultural Input Warehouse. Also in
Table III.7
Marketing boards or similar arrangements in place over the 2001-07 period
|
Country |
Marketing board |
Products marketed exclusively by board |
|
|
Central Marketing Corporation (CMC), established in 1973 |
The CMC no longer enforces its monopoly on imports of carrots, cabbages, onions, sweet peppers, and tomatoes. The system of import licensing is being phased out. |
|
|
Dominica Export and Import Agency (DEXIA), established in 1986 |
DEXIA has the exclusive right to import sugar (brown and white sugar, except EEC No. 1 used by bottlers, and icing sugar) and bulk rice (white and parboiled). |
|
|
Marketing and National Importing Board (MNIB), established in 1973 |
Exclusive importation of bulk rice and sugar in 50 kg polypropylene bags Centralized importer of rice in bulk, full cream powdered milk in bags, refined sugar in bags, and unrefined sugar in bulk. |
|
|
|
The GBCS is the sole authorized purchaser of bananas for export to countries outside the |
|
Table III.7 (cont'd) | ||
|
|
Central Marketing Corporation (CEMACO) Ministry of Trade and Industry |
Marketing agent for non-sugar agricultural produce; its monopoly rights on the non-sugar sector have been abolished. Monopoly on importation of bulk rice, wheat flour, and evaporated milk |
|
|
Ministry of Trade, Industry and Commerce |
Monopoly on importation of bulk rice, wheat flour, and sugar. |
|
|
|
Imports out-of-season goods such as cabbages, lettuce, tomatoes, carrots, and sweet potatoes, but does not have a monopoly |
|
|
Agricultural Input Warehouse Diamond Dairies Ltd. |
Has a de facto monopoly on the importation of dry fertilizers, and a legal monopoly on the importation of sugar. Also imports other inputs such as tools, seeds, and pesticides, but does not have a monopoly for these items. |
|
|
National Properties Limited |
The Produce Division is responsible for domestic sales and exports of fresh produce, but does not have a monopoly over either activity. The Supermarket Division sells both domestically produced and imported produce |
Source: Information provided by the different national authorities.
(iv) Government procurement
· None of the OECS countries has joined the WTO Agreement on Government Procurement. The relative size of government procurement in the OECS varies from a low of 4.7% of GDP in
· OECS Members generally provide for both public and selective tendering. Data are not available on the frequency with which different modalities are used, but public tendering is generally used for larger projects and when required by a donor's rules. Tenders boards generally choose the bid with the lowest price, but other issues can be taken into consideration (e.g., qualitative issues and the credibility of a bidder).
· OECS Members generally do not explicitly grant preferences to their own nationals or to other OECS or CARICOM countries. Local providers may be preferred when after-sales service is considered crucial to the procurement decision. The authorities in some Members indicate that there may be some implicit preference, especially for smaller and local projects.
· There are still a number of gaps related to the procurement process in some OECS countries. In
· Government procurement is referred to in the Revised CARICOM Treaty as part of a built in agenda for future negotiations aimed at developing disciplines in the area. The COTED has nevertheless launched an action plan to create a central regional information coordinating agency, and a promotional programme has been put in place to increase procurement of regional goods and services, within CARICOM.
(v) Intellectual property rights
· Although, none of the OECS Members has completed the revision of all their intellectual property laws, in order to fully reflect the TRIPS Agreement, substantive progress has been made since 2001 (Table III.8). Half of the IP laws approved by OECS Members since 1995 were enacted during the review period.
Table III.8
Intellectual property rights legislation enacted since the
|
Field |
|
|
|
|
|
|
|
Copyright |
Enacted: 2003 |
Enacted: 2003 |
None |
Enacted: 2000 |
Enacted: 1995 |
Enacted: 2003 |
|
Patents |
Enacted: 2003 |
Enacted: 1999 |
None |
Enacted: 2000 |
Enacted: 2001 |
Enacted: 2004 |
|
Industrial designs |
Enacted: 2003 |
Enacted: 1998 |
None |
None |
Enacted: 2001 |
Enacted: 2005 |
|
Layout designs |
Enacted: 2003 |
Enacted: 1999 |
None |
None |
Enacted: 2000 |
Enacted: 2004 |
|
Plant varieties |
None |
Enacted: 1999 |
None |
None |
Enacted: 2001 |
None |
|
Trade marks |
Enacted: 2003 |
Enacted: 1999 |
None |
Enacted: 2000 |
Enacted: 2001 |
Enacted: 2003 |
|
Geographical indications |
Enacted: 2003 |
Enacted: 1999 |
None |
Enacted: 2007 |
Enacted: 2003 |
Enacted: 2004 |
* Not yet in force (mid-2007).
Source: Information provided by the authorities.
·
· The TRIPS Council examined the intellectual property legislation of
· Some of the OECS Members signed intellectual property agreements during the review period (Table III.9).
· Under the 2002 Cooperation Agreement Between the OECS and WIPO, the two parties agreed to act in close cooperation, on matters of mutual interest with a view to harmonizing their efforts towards greater effectiveness.[59] The agreement identifies nine fields for cooperation, including updating information on IPR laws and regulations in the OECS member states through mutual exchange of data and information.
Table III.9
Membership in international instruments on intellectual property rights
|
|
Entry into force | |||||
|
Convention/Agreement |
ATG |
DMA |
GRD |
KNA |
LCA |
VCT |
|
The Convention Establishing the World Intellectual Property Organization (1970) |
2000 |
1998 |
1998 |
1995 |
1993 |
1995 |
|
The Berne Convention for the Protection of Literary and Artistic Works, |
2000 |
1999 |
1998 |
1995 |
1993 |
1995 |
|
The |
2000 |
1999 |
1998 |
1995 |
1995 |
1995 |
|
The Patent Cooperation Treaty (1970) |
2000 |
1999 |
1998 |
2005 |
1996 |
2002 |
|
Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (1957) |
n.a. |
2000 |
n.a. |
2005 |
2001 |
n.a. |
|
International Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations (Rome Convention, 1961) |
n.a. |
1999 |
n.a. |
n.a. |
1996 |
n.a. |
|
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (1971) |
n.a. |
n.a. |
n.a. |
n.a. |
2001 |
n.a. |
|
|
n.a. |
n.a. |
n.a. |
n.a. |
2001 |
n.a. |
|
World Intellectual Property Organization Copyright Treaty (1996) |
n.a. |
n.a. |
n.a. |
n.a. |
2002 |
n.a. |
|
WIPO Performances and Phonograms Treaty (1996) |
n.a. |
n.a. |
n.a. |
n.a. |
2002 |
n.a. |
n.a. Not applicable.
Source: World Intellectual Property Organization.
IV. TRade POLICIES BY SECTOR
(1) Agriculture
· Agriculture has continued to lose share of GDP in the OECS countries as a group, falling from 7.2% of GDP in 2000 to 5.5% in 2005.[60] The decline reflects the stronger growth of services and construction, but also the contraction of activity in traditional agriculture, particularly bananas and sugar.
· The banana industry has continued to lose ground in the
· Banana producers in the OECS Members may benefit from subsidies for fertilizers and other key inputs, and income tax exemptions. Farmers have also benefited from actions by the Windward Islands Banana Development and Exporting Company Limited, which has tried to ensure more benefits to the farmers, as well as from EC assistance under the Special Framework of Assistance (SFA), and (previously) under the STABEX export revenue stabilization scheme.
· The sugar industry in
· Agricultural policies in the OECS Members are formulated at the domestic level by the Ministries of Agriculture. In all OECS Members agricultural products receive higher tariff protection than non-agricultural goods (Table III.2). Some agricultural products, for example, such as fruit and vegetables, animals and products thereof, beverages and spirits, coffee, and tobacco benefit from substantially higher than average protection. Non-automatic import licences for a number of agricultural products from non-CARICOM countries are required in most OECS countries, with the exception of
· Most OECS Members maintain marketing boards for some agricultural imports; (Chapter III(3)(iii)(c)). Fiscal incentives available to the agriculture sector in most OECS Members include partial or complete waiver of import duties, and consumption and excise taxes on most inputs for the production of primary or processed agricultural commodities.
(2) Manufacturing
· The manufacturing sector, including food processing, accounted for 5.2% of current GDP in 2005, down from 5.6% in 2000. Manufacturing contracted over 2000-02, but has recovered since, particularly in 2005, when the value of output increased by almost 11%. The main value-added industries are food and beverages, soaps and detergents, paper and paperboard, and some electrical and machinery and equipment products.
· Exports of manufactured goods from the region are limited in value, but there are a few exceptions. For example, exports of electrical products, mainly to the
· The 2006 average MFN tariff on imports of industrial products (ISIC-2 definition) was 10.3%. The highest average tariffs are applied on food, beverages and tobacco, clothing and apparel articles, and footwear, with a peak of 165% in
· Incentive schemes for manufacturers include relief from corporate tax and customs duties for approved manufacturing enterprises for up to 15 years, under the Fiscal Incentives Act (Chapter III(4)(iii)). Free zones have been established in
(3) Services
(i) GATS commitments
· OECS Members have made a limited number of GATS commitments: ranging between 4 and 6 of the 12 main service areas, and ranging between 8 and 32 of the 160 subsectors (Table IV.1). There is some commonality among OECS countries in the sectors scheduled: all OECS Members have taken commitments in: financial services; tourism and travel related services; and recreational and sporting services; most have also scheduled commitments for communications services and transport services.
· Horizontal commitments scheduled by OECS Members all included provisions regarding natural persons and commercial presence. The provision of services through commercial presence generally requires local incorporation of the foreign service provider, and a licence must be obtained to hold property in accordance with the different Alien Landholding Acts. In the schedules of some countries, certain small business opportunities are reserved for nationals (
Table IV.1
Sectors in which GATS specific commitments were made
|
Sector-specific commitments |
|
|
|
|
|
|
|
◨ Part of sector/subsector has been scheduled ■ All of sector/subsector has been scheduled .. No commitments scheduled | ||||||
|
Number of sectors in which commitments taken |
6 |
4 |
4 |
5 |
5 |
5 |
|
Number of subsectors in which commitments taken |
32 |
20 |
19 |
8 |
9 |
8 |
|
1. Business services |
◨ |
.. |
.. |
.. |
.. |
.. |
|
A. Professional Services |
◨ |
.. |
.. |
.. |
.. |
.. |
|
B. Computer and Related Services |
◨ |
.. |
.. |
.. |
.. |
.. |
|
C. Research and Development Services |
■ |
.. |
.. |
.. |
.. |
.. |
|
2. Communications services |
◨ |
◨ |
◨ |
◨ |
.. |
.. |
|
B. Courier services |
.. |
■ |
■ |
... |
.. |
.. |
|
C. Telecommunication services |
■ |
■ |
◨ |
◨ |
.. |
.. |
|
7. Financial services |
◨ |
◨ |
◨ |
◨ |
◨ |
◨ |
|
A. All insurance and insurance-related services |
◨ |
◨ |
◨ |
.. |
◨ |
◨ |
|
C. Other financial services |
.. |
.. |
.. |
◨ |
.. |
.. |
|
8. Health and related social services |
.. |
.. |
.. |
.. |
◨ |
◨ |
|
A. Hospital services |
.. |
.. |
.. |
.. |
■ |
■ |
|
9. Tourism and travel related services |
◨ |
◨ |
◨ |
◨ |
◨ |
◨ |
|
A. Hotels and restaurants (incl. catering) |
◨ |
◨ |
◨ |
■ |
◨ a |
◨ |
|
B. Travel agencies and tour operators |
.. |
.. |
.. |
.. |
.. |
.. |
|
C. Tourist guides services |
.. |
.. |
.. |
.. |
.. |
.. |
|
10. Recreational and sporting services |
◨ |
◨ |
◨ |
◨ |
◨ |
◨ |
|
A. Entertainment services |
■ |
■ |
■ |
■ |
■ |
■ |
|
D. Sporting and other recreational |
.. |
■ |
■ |
■ |
■ |
■ |
|
11. Transport services |
◨ |
.. |
.. |
◨ |
◨ |
◨ |
|
A. Maritime Transport Services |
◨ |
.. |
.. |
◨ |
◨ |
◨ |
|
H. Auxiliary services |
.. |
.. |
.. |
.. |
◨ |
◨ |
Note Maximum number of sectors=12; subsectors=160. The table reflects commitments with respect either to market access or national treatment, and in any mode of supply.
a The commitment scheduled includes CPC 5126, which is within the scope of general construction work for buildings.
Source: WTO GATS Schedules.
· All OECS Members, with the exception of
(ii) Telecommunications
· Only
· Telecommunications is a notable case of where liberalization and greater regional cooperation have moved forward hand-in-hand. Up until 2000, Cable and Wireless provided all telecommunications services in five of the OECS Members (
· Liberalization of the telecommunications market began in 1998 under the OECS Economic Diversification Programme. The process was given significant impetus when Marpin Telecoms and Broadcasting Ltd was granted a licence to provide telephone services in Dominica following a court proceeding with Cable and Wireless over the legality of its monopoly rights. The five countries participated in the OECS Telecommunications Reform Project funded by the World Bank and, in May 2000, signed a Treaty Establishing the Eastern Caribbean Telecommunications Authority (ECTEL): the market was to be liberalized within a minimum of 12 months and a maximum of 18 months beginning
· ECTEL has an advisory and coordinating role with respect to NTRCs on telecommunications regulation, and is charged with ensuring a competitive, efficient, universally available service to OECS member states. It is headed by a Council of Ministers (comprising ministers responsible for telecommunications in the ECTEL states, and the Director-General of the OECS). The Council of Ministers gives policy direction to a board of directors consisting one member from each ECTEL contracting state, appointed by Ministers. The ECTEL Directorate is responsible for the day to day operations of the organization and is headed by a managing director. The national NTCRs are responsible for regulation of the telecoms sector in each contracting state. They are required by law to liaise and consult with ECTEL on various regulatory issues, including licensing, interconnection, spectrum management, pricing and tariffs, numbering, and dispute resolution. Individual licences may only be granted by national Ministers upon the recommendation of ECTEL.[62]
· The national Telecommunication Acts are largely the same in all OECS ECTEL member states, as are the various implementing regulations.[63] These regulations have been developed and, at May 2007, a number of additional regulations were at various stages of adoption by the OECS ECTEL contracting states.[64]
· As part of the World Bank Telecommunications and ICT Development project, the ECTEL Treaty, and national Telecommunications Acts and regulations are being reviewed. According to the authorities, there are, inter alia, some concerns about possible conflicts between the Telecommunications Act and regulations; and the responsibilities of ECTEL and the NTRCs need to be delineated more clearly. The review is under way and the estimated time of delivery is December 2007.
· As specified in national Telecommunication Acts, the provision of telecommunications services and the operation of a network require licences; these may be individual or class licences, and their terms and conditions are determined by the Minister in charge of telecommunications in consultation with ECTEL. Individual licences are largely for infrastructural services, and class licences are for value-added services. The criteria to be taken into account for granting a licence are, in general, include the legal status, and the financial and technical capacities of the applicant. Regulations are being developed to establish universal service funds; in the absence of these, there are no universal service requirements in force (mid 2007). Quality of service regulations, stipulating the broad parameters that providers are obligated to meet, have been developed and have been approved by the ECTEL Council of Ministers for adoption by the contracting states.
· The Telecommunications Acts and Interconnection Regulations stipulate that interconnection rates should be cost-oriented. ECTEL is in the process of consulting on cost models for the determination of cost-oriented interconnection rates. All interconnection agreements must be approved by the NTRCs. The authorities note that they are seeking to revise the Interconnection Regulations to improve NTRC capacity to regulate interconnection. The interconnection agreements that have already been signed between providers are for five years, and may be revised when they are up for review.
· In principle tariffs are determined freely by the suppliers. Where there is not enough competition to determine tariffs by market forces, and where services are provided by a major supplier, tariffs are regulated by the NTRCs and by ECTEL under a Price Cap Plan.
· There are no limits on foreign ownership of telecommunications companies in any of the OECS ECTEL members, nor are there citizenship requirements applied to directors. All telecommunications licensees, however, must be established or registered as local companies. Cross-subsidization is not permitted. Some OECS ECTEL members apply telecommunications-specific taxes, and in some others these have been replaced by the VAT.
· Since 2001, there have been a number of new entrants (individual licensees) into the basic telecoms market, particularly with respect to mobile and internet services. There was some consolidation in the mobile market, however with the takeover of Cingular Wireless by Digicel in 2005. A number of providers have obtained both individual and class licences but have not yet started operations.
· The incumbent, Cable and Wireless, remains the sole provider of fixed-lined services in the ECTEL member states, with the exception of
· One of the key outcomes of liberalization has been the rapid growth in cellular phone penetration rates across all ECTEL members. This has been driven primarily by increases in the availability of pre-paid mobile services and affordable handsets. Competition in the cellular market began in 2003 with new entrants in the market. However, mobile call tariffs between networks have not changed substantially since liberalization.
· Internet penetration has grown gradually in each OECS ECTEL member, but remains relatively low overall; ranging from 5% in St. Lucia to 18% in St. Kitts and Nevis (March 2006). Market competition does appear to have had an impact on the price and quality of services: according to the authorities, price reductions implemented by Cable and Wireless, the main provider of broadband in most countries, have stimulated a significant shift from dial-up to broadband usage.
· A new fibre optic cable, owned by Global Caribbean Network has been landed in all of the ECTEL members, and has been licensed in four (St. Kitts and Nevis, St. Vincent and the Grenadines, Dominica, and Grenada) to sell capacity to existing providers. According to ECTEL, no applications have yet been made for licences to provide telecommunications services directly to the end user.
·
· The authorities indicate that
(iii) Financial services
· All OECS Members operate both on-shore and off-shore financial services. In general, offshore and onshore financial-services companies and banks are incorporated under different legislation and are subject to different provisions. OECS Members are at various stages of consolidating regulation of their onshore and offshore sectors under a single unit (excluding domestic banks, which are regulated by the Eastern Caribbean Central Bank (ECCB)).
· None of the OECS Members participated in the WTO extended Negotiations on Financial Services; most have made GATS commitments on reinsurance services.
(a) Banking
· Onshore banking across the OECS is open to foreign investment. There are no limitations on foreign investment and foreign-owned banks may establish subsidiaries or branches in each of the OECS Members. There are no residency or citizenship requirements applied to bank managers or directors, only that they must be considered fit and proper to do the job in accordance with certain criteria. Banks (both local and foreign financial institutions) must have a place of business within the member state in which they are licensed.
· Weighted average spreads between deposit and lending varies from 5.3 percentage points in
· The ECCB Agreement (1983) gives the ECCB the authority to regulate banking businesses on behalf of, and in collaboration with, participating governments. Banks must be licensed by the respective Ministry of Finance. In all cases, applications are investigated by the ECCB, which makes a recommendation to the Ministry of Finance in the respective Member. Licences are specific to the country where they are granted.
· In the early 1990s, ECCU Members harmonized their onshore banking legislation, based upon a template Uniform Banking Act. In 2005, the Uniform Banking Act was amended and by all OECS countries have incorporated the revisions into their domestic banking legislation.[65] In general, the revisions upgrade legislation in relation to the Basle Core Principles. A foreign financial institution intending to open a branch or affiliate is now required to provide certification that the banking supervisor in the jurisdiction in which it was incorporated has no objection to its application for a licence, and evidence that it is subject to comprehensive supervision on a consolidated basis by the authorities in its home jurisdiction.
(b) Insurance
· There are no limitations on foreign investment in insurance companies in any of the OECS countries and, in most jurisdictions, insurance companies are foreign-owned. The only reinsurance company is registered in
· Each OECS Member has its own insurance legislation. However, new insurance legislation, which will be harmonized among all Members, is in an advanced stage of drafting (mid 2007).
(c) Offshore banking and insurance
· All OECS Members have offshore banking and insurance legislation. Offshore banks may conduct banking business only in currencies other than the EC$; and, generally, offshore banks and insurance companies are precluded from conducting business with citizens in the country in which they are registered. Offshore companies benefit from various tax exemptions (e.g. corporate tax and stamp duty). In some jurisdictions, there are citizenship requirements for directors of offshore companies.
· In June 2000, the G7 Financial Action Task Force (FATF) issued a report on the state of money laundering in various offshore centres.[66] On the basis of this report,
· There are no offshore insurance companies in
(iv) Air transport
· Air transport is considered to be crucial in supporting the tourism sector on which most OECS Members rely. All but two OECS Members (
· The main airports in the OECS are the
· Air transport policy is coordinated and set at the OECS level by the OECS Civil Aviation Regulatory Board, which brings together the OECS Ministers responsible for civil aviation. The Board formulates and manages aviation policy and is in charge of reviewing aviation laws and regulations within the OECS.[68] The Directorate of Civil Aviation of the Eastern Caribbean States, headquartered in Antigua, provides safety and security oversight through a system of inspection, investigation, maintenance, monitoring, and licensing, and is in charge of ensuring that all civil aviation activities in OECS ICAO contracting parties (all OECS countries except for
· The main civil aviation legislation in each OECS Member is the Civil Aviation Act; new Civil Aviation Acts were promulgated between 2003 and 2005. In general terms, licensing decisions take into account the existence of other air services in the area, the period for which air transport services have been operated, safety, continuity, regularity, and efficiency concerns, the financial resources of the applicant, and the type of aircraft to be used.
· In
· There are no domestically incorporated airlines in
· Cabotage is not restricted in
· During the period under review there has been some consolidation within the airline industry. In February 2007, the two main OECS airlines, LIAT and Caribbean Star, merged their flight schedules under the LIAT name as a first step towards a full merger. According to the authorities, both airlines had been running at a loss, and within the introduction of the combined schedule, the number of flights was reduced and ticket prices were increased.
· All commercial airports in OECS Members are owned by the Government and there are no plans to privatize them. In all except
· Aviation agreements with third parties are negotiated through bilateral and regional channels. Several OECS Members have bilateral agreements. A Multilateral Transport Agreement exists at CARICOM level.
(v) Maritime transport
· As estimated by UNCTAD, the costs of freight as a percentage of the value of imports in 2003 generally ranged from 7.4% in
· The efficiency of ports, as measured by the average number of containers unloaded per hour, varies widely between OECS countries: from 10-12 containers per hour in
· Maritime transport policy is formulated and implemented at the national level.
· In volume terms, the vast majority of the OECS's cargo trade is transported by sea. No government or other cargos reserved for domestically flagged vessels or for ships owned or operated by the Government.
· In all OECS countries there are limitations to foreign ownership of domestically flagged vessels. In
· There are no restrictions on international passenger and cargo maritime transport services in any of the OECS Members.
· Almost all commercial ports are government-owned and are generally managed by a state-owned port authority in each country (the authorities in
· Over the review period, all OECS countries have made investments in order to bring their ports into compliance with the ISPS code; in some, the project is ongoing.
· All except
(vi) Tourism
· All OECS Members made commitments in their GATS Schedule of Specific Commitments for hotel development. They generally bound market access for the development of hotels in excess of 50 rooms, subject to alien landholding and exchange control regulations. Hotel development of less than 50 rooms (100 in
· The main sources of stayover tourists to the OECS include other Caribbean countries, the
· Tourism policy is formulated at the country level. In each Member, the Ministry of Tourism, or the ministry in charge of tourism is responsible for policy formulation and implementation. The role of the tourist board is generally confined to marketing and promotion activities. Private sector associations are also active in each country.
· All OECS Members offer fiscal incentives for hotel development. These include exemptions from customs duties and other taxes on imports, generally under the respective Hotels Aid Acts, as well as corporate income tax exemptions. The maximum period for corporate income tax exemptions varies from
· While figures were available for some countries on the revenue forgone as a result of customs duty exemptions, no figures were available on revenue forgone as a result of corporate income tax exemptions, hence it was not possible to ascertain the full fiscal impact of these measures.
· All OECS Members raise a number of tourism related taxes, including on hotels and restaurants, on airline carriers, cruise ship passengers, and passengers leaving the country. Passengers departing from OECS countries by plane are liable for various embarkation and other taxes ranging from EC$40 in
(vii) Professional services
· Only
· OECS countries have different regimes with respect to professional services. In some specific laws regulate certain professional services, and in others, most professional services are totally unregulated. According to the authorities in each OECS Member, no professional services are exclusively reserved for nationals. In addition, none of the OECS Members have signed mutual recognition agreements in professional services.
· Beginning in 2003, steps have been taken to develop harmonized legislation across CARICOM countries for professionals (including professional service suppliers as defined under the GATS) to facilitate the movement of persons within the region. According to the authorities, a Draft Model Professionals Bill has been developed at the CARICOM level. This, inter alia, deals with requirements and procedures for registration and licensing, which should form the framework of laws for specific professions. Discussions with the medical profession are the most advanced: legislation for specific medical professionals has been drafted and is forming the basis for national consultations.
· All OECS Members have enacted the Caribbean Community Skilled Nationals Act. This allows CARICOM nationals who are university graduates to enter and work in any other participating CARICOM state without requiring a work permit. This may, indirectly, assist the market access of professional service providers once implementing regulations are in place. In addition, all OECS Members are contracting parties to the CARICOM Agreement Establishing the Council of Legal Education. In signing on to the agreement, the respective governments undertake to recognize that any person holding a Legal Education Certificate fulfils the training requirements for practice in its territory.
(viii) Other offshore services
· Besides financial institutions[71], international ship registries, and economic citizenship programmes, the offshore industry consists of management companies and other commercial companies, all of which are generally referred to as international business companies (IBCs).
· Only limited information was available from OECS Members on the number of registered IBCs and the contribution of offshore activities to employment, investment and government revenue.
· The registration and licensing of IBCs is generally regulated by an International Business Corporation Act (with the exception of
IMF (2006),
IMF (2007), Eastern Caribbean Currency Union: 2006 Regional Discussions-Staff Report, and Public Information Notice on the Executive Board Discussion on the Eastern Caribbean Currency
Mlachila, Montfort and Paul Cashin (2007), "The Macroeconomic Impact of Trade Preference Erosion on the Windward Islands", Eastern Caribbean Currency
OECS High Commission in
World Bank (2005), Organization of Eastern Caribbean States: Towards a New Agenda for Growth, Report No. 31863-LAC. Viewed at: http://siteresources.worldbank.org/LACEXT/Resources/258553-1122984920359/OECS.pdf.
WTO (1998a), Trade Policy Review:
WTO (1998b), Trade Policy Review:
__________
[1] Estimates of GDP per capita based on PPP in 2006 were US$13,908 for
[2] For example, an OECS Secretariat study estimates this contribution to be of some 90% for
[3] Averages are for the whole Eastern Caribbean Currency Union (ECCU) area, which comprises also Anguilla and
[4] Basic price is the amount receivable by the producer from the purchaser for a unit of a good or service produced, less any tax payable, plus any subsidy receivable on that unit as a consequence of its production or sale. It excludes any transport charges invoiced separately by the producer.
[5] IMF (2007).
[6] IMF (2007).
[7] IMF (2006).
[8] The previous benchmarks referred to Central Government accounts while the new ones refer to the public sector as a whole. The previous benchmarks included: (a) Gross central government debt had to be less than 60% of GDP; (b) the current balance of the central government had to be between 4 and 6% of GDP (this measure was dropped in the new system); (c) the overall balance of the central government had to be less than -3% of GDP; (d) the total debt service had to be less than 15% of current revenues (this measure was dropped. The previous system called for benchmarks to be applied equally across countries and to be achieved by 2007. The new system allows different speeds of convergence, with intermediate targets established for each country, based on initial conditions and constraints. See IMF, Eastern Caribbean Currency Union: 2006 Regional Discussions-Staff Report, and Public Information Notice on the Executive Board Discussion on the Eastern Caribbean Currency
[9] Anguilla and
[10] ECCB online information. Viewed at: http://www.eccb-centralbank.org/Money/rgsm.asp.
[11] Commercial bank credit distribution in December 2005 was as follows: personal mortgage, 26%; consumer credit, 21%; tourism, 10%; Central Government, 9%; distribution, 8%; construction and land development, 6%; manufacture, 2%; agriculture 4%; other, 14%.
[12] IMF (2007); and Mlachila, and Cashin (2007).
[13] IMF (2007).
[14] ECTEL online information. Viewed at: http://ectel.int/ectelnew-2/aboutus_files/aboutus.html.
[15] The OECS States have sourced several projects to aid in capacity building (see for example: http://www.oecs.org/proj_trade.htm).
[16] CARICOM online information. Viewed at: http://www.caricom.org/jsp/oecs_news/oecs_new_ treaty.jsp.
[17] Caribbean Regional Negotiating Machinery online information. Viewed at: http://www.crnm.org/ acp.htm. An overview of the state of play of OECS-WTO Members in various trade arenas is available at: http://www.acici.org/aitic/documents/reports/reports40_eng.htm.
[18] WTO online information. Available at: http://www.wto.org/english/ tratop_e/serv_e/s_negs_e.htm.
[19] WTO documents WT/DS265/28, WT/DS266/28, WT/DS283/9,
[20] WTO online information. Available at: http://www.wto.org/English/tratop_e/dispu_e/cases_e/ds27_ e.htm.
[21] WTO document G/SCM/W/535,
[22] Delegation of the European Commission in
[23] AITIC online information. Viewed at: http://www.acici.org/aitic/documents/reports/reports40_ eng.htm.
[24] WT/COMTD/SE/5,
[25] WT/GC/M/104,
[26] World Bank (2005); and AITIC online information. Viewed at: http://www.acici.org/aitic/ documents/reports/reports40_eng.htm.
[27] OECS Secretariat online information. Viewed at: http://www.oecs.org/proj_trade.htm.
[28] See for example OECS online information. Viewed at: http://www.oecs.org/proj_prog.htm.
[29] CARICOM online information. Viewed at: http://www.caricom.org/jsp/oecs_news/oecs_new_ treaty.jsp.
[30] For information on the history and development of the CSME see CARICOM online information. Viewed at: www.caricom.org.
[31] For further details on CARICOM's structure and operation see WTO (1998a), Chapter II and WTO (1998b), Chapter II.
[32] For the status of accession to the original jurisdiction of the Court see CARICOM online information. Viewed at: http://www.caricom. org/jsp/single_market/csme_summary_key_elements_jan_07. pdf.
[33] CARICOM Secretariat Press Release No. 87, 2001. Viewed at: http://www.caricom.org/jsp/ pressreleases/pres87_04.htm.
[34] CARICOM online information. Viewed at: http://www.caricom.org/jsp/single_market/csme_ implementation.jsp.
[35] For details of CARICOM bilateral agreements see CARICOM online information. Viewed at: for consultation at: http://www.crnm.org/bilateral.htm.
[36] For further details see WTO (1999a), Chapter II(iv).
[37] World Bank (2005).
[38] USTR online information. Viewed at: http://www.ustr.gov/assets/Trade_Development/Preference_ Programs/CBI/asset_upload_file 670_8672.pdf.
[39] World Bank (2005), Chapter 3.
[40] The basis and objectives of the European development strategy in the
[41] Delegation of the European Commission in
[42] World Bank (2005), Chapter 3.
[43] Caribbean Regional Negotiating Machinery online information. Viewed at: http://www.crnm. org/bilateral.htm.
[44] Caribbean Regional Negotiating Machinery online information. Viewed at: http://www.crnm.org/ acp.htm.
[45] OECD Creditor Reporting System. Viewed at: http://stats.oecd.org/WBOS/Default.aspx?Datset Code=CRSNEW.
[46] OECD Creditor Reporting System.
[47] OECD Creditor Reporting System.
[48] OECD Creditor Reporting System.
[49] WTO document WT/AFT/1,
[50]
[51] WTO document G/RO/W/106,
[52] WTO document WT/DS302/R,
[53] World Bank (2005), p. 44.
[54] The goods for which Article 164 may be applied and CARICOM origin suspended are (years, MDC/third party rates in percentage between parentheses): aerated beverages (10, 70/100); waters, other waters (10, 70/100); beer (10, 70/100); malt (10, 70/100); candles, paraffin wax (7, 40/50); curry powder (5, 30/40); pasta (5, 50/100); animal feed (10, 50/100); wooden furniture (10, 40/50); solar water heaters (10, 40/50); industrial gases, oxygen, carbon dioxide, acetylene (10, 40/50).
[55] WTO document G/TBT/CS/2/Rev.13,
[56] WTO document G/
[57] World Bank (2005), pp. 43 and 45.
[58] IMF (2007).
[59] The full text of the agreement is available in WIPO document WO/CC/48/2,
[60] Including forestry and fisheries, but excluding agri-business.
[61] IMF (2006).
[62] ECTEL online information. Viewed at: http://ectel.int/ectelnew-2/Newsletters/ECTEL%20Mag% 20LOWRES.pdf.
[63] ECTEL is responsible for putting together draft template acts and regulations. ECTEL Member countries are then responsible for enacting national laws and regulations, and during this process national governments may make small changes to the uniform legislation.
[64] Regulations have been developed on: interconnection; licensing and authorization; fees structure; confidentiality in networks and services; private network leasing; terminal equipment and public networks; spectrum management; retail tariff; numbering; and licensing classification. According to ECTEL, aspects of the numbering regulations remain outstanding. Regulations are also being developed on quality of services, exemptions; universal service; and dispute resolution.
[65] ECCB online information. Viewed at: http://www.eccb-centralbank.org/About/legal-banking.asp.
[66] FATF online information. Viewed at: http://www.fatf-gafi.org/dataoecd/57/22/33921735.pdf.
[67]
[68] OECS online information. Viewed at: http://www.oecs.org/dca_website/General_information.htm.
[69] Estimates were not available for
[70] Exceptions include
[71] Offshore banks, insurance companies, trusts, foundations, and mutual funds.
