World Trade Organization |
RESTRICTED |
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WT/TPR/G/190/KNA | |
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(07-3988) |
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Trade Policy Review Body |
Original: English |
TRADE POLICY REVIEW Report by Saint Kitts and Nevis |
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Saint Kitts and Nevis is attached. |
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 Saint Kitts and Nevis.
CONTENTS
Page
introduction 5
SECTORS 5
Agriculture 5
Services 5
Tourism 6
Financial Services 6
Telecommunications 6
Manufacturing 6
TRADE RELATIONS 7
CSME 7
CBI/CBERA/CARIBCAN 7
TRADE POLICY AND IMPLEMENTATION 7
Technical Standards 8
Sanitary and Phytosanitary Measures 8
FISCAL POLICY 8
MONETARY POLICY 8
CONCLUSION 9
introduction
1. Although
2. Trade liberalization however has affected the economy of
3.
SECTORS
Agriculture
4. Agriculture’s contribution to GDP has declined falling to 3% of GDP in 2005, mainly as a result of decreasing sugar cane production. The government’s decision to close the sugar industry in 2005 means a restructuring of the agriculture sector. The sector is expected to ensure the food security of the country, reduce its net food importing status, provide rural employment and contribute to foreign exchange earnings and sustainable development. The government plans to increase the production of its non-sugar agriculture, to add value to primary products and seek export markets. Areas of niche production will be explored and new products added to the current production.
5. The small physical size of
6.
Services
7. The services sector is a major focus of the readjustment of the post-sugar economy. Investment in tourism is encouraged with infrastructural investment on air and seaport facilities. Although tourism is the major service industry the government has indicated that financial services and information technology services are targets for diversification objectives.
Tourism
8. Over the period of the review the tourism sector has remained steady. Tourism growth fell in 2005 after extremely high growth in the previous year. Tourism continues to contribute significantly to Gross Domestic Product and is the main foreign exchange earning industry.
9. Tax and duty concessions are offered to the tourism industry through the Hotel Aids Act.
10.
11. With the decline and eventual closure of the sugar industry during the period under review
Financial services
12. The financial services sector has been identified as an area for development. To offset some setbacks in the sector several pieces of legislation were introduced to improve the regulation in the industry. A Financial Services Intelligence Unit was also created.
Telecommunications
13. The liberalization of the telecommunications industry has introduced a competitive market for the provision of such services. Licences were issued in both the fixed line and mobile markets. The mobile market is very buoyant with three providers. There is high penetration of internet service and broadband subscription has increased to 75% of subscribers. The resulting infrastructure and investment has provided a platform which will encourage investment in information technology based service industries. Reductions in telecommunication costs to subscribers have resulted from liberalization and increased competition in the industry. The government considers that such cost reduction would be an important consideration in attracting new investment in services to make this industry a route for diversification.
Manufacturing
14. The contribution of manufacturing to the economy declined during the period under review mainly as a result of decreasing production in sugar manufacturing and the eventual closure of the sugar industry. Production in manufacturing consists of beverages including beer and malt, and electronic components such as switches, filter traps and capacitors.
15. The manufacturing sector is the largest exporter of goods contributing 9.5% to GDP in 2005. Investment and diversification into manufacturing is assisted by tax incentives under the Fiscal Incentives Act. The government recognises the need to assist the manufacturing sector in order to provide employment opportunities, increase export trade and earn foreign exchange.
16. Many of the manufactured exports are marketed in the
TRADE RELATIONS
17.
CSME
18.
19. The government is of the view that the CSME can stimulate trade and help to improve the competitiveness of domestic producers.
CBI/CBERA/CARIBCAN
20. The Caribbean Basin Initiative of the
TRADE POLICY AND IMPLEMENTATION
21. With the closure of the sugar industry
22. The government has decided on a policy of diversification through the development of service industries. The infrastructure for the provision of information technology services is available through the opportunities provided by the liberalized telecommunications industry and the regulatory oversight of ECTEL. The government intends to attract investment in this industry with the provision of an infrastructure ready technology park. Other services for diversification include tourism and financial services. Widening the market for tourism from traditional countries of origin and creating a tourism brand are some of the goals of the tourism sector.
23. To achieve some of its goals the government intends to create an Investment Promotion Agency to provide information and advice to both domestic and foreign investors. A One Stop Shop investment facility will be established to make the investment process more timely and effective.
24.
25. Capacity constraints also exist in other related public sector departments and are compounded by financial constraints for the proper implementation especially of TRIPS, SPS and TBT Agreements.
Technical Standards
26. The government recognizes the importance of internationally accepted standards in the trading process. The government has established a Bureau of /standards with empowering legislation and the oversight of the Standards Council. A multi purpose lab serves the Standards Bureau. The Bureau of Standards has the responsibility of creating technical regulations to protect consumer health and safety from goods unsuitable for consumption. It is also expected to advise producers of standards in foreign markets that are targets for exports. The Standards council has begun work on food labeling standards and conducts training for domestic producers on labeling requirements and food safety standards.
Sanitary and Phytosanitary Measures
27.
28. Technical assistance would be required for both TBT and SPS measures to be effective to promote trade. Laboratory accreditation and a certification system would greatly facilitate trade.
FISCAL POLICY
29. The fiscal position of
30. The fiscal position remains vulnerable however as increased government expenditure on fuel imports will begin to affect the balance of payments. The fiscal revenue continues to depend on trade taxes. This source is under threat from proposed reduction in tariffs in the multilateral negotiations.
31. Government has not yet made a decision to change its tax system.
MONETARY POLICY
32. The monetary council of the Eastern Caribbean Central Bank is responsible for the monetary policy of
CONCLUSION
33.
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