Even as Guyana says it plans to continue the waiver on the 15% Common External Tariff (CET) for extra-regional cement, government is still to apply through the Caricom Secretariat, to the Council for Trade and Economic Development (COTED), to gain approval for the extension.
On Thursday, Industry and Commerce Minister Manniram Prashad confirmed that the government had taken a decision to extend the CET waiver on extra-regional cement, which ended last month. However, Caricom Adviser on the Single Market and Economy Desiree Field-Ridley said on Monday in an interview from the Secretariat, “We don’t have in the Secretariat a request from Guyana,” when this newspaper inquired if Guyana had applied for an extension of the CET waiver on cement.
According to Article 32 of the revised Treaty of Chaguaramas, as it relates to the operation of the CET, “any alteration or suspension of the Common External Tariff on any item shall be decided by the Council by unanimous vote.” Also, during the transitional period in respect of any item, a member state may decide as a temporary measure to reduce or suspend a duty in its national tariff for the purpose of domestic price control provided that goods originating from member states on which duties are payable are accorded treatment no less favourable.
Additionally, the Article says that any such action should be promptly reported to the other member states through the Secretariat; and if any member state so requests, “the Council shall hold consultations on the matter and may by majority vote make such recommendations as it considers appropriate to mitigate any damaging effects of such reduction or suspension of duty on the exports of the Member States concerned.”
Trinidad Cement Limited (TCL) Group which opened a US$10M bagging facility here mid-year imports bulk cement from its Barbados cement production plant Arawak to Guyana. At the COTED meeting planned for next week at the Buddy’s International Hotel, it remains to be seen if Barbados will challenge this recent move by Guyana.
According to the Article, where a commodity is not being produced in one or more member states or is being produced but in insufficient quantities to satisfy the requirements of the Common Market, the Council may decide to authorize the reduction or suspension of the tariff in respect of imports of that commodity subject to such terms and conditions as it may decide, provided that in no case the commodity imported from third countries be accorded more favourable treatment than similar products produced by member states.
Last week the minister declined to comment on the timeframe given for the waiver or the expiry date and would only say that the ministry was monitoring the situation closely. Prashad said Guyanese must be able to build homes at affordable prices and before taking the decision to extend the waiver, discussions were held with all stakeholders including TCL.
Regional supplier TCL has contended that they are able to supply the Guyana market and there is no need for imports. The local demand was put at 12,000 tonnes per month and TCL has argued that their bagging capacity per month is 30,000 tonnes more than double the local market.
However, Head of the Presidential Secretariat Dr Roger Luncheon said on Thursday that government took the decision to extend the waiver because, “We don’t have the information that provides us with the confidence.”
The TCL Group in a press release last week expressed “deep disappointment at the indication that the government of Guyana intends to maintain the waiver of the 15% CET on cement imports.” It also said territories that produce cement have a right to access the Guyana market under the conditions of the CET as is the case for products produced in Guyana and exported to other Caricom countries.
Extra-regional cement imports are sold on average at $1300 per sack Value Added Tax (VAT) inclusive in the city and at $1700 VAT inclusive outside the city whereas the TCL brand is sold at $1600 plus VAT in the city and $1900 plus VAT outside the city. At least one large cement importer is asking for the waiver to be extended for a year.