Jamaica: 25 years at WTO [Part I]
By Elizabeth Morgan
Twenty-five (25) years ago, Jamaica formally became a member of the World Trade Organization (WTO) on 9th March 1995. The independent international organization, the WTO, superseded the United Nations (UN) affiliated General Agreement on Tariffs and Trade (GATT) on 1st January 1995. Prior to this, Jamaica was a Contracting Party to the GATT from 31st December 1963.
The WTO regulates global trade in goods and services providing predictability and transparency. As a small developing economy, Jamaica supports multilateralism and a rules-based global trading system where it has a voice and can participate in decision-making. The country has been a strong advocate in trade and development matters.
Jamaica’s Permanent Representation and Mission in Geneva, established in 1965, serve the WTO and UN organizations in Geneva, UN offices in Vienna, Austria, and the UN Food and Agricultural Organization in Rome, Italy. In addition, they also serve as Embassy to Switzerland along with non-resident bilateral accreditations to other countries, including Austria and Italy. The Mission, in addition, acts as a Consulate. This is a mammoth task, not for the faint of heart!
Permanent representatives of Jamaica in Geneva from 1995-2018 were Lloyd Barnett, Richard Pierce, Anthony Hill, Ransford Smith, Gail Mathurin, Peter Black, and Wayne McCook. Cheryl Spencer is the incumbent. The men and women, serving through the years, in Jamaica’s small mission have given, and continue to give, yeoman service with limited resources.
Jamaica was actively engaged in the landmark GATT Uruguay Round of multilateral trade negotiations, 1986-1994. The Hon. Paul Robertson, then Minister of Foreign Affairs and Foreign Trade, led Jamaica’s delegation to the GATT Ministerial Conference in Marrakesh, Morocco, 12-15 April 1994 to sign the resulting Agreement establishing the WTO and a range of new multilateral trade agreements (MTNs) covering trade in goods and trade in services, as well as trade-related agreements on investment measures and intellectual property rights, and dispute settlement.
Implementing the Agreements
Having joined the WTO, Jamaica turned to implementing the MTN Agreements which include special provisions in support of developing country members known as special and differential treatment (S&DT). S&DT provide, among other things, transition periods and other concessions to facilitate implementation and the more gradual integration into global trade.
Implementing these agreements included drafting and adopting new domestic legislation and reforming existing or establishing new institutions. This work was done in collaboration with other relevant regional and international organizations. The Jamaica Intellectual Property Office (JIPO) and the Antidumping and Subsidies Commission (ADSC) resulted from this process. Jamaica Customs, Trade Board, the Bureau of Standards, the Ministries of Agriculture, Industry and Commerce, and Finance had to reform procedures to implement these Agreements and to align Jamaica’s trade policies and procedures with international standards. This work is ongoing.
By the time the Textiles and Clothing Agreement was implemented in 2005, liberalizing trade in this industry, the sector in Jamaica, based on quotas, had already disappeared. The more favourable terms granted by the USA and Canada to Mexico in the North American Free Trade Agreement (NAFTA) led to investors relocating. Jamaica was also unable to compete with producers in Asia and Latin America.
For Jamaica, WTO tariff reductions in goods were actually not significant, as from the mid-1970s, Jamaica undertook unilateral tariff reductions implementing CARICOM’s Common External Tariff (CET) and through structural adjustment programmes with the International Monetary Fund (IMF) and World Bank. Jamaican governments also gave duty waivers to stakeholders for importation of various production inputs.
Jamaica’s WTO goods schedule provides space enabling the application of higher tariffs to protect domestic agricultural and manufacturing products. This has not had a significant impact on imports.
Under the WTO Agriculture Agreement, Jamaica is permitted to use “green box” subsidies in the agriculture sector, if the government is able to finance the programmes. Under the Agreement on Subsidies and Countervailing Measures, however, Jamaica was required to phase out export subsidies in free trade zones. So far, there are no disciplines for subsidies in services.
Trade in Services
The General Agreement on Trade in Services (GATS) regulated global trade in services for the first time. In 1997, Jamaica was party to concluding the Agreement on Basic Telecommunications Services which liberalized the telecommunications sector. In the same year, the country also participated in the negotiations for the Agreement on Financial Services, which it eventually ratified in 2012.
The WTO dispute settlement mechanism was strengthened under the Dispute Settlement Understanding (DSU). Among the first cases initiated in 1996, under these rules, was the Case against the European Communities (EC) Regime for the Importation, Sale and Distribution of Bananas brought by Latin American banana producers supported by the USA. The African, Caribbean and Pacific (ACP) banana producers, including Jamaica, were third parties. The EC lost this protracted case which was finally concluded in 2009.
Similarly, Australia, Brazil and Thailand, in 2003, brought a case against the EC’s Export Subsidies on Sugar. ACP sugar exporting countries, including Jamaica, were again third parties. This case, concluded in 2005, was also lost by the EC. Jamaica’s exports of bananas and sugar have become uncompetitive in the UK market.
Jamaica has not been a party to a dispute at the WTO. Nevertheless, it is significant that various Jamaican legal experts have been invited to serve on WTO dispute settlement panels particularly adjudicating trade remedy (anti-dumping, subsidy, safeguard) cases.
Review of the dispute settlement mechanism (DSM) has been in progress since 2000 as part of the built-in agenda for improvements in the WTO. Jamaica participated in this process, but among key members, the political will to make progress was absent. Now the USA has brought about the suspension of the Appellate Body by not approving new judges. With this situation, discussions on DSM reform have been revived.
Trade Policy Review
The Trade Policy Review Mechanism (TPRM) promotes transparency through monitoring Members’ national trade policies and practices and assessing their effect on the multilateral trading system. Jamaica, as a developing country, has trade policy reviews very six (6) years. So far, the country has undergone four (4) reviews in 1998, 2005, 2010 and 2017.
Multilateral Trade Negotiations (MTNs)
The WTO is the forum for multilateral trade negotiations to facilitate the progressive liberalization of global trade. Negotiations on subjects left-over from the GATT UR and built into the Agreements e.g. on Trade in Services, Agriculture, and Dispute Settlement, continued in the WTO. Product and subject specific negotiations are also facilitated e.g. the Information Technology Agreement liberalizing trade in IT products.
In 2001, a new Round of MTNs was launched. This is the Doha Development Round. Jamaica has been an active participant in these deliberations. See Part II.
Technical Cooperation including Training
Capacity-building is a necessary activity in the WTO. Jamaica, like other developing members, was at a disadvantage in international trade policy practices and procedures. The country continues to benefit from the many training courses offered both at WTO headquarters in Geneva and within the region in association with the Inter-American Development Bank (IDB) and other partners. Jamaica has also had several WTO internships. The UWI Mona Campus was once the location for the 3 month WTO regional trade policy course and site of the WTO academic Chair. Trade capacity-building is an ongoing need for Jamaica.
Personnel in the WTO Secretariat
The most senior Jamaican employed at the WTO in 25 years is Ambassador Wayne McCook, Senior Adviser in the Office of the Director General. Ms. Anneke Hamilton was employed as an economic officer in the Agriculture and Commodities Division. A few Jamaican nationals have worked at the WTO as interpreters and translators.
High Level Visits
Former WTO Director General (DG), Pascal Lamy, visited Jamaica in May 2009 to attend the Second Regional Review of Aid for Trade in Montego Bay. Roberto Azevêdo, Director General since 2013, paid an official visit to Jamaica in January 2016.
Jamaican Foreign Trade Ministers have visited the WTO at Geneva to attend Ministerial meetings, such as the Global Aid for Trade Review, and to participate in Jamaica’s Trade Policy Reviews. Senator, Hon. Kamina Johnson Smith, participated in Jamaica’s 4th Trade Policy Review in September 2017. Prime Minister Andrew Holness visited the WTO HQ in June 2019 and met with the DG. In his remarks, DG Azevêdo acknowledged that Jamaica is an active Member and a keen advocate for issues concerning small developing economies.
Indeed, as a small developing member with resource constraints, Jamaica has certainly made a positive impact at the WTO during these 25 years.
Jamaica’s challenges and achievements through these years are further examined in Part III.
Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics