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IV.
SECTORAL TRADE POLICIES
(1)
OVERVIEW
Trade Policies Review
1.
Jamaica continues to use trade policies and incentive schemes geared at promoting specific
sectors. The National Industrial Policy identifies these sectors, focusing on activities where a
comparative advantage is perceived to exist, such as tourism and on identifying others where it could
be developed through policy actions, such as data processing and systems development.
2.
Traditionally, Jamaica's endowments led to the development of activities linked to certain
agricultural crops and minerals. Although agriculture and mining remain important, both sectors have
lost GDP share to services and manufacturing. A number of incentives promote activity in
manufacturing, including income tax exemptions, and import duty concessions for production for
export outside of CARICOM. The main exporter in manufacturing is the textiles and clothing
subsector, although the industry has been suffering from a loss of competitiveness and inability to fill
bilateral export quotas in the past few years. A substantial part of the garment industry is located in
free zones.
3.
Jamaica's tariff structure offers higher levels of protection to goods with high value added and
to agricultural products (Chart IV.1). Goods used as inputs are generally granted duty-free access.
4.
The services sector is the largest and fastest growing in the Jamaican economy. Among
services, tourism is the main earner of foreign exchange, generating around US$1.13 billion in 1997.
After a period of privatization and reform, activities in the services sector have been largely
liberalized, few restrictions remain and national treatment is prevalent. Financial services and
telecommunications have undergone major reforms in recent years. In the case of the financial sector,
this has led to a relatively liberal business environment, with a strengthened regulatory framework. In
telecommunications, privatization has led to a temporary monopoly in the provision of basic
telephony services, which is expected to be dismantled by 2013.
(2)
AGRICULTURE AND FOOD PRODUCTS
5.
Value added in the agriculture sector (excluding food products) was J$16.9 billion in 1996,
equivalent to 8.4% of GDP. Its contribution to GDP declined to 7.4% in 1997 (J$17.6 billion),
reflecting in large measure the effects of a severe drought. Including food processing, beverages and
tobacco, agriculture represented 16.5% of GDP in 1996, and 15% in 1997 (Chart IV.2). Agriculture is
labour intensive and employs 22% of the total labour force. It comprises three main subsectors:
traditional agriculture, non-traditional agricultural products, and food processing, beverages and
tobacco. Traditional agriculture includes products that have been grown at scale for a long period,
namely: sugar, bananas and coffee. Non-traditional products include a variety of tubers, spices,
herbs, fruit and vegetables, horticultural products, chicken, beef, pork, and goat's flesh.
6.
Agricultural exports are dominated by traditional products, especially sugar, bananas, coffee,
cocoa, citrus and other fresh fruit and vegetables (Chart IV.3). They accounted for almost 16% of
Jamaica's total merchandise exports in 1997. Exports of processed foods, beverages and tobacco
accounted for an additional 14% of exports of goods.
Jamaica
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Chart IV.1
Average tariffs by ISIC classification, 1997
(Per cent)
35
30
25
20
15
10
5
0
111
122 210 230 311 313 321 323 331 341 351 353 355 361 369 372 382 384 390
121 130 220 290 312 314 322 324 332 342 352 354 356 362 371 381 383 385
ISIC
Major groups
ISIC
Major groups
111
121
122
130
Agriculture and livestock production
Forestry
Logging
Fishing
210
220
230
290
Coal mining
Crude petroleum and natural gas
production
Metal ore mining
Other mining
311-312
313
314
321
322
323
324
331
Food products
Beverages
Tobacco
Textiles
Clothing
Leather products
Footwear
Wood products
332
341
342
351
352
353
354
355
356
361
362
369
371
372
381
382
383
384
385
390
Furniture except metal
Paper products
Printing and publishing
Industrial chemicals
Other chemical products
Petroleum refineries
Petroleum and coal products
Rubber products
Plastic products
Pottery and china
Glass and glass products
Other non-metallic mineral products
Iron and steel
Non-ferrous metal
Fabricated metal products
Non-electrical machinery incl. computers
Electrical machinery
Transport equipment
Professional and scientific equipment
Other manufactured products
Source: Data provided by the authorities of Jamaica; and estimates by the WTO Secretariat.
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Trade Policies Review
Chart IV.2
Agricultural GDP by subsector, 1992 and 1997
(Per cent, based on constant 1986 prices)
a
1992
1997
Food, beverages
and tobacco
52.5
Forestry and
fishing
2.6
Food, beverages
and tobacco
50.5
Forestry and
fishing
2.6
Livestock
and hunting
8.0
Livestock
and hunting
7.6
Other primary
products
17.1
Root crops
14.0
Sugar cane
4.0
Other main
export products
2.2
Sugar cane
3.7
Other primary
products
18.4
Other main
export products
1.8
Root crops
14.7
Total: J$2.6 billion
Total: J$2.6 billion
a
Estimates.
Source: Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica 1997.
Chart IV.3
Exports of unprocessed agricultural products, 1992 and 1997
(Per cent)
a
1992
1997
Sugar
46.9
Other (nontraditional)
14.9
Sugar
47.3
Other (nontraditional)
11.8
Coffee
15.2
Coffee
9.2
Cocoa 1.4
Cocoa 0.9
Pimento 1.7
Pimento 2.5
Citrus (fresh fruit)
2.6
Bananas
22.5
Total: US$176.1 million
Citrus (fresh fruit)
1.9
Bananas
21.2
Total: US$212.7 million
a
Estimates.
Source: Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica 1997.
Jamaica
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7.
Jamaica is a net importer of agricultural products, with imports almost one third higher than
exports in 1996 (Table IV.1). The main imported agricultural products are cereals and preparations of
cereals, dairy products and eggs, meat, sugar and sugar products, beverages and spirits, vegetable oils
and fats, and fish. With the exception of sugar, Jamaica is a net importer of all the above-mentioned
products. A substantial proportion of imported sugar is used as an input in domestic production of
refined sugar and other products. Jamaica is a net exporter of vegetables and fruit, coffee, and
beverages and spirits. Products of export interest to Jamaica are generally subject to import tariffs
rates above the average for the sector. A wide range of fruit and vegetables are subject to additional
stamp duties, while beverages and spirits are also subject to a special consumption tax
(Chapter III.(2)(iv)).
Table IV.1
Trade and tariff data for agricultural products, 1997
(Per cent and US$ '000)
Tariff (MFN)
HS
Description
01-24
01
02
03
Agricultural products
Live animals
Meat and edible meat offal
Fish & crustaceans, molluscs &
other aquatic invertebrate
Dairy products; birds eggs; natural
honey; edible prod. nes
Products of animal origin, nes or
included
Live tree & other plant; bulb, root;
cut flowers etc.
Edible vegetables and certain roots
and tubers
Edible fruit and nuts; peel of citrus
fruit or melons
Coffee, tea, mate and spices
Cereals
Prod mill industry; malt; starches;
inulin; wheat gluten
Oil seed, oleagi. fruit; miscell.
grain, seed, fruit, etc.
Lac; gums, resins & other
vegetable saps & extracts
Vegetable plaiting materials;
vegetable products nes.
Animal/veg. fats & oils & their
cleavage products; etc.
Prep. of meat, fish or crustaceans,
molluscs etc.
Sugars and sugar confectionery
Cocoa and cocoa preparations
Prep. of cereal, flour, starch/milk
Prep. of vegetable, fruit, nuts or
other parts of plants
Misc. edible preparations
Beverages, spirits and vinegar
Residues & waste from the food
industry; prep. animal fodder
Tobacco and manufactured tobacco
substitutes
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Imports
Exports
Average (%)
Minimum (%)
Maximum (%)
(US$ '000)
(US$ '000)
20.2
22.9
26.2
25.5
0
0
0
0
40
40
40
40
436,916.7
1,148.2
43,165.1
28,636.3
339,700.0
50.0
511.9
19,498.9
20.4
0
40
44,533.3
3,953.5
0.0
0
0
1,498.8
-
26.7
0
40
670.8
2,045.4
26.5
0
40
7,102.3
16,219.9
35.2
0
40
1,992.3
59,330.9
22.8
14.3
8.5
0
0
0
40
40
40
4,621.8
75,211.9
10,550.1
36,891.0
28.4
3.7
0
40
4,013.7
518.0
3.3
0
20
692.7
5.2
0.0
0
0
85.7
3.9
21.7
0
40
29,687.8
33.4
20.0
0
25
19,970.6
671.9
26.5
9.1
16.9
17.9
0
0
0
0
40
25
25
40
38,280.5
3,990.5
30,657.4
13,959.4
109,308.9
3,482.3
8,318.4
6,327.4
20.8
26.3
6.5
0
0
0
25
30
25
15,005.2
30,150.3
21,617.5
11,750.8
49,432.2
1,256.7
20.0
0
30
9,674.6
10,061.2
Note:
Trade data applies to 1996.
Source:
WTO calculations based on data provided by the Jamaican authorities.
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8.
Producers of non-traditional products are hampered by high capital costs, inadequate
infrastructure and a lack of research and development. In principle, loans for investment in the
agriculture sector are not subsidized, although farmers may have access to some programmes with
concessionary terms (Chapter III.(4)(iv)).
9.
Agricultural production declined by 16.5% in volume terms in 1997, after increasing by 5.5%
in 1996 (Chart IV.4). Agricultural GDP contracted by 4% in 1997, after expanding by 3.1% in 1996
(3.4% including food and beverages). Over the 1986-96 period, agricultural production of
unprocessed goods increased by 54.5%: production for the domestic market rose by 70% and exports
by 52%. Export crops outperformed domestic crops in 1996 and 1997. 1
Chart IV.4
Agriculture production index, 1990-97
1986=100
200
Exports
180
Meat and poultry
Domestic
Total
Fisheries
160
140
120
100
80
60
40
20
0
1990
a
Source:
1991
1992
1993
1994
1995
1996
1997 a
Estimates.
Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica, 1997.
10.
In livestock, self-sufficiency ratios are high for beef and veal, and close to 100% for whole
chickens. Jamaica is, however, a large importer of certain livestock items, including chicken necks,
mutton and goat meat. Imports of mutton and goat meat are not subject to additional stamp duties
unlike beef and veal, pork meat, and some chicken cuts.
11.
Although the fish harvest was over 50 million kilos in 1996, Jamaica remains a net importer
of fish and seafood. Imports of fish are subject to an average tariff of about 26%.
1
Export crops increased by 7.2% in 1996 compared to 5.7% for domestic crops. This was due to an
exceptional increase in the production of bananas, sugar cane and coffee. In 1997, production for export
declined by less (10.1%) than production for domestic consumption (21.2%).
Jamaica
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12.
One of the main concerns of exporters of agricultural goods is access to the U.S. market.
Access is facilitated by the existence of a preshipment clearance facility operated by the United States
in Jamaica.
13.
Until the mid 1980s, Commodity Marketing Boards acted as single buyer and seller of a
number of crops, including cocoa, coffee, bananas, coconut and sugar. Deregulation broke the
monopoly of the Boards, allowing producers to sell to alternative outlets which then competed with
the Boards in the marketing of products.
14.
Government policy in agriculture is geared at increasing production and productivity to
expand exports, reducing reliance on food imports, and encouraging agro-industrial development.
The sector is expected to provide the inputs required for this development. Policy is also aimed at
lowering the unemployment rate and pursuing development strategies to achieve long-term
environmental objectives. The strategy to obtain these goals is based on market forces combined with
agricultural planning. Government support has focused on providing public investment in road
construction, irrigation schemes, and research and development. Under the National Irrigation Plan,
prepared in 1997, 51 irrigation projects have been identified; these are to be implemented over a
period of 17 years.
(i)
Market access
15.
There are no quantitative restrictions on imports of agricultural products. Such measures
were dismantled in the mid-1980s under a World Bank Structural Adjustment Programme, and
replaced by tariffs and additional stamp duties; these were set initially at levels to provide protection
equivalent to that previously given by the quantitative measures. The reforms included the
dismantlement of the discretionary licensing system, which was in place for all agricultural
commodities, and the elimination of the system of reference prices. The reforms continued in the
1990s under the Agricultural Adjustment Loan (ASAL), which sought to enhance the sector's
competitiveness by eliminating most of the remaining distortions.
16.
Under its Uruguay Round commitments, Jamaica bound the tariffs on all its agricultural lines
at 100%. Other duties and charges were bound at 15%, except for a list of 56 products for which rates
were bound at 80% and three products bound at 200%. These products include bovine and swine
meat, poultry, vegetables, some cereals, fruit juices, sugar other than raw sugar (Chapter III(2)(v)).
Applied tariff rates range from zero to 40%, with inputs normally subject to low rates or granted dutyfree access. In 1997, Jamaica's simple average MFN tariff on agricultural products was 20.2%.2
17.
There is considerable dispersion of MFN rates by product groups in the farm sector. Fruit
falling under HS chapter 8 are subject to an average MFN tariff of 35.2%, with a peak of 40%. This
is the highest average tariff applied to any group of imports into Jamaica. Vegetables and live plants
are also subject to relatively high tariff rates, 26.5% and 26.7%, respectively. In contrast, products
of animal origin and vegetable plaiting materials are dutyfree. Imports of sugar and sugar
confectionery are subject to an average MFN tariff of 26.5%, with a 40% peak. Cereals carry an
average tariff of 14.3%. Here, again, tariff dispersion is high and based on the end use of the
imported product. This is true for most of the agriculture sector's 24 HS chapters (Table IV.1).3
2
This rate has been calculated by the WTO Secretariat at the HS seven-digit level. Under the ISIC
definition of agriculture (including hunting, forestry and fishing), the average tariff rate is 20.1% (20.8% if only
agricultural and livestock production is taken into account (Table AIV.1).
3
The definition of agricultural products used in Table IV.1 includes products HS Chapters 1 to 24. This
includes beverages, tobacco products and other products that are considered manufactured goods under the ISIC
classification.
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Dispersion is low only in subsectors where goods are destined mainly for final consumption, in which
case the tariff is generally high, in many cases 40%, or are to be used as inputs, in which case the
tariff is low or the good enters Jamaica duty free (Table III.6).
18.
A wide range of agricultural imports are subject to additional stamp duties, which, applied on
the c.i.f. price plus the tariff, can raise the level of nominal protection to up to 90%. This is the case
for potatoes, onions, peanuts, tomatoes, kidney beans, fresh carrots, peppers and cabbage. A wide
range of meat products - including all pork cuts and products, all beef and veal cuts and products, and
some chicken cuts - and most fruit and vegetables face an aggregate border charge of 86%. Grains
imported for animal feed are subject to a 70% tariff. Alcoholic beverages and tobacco are also subject
to a special consumption tax.
19.
Under the Approved Farmer Status Programme, machinery and equipment, as well as inputs
used in the production of agricultural commodities may benefit from a reduction or removal of import
duties. To obtain Approved Farmer Status, farmers must be involved in a prescribed agricultural
activity.4
(ii)
Sanitary and phytosanitary regulations
20.
According to the authorities, some of Jamaica's sanitary and phytosanitary standards are
obsolete and need to be updated to comply with the requirements of the WTO Agreement on the
Application of Sanitary and Phytosanitary Measures (SPS). The Acts that need to be amended
include the Plants Quarantine Act of 1993 and the Agricultural Products Act of 1926.
21.
All imports of fresh fruit and vegetables, plants and plant parts require an import permit,
issued by the Plant Quarantine/Produce Inspection Unit of the Ministry of Agriculture. The permit
must be obtained before importation takes place and then forwarded to the supplier. Phytosanitary
certificates stipulating the phytosanitary conditions are required for all materials imported under an
import permit. On arrival, all produce is inspected and certificates verified. Imports of plants and
seeds are governed by the Plants Quarantine Act of 1993. Several plants and seeds are subject to
import prohibition (Table IV.2). Importation of coffee berries; bees wax; some tropical fruit, such as
mango; and root crops, such as yams or sweet potatoes, is forbidden.
22.
Import permits accompanied by health certificates are required for live animals. Imported
animals are subject to quarantine at the Government Quarantine Station for a minimum period of two
weeks, with the exception of poitacine birds, which are subject to a longer quarantine period.
4
For inputs or capital goods, there is no real concession, since imports are generally duty-free.
Jamaica
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Table IV.2
Import and export regulations for selected agricultural productsa
Product
Regulation
Imports
Fresh fruits and vegetables
Import permit and phytosanitary certificate required.
Dried or frozen fruits and vegetables and processed plant
materials
No import permit or phytosanitary certificate required.
Coffee
Importation of coffee berries is prohibited. Roasted coffee and coffee in
parchment may be imported by permit from the Ministry of Agriculture
through the Coffee Industry Board.
Citrus
Importation of citrus fruit plants or parts thereof is forbidden.
Banana
Importation of fruit suckers or plant parts is prohibited.
Bees and bee products
Importation of raw honey, unprocessed wax, bees, pollen and other live
products is prohibited.
Importation of processed wax for cosmetics or manufacturing purposes
requires a permit.
Plants
Import permit required. Importation of finished plants in growing media
prohibited. Plants must be bare-rooted; seedlings in liners or small pots.
Soil
Importation of soil is prohibited.
Fruit
Importation of mango, naseberry, and tropical soft fruits is prohibited.
Root crops
Importation of yam, dasheen, and sweet potatoe is prohibited.
Exports
Pimento
Export of plants, cuttings or seeds of pimento is prohibited. Commercial
exportation of pimento is allowed only by authorized exporters.
Ginger
Export of all portions of Jamaican ginger is prohibited except by special
permit from the Ministry of Agriculture. Peeled dried ginger may be
exported.
Coconut
Coconut Industry Board is the only body authorized to export coconut or
grant a licence for its exportation.
a
These measures are applied under the Customs Act or the Plants Protection from Disease Act.
Source:
Information provided by the Jamaican authorities.
(iii)
Domestic support
23.
The programme of reforms has led to divestment in state-owned enterprises and government
land. All quantitative restrictions on imports were eliminated and the use of reference prices was
phased out. Nominal tariff rates were reduced to a maximum of 100% and a timetable was set to
lower these levels to CET rates over a period of five years.5 By 1995, all applied tariffs for
agricultural products had been lowered to a maximum of 40%. Other reforms included the
elimination of general food subsidies, which were administered by the Jamaica Commodity Trading
Company (JCTC), and the removal of agricultural credit subsidies. The JCTC monopoly on the
importation of basic foodstuff was terminated, including for corn, soybeans, wheat and rice.
24.
Until recently, the marketing of cocoa, coconut, coffee, sugar and bananas was through
commodity boards, established by law, which were sole buyers and sellers of the respective crop
(Chapter II.2(x)).6 The main objectives of these organizations were to facilitate product marketing
5
According to information provided by the Ministry of Agriculture, the reduction timetable for some
products was extended to seven years. Tariffs for a number of products, however, were adjusted to CET levels
in a period of three years.
6
The Cocoa Industry Board, the Coconut Industry Board, the Coffee Industry Board, the Banana
Industry Board, and the Sugar Industry Authority.
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and stabilize producer returns. The role of the boards has been reformed and currently only the
Coconut and Cocoa Industry Boards retain a marketing monopoly for their respective crops.
25.
Farmers who are granted approved farmer status may benefit from income tax exemptions on
profits derived from farming activities. The exemptions are granted for a five-year period in the first
instance and may be extended for an additional five years.
26.
Agricultural credit is allocated by the Agricultural Credit Bank (ACB) through the People's
Cooperative Banks (PCBs) and other approved financial institutions (AFIs). Credit allocated by the
ACB in 1996 amounted to J$381.5 million. One third of this credit (some US$3.5 million) was in
U.S. dollars at an interest rate of 8.5%.7 In 1997, credit allocated by the ACB increased by 9.2% to
J$416.6 million.8 More than half of total credit was allocated to export crops, with coffee and sugar
cane the major beneficiaries. Farmers also benefited until April 1997 from the Interest Rebate
Programme, which granted loans to farmers at an interest rate well below market rates.9 To replace the
Interest Rebate Programme, the Government introduced in April 1997 a new preferential interest rate
scheme allowing the ACB to grant funds at the wholesale level at the lowest Commercial Bank
Passbook Savings rate, currently at 13%. Furthermore, rates for outstanding loans by farmers were
reduced to 13%. Another source of credit for the sector is the Jamaican Agricultural Development
Foundation, which in 1996 provided loans at rates of 22-23% under the Micro Enterprise Programme.
27.
The GCT is applicable to agricultural goods at its current rate of 15%. A number of products,
however, especially those considered necessary to meet the basic nutrition needs of the population,
are exempt from this tax, as provided in the General Consumption Tax Act, amended in 1991
(Chapter III, Table III.9).
28.
Domestic support to the agriculture sector includes also the allocation of funds for a number
of development projects, such as the Banana Quality Improvement Project, the Hillside Agricultural
Project (to increase the productivity of some selected export crops), the Claverty Cottage/Shirley
Castle Coffee Development Project, and the Citrus Certification Strategy. The Government is
considering the introduction of a milk production enhancement programme, aimed at achieving milk
self-sufficiency.
29.
Supply of public services, such as electricity, water and transport is not provided to farmers at
concessionary rates.
(iv)
Export assistance
30.
Agricultural goods do not receive export subsidies. Credit subsidies are not specific to
production for export.
Incentives under the Export Industry Encouragement Act (EIEA)
(Chapter III(3)(iii)(a)) do not apply to unprocessed agricultural products, but are applicable to
agro-industrial products.
7
The exception being credit granted under the World Bank Private Investment and Development
Facility, which was granted at an interest rate of between 9.3% and 9.4% (Planning Institute of Jamaica 1997).
8
The increase in real terms was zero, but due to the contraction in production, credit allocated by the
ACB covered a higher percentage of total agricultural production (2.4%) than in the previous year.
9
The rate was in the order of 17%, compared with the regular domestic currency rate of 26% for
small-scale farmers and of 26%, plus the interest spread of AFIs, for medium and large-scale farmers.
Jamaica
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(v)
Crop production and livestock
(a)
Sugar
31.
Sugar is Jamaica's main agricultural export, totalling US$109.7 million in 1996 and
US$100.7 million in 1997. Sugar exports are directed mainly to two markets, the United Kingdom
and the United States, which pay a preferential price. Exports to these two markets are subject to
quotas. In 1997, the United Kingdom absorbed some 78.3% of Jamaica's sugar exports10 and paid a
price of US$646 per tonne, considerably higher than the world market prices, which stood at around
US$220 per tonne. The second main destination was the United States, which accounted for 12.2% of
total exports, and paid an average price of US$443 per tonne in 1997 (Table IV.3).
Table IV.3
Sugar exports by destination, 1992-97
(Tonnes and US$ million)
United Kingdom
United States
Total
Volume
Value f.o.b.
Volume
Value f.o.b.
1992
126,155
76.65
13,207
5.87
139,362
82.52
1993
126,599
88.40
22,920
10.20
149,519
98.60
1994
126,083
73.05
-
-
126,083
73.05
1995
141,325
96.80
3,646
1.71
144,971
98.51
156,780
98.82
24,403
10.89
181,183
109.71
134,409
83.91
20,898
9.27
170,94
100.65
1996
1997
a
a
Exports to other countries in 1997 totalled 15,641 tonnes and US$7.47 million.
Source:
Data provided by the Planning Institute of Jamaica and the Sugar Industry Authority.
Volume
Value f.o.b.
32.
Exports of sugar to the European Union are subject to a regular annual quota of
126,000 tonnes, allocated to Jamaica in 1990. Jamaica was allocated a supplementary quota of
30,000 tonnes in 1994. The regular quota has been filled every year, while the degree of use of the
supplementary quota has varied: in 1995, around two thirds of the supplementary quota filled; in
1996, the whole quota was filled; while in 1997, only slightly over one quarter of the supplementary
quota was used.
33.
The privately owned Sugar Company of Jamaica is estimated to control around 60% of
production. Sugar production remained relatively steady between 1992 and 1995, in a range of
211,000-219,000 tonnes. In 1996, production reached 231,000 tonnes, but declined to 228,000 tonnes
in 1997 (Chart IV.5). The Government's goal is to achieve a level of production of 300,000 tonnes for
the year 2000. Exports, at 171,000 tonnes in 1997, account for 75% of total production. The volume
of sugar cane milled in 1997 was 2.4 million tonnes (Table IV.4).
10
This was, however, below its market share in the previous two years: in 1996, 87% of Jamaica's
sugar exports went to the United Kingdom, down from 97% in 1995, and 100% in 1994.
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Chart IV.5
Sugar production, exports and prices, 1992-97
('000 tonnes)
(US$ per tonne; US$ million)
250
600
500
200
400
150
300
100
200
50
100
0
0
1992
Left hand scale:
1993
1994
Production volume
1995
1996
Right hand scale:
Unit prices
Export value
Export volume
a
Source:
1997
a
Estimates.
Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica, 1997.
Table IV.4
Production of sugar cane and its derivatives, 1992-97
('000 tonnes)
1992
1993
1994
1995
1996
1997
2,525
2,661
2,450
2,295
2,624
2,413
Farmers
1,381
1,546
1,402
1,270
1,482
1,346
Estates
1,144
1,115
1,048
1,024
1,142
1,067
223
215
217
210
231
228
98
104
93
90
101
93
Total sugar cane milled
Sugar production
Molasses production
Source:
Data provided by the Planning Institute of Jamaica and the Sugar Industry Authority.
34.
The Sugar Industry Authority (SIA), established by the Sugar Industry Control Act of 1937,
is in charge of handling specialized market arrangements and of granting export licences. The SIA
was, before the deregulation of the industry, the sole body allowed to engage in marketing; it was also
responsible for determining and administering import quotas. The deregulation of the industry started
in 1984 when the Government sold three factories and associated lands, and was completed in 1993
with the sale of the last four publicly owned sugar companies (Frome, Monymusk, Bernard Lodge,
and Long Pond). Currently, the Authority plays mainly an information and advisory role and is no
longer directly involved in the marketing of sugar. The SIA's marketing functions and the
administration of export quotas are now conducted by Jamaica Cane Product Sales, a private grower
company, which acts as an agent for the Authority. The allocation to local producers of export quotas
Jamaica
WT/TPR/S/42
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assigned to Jamaica in bilateral agreements with the United Kingdom and the United States is done on
a first-come, first-served basis, taking into account the producer's past year's performance, until quota
limits are filled. Once quotas are allocated, exporters must obtain a licence from the SIA.
35.
Farmgate prices for sugar exports are determined by Jamaica Cane Product Sales on behalf of
the SIA, based on the prices received under Jamaica's two bilateral market arrangements. They are
split into two parts: 62% of the price is paid to growers and 38% to the manufacturers of refined
sugar. Farmgate prices were J$17,170 (US$484) per tonne in 1997; they doubled between 1992 and
1997 in domestic currency, but lagged behind inflation. Profit margins have been affected by the
rising costs of some inputs, such as fertilizers.
36.
Imports of sugar and sugar confectionery were US$38.3 million in 1996. The reason for
importing sugar is that once the export quotas are filled the remainder is insufficient to satisfy the
requirements of the manufacturing sector. Refined sugar for final consumption is also imported.
While sugar imports (HS Chapter 17) face an average 26.5% tariff rate, refined sugar enters duty free,
but may be subject to additional stamp duties if the price of sugar falls below US$0.22 per lb. Imports
of raw sugar are subject to a 40% tariff. Other duties and charges for sugar other than raw sugar are
bound at a rate of 200% in the WTO, except refined sugar, for which they have been bound at 15%.11
(b)
Bananas
37.
Bananas are Jamaica's second largest agricultural export, with a total export value of
US$45 million in 1997, compared to some US$44 million in 1996. Production was 89,000 tonnes in
1996 (Chart IV.6 ), practically all of which was exported. Preliminary information for 1997 shows a
10% decline in production, to 79,700 tonnes, as a consequence of the drought.
38.
The farmgate price of bananas more than doubled between 1992 and 1995, before dropping
by 16.3% (to J$17,813 per tonne) in 1996. Nevertheless, price increases lagged inflation, as was also
the case for most of the other major agricultural crops, except pimento (Table IV.5). In 1997, the
farmgate price of bananas fell slightly, to J$17,680 per tonne.
39.
The main market for Jamaican bananas is the United Kingdom, with a share of 18% of U.K.
banana imports in 1997. Bananas from Jamaica and other Caribbean countries have traditionally
enjoyed preferential access to the European Union (EU) under the Lomé Convention. The sector
could be affected by the ruling of the WTO Dispute Settlement and Appellate Bodies that certain
import practices by the EU contravene WTO rules. The EU has decided to dismantle its import
licensing assignment system by February 1999.12 Since the economic rent generated by the licences
was an incentive to import bananas from ACP countries, the elimination of the assignment system
may imply the end of preferential access of Jamaican bananas to the EU market in 1999. This could
aggravate the sector's difficulties, which have included a reduction in prices in the past. The EU has,
however, offered compensation for the possible losses. Compliance with the WTO dispute settlement
recommendation will also imply the removal of tariff-free quotas by 2001. In the case of Jamaica,
this quota is 105,000 tonnes a year.
11
Import duties on sugar other than raw containing added flavouring or colouring matter are 40%; the
tariff on imports of icing sugar is 20%.
12
The "B" licencing regime allocated 30% of the EU's global banana import tariff quota (2.2 million
tonnes) to ACP and EU bananas. Imports from ACP countries within the 2.2 million-tonne quota pay a tariff of
ECU 75 per tonne. Imports beyond the quotas are subject to a tariff of ECU 850 per tonne.
WT/TPR/S/42
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Trade Policies Review
Chart IV.6
Volume of production in selected crops, 1992-97
('000 tonnes)
100
90
80
70
60
50
40
30
20
10
0
1992
1993
Banana
sCitrus fruit
a
Source:
1994
1995
1996
1997
Coffee
Cocoa (deliveries to processing plants)
Coconut
Cocoa (outturn from processing plants)
a
Prelimary; data for citrus fruit are not available.
Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica, 1997.
Table IV.5
Farmgate prices of selected traditional export crops, 1992-97
(J$/tonne)
Product
1992
1993
1994
1995
1996
1997a
Relativeb price
change (1992-96)
Sugar cane
6,537
7,070
14,825
18,120
20,456
17,170
30.4
Bananas
8,818
11,000
17,000
20,078
17,813
17,680
-15.8
Citrus (oranges)
30,800
15,432
30,864
39,683
55,115
n.a.
-25.5
Coffee (Blue Mountain)
39,315
37,073
49,999
56,666
56,666
56,666
-40.0
Pimento
11,464
23,148
27,550
34,171
36,376
11,200
32.2
Coconut (copra)
12,376
13,738
13,738
16,500
16,500
n.a.
-44.4
7,220
6,000
6,602
8,402
10,400
45,194
-40.0
Cocoa
a
b
Preliminary.
With respect to CPI change.
Source:
Information provided by the Jamaican authorities.
40.
One of the goals of the Government is to try to enhance the competitiveness of the bananaproducing industry. For this purpose, Jamaica has used funds stemming from an Income Support
Programme provided by the EU to ACP countries. The programme comprises three phases: in the
first phase (1995/96), the EU disbursed a total of ECU1.99 million; the amount was used to fund a
water management system, to improve Sigatoka disease management, and to facilitate the purchase of
inputs. Phase II of the project started in 1997: funds for a total of around ECU 3 million were to be
Jamaica
WT/TPR/S/42
Page 97
disbursed for the improvement of the industry's information system and the compilation of a data
base, and for the improvement of packaging techniques. In Phase III, expected to start in 1998, a total
of ECU5.8 million will be provided to continue the improvements initiated in Phase II.
41.
The Banana Board was the exclusive exporter of bananas until 1985, when its commercial
operations were divested and assumed by the Banana Export Company, which now purchases, ships
and markets Jamaican bananas to the United Kingdom. The Board retains regulatory functions,
manages a crop insurance scheme and runs a research programme.
(c)
Coffee
42.
Coffee is Jamaica's third main agricultural export, with sales abroad of US$33.5 million in
1996 and US$32.4 million in 1997. It is also one of the fastest growing exports, having tripled in
value between 1991 and 1996. Most of the production (estimated at 18,612 tonnes in 1997;
Chart IV.6) takes place in the Blue Mountain area. Production has been aided by the Claverty
Cottage/Shirley Castle Coffee Development Project, which has resulted in an expansion of
agricultural land for the sector, and has improved processing capacity through the construction of two
pulperies and the development of infrastructure in the area.
43.
The Coffee Industry Board has retained some marketing functions after its deregulation in
February 1983. Although no longer the only purchaser from producers, it still participates in the
market competing with private producers, which are also entitled to export directly.
(d)
Cocoa
44.
Jamaica is a small exporter of cocoa, with exports in 1997 of some US$2.0 million, down
from US$2.1 million in 1996 and US$2.7 million in 1995. The Cocoa Industry Board plays an active
role in the market, intervening to support prices and stimulate production. The Board is the sole
purchaser and exporter of cocoa. Since the industry was deregulated, minimum production
requirements for the obtention of export licences were eliminated, as well as all restrictions on private
transaction prices and on location of exporters. In 1996, as a consequence of depressed international
prices, the Board intervened to increase the advance price of cocoa, to J$200 a box, equivalent to a
48% increase. In 1997, the drought caused a decline in production, and the Board intervened,
increasing the farmgate price to J$11,200 in crop year 1996-97 (October-September) from J$10,400 in
the previous crop year. A recovery in international prices is expected to benefit production and
exports during crop year 1997/98.
(e)
Citrus
45.
The production of citrus fruit has gained importance during the 1990s, with total exports
increasing from US$3.3 million in 1991 to US$5.7 million in 1996. Acreage under production has
been systematically increased and standards have improved. In 1997, however, exports were affected
by drought conditions and lower international prices, dropping by 28%, to US$4.1 million. In 1996,
the citrus industry introduced a certification strategy with the assistance from the FAO. The Citrus
Growers Association, an organization of private producers had regulatory and monopoly power over
the industry until export licenses were removed, and minimum production and planting requirements
for exporters were eliminated. Imports of citrus face a tariff of 40% plus an additional stamp duty, for
total border charges of 86%.
WT/TPR/S/42
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(f)
Trade Policies Review
Pimento
46.
Exports of pimento are subject to export licensing. However, they increased their importance
as sources of foreign exchange during the first half of the 1990s, with total exports increasing from
US$3.5 million in 1991 to US$4.9 million in 1995. Affected by the drought, exports suffered a
setback in 1996 and 1997 (Chart IV.3), returning to 1991 levels in value terms. The Government is
trying to support an expansion of the industry, aiding it through research conducive to the propagation
of grafted plants and pimento seedlings and through a Pimento Tree Planting Programme.13 The
exportation of pimento plants is prohibited.
(g)
Cereals
47.
Jamaica is a net importer of cereals. Imports in 1996 were 277,000 tonnes, to a value of
US$75.2 million.
Preliminary estimates for 1997 point to imports of US$76.6 million
(300,000 metric tonnes). The main cereals imported are rice (37.8% of cereal imports), maize
(36.2%), and wheat (25.9%).
48.
The average tariff on imports of cereals in 1997 was 14.3%; the maximum applied rate was
40%. Imports of cereals to be used as, or in the manufacture of animal feeds are subject to a stamp
duty, for a total border charge of 70%.
49.
Jamaica benefits from the United States's Department of Agriculture's Programme PL480, by
which brown rice is provided in the form of aid; the Jamaica Commodity Trading Company (JCTC)
is in charge of importing this rice.
(h)
Animal and dairy products
50.
In 1996, Jamaica imported US$44.5 million of dairy products (HS 04) and exported less than
US$4 million. Imports of meat (HS 02) were US$43.2 million, while exports were negligible.
51.
Imported animals are subject to customs duties based on c.i.f. value. The average MFN tariff
for live animals is 22.9%, with a peak of 40%. Imports totalled US$64.7 million in 1996. The
average tariff on imports of meat and dairy products in 1996 were 26.2% and 20.4%, respectively;
maximum applied rates in both cases were 40%. Imports of milk and cream from CARICOM
countries are not exempt from customs duties, and must pay the CET on these products.
(i)
Food processing, beverages and tobacco
52.
Food processing, beverages and tobacco represented 68.6% of the agricultural sector's
production in 1996. In the food processing sub-sector, Jamaica is an important producer of animal
feeds, refined sugar and sugar products, flour, molasses and processed poultry meat, among other
products. Imports of poultry meat are subject to a 40% tariff, and some cuts are subject to additional
stamp duties; aggregate protection levels may be as high as 86% (Table III.7). Refined sugar imports
are subject to a benchmark price regime (section (v)(a)).
53.
Jamaica is an important producer of rum, beer and carbonated beverages. Imported beer is
subject to customs duties, additional stamp duties, to a special consumption tax, and to the GCT. All
considered, the aggregate duty level on imported beer can be as high as 132.2% and is never lower
than 86.5%. In the case of spirits, total border charges can reach 149%. This compares to a
maximum aggregate tax level of 33.3% for domestically produced beer and of 42.9% for domestically
13
PIOJ (1998), p.7.10.
Jamaica
WT/TPR/S/42
Page 99
produced spirits. The production of carbonated beverages has competition from imports that use PET
instead of glass bottles.14
54.
Although the production of cigarettes in Jamaica remained virtually unchanged between 1992
and 1997, the production of cigars has doubled during this period, basically due to strong foreign
demand. Imported tobacco products are subject to a maximum border charges of 226.3% (cigarettes),
and a minimum of 15% (tobacco), with cigars facing duties of 161.2%. By comparison, domestically
produced cigarettes face an aggregate tax level of 60.9%, and duty levied on domestically produced
cigars is 28.8%.
(3)
FORESTRY AND FISHERIES
(i)
Forestry
55.
Jamaica has had a serious problem of deforestation since Hurricane Gilbert hit in 1988. The
annual rate of deforestation has been estimated at 3.5%, triggered by the pressure to convert forest
land into agricultural land, or for industrial development and housing purposes. The high rate of
deforestation has affected timber and water production, and accelerated soil erosion and flooding.
Forest resources are estimated to be 259,930 hectares, of which 77,000 in undisturbed natural forest.
56.
The production of lumber increased substantially between 1992 and 1995, before
experiencing a severe contraction in 1996. Imports of forestry products are subject to an average
tariff of 3.3%, with a peak of 20%, and logging products to an average rate of 6.4%.
57.
Government policy in the sector aims at developing an export market for local forest
products, reducing soil erosion, and encouraging the use of wood as a source of energy. This policy is
being implemented and coordinated by the Forestry and Soil Conservation Department of the Ministry
of Agriculture.
(ii)
Fisheries
58.
Total fish production in Jamaica is estimated to have been 17 million kilograms in 1996.
Despite sizeable domestic production, Jamaica is a net importer of fish and crustaceans. Imports in
1996 of products classified under HS chapter 3 were US$28.6 million, compared to exports of
US$19.5 million. Tariff protection and dispersion are high: the average tariff is 25.5%, with rates
ranging from zero to 40%. Tariffs are applied according to whether the good is for final consumption
or used as an input. Fresh, frozen or chilled fish is subject to a 40% tariff, smoked fish faces a 25%
customs duty, and imports of cod, herring, mackerel and alewives are duty-free. Fish imports for
processing are also free of customs duty. The main imported products are canned sardines, smoked,
dried or slated codfish, and fresh, chilled or frozen fish.
59.
Government policy with respect to fisheries is managed by the Fisheries Division of the
Ministry of Agriculture. The Division is responsible for managing three major programmes
regarding: Fisheries, Aquaculture, and Oyster Culture. Among the aims of these programmes is the
development and increase in the production of marine and fresh water species.
14
p.p. 10-3.
Mainly imports from Canada, Trinidad and Tobago, and the Dominican Republic. See: PIOJ (1997),
WT/TPR/S/42
Page 100
(4)
Trade Policies Review
CONSTRUCTION
60.
Construction accounts for 9.1% of Jamaica's GDP and employs around 9% of the labour
force. Activity in the sector is closely linked to tourism, but also, in the past few years, to a number of
projects to improve Jamaica's infrastructure, such as the increase in telephone lines undertaken by
Cable and Wireless Jamaica, a number of water connection programmes, and the development of new
berths by the Port Authority. The sector experienced a period of varying output between 1992 and
1996, mainly due to fluctuations in the number of housing starts (Table IV.6). In 1997, the
construction sector again showed mixed results, with housing starts, cement production and the value
of imported materials increasing; the number and value of mortgages, however, declined substantially,
affected by high interest rates.
Table IV.6
Performance indicators of the construction sector, 1992-97
Housing starts
1992
1993
1994
1995
1996
1997
7,193.0
5,710.0
6,045
4,842.0
10,848
6,047.0
Production of cement ('000 tonnes)
473.7
450.8
445.5
562.8
565.4
591.2
Value of mortgages (J$ million)
356.8
517.2
998.4
2,146.8
3,646.0
2,757.7
Value of imported construction material (US$ million)
71.6
95.9
92.7
149.9
131.6
162.2
Number of persons employed ('000)
59.1
62.1
66.3
72.6
81.2
79.6
Source:
Information provided by the Jamaican authorities.
61.
The construction sector used imported materials totalling US$162.2 million in 1997.
Construction materials classified in Jamaica's Customs Tariff as "competing inputs" (such as bricks,
baths, lavatories, building blocks, pipes, products of asphalt, clay tiles) are generally subject to a 20%
customs duty; those classified as "non-competing inputs" (corrugated sheets, articles of stone, wired
sheets, some kinds of glass) may be imported duty free. Kitchenware is subject to a 25% tariff.
62.
The sector accords a number of incentive schemes, such as the Factory Construction Law,
which provides relief on import duties for items not available locally, and tax exemption on income
from leasing factories to manufacturers operating under the Export Industry Encouragement Act
(EIEA); 15 capital gains on sales of such factories are also tax exempt. The Hotel Incentives Act
provides income tax relief for ten years, and duty-free importation of building materials and
furnishings used for hotels of at least ten bedrooms. The Resort Cottage Incentives Act offers a
similar duty relief, but for seven years, provided the articles imported are used for the construction
and equipment of resort cottages. The Urban Renewal (Tax Relief) Act provides income duty relief to
persons undertaken developments in declining urban areas. Some construction materials, including
cement, concrete and steel products, are subject to the GCT at the reduced rate of 12.5%.
(5)
MANUFACTURING
63.
Manufacturing accounted for 18.1% of Jamaica's GDP in 1997, employing 9.4% of the labour
force. Excluding food, sugar, molasses and rum, alcoholic and non-alcoholic beverages, and tobacco
and tobacco products, the sector's share of GDP was 10.5%. During the period 1992-96,
manufacturing GDP declined by 0.9% on average per year, after expanding by 3% during 1987-91. It
declined by a further 2.5% in 1997. Jamaica is a significant net importer of manufactures, with
imports twice as large as exports. Manufactured exports were US$512.9 million in 1996, and
15
The import duty relief may, in many cases, be of little relevance, since inputs and capital goods not
available locally are likely to be classified as "non-competing" in the Jamaican Customs Tariff, and, therefore,
granted duty-free access to Jamaica.
Jamaica
WT/TPR/S/42
Page 101
US$489.6 million in 1997 (Chart IV.7). This figure includes exports of processed foods and
beverages and tobacco (combined exports of US$ 194.2 million in 1996 and US$188.5 million in
1997) and excludes exports from the Free Zones. Exports of industrial products (including mining
products) were US$1.07 billion in 1996. Imports of industrial products were US$2.4 billion in the
same year.
Chart IV.7
Value of selected exports of manufactured commodities, 1992-97
(US$ million)
600
500
Total exports
Non-traditional exports
Traditional
400
300
200
100
0
1992
a
Note:
Source:
1993
1994
1995
1996
1997
a
Estimates.
Selected exports include SITC sections: processed foods, beverages and tobacco, crude materials, mineral fuels,
animal and vegetable oils and fats, chemicals and products, manufactured goods, machinery and transport
equipment and miscellaneous manufactures.
Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica, 1997.
64.
Excluding food, beverages and tobacco, the main manufacturing sub-sectors are: machinery
and equipment; textiles and clothing; petroleum refining; and chemical, rubber and plastic products
(Chart IV.8).
65.
On average, the most dynamic sub-sector has been textiles and clothing. Other sub-sectors
have performed more erratically (Table IV.7).
66.
Industry has high labour costs and has been further affected by high interest rates, which have
had a negative impact on investment. To counter this and other investment disincentives, the
Government has put forward several measures, such as the removal in 1996 of tariffs on noncompeting capital goods, a waiver of the GCT on capital equipment (under the Modernization of
Industry Act), the extension of Free Zone status to single entities, a programme to support and
restructure the garment industry, a plan for low interest financing of working capital through the
NEIBJ, an interest rate rebate scheme, assistance to small enterprises, and the provision of funds to
the manufacturing sector through the National Industrial Bank of Jamaica (NIBJ), the National
Development Bank and other financial institutions (Chapter III(3)(v) and (4)(i)and (iii)).
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Trade Policies Review
Chart IV.8
Manufacturing GDP by subsector, 1992 and 1997
(Per cent, based on constant 1986 prices)
a
1992
1997
Chemicals & other
non-metal products
30.3
Paper, printing &
publishing
5.8
Chemicals & other
non-metal products
29.5
Paper, printing &
publishing
5.8
Metal products,
machinery & equip.
22.7
Other manufacturing industries
5.0
Metal products,
machinery & equipment
28.1
Textiles & clothing
10.0
Petroleum refining
26.1
Petroleum refining
20.0
Other manufacturing industries
6.3
Total: J$2.1 billion
Textiles & clothing
10.4
Total: J$1.9 billion
a
Estimates.
Source: Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica 1997.
Table IV.7
Manufacturing output, 1992-96
(Per cent change)
1992
1993
1994
1995
1996
Manufacturing
1.6
-1.9
0.3
-1.2
-3.1
Textiles, clothing and leather
8.1
3.1
30.7
6.8
-11.5
-2.5
-0.4
0.6
-17.0
-5.6
3.3
13.7
-1.2
10.2
-8.4
23.2
-5.4
-2.6
5.2
1.3
Chemicals, petroleum, rubber and plastic
Metal based products
Non-metallic mineral products
Source:
Information provided by the Jamaican authorities.
(i)
Market access
67.
The tariff on imports of industrial products (HS chapters 25-97, covering both manufacturing
and mining) averaged 8.4% in 1997, with a range of zero to 30%. The highest tariffs were on those
items for which there is an important domestic production base, such as clothing and clothing articles,
leather goods, and soap, toiletries and detergents. Major imports, with a low degree of domestic
substitutes, face tariff rates below, around, or slightly above the average. Examples of this are
mechanical machinery (average tariff of 2.6% for HS chapter 84); electrical machinery (HS
chapter 85), subject to an average tariff of 10.1%; paper (9.4%); and plastics (11.2%). Inputs for the
textile and clothing industry (HS chapters 50-55) enter Jamaica duty free. The same applies to
fertilisers and most organic chemical products. Table IV.8 provides a detailed analysis of tariff
averages by HS chapter.
Jamaica
WT/TPR/S/42
Page 103
Table IV.8
Trade and tariff data for industrial products, 1997
(Per cent and US$ '000)
Average
Max
Imports
Exports
(US$ '000)
Description
25-97
Industrial products
8.4
0
30
2,399,768.7a
1,007,353.5
25
Slat; sulphur; earth & stone.; plastering mat.; lime &
cement.
2.9
0
25
8,192.2
2,945.8
26
Ores, slag and ash
2.2
0
15
51.3
78,350.1
27
Mineral fuels, oils & product of their distillation; etc.
8.4
0
25
447,096.0
5,930.2
28
Inorg. chm; compds. of prec. met., radioact. elements,
etc.
1.6
0
20
72,084.4
617,212.9
29
Organic chemicals.
0.5
0
20
19,368.6
6,465.5
30
Pharmaceutical products.
7.8
0
15
43,455.0
1,202.3
31
Fertilizers.
0.6
0
15
11,738.8
120.0
32
Tanning/dyeing extract; tannins & derivs; pigm etc
10.7
0
20
13,110.7
1,107.4
33
Essential oils & resinoids; perf, cosmetic/toilet prep
19.6
0
30
13,650.5
10,069.9
34
Soap, organic surface-active agents, washing prep, etc
20.5
0
30
29,081.3
2,260.2
35
Albuminoidal subs; modified starches; glues;
enzymes.
4.3
0
20
1,423.3
1,079.8
36
Explosives; pyrotechnic prod; matches; pyrop alloy;
etc
12.7
0
25
982.6
448.6
37
Photographic or cinematographic goods.
4.3
0
25
5,437.1
8.8
38
Miscellaneous chemical products.
4.0
0
30
37,099.5
490.3
39
Plastics and articles thereof.
11.3
0
25
74,170.7
3,290.1
40
Rubber and articles thereof.
8.0
0
30
41,685.7
4,630.8
41
Raw hides and skins (other than furskins) and leather.
0.0
0
0
818.5
1,061.1
42
Articles of leather; saddlery/harness; travel goods etc
21.8
0
25
3,692.0
56.6
43
Furskins and artificial fur; manufactures thereof.
8.3
0
25
33.2
-
44
Wood and articles of wood; wood charcoal.
11.2
0
25
55,862.0
709.0
45
Cork and articles of cork.
4.5
0
25
20.3
-
46
Manufactures of straw, esparto/other plaiting mat; etc
16.7
0
25
209.6
9.3
47
Pulp of wood/of other fibrous cellulosic mat; waste etc
0.0
0
0
177.0
470.8
48
Paper & paperboard; art of paper pulp,
paper/paperboard
9.4
0
25
88,801.2
1,159.9
49
Printed books, newspapers, pictures & other product etc
7.2
0
25
26,487.6
749.5
50
Silk.
0.0
0
0
446.1
-
51
Wool, fine/coarse animal hair, horsehair yarn & fabric
0.0
0
0
135.8
-
52
Cotton.
0.0
0
0
10,602.3
48.5
53
Other vegetable textile fibres; paper yarn & woven fab
0.0
0
0
1,067.3
4.8
54
Man-made filaments.
0.0
0
0
9,042.0
0.3
55
Man-made staple fibres.
0.0
0
0
16,215.2
8.6
56
Wadding, felt & nonwoven; yarns; twine, cordage,
etc
7.7
0
25
3,093.7
-
57
Carpets and other textile floor coverings.
25.0
25
25
2,266.5
32.4
58
Special woven fab; tufted tex fab; lace; tapestries
etc
0.9
0
20
8,200.2
3.2
59
Impregnated, coated, cover/laminated textile fabric
etc
3.6
0
25
8,704.0
0.2
60
Knitted or crocheted fabrics.
0.0
0
0
4,268.0
-
61
Art of clothing & clothing access, knitted or
crocheted.
24.7
0
25
73,248.3
206,578.5
62
Art of clothing & clothing access, not
knitted/crocheted
24.6
0
25
162,509.8
43,457.2
(MFN)
Min
(US$ '000)
HS
Table IV.8 (cont'd)
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Trade Policies Review
Average
Exports
(US$ '000)
63
Other made up textile articles; sets; worn clothing
etc
20.3
0
25
7,367.7
550.7
64
Footwear, gaiters and the like; parts of such articles.
20.0
0
25
11,306.8
1,450.9
65
Headgear and parts thereof.
17.7
0
25
903.9
68.4
66
Umbrellas, walking-sticks, seat-sticks, whips, etc
18.8
0
25
401.5
1.1
67
Prepr feathers & down; arti flower; articles human
hair
17.1
0
25
226.7
-
68
Art of stone, plaster, cement, asbestos, mica/sim mat
10.6
0
25
5,789.4
326.9
69
Ceramic products.
15.7
0
25
21,279.2
62.6
70
Glass and glassware.
6.0
0
25
13,076.7
702.4
71
Natural/cultured pearls, prec stones & metals, coin etc
19.9
0
30
30,662.2
4.1
72
Iron and steel
2.1
0
20
36,838.4
291.5
73
Articles of iron or steel
8.3
0
25
64,020.9
1,988.8
74
Copper and articles thereof
2.8
0
25
5,373.1
872.6
75
Nickel and articles thereof
0.0
0
0
91.1
-
76
Aluminium and articles thereof
7.3
0
25
15,949.9
1,726.4
78
Lead and articles thereof
4.3
0
5
89.6
26.7
79
Zinc and articles thereof
0.0
0
0
35.6
-
80
Tin and articles thereof
0.0
0
0
3,595.0
214.6
81
Other base metals; cermets; articles thereof.
0.0
0
0
13.5
-
82
Tool, implement, cutlery, spoon & fork, of base met
etc
6.8
0
25
9,525.6
61.7
83
Miscellaneous articles of base metal.
7.6
0
25
13,925.5
264.5
84
Nuclear reactors, boilers, mchy & mech appliance;
parts
2.6
0
25
305,469.8
650.1
85
Electrical mchy equip parts thereof; sound recorder
etc
10.3
0
30
176,409.7
2,683.7
86
Railw/tramw locom, rolling-stock & parts thereof;
etc
0.0
0
0
2,036.0
-
87
Vehicles o/t railw/tramw roll-stock, pts & accessories
8.3
0
30
239,760.1
134.6
88
Aircraft, spacecraft, and parts thereof.
3.8
0
25
50,421.7
-
89
Ships, boats and floating structures.
3.7
0
25
1,865.0
76.6
90
Optical, photo, cine, meas, checking, precision, etc
6.0
0
25
31,534.3
21.6
91
Clocks and watches and parts thereof.
18.1
0
30
12,769.6
3.5
92
Musical instruments; parts and access of such articles
10.9
10
25
541.2
5.3
93
Arms and ammunition; parts and accessories thereof.
19.5
0
30
1,961.7
0.5
94
Furniture; bedding, mattress, matt support, cushion
etc
21.0
0
25
31,516.0
3,350.4
95
Toys, games & sports requisites; parts & access
thereof
19.3
0
25
4,478.4
214.0
96
Miscellaneous manufactured articles.
15.6
0
25
5,838.9
1,631.5
97
Works of art, collectors, pieces and antiques.
25.0
25
25
165.6
5.1
a
Excluding "special transaction trade", totalling US$79.6 million.
Note:
Trade data applied for 1996.
Source:
WTO calculations based on data provided by the Jamaican authorities.
Max
Imports
Description
(MFN)
Min
(US$ '000)
HS
68.
Import licensing applies to some industrial products, in particular to motor vehicles and parts,
arms and ammunition and certain toys (Chapter III(2)(ix)). No safeguards or trade-related investment
measures are applied in the manufacturing sector.
Jamaica
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69.
Under its Uruguay Round commitments, Jamaica bound all of its industrial tariffs at ceiling
rates of 50%. Other duties and charges were bound at 15%, except for aluminium extrusions (solid
and hollow shapes and slugs for toothpaste) and corrugated sheets, for which they were bound at 80%
(Chapter III(2)(v)).
(ii)
Incentive schemes
70.
The manufacturing sector has a number of incentive schemes (Chapter III(4)(iii)).
Manufacturing firms that export their production may use the Export Industry Encouragement Act
(EIEA) and can receive income tax exemption and tariff concessions for ten years; if they also
produce for the domestic market but export at least 5% of their production to non-CARICOM
markets, manufacturing firms can receive an income tax exemption but not tariff concessions
(Table III.12). Firms can benefit from this scheme up to 2002. Manufacturing firms can also use the
provisions of the Free Zones Act, whose scope was extended in 1996 to encompass both firms that
sell a maximum of 15% in the domestic market and firms operating outside the physical area of the
Free Zones (single entity free zones).16 The Modernization of Industry Act allows relief for
manufacturing companies from the GCT on capital goods. Qualified businesses operating in the
manufacturing sector may also take accelerated depreciation allowances. In 1997, the National
Development Bank (NDB) was commissioned to establish a lending facility, similar to the one
established by the ACB for farmers, which is to provide funds to manufacturers at the lowest
commercial bank savings rate (currently 13%). A Productivity and Performance Improvement
Scheme, to be operated by the Jamaica Manufacturers Association, has been established.
(iii)
Textiles and clothing
71.
Jamaican exports of a number of clothing products have guaranteed or designated access to
the U.S. market under bilateral quota arrangements, such as the TSUS807 and the Cut, Make and
Trim (CMT) programme. Quotas are, however, generally not filled. Most of the production under
these programmes takes place in Free Zones. Textiles and clothing exports from the Customs
Territory of Jamaica were US$253.0 million in 1996; total exports, including production in the Free
Zones were US$538.2 million (Table IV.9(a)). Although this was a decline from the previous year,
only producers operating outside the Free Zones experienced an actual contraction in their exports.
Preliminary data for 1997 shows a slight decrease in exports: they were US$536.6 million, 0.3%
below the level posted in the same period the previous year, of which US$403 million were under the
TSUS 807 Programme (Table IV. 9(b)).
72.
The main market for Jamaican textile and clothing exports is the United States (around 84%
of total exports). Exports take place mainly through the TSUS807 programme - which accounts for
around 85% of U.S. imports of textiles and clothing from Jamaica - and through the CMT programme,
which accounts for 15%. Most companies benefiting from access to the U.S. market under these
programmes operate in Free Zones, particularly in the Montego Bay Free Zone. Exports to the
United States declined by 1.9% in 1997, chiefly due to an 11.2% contraction on exports under the
CMT programme. Exports under TSUS807 (807A) continued to post high growth rates.
16
Up to April 1998, four manufacturing companies had been granted single-entity-free-zone status,
PIOJ (1998) p. 10.5.
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Table IV.9 (a)
Structure of clothing exports, 1993-97
(US$ million value)
Source
1993
1994
1995
1996
1997
Total
453.1
481.8
580.9
538.2
536.6
Customs territory
239.4
246.6
288.0
253.0
257.2
Free zones
213.7
235.2
292.9
301.8
279.4
Source:
Information provided by the Jamaican authorities.
Table IV.9 (b)
Textile/clothing exports to the U.S. market 1996/97
(US$ million value)
Market
Jan-Dec 1996
Total
Absolute change
Percent change
475.17
466.26
-8.90
388.05
402.96
14.91
3.84
807 A
259.93
289.18
29.26
11.26
807 R
128.12
113.78
-14.34
-11.19
CMT
87.12
63.30
-23.82
-27.34
61.43
89.35
27.92
45.44
Total 807
Others
Jan-Dec 1997
-1.87
Note:
807 A products are made of fabric formed and cut in the United States; 807R products are made of fabric cut but not formed in
the United States.
Source:
Information provided by the Jamaican authorities.
73.
Jamaica signed a Bilateral Textile and Apparel Agreement with the United States in 1994; it
has been notified by the United States to the WTO Textile Monitoring Body under Article 2.1 of the
Agreement on Textiles and Clothing. This agreement is the successor to the United States/Jamaica
Bilateral Textile Agreement of 27 August 1986. The agreement sets export restraints on a number of
textile and clothing items. There are currently quotas applied on 20 products, grouped in eight (US)
categories. Under the agreement, exports of products of fabric cut and formed in the United States
(TSUS807.0010, or 807A) are classified under Group I (GALS) and given guaranteed access to the
U.S. market. Access levels are determined by the United States every year, but generally exceed
Jamaica's export capacity, as evidenced by the large percentage of quotas that remain unfilled
(below). Guaranteed access levels may be renegotiated. A flexibility clause allows a specific product
to exceed its GAL by not more than 7% during any agreement period, provided equivalent adjustment
is made in other products. The agreement also has carry-forward and carry-over allowances.17
Products classified under Group II and Group III include products of fabric cut but not formed in the
United States (TSUS807.0050, or 807R), and CMT products. Products in Group II are subject to
Designated Consultation Levels (DCLS), while products in Group III are subject to Specific Limits
(SL).
74.
Exporters of clothing under any quota schedule must obtain a certificate of exportation from
JAMPRO. To obtain a certificate, products must be included in the Schedule of Specific Products
listed in the Trade (Certificates of Jamaican Origin) Regulations, 1984, and must be of Jamaican
origin (as defined by rules of origin requirements that concern the nature of the imported components,
the manufacturing process undertaken in Jamaica, and the cost of that process).18 In the case of
17
18
Which should not exceed 11% of the GAL.
Jamaica National Export Corporation. Certificate of Jamaican Origin System. November 1986. p.3.
Jamaica
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products made of U.S. fabric and re-exported under TSUS807, a Certificate of Jamaican Origin is not
required, but a certificate of exemption must be obtained from JAMPRO. Exporters located in the
Customs Territory of Jamaica must pay a fee per shipment for the certificate of Jamaican origin of
J$25 per J$25,000 f.o.b. (or part thereof) of exported goods, with a free-ceiling of J$500. Exports
from Free Zones must, as from 1 August 1997, pay a fee of US$10 per US$10,000 f.o.b. (or part
thereof), with no ceiling per shipment. Exports to the United States require also a circular visa stamp
on the Certificate of Jamaican Origin.
75.
JAMPRO allocates export quotas among eligible exporters, who must be registered
manufacturers of textiles and clothing under the Trade (Certificates of Jamaican Origin) Regulations,
1984. There are three main types of quota allocation: 60% of Jamaica's national quota is allocated
among (performing) exporters who have shipped in the past twelve months (regular quota);19 30% of
the quota is allocated among rural exporters (rural quota); 10% of the quota is allocated to new or to
performing exporters (free quota allocation).20 Additionally, any undistributed portion of the rural or
the free quota allocation may be distributed among all exporters on the basis of the regular quota
allocation. Supplementary quota allocations are possible within the 7% limit set by the Bilateral
Textile and Apparel Agreement. There are penalties for underutilization of quotas, which translate
into reductions of future quotas in accordance with the portion of the quota that has remained unused.
76.
Despite the existence of penalties, quotas for certain categories of products remain
underutilized (Table IV.10). In 1997, none of the guaranteed access level quota was used in the case
of cotton sweaters, and very little of it in the case of woven blouses. The highest utilization rates for
products with guaranteed access levels was for cotton underwear (88.2%), and cotton shirts and
blouses (73.2%). Quota utilization for products under specific limits was even lower.
77.
Table IV.10 shows that exports under 807R and CMT have fallen considerably in certain
categories. A possible explanation for this may be found in increasing production costs in Jamaica,
triggered by high labour and capital costs, which has resulted in a loss of competitiveness vis-à-vis
other producers. Another factor cited by the Jamaican authorities is the advent of NAFTA, which they
state has resulted in a 190% increase in Mexican exports of 807A products to the United States
between 1992 and 1995 - with most of the increase taking place in 1994 and 1995, when NAFTA was
already in place21, displacing exports from CBI beneficiaries.22
19
Quota allocation may be enhanced if the exporter contributes to employment creation; subcontracts to
manufacturers outside a Free Zone; purchases machinery, equipment, raw material and services from the
exporting country; the exported product has a level of local value added of at least 35%.
20
Exporters allocated quotas under the free quota allocation are required to export 95% of their quota;
if they fail to do this of they may be excluded from future participation in the allocation for a specified period.
See: Jamaica National Export Corporation. Quota Allocation System for Exports of Textiles and Textile
Products. 1987, p.4.
21
As a result of this increase, Mexico's 807A exports to the United States represented 77% of total U.S.
imports of clothing from Mexico in 1995, compared to 58% in 1992, while non-807A exports loss share, falling
from 29% of the total to 7%. In the case of the CBI countries, exports of clothing to the United States rose by
80% during the same period, but the share of 807A products remained low, at 22%, while the bulk of exports
was accounted for by non-807A products (61% in 1995) (JAMPRO.-Brief Comparative Analysis of Mexico and
CBI Apparel Imports into the U.S.A. Working Paper. September 1996).
22
However, Jamaica's share of 807A exports on total exports of textiles and clothing to the United
States increased to 62% in 1997 from 54% in 1996, in the midst of a 2% contraction in exports to the U.S.
market.
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Table IV.10
Clothing exports under quota, 1996-97
Quota
1997
(dozens)
Exports
Jan-Nov
1997
Unused
quota
Change
97/96
%
Group
Description
331/631
GAL
Gloves and
mittens,
cotton and
m.m.f.a
1,320,000
184,322
1,135,678
13.96
150,911
22.14
338/339/638/639
GAL
Shirts and
blouses,cotto
n and m.m.f.
4,500,000
3,292,518
1,207,482
73.17
3,386,385
-2.77
340/640
GAL
Woven
shirts, cotton
and m.m.f.
300,000
15,410
284,590
5.14
26,191
-41.16
341/641
GAL
Woven
blouses,
cotton and
m.m.f.
375,000
1,859
373,141
0.50
109
1605.50
345/845
GAL
Sweaters,
cotton and
other veg.
fibres
50,000
0
50,000
0.00
0
0.00
347/348/647/648
GAL
Trousers,
slacks and
shorts
2,000,000
447,396
1,552,604
22.37
418,010
7.03
352/652
GAL
Underwear,
cotton and
m.m.f.
13,500,000
11,901,352
1,598,648
88.16
11,176,940
6.48
331/631
SL
Gloves and
mittens,
cotton and
m.m.f.
621,149
32,433
588,716
5.22
170,122
-80.94
338/339/638/639
SL
Shirts and
blouses,cotto
n and m.m.f.
1,224,743
468,218
756,525
38.23
613,021
-23.62
340/640
SL
Woven
shirts, cotton
and m.m.f.
572,721
241,947
330,774
42.25
274,940
-12.00
341/641
SL
Woven
blouses,
cotton and
m.m.f.
719,163
41,140
678,023
5.72
69,147
-40.50
345/845
SL
Sweaters,
cotton and
other veg.
fibres
177,456
759
176,697
0.43
0
0.00
347/348/647/648
SL
Trousers,
slacks and
shorts
1,321,957
110,264
1,211,693
8.34
191,002
-42.27
352/652
SL
Underwear,
cotton and
m.m.f.
1,975,492
93,709
1,881,783
4.74
122,597
-23.56
445/446
SL
Wool
sweaters
52,304
6,399
45,905
12.23
7,725
-17.17
a
Man-made fibres.
Note:
GAL = guaranteed access level
SL = specific limit
Source:
Data provided by the Jamaican authorities.
Fill rate %
Exports
Jan – Nov
1996
Category
Jamaica
WT/TPR/S/42
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78.
Jamaica also has a bilateral arrangement for textile and clothing exports to Canada. This
agreement deals with managed access to the Canadian market. Market access is enhanced every year
by an automatic annual increase of imports of 6%, with the exception of some sensitive products, such
as women and girls underwear. The agreement also has carry-forward and carry-over allowances of
5%.
79.
Although Free Zones are a different customs territory, exports originating in them are
considered a part of Jamaica for quota purposes. Clothing imports from MFN suppliers bear a
customs duty of 25%, with a few exceptions.23 Under the WTO Agreement on Textiles and Clothing,
Jamaica benefits from the higher growth rates assigned to smaller countries for the integration of their
products into GATT 1994.
(iv)
Other industries
80.
Other important industries in Jamaica include the chemicals industry, where there is domestic
production of oxygen and acetylene, sulphuric acid, aluminium sulphate, paint, printing ink, soap,
detergent, toothpaste, among others. Imports of these products are subject to a tariff of 20%, with the
exception of detergents, which are subject to a 25% tariff rate, and soap and toothpaste, which face a
30% tariff. This contrasts with rates applied on products where there is little or no local production, on
which rates are generally much lower. Pharmaceuticals, for example, are subject to an average tariff
of 7.9%, while miscellaneous chemical products face an average tariff of 4%. Despite a reduction in
production, exports of chemicals have grown rapidly during the first half of the 1990s, doubling
between 1995 and 1996, when they were US$48.3 million. In 1996 and 1997, the chemical sector
showed a weak performance, with output and exports contracting in both years (exports totalled
US$39.5 million in 1997). The production of soap and detergents declined during the 1990s; despite
high rates of protection, domestic products are having difficulties competing with imported
substitutes. The decline in the domestic production of soaps and detergents has triggered a fall in
demand for sulphonic acid, a key input.24
81.
The non-metallic minerals industry is an area that has experienced accelerated development
during the 1990s, particularly, the production of cement and PVC pipes. Production is primarily
aimed at satisfying local needs, with small exports of cement, glass and other products (totalling
US$1.7 million in 1996 (Table AIV.2). Tariff protection in this industry is slightly higher than the
average for industrial products (9.4%).
(6)
MINING
82.
Mining is an important earner of foreign exchange for Jamaica, due primarily to bauxite and
alumina production. Jamaica is the world's third largest producer of bauxite and of alumina. Exports
of the products account for over 50% of Jamaica's merchandise exports; they generated foreign
exchange earnings of some US$700 million in 1996. This makes the sector the second most
important generator of foreign exchange, after tourism. Other mining products of importance include
non-metallic materials, such as limestone/lime, marble and gypsum.
83.
Between 1992 and 1996 mining activity expanded at an annual average growth rate of 1.1%,
modest but still above total GDP growth. In 1997, mining grew by 3.3% triggered by an increase in
international demand for aluminium, especially in the first half of the year. Consequently, the sector's
contribution to GDP was 9.9% in 1997, up from 8.8% in 1992. Mining is capital-intensive, employing
only about 6,000 people in Jamaica (4,500 in the production of bauxite and alumina). The sector's
23
24
Average tariff rates for HS chapters 61 and 62 are 24.7% and 24.6%, respectively.
PIOJ (1998), p.p.10-3.
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Trade Policies Review
performance was particularly dynamic in 1996 and most of 1997, mainly as a consequence of a
relatively calm situation in the labour front, which prevented production disruptions. In the past,
production disruptions caused by labour unrest have plagued the sector, despite wages being
considerably higher than the national average.
84.
Mining is regulated by the Mining Act and the Quarries Control Act; both are currently in the
process of amendment. Mining companies operating in Jamaica are granted a 25-year lease to pursue
their activities, except bauxite companies which, by special agreement, hold 40 year leases. The
owner of all minerals in Jamaican territory is the state, which retains all rights for the exploration and
extraction of minerals. Under the Natural Resources Conservation Act (NRCA), an environmental
impact assessment must be presented before a mining lease is granted. There are no government
controls on mining production. Prices are determined by market forces. Although there are no
restrictions on the importation or exportation of minerals, all exports of minerals require a permit
from the Ministry of Mining.
(a)
Bauxite and alumina
85.
The bauxite and alumina industry has four operators: Jamalcan, a joint venture between
Alcan Aluminium Ltd. (Canada) and the Government of Jamaica through Jamaica Bauxite Mining
Ltd.; Alumina Partners (Alpart), owned by Kaiser and Norsk Hydro; Jamalco, a joint venture between
Alcoa Minerals of Jamaica and the Government of Jamaica through Clarendon Alumina Production
(CAP); and Kaiser Jamaica Bauxite Company, owned 51% by Jamaica Bauxite Mining Ltd. and 49%
by Kaiser Bauxite. There are five bauxite mines in operation in Jamaica (Water Valley in St. Ann,
Mocho, Schwallenberg, Kirkvine, and Manchester Plateau) which, combined, produce some
12 million tonnes a year (around one tenth of world production). Discovery Bay is the largest mine,
with an annual capacity of 4.5 million tonnes; annually, Manchester Plateau produces 3.6 million
tonnes, Schwallenberg and Kirkvine together have an output of 3 million tonnes, and Mocho 2 million
tonnes a year. One third of total bauxite production is exported as ore to the Unites States. Two-thirds
of production is treated in domestic refineries and exported as alumina, mainly to the United States,
Canada, and Western Europe. Jamaica has bauxite reserves estimated at 2 billion tonnes, which at the
current level of exploitation, is equivalent to 167 years of production.
86.
Four alumina refineries operate in Jamaica. They produced a total of 3.4 million tonnes in
1997. The largest producer is at Nain, owned by Alpart with participation from Kaiser, with a capacity
of 1.45 million tonnes a year, followed by Jamalco's Clarendon (830,000 tonnes) and Jamalcan's
Ewarton and Kirkvine (1.1 million tonnes).
87.
The bauxite-alumina industry is an important user of energy. According to some sources, it
consumes around 45% of all crude oil and petroleum imports.25 Despite increasing labour costs,
Jamaica remains a relatively low cost bauxite producer, partly due to the proximity of production
areas to ports. Production disruption due to labour unrest has led to supply being supplemented by a
reduction in alumina stocks to meet demand requirements, since exports have outpaced production in
every year of the 1992-97 period, except in 1993 (Table IV.11).
25
Latin American Economy and Business. November 1997, p. 28.
Jamaica
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Table IV.11
Alumina and bauxite sector performance 1992-97
1992
1993
1994
1995
1996
1997
Production (tonnes)
2,917,162
2,989,360
3,221,222
3,030,167
3,199,513
3,394,200
Exports (tonnes)
2,941,440
2,943,345
3,326,305
3,044,590
3,253,072
3,414,000
Prices (f.o.b.) (US$)
160.1
151.1
162.4
210.2
188.5
191.4
Earnings (US$ million)
470.9
444.7
540.1
639.8
613.3
653.4
Production (tonnes),
4,131,760
3,938,590
3,628,830
3,532,810
3,924,780
3,645,300
Exports (tonnes)
4,128,330
3,916,723
3,649,419
3,546,893
3,917,478
3,641,100
Prices (f.o.b.) (US$)
21.5
21.5
20.0
20.0
20.0
20.0
Earnings (US$ million)
88.8
84.2
73.0
70.9
78.4
72.8
Alumina
Bauxite (crude)
Source:
Information provided by the Jamaica Bauxite Institute.
88.
A levy, the Bauxite Levy, which is collected at the production level, is calculated on a base
price of US$5 per tonne, to which a variable percentage, based on the difference between the world
price and a benchmark price, is added. Revenue accruing from the Bauxite Levy was J$2.04 billion in
FY1996/97, or around 5% of total government revenue.
89.
The Government provides incentives for the exploitation of bauxite and alumina through the
Bauxite and Alumina Industries (Encouragement) Act. The Act provides for the exemption of
customs duties on imports of capital goods; and duty concessions and exemption from the special
consumption tax on lubricating oil, greases and other petroleum products used by the industry. These
are also exempt from the special consumption tax normally applied on them. Items acquired under the
Act are zero-rated for GCT purposes. Dividends repatriated are exempt from withholding tax. Under
the National Industrial Policy, the Government is envisaging extending these concessions to the whole
mining sector. Currently, the concessions are extended to non-bauxite minerals, but on a case-by-case
basis. Accelerated capital depreciation over a period of two years is applicable to mining.
90.
The prospects of the bauxite and alumina industry seem to point to an expansion in
production. Capacity utilization is high: 81.0% for bauxite, and 99.8% for alumina in 199726, and all
producers have expansion plans. The four alumina refineries are currently considering an increase in
capacity, which could take production levels to 4.8 million tonnes a year. Additionally, studies being
concluded could lead to the implementation of a new project, Trelawny, that would include a bauxite
mine and an alumina refinery, which could add another 1 million tonnes to Jamaica's annual alumina
production.
(b)
Other Minerals
91.
The production of gypsum, limestone, sand and gravel, and marl and fill has been gaining
importance since 1992 (Table IV.12). Although exports remain modest, with gypsum being the most
significant export product among them (US$1.64 million in 1997), prospects are relatively good,
especially for limestone and silica sand.
26
PIOJ (1998) p. 8.4, from Jamaica Bauxite Institute.
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Table IV.12
Production of industrial minerals, 1992-97
(Thousand tonnes)
1992
1993
1994
1995
1996
1997
Silica sand
20.4
21.3
18.4
16.3
15.8
12.1
Limestone
3,161.0
3,319.1
3319.0
3,385.0
3,351.0
3,350.0
145.0
152.2
203.7
208.0
338.9
263.7
4.6
5.8
5.7
2.8
2.0
1.5
Sand and gravel
1,337.0
1,548.1
1,700.0
1,800.0
1,836.0
1,928.0
Marl and fill
3,451.0
3,627.0
3,808.7
3,920.0
4,116.0
4,198.0
Gypsum
Marble
Source:
Information provided by the Planning Institute of Jamaica.
92.
Imports (actual or potential) of all these minerals, with the exception of gypsum and
limestone, are exempt from customs duties. Imports of gypsum are subject to a 20% tariff, while
limestone, an input in the production of cement, is subject to a 15% tariff. Silica sand is mainly used
by the beverage industry for the production of glass bottles, which are classified as an intermediate
input and subject to a 20% tariff. Minerals in the form of stone are subject to the GCT, but crushed
minerals, sand and gravel are exempt.
(7)
SERVICES
93.
The services sector in Jamaica accounts for over 56% of GDP and employs around 60% of
the labour force (Chart IV.9). Tourism receipts, estimated at US$1.13 billion in 1997, are around
80% of merchandise exports (US$1.4 billion).
Chart IV.9
Services GDP by subsector, 1992 and 1997
(Per cent, based on constant 1986 prices)
a
1992
Other
7.0
1997
Commerce
31.0
Commerce
30.6
Other
6.4
Transport, storage &
telecommunications
15.4
Financing &
insurance services
17.6
Real estate services
11.9
Total: J$9.8 billion
Electricity
& water
6.6
Government
services
11.6
Electricity
& water
6.8
Transport, storage &
telecommunications
19.5
Financing &
insurance services
16.0
Government
services
9.1
Real estate services
11.6
Total: J$9.8 billion
a
Estimates.
Source: Planning Institute of Jamaica (1998), Economic and Social Survey, Jamaica 1997.
Jamaica
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94.
The services sector has witnessed a process of privatization and liberalization in the past
decade. There is currently little government involvement in activities such as tourism,
telecommunications and financial services. Market access is relatively open in most of the services
sub-sectors with the exception of telecommunications, where Telecommunications of Jamaica has an
exclusive licence for the provision of basic telephony until 2013.
95.
Under the General Agreement on Trade in Services (GATS), Jamaica scheduled horizontal
commitments on commercial presence and the presence of natural persons for all sectors included in
its Schedule. Specific commitments were scheduled in business services (including professional
services, computer and related services, research and development services, real estate and other
business services); educational services; financial services; health related and social services; tourism
and travel-related services; recreation, cultural and sporting services; and transport services. Jamaica
presented a Schedule of Specific Commitments in the Negotiations on Telecommunications.27
Jamaica also submitted an offer in the Negotiations on Financial Services. The commitments in
professional and other business services, including computer services generally accord national
treatment; employment of foreigners ("presence of natural persons") is subject to the relevant
domestic legislation. For some services (e.g. tax agents), an economic needs test may be required.28
96.
Jamaica maintains no broad restrictions with respect to national treatment: total foreign
ownership is allowed in all sectors. The last area where foreign ownership was limited, insurance, was
liberalized in the WTO Negotiations on Financial Services, which were concluded in December 1997.
97.
Services activities are eligible for a number of incentive schemes, such as the Hotel and
Incentives Act, and the Resort Cottages Incentive Act, in the case of tourism (discussed below), and
the Motion Picture Industry (Encouragement) Act, in the case of film production.29
(i)
Tourism
98.
Tourism is the main earner of foreign exchange in Jamaica. The sub-sector generates some
45% of Jamaica's foreign exchange receipts, equivalent to over 80% of exports of merchandise.
Tourism also accounts for more than 13% of GDP and for 8% of total employment (directly
employing over 30,000 people). The spill-over effects to other areas of the economy, including
manufacturing and agriculture make an important contribution to Jamaica's economy.
99.
Tourism receipts have been increasing substantially during the 1990s, at an annual average
rate of 5.6% between 1992 and 1997, moving from US$858 million to US$1.13 billion despite
competition from other Caribbean states and the recent real appreciation of the Jamaican dollar. The
number of visitor arrivals has increased at a slower pace than receipts, 2.2% as annual average during
the same period, to reach a total of 1.9 million in 1997, of which 1.19 million were stop-over arrivals,
and the rest cruise arrivals (Table IV.13).
27
GATS/SC/45/Suppl.1, 11 April 1997.
See WTO document GATS/SC/45.
29
The Motion Picture Industry (Encouragement) Act provides recognized motion picture producers the
right to import into Jamaica any plant, equipment, machinery and materials for the building of studios or for use
in motion picture production free of customs duty, additional stamp duty and general consumption tax, provided
the goods cannot be manufactured domestically.
28
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Table IV.13
Summary performance of tourism 1992-97
Performance indicators
1992
1993
1994
1995
1996
1997
Visitor arrivals
1,706,699
1,734,969
1,693,323
1,752,179
1,820,627
1,903,893
Stop-over
1,057,182
1,105,382
1,098,287
1,147,001
1,162,449
1,192,194
649,517
629,587
595,036
605,178
658,178
711,699
Cruise
By source market (stopover)
United States
563,009
610,600
723,463
760,304
773,846
804,361
Europe
187,874
202,362
189,327
197,551
208,366
210,632
Canada
100,770
94,916
103,882
108,440
102,215
99,226
Caribbean
18,189
20,394
28,466
29,386
31,070
34,768
Japan
15,901
18,660
22,471
23,673
22,280
15,775
Latin America
16,642
26,745
26,278
22,261
18,721
20,682
6,625
5,038
4,310
5,393
5,951
6,750
858
950
919
1,069.9
1,092
1,128
Employment
25,842
26,030
27,210
27,937
28,182
28,976
Number of rooms
18,489
18,935
19,760
20,896
21,984
22,945
Number of beds
37,759
38,859
40,697
43,370
45,577
47,537
Other
Earnings (US$ million)
Source:
Data provided by the Jamaica Tourist Board.
100.
Some two-thirds of arrivals are from the United States, 18% from Europe, 8% from Canada,
and the rest from other countries. In 1997, there were 31 all-inclusive hotels and 166 non-all inclusive,
which have a total of 15,094 rooms and 31,934 beds. Three domestic groups (Sandals, Super Clubs,
and Friends International) account for some 40% of the total rooms available, or 60% of all-inclusive
hotels. The average occupancy rate stood at 55.7% in 1997.30 The reason for the low growth of the
sector in the last few years may be found in increased competition- sometimes at a lower cost- from
other destinations, particularly from other Caribbean countries, as well as from some countries in
Asia. Increasing labour costs, and high operation and capital costs have resulted in higher prices for
tourist services than in some comparable destinations. This problem may have been magnified by the
relative strength of the Jamaican dollar. The fact that tourism receipts have been increasing at a much
faster pace than the number of visitors seems to corroborate, at least partially, that the services
provided by the sector have become more expensive in U.S. dollars terms since 1992.31 The average
expenditure per tourist and visit increased from US$503 in 1992 to US$604 in 1997. Expenditure per
day was US$87.5 for stop-overs, and US$84.7 for cruise passengers.
101.
The supply of tourism services is provided mainly by private operators, with the Government
divested from the sector over the past ten years. Between 1989 and 1994, eleven hotels were
privatized. The Government, through the Ministry of Tourism32 and the Jamaica Tourist Board (JTB),
continues to play an important role in the development of infrastructure and the provision of
promotion activities. A Tourism Council was created in 1997 to act as an advisor to the Government
with respect to policies affecting the industry. The main policy aims are to attract more investment
30
Occupancy rates vary considerably according to the type of hotel. In 1995, when the average
occupancy rate was 60.8%, all-inclusive hotels had an occupancy rate of 75%, while non-all inclusive hotel
posted a 51% occupancy rate. See PIOJ (1996) p.p. 14-4, (1997) and (1998).
31
Another factor contributing to the difference in growth rates may be the gradual move to the middle
and upper-end of the market. The increase of popularity of all-inclusive destinations, generally four and five-star
hotels, is witnessed by their higher occupancy rate compared to non-inclusive hotels, which include hotels of
lower categories. The popularity of all-inclusive destinations may also have been triggered by the safety
problem, since this kind of hotel often provides good protection against theft and harassment.
32
The Ministry of Tourism is under the direct responsibility of the Prime Minister, who is also Minister
of Tourism
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into the sector - through the use of the services of the JTB and JAMPRO - and to increase the level of
foreign exchange generated by the sector. Another goal is to encourage product diversification and
expansion. The policy of diversification aims at reducing reliance with respect to visitors from the
United States, and trying to attract visitors from other destinations, particularly Europe and Japan.
Guidelines for the development of the tourist industry are included in the National Industry Policy,
designed in 1996.
102.
Foreign investment policy allows total foreign control of hotels, resort cottages, or tour
operators. Any newcomer may open a hotel or start a tour operator, subject to the prior satisfaction of
some required standards. The main requirement is the obtention of a license from the Jamaica Tourist
Board (JTB). The proposal is examined by the Standards Division of the Tourism Product
Development Company (TPDCo), which sends a recommendation to the JTB. The Standards
Division inspects hotels and resorts at least twice a year; those that do not meet the required standards
are removed from the official list of the JTB.
103.
The tourist industry has a number of incentive schemes33, including: the Hotel Incentives Act,
and the Resort Cottages Incentive Act. The Hotel Incentives Act (HIA) allows for a ten-year relief
from income tax and import duties on building materials, machinery and equipment; convention-type
hotels have a 15-year relief period. For purposes of the HIA, a hotel is defined as a building or group
of buildings containing no less than 20 bedrooms and facilities for meals. A convention-type hotel
must contain at least 350 bedrooms and facilities for holding conferences. The Resort Cottages Act 34
grants income tax relief for up to seven years, as well as import duty relief for the importation of
building materials, furniture and machinery. Establishments that do not fall into the category of
"hotel" or "resort cottage" may still benefit from import duty concessions under the Tourist
Accommodation Refurbishing Programme.
104.
Investment in tourism continues and a number of hotels are planned, mainly along the North
Coast of Jamaica, from Negril to Ocho Rios. Investment in hotels has been accompanied by a
programme of public works to upgrade existing infrastructure. Infrastructure projects include the
construction of the New Development Road in Ocho Rios and of the Northern Coastal Highway; the
upgrading of the Montego Bay Airport; improvement of the Montego bay sewage system; and a
drainage and flood control programme in Montego Bay.
105.
Jamaica's Schedule of Specific Commitments under the GATS sets no limitations on market
access for cross-border supply, consumption abroad, and commercial presence, for the activities of
hotels and restaurants, as well as travel agencies and tour operators. Only the movement of natural
persons remains unbound. Similarly, there are no limitations on national treatment.
(ii)
Financial services
106.
The Jamaican financial system accounted for 12.2% of GDP in 1997, of which
10.8 percentage points are accounted for by banks and related institutions, and 1.4 percentage points
by insurance activities. The sector is relatively well developed and liberalized, and experienced
dramatic growth up to 1995, when activities were affected by a severe financial crisis. Between 1992
and 1997 the sector expanded by 32.6% in real terms (Table.14).
33
These incentives have been outlined in Chapter II.
A resort cottage is defined for the purposes of the Resort Cottages Act as : "any accommodation
containing at least two furnished bedrooms, a furnished living room with kitchen and bathroom facilities used
for the accommodation of transient guests, for reward".
34
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Table IV. 14
Banking and insurance: contribution to GDP and employment, 1992-97
Indicator
1992
1993
1994
1995
1996
1997
Contribution to GDP
11.7
10.8
15.9
15.5
15.0
12.2
Financial services
10.4
9.4
14.5
14
13.5
10.8
1.2
1.3
1.4
1.5
1.5
1.5
Insurance
Real GDP growth
8.0
-6.6
49.9
-2.2
-5.2
-20.1
Financial services
8.3
-8.5
56.0
-3.4
-5.0
-22.0
Insurance
4.8
9.8
6.5
10.7
-6.9
-2.7
43.6
43.3
47.2
51.6
54.5
59.5
Employment ('000)
Source:
Information provided by the Jamaican authorities.
107.
Some 59,500 persons are employed in financial sector activities. Fast growth has been
accompanied, however, by lax credit policies, which helped create an unstable situation in 1995. The
difficult situation of several financial institutions has prompted the intervention of the Bank of
Jamaica and the creation of the Financial Sector Adjustment Company (FINSAC) to rescue some
institutions and enhance regulation (Chapter I). This adds to steps undertaken previously or in
parallel to improve the financial supervision of institutions accomplished through amendments to
various laws related to the sector, namely the Banking Act, the Financial Institutions Act, the Bank of
Jamaica Act, the Building Societies Act, the Bank of Jamaica (Building Societies) Regulation, the
Deposit Insurance Scheme, and the Industrial and Provident Societies Act. An intervention by
FINSAC generally implies that a percentage of shares is traded for a liquidity injection. The amount
of scheduled and projected assistance at 31 March 1998 was J$37.64 billion (slightly over
US$1 billion) (Table IV.15).
Table IV.15
FINSAC, loans and investments, actual and projected, 31 March 1998
(J$ million)
Institutions
Crown Eagle life
Loan amount
13,729.6
Workers Bank
2,000.0
Mutual Life
9,500.0
Eagle Merchant Bank
2,000.0
Eagle Commercial Bank
450.0
National Commercial Bank
4047.8
Life of Jamaica
1,200.0
Citizens Bank
3,067.3
C.I.B.C.
519.8
Island Life
300.0
Crown Eagle Life
624.0
Dyoll Life
200.0
Total
Source:
37,638.5
Data provided by the Financial Sector Adjustment Company (FINSAC).
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108.
The Bank of Jamaica Act, as amended in 1992, enhances the Central Bank's supervisory
authority over commercial banks and its degree of independence. Exchange control restrictions were
completely removed in 1992 and decisions on monetary policy rest with the Bank of Jamaica. Final
decisions remain, however, with the Ministry of Finance. The Department of Supervision of Banks
and Financial Institutions of the Bank of Jamaica is responsible for the supervision of banks and
specified financial institutions. The Bank reports to the Ministry of Finance every year on its
activities.35 The policy with respect to the granting of banking licences is determined by the Minister
of Jamaica in consultation with the Bank of Jamaica. Licences are granted by the Minister of
Finance, on recommendation from the Bank of Jamaica which applies "fit and proper" criteria with
respect to directors, management and major shareholders to ensure that the approved institutions are
stable and sound. The transfer of 20% or more of total shares in any financial institution or any
arrangement by which a person would acquire 20% or more of the voting power in an institution must
also be approved by the Minister of Finance.
(a)
Banking
109.
The banking system in Jamaica consists of commercial banks, merchant and trust banks,
finance companies, building societies and development banks. Currently, the sector includes nine
commercial banks (National Commercial Bank, Bank of Nova Scotia, Citizens Bank, Workers Bank,
Canadian Imperial Bank of Commerce, CIBC Jamaica, Island Victoria Bank, Trafalgar Commercial
Bank, and Citibank) of which three are foreign-owned (Bank of Nova Scotia, Canadian Imperial Bank
of Commerce, Citibank); 22 merchant banks and trust companies; 4 finance companies; 10 building
societies; and three development banks. Concentration in the banking sector is relatively high: the
five largest commercial banks control two thirds of total deposits.
110.
As bound in the offer presented during the WTO Negotiations on Financial Services, there are
no restrictions to private foreign ownership of banks and the banking sector benefits from the national
treatment principle. Foreign governments or agencies may not, however, hold more than 5% of the
issued share capital of any bank without the written approval of the Minister of Finance.36
111.
The Bank of Jamaica supervises commercial banks, governed by the Banking Act; financial
institutions licensed under the Financial Institutions Act, called Financial Institutions Act Licensees
(merchant banks, finance houses, trust companies); building societies (regulated by the Building
Societies Act);37 and, more recently, also institutions operating under the Industrial and Provident
Societies Act, which are engaged in credit and deposit-taking activities. Minimum reserve
requirements for commercial banks are currently fixed at 47% of deposit liabilities, with cash
requirements fixed at 25 per cent. Reserve requirements for financial institutions are currently at 35%,
while building societies are subject to a (lower) dual cash reserve ratio (Chapter I, Section (2)(iii)).
The capital adequacy ratio is 25:1 for commercial banks, and 20:1 for institutions governed by the
Financial Institutions Act. Building societies are subject to a minimum risk weighted capital adequacy
requirement.38 Minimum capital requirements vary according to the type of financial institution (they
are higher for banks) and also, in the case of banks, according to whether the bank is foreign or
35
See: The Bank of Jamaica: The Bank of Jamaica Act. In: http://www.boj.org.jm/boj-boja.htm.
The Banking Act 1992, par.7(a).
37
The supervisory principles for building societies are contained in the Bank of Jamaica (Building
Societies) Regulations, 1995. See: http://www.boj.org.jm/boj-fia.htm.
38
The capital adequacy requirement is defined as the ratio of deposits to the capital base. This is used
as a proxy to a weighted risk capital adequacy requirement, which is not yet incorporated in the Banking Act,
nor in the Financial Institutions Act. Guidelines with respect to risk capital requirements are expected to be
included in a review of both Acts, currently under way. The Building Society Regulations Act already includes
guidelines in this respect.
36
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national (Table IV.16); for prudential reasons foreign-owned banks are subject to higher minimum
subscribed capital requirements than local banks (J$250 million, compared with J$80 million). The
amount of paid-up capital is, however, the same for domestic and foreign-owned banks
(J$60 million).
Table IV.16
Minimum capital requirements for financial institutions
Type of institution
Paid-up capital
Subscribed capital
Local commercial banks
J$60 million
J$80 million
Foreign commercial banks
J$60 million
J$250 million
Financial institutions act licensees
J$20 million
J$25 million
Building societies
J$20 million
J$25 million
Source:
Information provided by the Bank of Jamaica.
112.
Under the Banking Act, 1992 and the Banking (Amendment) Act, 1997 licensing
requirements for foreign-owned banks are the same as those for domestic banks. Foreign banks may
establish both branches and subsidiaries. The same capital-fixed-asset and credit limit exposures
apply to foreign and domestic-owned banks.39 No distinction is made between domestic and foreign
banks with respect tothe services they can provide. Banks are subject to a compulsory creation of
reserves from profits: they are required to transfer each year a minimum of 15% of net profits to a
statutory reserve fund until its balance reaches 50% of the paid-up capital. After this level is reached,
a minimum of 10% must be transferred every year until the reserve fund covers the whole paid-up
capital.
113.
The Bank of Jamaica (Authorized Dealers) Order 1995 authorizes 15 institutions licensed
under the Financial Institutions Act to operate as authorized dealers. Authorized dealers are allowed
to lend and borrow in foreign currency, as well as trade foreign currency instruments. Apart from
this, there are about 100 cambios and bureaux de change, which are authorized to buy and sell foreign
currency only. Cambios are required to sell a minimum of 5% of their foreign exchange purchases to
the Bank of Jamaica at least once a week.40 The price paid should not exceed the preceding day's
weighted average selling rate of the authorized foreign currency dealers as a whole. Cambios must
obtain a licence from the Bank of Jamaica based on an assessment of whether the applicant is "fit and
proper" and has sufficient financial resources. There is an application fee of J$1,000. Licensees must
pay an initial fee of US$2,500 per licence per location, and, subsequently, a fee of US$1,500 per year.
Cambio licences are renewable annually and are not transferable.
114.
The Banking Act (Amendment), 1997 and the Financial Institutions (Amendment) Act, 1997
introduced some modifications to the 1992 Act. Some of the changes include a tightening of reservesfor-non-performing loans obligations. Banks are now required to create reserves against losses when
no payment on principal or interest of a loan has been made for a period of three months, instead of
six months, as was the case previously.41 Banks and licensees are now also required to add to their
deposit liabilities all other indebtedness for borrowed money for the calculation of their capital
adequacy ratios; deposit liabilities must not exceed 25 times their capital base for banks and 20 times
39
Banks may not maintain fixed assets exceeding an amount equivalent to their capital base, without
prior authorization from the Minister of Finance. (The Banking Act, 1992, par.10).Credit exposure is limited to
10% of the capital base in the case of unsecured lending to a single costumer; 20% in the case of unsecured
lending to a group of costumers; 30% in the case of secured lending to a single customer; and 40% in the case of
secured lending to a group of customers.(The Banking Act, 1992, par.13).
40
The maximum amount to be purchased by the Bank of Jamaica from any single cambio in any
specific day should not exceed 10% of the cambio's purchases during that day.
41
The Banking (Amendment) Act, 1997, section 7.
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the capital base for licensees.42 Banks and other financial institutions are required to submit monthly
balance sheets, quarterly and annual statements of earnings and expenditure, and audited financial
statements, which must be published in a daily newspaper.
115.
Business in 1996 by licensees, such as merchant and investment banks, under the Financial
Institutions Act (FIAs) included J$ 7.1 billion in loans and advances, 53.6% of which went to finance
productive activities, with the rest financing chiefly consumer-oriented activities. Despite a substantial
increase in activities and a high growth rate (assets and liabilities experienced a 32.6% growth
in 1996), liquid asset ratios have been kept well above statutory requirements.44 Capital adequacy
ratios have been well within the statutory limit of 20 to 1: in 1996, it was 2.84 to 1, which resulted in
a large amount of unused deposit-taking capacity. As a comparison, the capital adequacy ratio for
commercial banks was 23.88 to 1 in the same year (Table IV.17).
Table IV.17
Key prudential indicators of commercial banks and licencees under the Financial Institutions Act, 1996 and 1997
(Per cent)
Commercial banks
FIA licensees
1996
1997
Overall Structure
Assets: rate of growth
Deposits: rate of growth
Loans: rate of growth
Investments/total assets
Fixed/total assets
Loans/total assets
Loans/deposit
11.9
5.6
18.8
18.2
2.8
39.2
55.7
7.5
16.2
4.3
21.7
2.8
37.9
50.1
14.6
-1.1
20.1
34.3
2.6
35.5
103.0
-19.9
-2.0
-36.5
35.6
2.4
28.1
66.7
Liquidity
Cash reserves/prescribed reserves
Liquid assets/prescribed liabilities
25.0
50.4
25.0
50.7
17.0
56.8
17.0
55.4
Asset quality
Loans arrears/total loans
Loan loss reserves/total loans
14.0
3.9
24.4
7.2
23.8
4.8
48.8
17.2
23.88: 1
4.9
2.9
21.14: 1
4.4
3.6
2.84: 1
14.8
12.1
6.12: 1
10.3
6.9
9.7
2.1
44.9
1.5
0.2
3.8
5.3
1.7
13.6
-15.6
-4.1
-41.4
Capital adequacy
Deposits/capital (ratio)
Total shareholders equity/total assets
Primary capital/total assets
Profitability
Gross profit margin
Return on average assets
Return on average capital employed
Source:
1996
1997
Data provided by the Bank of Jamaica.
116.
Building societies mobilize and allocate savings by providing long-term mortgage financing,
of up to 90% of the value of a property, mainly for residential purposes. There are currently
10 building societies in operation, down from 13 in 1996, which follow the Bank of Jamaica
(Building Societies) Regulations,1995 and the Building Societies (Licences) Regulations, 1995. Their
combined assets at the end of 1996 were J$32.9 billion, of which 78.7% was controlled by the largest
three building societies: Jamaica National Building Society (32.8%); Victoria Mutual Building
Society (31.6%); and Citizens Building Society (14.3%).
42
Previously, the requirement referred to deposit liabilities only. See : The Banking (Amendment) Act,
1997, section 4, and The Banking Act, 1992, section 9.
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117.
Cash requirements for building societies are lower than for other financial institutions, and
also vary according to the perceived solvency of the society linked to the amount of total loans which
are granted for residential mortgage purposes, with a dual reserve mechanism currently applied. The
Building Societies (Licences) Regulations, 1995 were modified in 1996 to introduce more stringent
cash reserve requirements, with the higher ratio raised from 5% to 11%. Of the 13 building societies
in operation, seven qualified in 1996 for the lower cash reserve requirement of 1%, while the other six
qualified for the higher ratio of 11%.43 Gross profit margins and return of capital were higher than for
commercial banks and FIAs during that year (Table IV.18 ).44
Table IV. 18
Key prudential indicators of building societies, 1996 and 1997
Ratio
Overall structure
1996
1997
Investments/total assets
29.7
28.4
Fixed assets/total assets
2.9
3.2
Loans/total assets
43.1
41.9
Mortgage loans/total loans
71.5
78.8
Average cash reserves/savings fund
3.6
3.6
Average liquid assets/savings fund
19.9
21.6
11.2
3.5
Gross profit margin
7.6
-1.5
Return on assets
3.4
-0.6
Return on capital
55.8
-12.7
Liquidity
Assets quality
Loans arrears/total loans
Profitability
Source:
Information provided by the Bank of Jamaica.
118.
Credit unions started to operate in Jamaica in the 1940s. Loans obtained through credit unions
are short-term and are at relatively low interest rates. There are currently 77 credit unions in operation
in Jamaica with over 500,000 members. Institutions are part of a league, the Jamaica Cooperative
Credit Union League, which pools resources through the "Central Finance Facility" and then redirects
them to individual credit unions at concessionary interest rates. Credit unions have been very
successful in attracting savings (which expanded from J$694.2 million in 1990 to J$4,681.4 million
in 1996) and have entered the mortgage market. Credit unions are regulated by the Co-operatives
Societies Act and are not subject to the minimum capital requirements imposed by the Banking or
Financial Institutions Acts, nor are the liquidity ratio guidelines enforced. As a result, the ratio of
loans to savings has been traditionally higher than the ratio loans/deposits in commercial banks.45
119.
Among specialized development financial institutions, the National Development Bank,
owned by the Government, provides medium and long-term financing to businesses (particularly
manufacturing and tourism) through commercial banks. Funding is provided through the National
Industrial Bank of Jamaica (NIBJ) (Chapter III(4)(i)), the European Investment Bank, the Caribbean
43
The lower ratio applies to building societies where loan assets are not less than 27% of its liabilities in
respect of deposits and withdrawable shares paid in Jamaican dollars. See : BOJ Annual Report 1996, p.98.
44
Bank of Jamaica. Annual Report 1996, p.46.
45
The ratio was 78% in 1996, compared to a loan/ratio of 54.6% for commercial banks.
Jamaica
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Development Bank, and through bond issues of the Bank of Jamaica. The Agricultural Credit Bank
(ACB) acts as a wholesaler of funds by providing agricultural credit through commercial banks,
people's cooperative banks, and approved lending institutions to finance agricultural activity. To
finance its lending programmes, the ACB supplements internally generated resources by sourcing
funds from a number of bilateral and multilateral agencies (through the Government), as well as from
the Caribbean Development Bank and from the Government. The Trafalgar Development Bank
provides medium and long term financing to productive enterprises in the private sector; its activities
are concentrated on the foreign exchange loan market. Around half of the loans disbursed are directed
to manufacturing, with agriculture, tourism and mining following at a certain distance.46 The Jamaica
Mortgage Bank borrows funds from foreign and local lenders for on-lending to other public sector
institutions; it also operates in the secondary market, buying and selling mortgages on residential
property, and performs mortgage loan-insurance activities.
120.
Jamaica presented an offer in the WTO Negotiations on Financial Services concluded in
December 1997 in Geneva.47 Banking and other financial services, acceptance of deposits and other
repayable funds from the public, as well as lending of all types, including consumer credit, mortgage
credit, factoring and financing of commercial transactions remain unbound for all modes of supply,
with the exception of commercial presence. The free operation of foreign banks and other financial
institutions in Jamaica is bound, prior entry authorization subject to meeting prudential as well as "fit
and proper" criteria under the Banking Act (the same requirements apply for local banks). There are
no limitations on national treatment.
(b)
Insurance
121.
Insurance activities accounted for 1.4% of GDP in Jamaica in 1997. They expanded at a fast
pace between 1992 and 1995; but experienced a sharp contraction in both 1996 and 1997. There are
10 life insurance companies operating in Jamaica; the largest two are Life of Jamaica, and Mutual
Life Insurance Company. Under the Insurance Act, 1972, the Office of the Superintendent of
Insurance, within the Ministry of Finance and Planning, regulates and supervises all the operations of
registered insurance companies, brokers, agents and salespersons.48
122.
The Superintendent of Insurance is in charge of the verification needed to register insurance
companies. Authorization by the Superintendent of Insurance is accorded as defined within the
conditions of the Insurance Act. These include limitations in the scope of operations: a company may
not engage in both long-term and general insurance operations, unless general insurance operations
are limited to the personal accident insurance business.49 Solvency requirements stipulate that assets
exceed liabilities by an amount equivalent to 50% of the capital requirements. Capital requirements
are currently J$100 million for Life insurance companies, or J$75 million for Non-life insurance
companies. Foreign insurance companies are required to establish a branch or agency to operate in
Jamaica. They are also required to deposit in Jamaica the equivalent of the capital requirements set
for locally incorporated companies. Insurance companies are required to pay a quarterly fee of 0.25%
of its Gross Written Premium Income in the case of domestic companies and 0.5% in the case of
foreign-owned companies. Fee payments are subject to an annual minimum level of J$10,000 for
domestic life companies (ordinary long term and industrial insurance) and general companies dealing
46
Loans by the Trafalgar Development Bank outstanding in 1996 reached J$1.29 billion, compared to
J$2.64 billion for the National Development Bank, and J$1.19 billion for the Agricultural Credit Bank. See :
BOJ Annual Report 1996, p.p.22-26.
47
WTO document, S/FIN/W/12/Add.38, 3 December 1997.
48
There were 183,467 life-insurance policies in force at the end of 1996.
49
Life insurance companies are permitted to market personal accident business (accident, health and
sickness insurance), but no other class of non-life policy.
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Trade Policies Review
with motor vehicle insurance, and of J$12,000 for foreign companies. Domestic general companies
must pay minimum fees of J$5,000 for each other class of insurance (apart from motor vehicles
insurance) they provide (J$6,000 for foreign companies).
123.
Jamaica made national treatment commitments in both the life and non-life insurance sectors
during the Uruguay Round negotiations.50 These commitments were enhanced in the Negotiations on
Financial Services, concluded in December 1997. All forms of insurance activities are open to foreign
suppliers; the sector has been further liberalized and is open to foreign investment with up to 100%
foreign equity permitted under the 1997 investment regime. Previously, foreign investors were
required to establish joint ventures with domestic investors, in which the latter would own at least
51% of the equity. Three insurance companies have foreign participation: CUNA Mutual Insurance
Society - a wholly owned subsidiary of CUNA Mutual Group -, American Home Assurance Company
- wholly owned subsidiary of American International Group -, and Royal and Sun Alliance Insurance
Company Limited - 51% owned by Sun Alliance (Overseas) Limited.
124.
Under the Insurance Act, 1972, insurance may only be taken with licensed insurance
companies. Third-party motor vehicle insurance (covering death, bodily injury and property damage
to third persons) is the only class of insurance compulsory by law.
125.
Since January 1997, when the Financial Sector Adjustment Company (FINSAC) was created,
supervision has been tightened. The financial crisis affecting banks and other institutions has not
spared insurance companies. Four insurance companies - Crown Eagle Life Insurance Company, Life
of Jamaica, Island Life, and Dyoll Life- have traded a percentage of their shares in exchange for an
injection of capital from FINSAC. The percentage of shares traded is 86% for Crown Eagle, and
26.5% for the other three companies. Additionally, Life of Jamaica has sold its stake in two banks to
FINSAC. FINSAC has also been approached by Mutual Life Assurances for funding; a restructuring
approach has, however, not yet been decided.
(c)
Securities trading
126.
Securities trading is regulated by the Securities Act, 1993, which established a Securities
Commission. The Commission is in charge of ensuring that appropriate standards of performance,
security, and business practices are maintained. It is also in charge of granting the licences required to
operate in the Stock Exchange. Stockbroking activities are restricted to broker-members (of the Stock
Exchange), who act both as agents and principals and must be Jamaican nationals. Broker-members
have the same faculties as company directors and are the only ones who can trade. There are currently
nine broker-members in operation. The Stock Exchange also has associate members with no trading
rights. The Stock Exchange Council is the governing body; its members are: the Governor of the
Bank of Jamaica (or a representative), a representative of the Ministry of Finance, up to four brokermembers, and a representative of the associate members.
127.
Three different types of stock are traded: ordinary/common, preferential, and loan/stocks.
Some 50 companies are listed in the Jamaica Stock Exchange. Market capitalization at the end of
1996 stood at J$66.12 billion (around US$1.9 billion), the equivalent to 32.6% of GDP. The top 10
stocks by market capitalization are listed in Table IV.19.
50
GATS/SC/25, 15 April 1994.
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Table IV.19
Top ten stocks by market capitalization, 1996 and 1997
(J $ million)
Stock
1996
1997
Telecommunications of Jamaica
14,176.2
18,927.4
Bank of Nova Scotia
12,806.6
12,879.8
C.I.B.C. Holdings
10,347.3
16,951.9
Carreras Group
6,602.0
7,281.6
Lascelles
2,275.2
2,256.0
C.I.B.C. Jamaica
2,126.7
1,546.7
National Commercial Bank Group
1,991.6
2,121.5
Caribbean Cement Company
1,962.5
n.a.
Grace Kennedy
1,482.6
2,957.8
Jamaica Producers Group
1,405.3
n.a.
Source:
Data provided by the Bank of Jamaica.
128.
Government bonds are not listed in the Stock Exchange; they may, however, be traded by
broker-members in over-the-counter markets regulated by the Bank of Jamaica. The Bank of Jamaica
actively operates in both the primary and the secondary market. The main primary markets are the
Treasury Bill market, the Local Registered Stocks market, and the commercial paper market. The
Treasury Bill market is a short-term market with issues with maturities ranging from a few days to a
year. There is a regular issue of a 6-month Treasury Bill every month, with other issues taking place
throughout the year.51 There is a ceiling of J$12 billion for the outstanding amount of Treasury Bills
at any time during the year. Local Registered Stocks are medium-term issues, of a maturity generally
comprised between one and three years.52 Through the commercial paper market, companies issue
promissory notes, which are becoming an important source of funding, especially for the
manufacturing sector. Trading in securities in the secondary market has been expanding since 1994,
triggered by the need of financial institutions to meet stricter liquidity requirements in accordance
with Bank of Jamaica regulations.
(iii)
Transportation
(a)
Air transport
129.
There are two major airports in Jamaica: Norman Manley International in Kingston and
Sangster International in Montego Bay. Since June 1997, Montego Bay is Air Jamaica's hub. Both
airports are currently operated by the Airports Authority of Jamaica, a public sector body, established
by the Airports Authority Act. Privatization of the administration of both airports is envisaged,
starting with Sangster International. Norman Manley International Airport has the lead in freight
movement - 12.5 million tonnes landed, and 12.7 million loaded in 1996, compared to 4.9 million
tonnes and 5.6 tonnes at Sangster. In number of flights and passengers, however, Sangster
International is the leading airport - 27,129 flights and 1.1 million passengers in 1996, compared to
Norman Manley's 25,160 flights and 703,516 passengers.
130.
Several airlines service Jamaica's two main airports. The flag carrier, Air Jamaica - privatized
in 1994 - is 75% privately owned, while the Government's share is 25%. It is 100% locally owned and
51
In 1996, there were 31 issues, totalling J$23.5 billion; this implied a net increase of J$1.5 billion, and
an outstanding total of J$10.47 billion at the end of 1996.
52
A total of J$21.3 billion was issued in 1996, increasing the outstanding stock to J$15.5 billion.
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Trade Policies Review
currently flies to 15 destinations.53 There are nine local operators providing charter services (Air
Jamaica Express, Tropical Airlines, etc), all of which are totally locally owned, in accordance with the
Civil Aviation Act, 1995, which requires that airlines be substantially owned and controlled by
Jamaican citizens. Airline operations are monitored by the Civil Aviation Authority, under the
Ministry of Transport and Works. Airlines have the right to transport cargo and passengers. Cabotage
is not allowed.
131.
Jamaica has bilateral aviation agreements with 26 countries. Jamaica is not a party to the
CARICOM Multilateral Air Services Agreement. Prices of air transport on international routes are
determined by bilateral agreements. National prices are determined in accordance with the different
airlines; they are supervised and regulated by the Civil Aviation Authority. Fare increases need to be
previously approved by the Authority. Air tickets are not subject to the GCT; but a stamp duty is
applied, which depends on the value of the ticket for international destinations, and is a fixed (and
lower) amount for domestic destinations. Additionally, travellers are subject to a travel tax of J$750.
132.
Maintenance services are provided by private operators. National treatment applies on the
provision of these services, subject to technical requirements.
(b)
Maritime transport
133.
Maritime activities are mainly governed by the Marine Board Act, the Port Authority Act, the
Merchant Shipping Act and the Harbours Act. The Port Authority of Jamaica, a statutory public
company, has regulatory responsibility for the operations of both privately and publicly owned ports.
Maritime transport policy is aimed at providing incentives, modern infrastructure and appropriate
legislation, responsive to the needs of the international maritime community. To this end, a Shipping
Bill is currently in the process of being examined. The Bill would result in the creation of a Maritime
Authority, which would regulate maritime transport, including areas such as safety at sea, and
pollution. The Bill would incorporate International Maritime Organization (IMO)- of which Jamaica
is a member- conventions and guidelines into domestic legislation.
134.
Jamaica is a member of the UN Convention on a Code of Conduct on Liner Conferences. It
has exempted cargo reservation from MFN treatment in its Schedule under GATS, limiting it to
signatories of the Convention for an indefinite period.
135.
The mains seaports include Kingston, Montego Bay, Ocho Rios, and Port Antonio. The main
port is Kingston, which is increasing its importance as a transhipment center. In 1997, out of a total of
15.24 million tonnes handled by Jamaican ports, 6.39 million tonnes of cargo were handled in
Kingston, of which 4.06 million tonnes corresponded to transhipment. Transhipment activities in
Kingston have tripled between 1993 and 1997 (Table IV.20). Kingston is one of the most highly
mechanized ports in the Caribbean;54 its transhipment terminal (Port Bustamante) has four berths,
totalling 2,100 feet, 85 lands of paved land, and about 10,200 feet of warehouse space. Jamaica has
applied to the Association of Caribbean States (ACS) to be considered as a candidate for becoming
the Transhipment Hub Center of the region.
53
New York, Miami, Orlando, Fort Lauderdale, Los Angeles, New Jersey, Philadelphia/Baltimore,
Chicago, Atlanta, Nassaue, Grand Cayman, London, St. Lucia and Barbados.
54
According to information provided by Lloyds, the port of Kingston has five ship-to-shore gantry
cranes, 30 Valmet narrow-span straddle carriers, 50 stevedoring chassis, 22 stevedoring yard tractors and
five tractors dedicated to yard activities (Lloyd's List. 31 July 1996. In: http://www.llplimited.com/
LLArchi...tput.cgi?Wed 31Jul1996-025&jamaica).
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Table IV.20
Ports: ship traffic and cargo flow, 1992-1996
1992
1993
1994
1995
1996
1997
Kingston
Number of vessels (visits)
Volume of cargo ('000 tonnes)
Domestic
Transhipment
1,413
2,303
1,496
807
1,750
2,983
1,779
1,204
2,048
4,011
1,729
2,282
2,210
4,502
1,972
2,530
2,218
5,716
2,076
3,653
2,180
6,390
2,328
4,062
Outports
Number of vessels (visits)
Volume of cargo ('000 tonnes)
Landed
Loaded
1,200
10,253
2,075
8,178
1,171
10,802
2,807
7,955
1,190
10,769
2,749
8,020
1,155
10,544
2,779
7,765
1,258
11,153
2,832
8,321
1,227
11,242
3,105
8,137
TOTAL
Number of vessels (visits)
Volume of cargo ('000 tonnes)
2,613
13,533
2,921
14,197
3,239
14,157
3,275
14,824
3,476
14,908
3,415
15,239
Source:
Data provided by the Planning Institute of Jamaica; and Port Authority of Jamaica.
136.
Shipping services are provided by over 30 shipping lines. Jamaican shipping companies may
benefit from the incentives included in the Shipping Incentives Act, by which they are exempt from
income tax and from import duties for a period of ten years after their establishment.
137.
The Jamaica Maritime Institute (JMI) currently provides maritime training to the region.
Pursuant to the 1995 amendment to the Convention on Standards of Training Certification and Watch
keeping (STCW) JMI is upgrading its equipment, facilities and staff to meet the requirements of the
revised convention. JMI has also applied to the ACS to be named as the Training Institute of the
region.
(iv)
Telecommunications
138.
The provision of telecommunications services in Jamaica is currently under the monopoly
control of the privately owned Cable and Wireless Jamaica Limited (formerly Telecommunications
of Jamaica Ltd.).55 TOJ has been granted a 25-year exclusive right to operate basic telephony
services, which will expire in 2013. This arrangement is being reviewed, however, with Cable and
Wireless Jamaica in the context of a draft Telecom Bill.
139.
Jamaica presented an offer in the WTO Negotiations on Telecommunications, which was
added to its Schedule under GATS (GATS/SC/45). The Schedule contains limitations on market
access (commercial presence and cross-border supply) for voice telephone services, which, in
accordance with the concession granted to the former TOJ when it was privatized, are the monopoly
of TOJ until September 2013. Exclusive rights are also extended to telex and facsimile services.
Similarly, cross-border supply or consumption abroad of callback services is not permitted, and
telephone, telex, teleprinter and facsimile services may not be supplied over cable TV network
facilities. Monopoly rights do not extend to paging, internet services, or cellular phones. If the review
55
According to Government sources, Cable and Wireless Jamaica Ltd. is 89% foreign-owned, with the
rest of shares being owned by domestic investors.
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Trade Policies Review
currently conducted with Cable and Wireless Jamaica is successful, the Government expects to submit
an improved commitment of private voice telephone services.56
140.
Under the jurisdiction of the Ministry of Transport and Works, the Office for Utilities
Regulation (OUR) is the body in charge of regulating and monitoring telecommunications activities
(see below). Pricing practices by the Cable and Wireless Jamaica are regulated by the Government,
who determines the rate of return to be earned, taking into account the risks to the provider.
According with information provided by the Government, this rate of return is currently 17.5%.
Based on this rate-of-return requirement, Cable and Wireless Jamaica then sets prices.
141.
Jamaica's penetration rate of telephone lines has substantially increased in the 1992-1996
period, going from a telephone density of 5.4 lines per 100 inhabitants in 1992 (a total of
131,566 lines), to 11.9 lines per 100 inhabitants in 1996 (a total of 300,000 lines). According to
government estimates, the number of lines were 402,194 at the end of 1997, which brought telephone
density to 15.8 lines per 100 inhabitants (Table IV.21); additionally, 55,500 cellular phones were in
operation.
Table IV.21
Telecommunications indicators, 1992-97
Number of subscribers
1992
1993
1994
1995
1996
1997
131,566
167,251
208,480
245,480
300,000
402,194
5.4
6.8
8.4
9.8
11.9
15.8
Telephone density (per 100)
Source:
Information provided by the Jamaican authorities.
142.
The postal service is currently under Government control: all investment and price decisions
are determined by the State. There are, however, plans to undertake a partial privatization of postal
services. The Post and Telecommunications Department is the body in charge of providing postal
services; its operations have resulted in a deficit in every year of the period 1992-96.57 Overseas
cable service is provided by JAMINTEL, a company controlled by Cable and Wireless.
143.
The combined contribution of telecommunications and transport (data is reported for the two
sectors together in Jamaica's GDP statistics) to GDP is 14.9% and they employ about 53,400 persons
(Table IV.22).
Table IV.22
Telecommunications and transport: contribution to GDP and employment, 1992-97
Indicator
1992
1993
1994
1995
1996
1997
GDP contribution
Employment ('000)
10.2
36.5
11.0
40.1
11.4
40.2
12.4
44.5
13.8
48.3
14.9
53.4
Source:
Information supplied by the Jamaican authorities.
(v)
Public Utilities
144.
The Office of Public Utilities (OUR) was established in 1995 and became operational in
1996, with a mandate to regulate all utilities (electricity, water, telecommunications) and utility
56
WTO document, GATS/SC/45/Suppl.1, p.3.
The deficit was particularly large in 1996, when it reached J$380 million, more than double the
deficit of the previous year (PIOJ (1997), p.p. 13-2).
57
Jamaica
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providers, as well as land transportation. The main utility companies regulated include the Jamaica
Public Service Company (JPSC), Cable and Wireless Jamaica, and the National Water Commission
(NWC). OUR is also in charge of establishing operating and customer service standards for these
three utility companies.
(a)
Electricity
145.
The main supplier of electricity in Jamaica is JSPC, which is wholly owned by the
Government. There are several private suppliers of electricity, both domestic and foreign, on the
generation side; they sell their electricity to JSPC, which is the sole distributor. JSPC offers them a
standard offer contract and sale prices are negotiated.
146.
Out of a total electricity output of 2.77 billion kilowatt hours in 1997, generation of electricity
by JSPC reached 1.9 billion kilowatt hours; the rest (864 million kilowatt hours) was purchased by
JSPC from private sources. Increasing the share of electricity generated by independent providers has
become an important policy element of JSPC. About 82% of total electricity output is sold, with the
rest being lost. More than one third of sales are to households (Table IV.23).
Table IV.23
Output and distribution of electricity, 1992-97
(KWh)
Net output
1992
1993
1994
1995
1996
1997
2,140.0
2,216.0
2,303.0
2,043.3
1,879.8
1,904.3
Steam
1,601.0
1,594.0
1,470.0
1,325.1
1,287.3
1,520.9
Hydro
248.0
240.0
256.0
225.8
237.7
116.3
Slow speed diesel
108.9
90
11.0
99.8
109.8
114.5
Gas turbine
181.9
292
446.0
392.6
244.9
152.6
13.0
18.0
22.0
373.8
677.1
864.1
Total output
2,153.0
2,234.0
2,325.0
2,417.1
2,556.8
2,768.4
Disposal
1,693.0
1,793.0
1869.0
1,998.0
2,146.8
2,281.1
Residential rate sales
535.6
568.0
618.0
684.1
763.9
829.3
General service rate
388.0
403.0
436.0
470.5
500.8
545.9
Power service rate
396.0
444.0
433.0
451.7
471.6
495.4
Large power rate
322.0
336.0
332.0
339.9
357.8
356.7
Street lighting rate
35.0
36.0
36.0
36.5
43.3
49.2
Other
16.0
6.0
14.0
15.3
9.5
4.6
Power purchased
JPSC use
Line losses
Source:
6.0
8.0
11.0
9.8
8.4
9.5
460.0
440.0
455.0
419.1
410.0
487.3
Data provided by the Jamaican authorities.
147.
The Electric Lighting Act, 1890 regulates the electricity industry but does not contain
guidelines regarding prices. JPSC needs approval from the Ministry of Transport and Works to
modify rates. Pricing procedures are based on average U.S. Gulf petroleum prices. The OUR does
not, at present, participate in price determination. Discrimination between consumers for the
application of electricity rates is not very wide. Households pay preferential fares; other fares include
the general service rate, the power service rate, the large power rate, and the street lighting rate. JSPC
is moving towards a policy of applying fares according to marginal costs.
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Trade Policies Review
148.
Jamaica is a large importer of petroleum products. Imports are made through three main
channels: Petrojam, the Bauxite-producing companies, and marketing companies (Table IV.24).
Crude petroleum imported by Petrojam is of Mexican (57% of imports) or Venezuelan (43% of
imports) origin, and enters under the terms of the San Jose Accord. Total petroleum imports were
US$473.3 million in 1996, or a total volume of 22 million barrels. Ex-refinery prices are determined
weekly, based on U.S. Gulf reference prices.
149.
Imports of crude oil are subject to a 5% tariff. Imports of other products are faced with tariffs
which range from zero to 25%. Some petroleum products are subject to a special consumption tax
(Table III.8).
Table IV.24
Volume and value of petroleum imports, 1993-96
(Barrels and US$)
1993
Volume
Value US$
(Bls)
1994
Volume
Value US$
(Bls)
1995
Volume
Value US$
(Bls)
1996
Volume
Value US$
(Bls)
Venezuelean
crude
2,740.2
48,666.8
2,449.8
40,963.8
2,099.3
37,016.1
2,154.6
45,203.9
Mexican crude
2,618.4
42,444.5
3,048.9
45,246.3
2,821.2
48,412.6
2,959.0
61,420.3
358.7
5,822.5
241.3
3,977.3
..
..
Oriente crude
Total crude oil
5,358.7
91,111.3
5,857.4
92,032.6
5,161.8
89,406.0
5,113.7
106,624.2
Refined
products
6,209.7
115,190.7
5,947.5
117,700.5
5,345.8
109,073.1
6,165.2
148,526.6
11,568.4
206,302.0
11,804.8
209,733.1
10,507.6
198,479.1
11,278.9
255,150.8
Bauxite
companies
imports
7,054.0
84,696.7
7,198.9
93,914.6
8,105.6
112,807.3
7,490.6
114,120.2
Marketing
companies
imports
383.9
18,681.6
1,256.2
43,628.4
1,653.3
52,820.2
3,261.4
104,000.6
19,006.3
309,680.4
20,259.9
347,276.1
20,266.6
364,106.7
22,030.9
473,271.6
Total Petrojam
imports
Total
..
Not available.
Source:
Data provided by the Jamaican authorities.
(b)
Water
150.
Water in Jamaica is supplied by governmental bodies, in accordance with the National Water
Commission Act. The National Water Commission is the body in charge of the distribution of potable
water to urban areas. Distribution for agricultural purposes is under the responsibility of the National
Irrigation Commission. Rates charged are partly subsidized; they are not structured to recover capital
costs. The OUR is currently the body in charge of determining rates, taking into account the Water
Act's guideline that the Commission is not expected to make a profit from the supply of water. In
urban areas, the Commission practices price discrimination, with commercial users paying higher
rates than residential users.
151.
Irrigation water is viewed as an agricultural input, and not as a utility. Since the Government
considers water an important input for agricultural development, the rates charged for the supply of
water are heavily subsidized: recovery costs are, on average, about 60% of actual costs. The rates
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charged for irrigation water are uniform and hence the element of subsidy varies according to the
region and beneficiary. The Government intends to eliminate all subsidies for water supply by 2002.
152.
An estimated 284,168 megalitres of water were produced in 1997. Consumption of water
reached 98,208 megalitres in 1997;58 approximately 80% of the population has access to running
water. A number of projects are currently been carried out to improve water supply conditions. These
include the Lucea/Negril Water Supply Sub-Project, the Montego Bay Sewerage Improvement
Sub-Project, the Great River/Montego Bay Water Supply Programme, the Lluidas Valer Water
Supply Project, and the south Chapelton Water Supply Project.
58
The sizeable difference between production and consumption is due to leakage losses, theft and
underestimation of consumption (PIOJ (1998), p.13.2).
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Trade Policies Review
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