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(from left) Mark Maloney, Managing Director of Preconco Limited; Dr. Frank Ward, Chairman of the Barbados Rum Committee; and Dr. David Estwick, Minister of Agriculture, discuss the design plans for the new molasses tanks.

 
   

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Rum industry could have WTO case

11/6/2012

By Amanda Nieves

The Caribbean rum industry could have a case at the World Trade Organisation (WTO) against the United States.

According to Chairman of the Barbados Rum Committee, Dr. Frank Ward, the subsidies for rum industries in the US territories of Puerto Rico and the US Virgin Islands are severely impacting Barbados’ own industry’s ability to thrive and survive.

Ward was speaking to the media at the Bridgetown Port yesterday where the Minister of Agriculture announced plans to build three new molasses tanks.

The Chairman explained that the Caribbean territories are currently paying on average US$200 a tonne for molasses, while the American territories in question, with the subsidies being given to their industries, are paying on average US$20 a tonne – a vast difference.

“We find that extremely difficult to compete [with] and it is a challenge at this point in time and we are appealing, not just the Barbados rum industry, but the CARIFORUM rum industry in general, to our governments to take this issue very seriously and to seek to have dialogue with the US government with a view to resolving what we feel is an iniquitous and pernicious use of subsidies for multinational spirit companies and their rum production,” Ward stated.

He further warned that if the situation is not dealt with immediately it could result in the demise of the rum industry not just in Barbados, but throughout the Caribbean.

Ward went on to say that if the situation cannot be resolved via negotiations between the CARIFORUM governments and the US government, the other option would be to take the case to the WTO.

“We have had so far three legal opinions of the legality at the WTO of these subsidies which are being given by US territories and all of them stated that there is a case to be made against the subsidies, and one of the opinions came from the advisory centre on WTO law which is a body set up to advise individual countries on issues related to WTO laws. So we have a clear case there. We now need the political will to take it forward and time is not on the side of the industry,” Ward stressed.

In response to the plight of the rum industry, Minister of Agriculture, Dr. David Estwick, said that CARICOM must decide to fight in the interest of all regional players in the rum industry.
As for what he will do personally, the Minister said that as soon as yesterday afternoon he would contact the relevant entities to explore the options.

“From the domestic perspective now, what I have to do from hearing the scenario painted here… I will now have to speak to the Private Sector Trade Team as well as the Ministry of Foreign Trade to see if there is a de minimis rule within WTO which relates to subsidies in regards to ten per cent of any total government support of any industry,” Estwick said.

The Minister maintained that effort will be made to negotiate with the offending party first, and failing that, the next option will be to file a case at the WTO against the United States.

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