‘Whose bidding is Clarke doing?’

Opposition Leader Mark Golding has dismissed Finance Minister Dr Nigel Clarke’s claim that Jamaica would have been blacklisted had general consumption tax (GCT) not been removed from imported raw foodstuff.

Following his opening of the 2024-2025 Budget Debate in the House of Representatives on Tuesday of last week, Clarke said Jamaica’s years-long non-compliance by not removing the tax from all raw food items had placed it on the cusp of being sanctioned by the World Trade Organization (WTO).

However Golding, who was making his contribution to the Budget Debate yesterday afternoon, said the international trade body does not blacklist countries or unilaterally punish member states for non-compliance.

He said, instead, an aggrieved member state must first enter into consultations with a non-compliant member state to seek changes in the offending measure, or to win concessions before requesting the establishment of a panel to settle the dispute.

He said the panel will thereafter issue a report, which can subsequently be appealed before the WTO’s Appellate Body.

“The minister therefore needs to state whose bidding he is doing,” Golding said.

Further, he said in recent years, tensions in the United States-China relations and Russia-European Union sanctions resulting from the war in Ukraine have adversely affected the working of the WTO.

He said that, for some time now, the WTO has not had a functioning dispute settlement mechanism, since the US decided not to appoint members of the appellate body.

UNRESOLVED ISSUES

Golding said the recently concluded MC-13 meeting of trade ministers in Abu Dhabi has left a number of critical issues unresolved, including subsidies in agriculture and fisheries by developed countries, reforms in the dispute settlement mechanism, and other long-outstanding issues for the benefit of small and vulnerable economies like Jamaica.

“In this context, we must question why the minister finds it necessary to proceed down this path, instead of entering into negotiations with an aggrieved party, as provided for under the WTO rules,” Golding said.

At the same time, he called for clarity on the scope of the measure, questioning the specific raw food items which will see GCT being removed.

Golding said the removal of the GCT leaves local farmers very exposed to unfair competition from importers, who, he said, have little risk.

“We know that the rich countries in North America and Europe provide massive subsidies to their agricultural sector, distorting fair competition and giving food imports from those countries an advantage over Jamaican producers,” said Golding.

He said that, over the past 15 years, Jamaica’s food imports have seen a steady increase, reaching over US$1.4 billion in 2022.

In contrast, Golding argued, agricultural exports lagged far behind, at US$273 million in the same year. This, he noted as a growing trend, underscoring the vulnerability of local food production.

Golding said local farmers already contend with high overhead costs, including GCT on input farm supplies, which producers in other countries do not face.

Jamaican farmers also have other disadvantages, he said, including their small scale, reliance on rainfall rather than irrigation systems, and limited access to mechanisation and financial resources.

ALLOCATION TO FARMING OPERATIONS

Golding said that, in 2022, loans allocated to farming operations amounted to a mere $146.3 million.

“The removal of GCT on imported foodstuff will worsen this imbalance between locally produced and imported foods. This move is likely to adversely impact the sector and the livelihood of farmers, while undermining rural communities, who are the breadbasket of our country,” said Golding.

Further, he said the Jamaica Agricultural Society was not consulted before the measure was announced by Clarke.

He said this is “an egregious example of arrogant and uncaring governance”.

Golding is proposing the removal of GCT from farm input supplies, local food products, such as table eggs, and making the grant of import permits subject to parliamentary approval.

Golding wants import permits to be allocated by public auction and said until these protective measures are in place, GCT on imported foodstuff must be replaced with a stamp duty.

kimone.francis@gleanerjm.com