Caribbean calls for Amicable Solution in Rum Dispute

The Caribbean Community (CARICOM) Council for Trade and Economic Development (COTED) has reiterated the need for an amicable solution to the rum dispute with the United States.

The Guyana-based CARICOM Secretariat in a statement following the meeting of regional trade and economic ministers said the matter had been extensively discussed during the COTED meeting here last week.

According to the CARICOM statement, COTED “is determined to seek a satisfactory solution to the matter of trade-distorting subsidies being granted to USVI (United States Virgin Islands) and Puerto Rico rum producers that threaten the long-term viability of the rum industry in the Caribbean.

“Ministers agreed to explore all avenues to address this serious matter with the United States and other relevant parties,” the statement added.

Last December, COTED said the region continues to have “serious concerns” regarding the competitiveness of Caribbean rum in the United States.

"In addition to being the largest agriculture-based export industry in CARICOM, the rum industry is a substantial employer and a major contributor to foreign exchange earnings and government revenues," COTED said.

Last August, the UK-based Diageo reportedly warned that should CARICOM mount a complaint to the WTO over the alleged subsidies it would "re-evaluate" its Caribbean interests.

Diageo has denied 'flooding' the US market and has defended the US governments 100-year-old 'cover over' programme, which it said granted the USVI and Puerto Rico much-needed revenues to promote economic stability and fiscal autonomy.

In March, USVI Governor John de Jongh wrote regional leaders urging CARICOM governments to back down on their plans to take their ongoing rum dispute before the World Trade Organization (WTO).

de Jongh in his letter to the prime ministers of Antigua and Barbuda, St. Vincent and the Grenadines, Grenada, St. Kitts and Nevis, Dominica, and St. Lucia, urged them to avoid the WTO, claiming that this could lead to a prolonged legal case that could also be divisive and difficult to win.

He also warned that going to the WTO could “inflict damage on all of our economies”.

Earlier this year, Barbados Prime Minister Freundel Stuart said that rum producing countries had been holding high-level talks with the United States on resolving issues surrounding the rum industry in the region.

Stuart said the discussions, which were also attended by officials from the Dominican Republic, were necessary since, within recent time, subsidies had been given to rum producers in the USVI and Puerto Rico, much to the disadvantage of Caribbean rum producers, including Barbados.

He said the situation is so serious that Barbados is prepared to take its case to the WTO if a solution is not forthcoming.

 

(CMC)

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Date Posted

May 09 2013