New rate of duty on the horizon for traffickers

Traffickers in Grenada have expressed fears that the two-year old Keith Mitchell-led administration is trying to wipe them out of business over a new piece of legislation that will affect their business.

Some of the traders called the Office of THE NEW TODAY to complain that the government is increasing the duties paid at Customs on their soft drink beverages from Trinidad and Tobago in order to protect the market for local businesses like the Grenada Bottling Company and the Grenada Breweries Limited.

The traffickers are adamant that the rate increase on some items imported from the Caribbean Community (CARICOM) is geared at getting them out of business.

However, the Ministry of Trade is insisting that consultations were held during the course of last week with traffickers and businesses that would be affected by the new rate.

According to Trade Minister, Oliver Joseph, Government is only moving to implement the measure, which was approved in 2008, by the Council for Trade and Economic Development (COTED).

Goods to be affected according to a list obtained from the Ministry of Trade are: aerated beverages, aerated waters; other waters, beer and malt at 70%; and chairs, other seats with wooden frames and other furniture of wood and upholstered fabric at 40%.

In an interview with THE NEW TODAY last week Wednesday, Minister Joseph acknowledged that the traffickers have some concerns but dismissed the idea that the impending fee is geared at getting rid of them.

He noted that the decision on the rate increase was taken “during the Thirty-Fifth Meeting of the Council for Trade and Economic Development – under Article 164 of the Revised Treaty of Chaguaramas,” establishing CARICOM.

Article 164 provides for the promotion of industrial development in Lesser Developed Countries (LCD’s) of CARICOM, which includes countries that are member states of the Organisation of Eastern Caribbean States (OECS) and Belize.

“All the other LDC’s have already implemented it [the rate] and “Grenada, in keeping with the decision of the Council has decided to bring it into effect,” asserted Minister Joseph who also hold the portfolio for Economic Development, Planning, Cooperatives and International Business.

“The local producers – the Grenada Bottling Co. Ltd., (GBC) and the Grenada Breweries Ltd., (GBL), they are very happy because they knew about the decision for a long time and were wondering why government was not introducing it when it was a decision of COTED. So they are happy to see government moving in that direction,” he added.

Under the CARICOM Single Market and Economy (CSME), goods produced in countries satisfying the rules of origin could be traded freely with no duty applied.

According to Minister Joseph, in order to bring this measure into effect LCD’s sought approval from COTED.

“…We had to go to the Council (COTED) to get permission,” Minister Joseph affirmed.
Additionally, he noted that the new measure also calls for the removal of trade licenses and the implementation of what is called “tariffication” or the imposing of a fee for the importation of goods.

“Under the rules of the World Trade Organisation (WTO)” countries can no longer use licenses because “license is quantitative restriction…so countries now have to remove the licenses and bring up the tariff,” as the “license is no longer required,” Minister Joseph explained.

“Everyone is free to import products from any part of the world now…you bring it in and you pay your duties and it is sold on the market,” he further explained, pointing out “before, they (the traffickers) would have to get a license and the quantity would be restricted.”

“This measure” Minister Joseph said “would go up to the end of 2018,” after which a review would be conducted by COTED, which would then decide whether to “renew or discontinue it.”

The Trade Minister, who was expected to meet with the vendors this week to address their concerns said, “Cabinet has already decided on the rates, so it would just have to be gazetted before taking effect.”

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