Caribbean rum producing countries may have to approach the World Trade Organization (WTO) in its ongoing dispute with the United State over the provision of subsidies to rum producers in Puerto Rico and the United States Virgin Islands (USVI).
“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 (Caribbean Forum) rum industry in general, to our governments to take this issue very seriously,” said Chairman of the Barbados Rum Committee, Dr. Frank Ward.
He said the discussions with Washington should be with a “view to resolving what we feel is an iniquitous and pernicious use of subsidies for multinational spirit companies and their rum production”.
The West Indies Rum & Spirits Producers Association Inc. (WIRSPA) says while it has no dispute with rum producers in the United States it is nonetheless warning that subsidies given to US-based producers could damage Caribbean economies.
Earlier this year, the West Indies Rum & Spirits Producers Association Inc. (WIRSPA) said while it has no dispute with rum producers in the United States it is nonetheless warning that subsidies given to US-based producers could damage Caribbean economies.
WIRSPA said that it has been brought to its attention of a possible trade dispute at WTO between CARIFORUM countries and The United States over the compatibility of subsidies given to multinational spirits companies producing rum in the USVI and Puerto Rico under the US cover-over programme.
But WIRSPA, which describes itself as “the regional trade association for rum producers in the CARIFORUM group” said that the dispute is between the governments of these independent Caribbean countries and the United States and not between rum producers.
Ward told reporters that the subsidies for rum industries in the US territories were severely impacting Barbados’ own industry’s ability to thrive and survive.
He 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.
On the issue of approaching the WTO, Ward said there was still the option of resolving the matter through dialogue with Washington.
“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 said.
Agriculture Minister Dr. David Estwick said that the Caribbean Community (CARICOM) countries must decide to fight in the interest of all regional players in the rum industry.
“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 … rule within WTO which relates to subsidies in regards to 10 per cent of any total government support of any industry,” Estwick said.
Estwick said Barbados might eventually have no other choice but to file a case with the WTO against the US or suffer the death of its US$50 million-a-year rum export industry.
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