WT/TPR/S/42 Trade Policies Review
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II. TRADE AND INVESTMENT POLICY REGIME:  INSTITUTIONAL FRAMEWORK
(1) INSTITUTIONAL STRUCTURE OF TRADE AND INVESTMENT POLICY FORMULATION
(i) Form of Government
1. Jamaica, a member of the Commonwealth, is a constitutional monarchy.  The Head of State is
Queen Elizabeth II, represented by a Governor General.1  The Privy Council, which advises the
Governor General on special issues, has six members, who are appointed by the Governor Generalafter consultations with the Prime Minister.  Jamaica is a parliamentary democracy, with a bicameral
legislature, Senate and the House of Representatives, and party system, based on universal suffrage.
There are two major political parties:  the People's National Party (PNP) and the Jamaica Labour
Party (JLP).
2  The executive branch is headed by the Prime Minister, appointed by the
Governor General, who also appoints the leader of the opposition.  The Prime Minister leads aCabinet of at least 11 members
3, appointed by the Governor General from among members of
Parliament:  not more than four nor less than two Cabinet members are to be from the Senate and the
rest from the House of Representatives.  Each Ministry, which is administered by a Permanent
Secretary, and is divided into departments, may also have responsibility over agencies and statutory
bodies.  The executive branch also includes an Attorney General, the Government's main legaladviser.
2. In the hierarchy of domestic legislation, the Constitution is the supreme law and in principle
all other laws must conform to it; however, subsequent laws voted by Parliament may prevail over
some of its sections.
4  The Constitution may be amended by simple majority of both the House of
Representatives and the Senate, except the entrenched provisions, such as those dealing with
fundamental rights and the Privy Council's and Attorney General's functions, which require a two-
thirds majority for amendment;  certain entrenched provisions, such as those relating to themembership of the House of Representatives, require, additionally, majority support in a referendum.
International agreements, once ratified, must be implemented through domestic legislation to have
effect;  as part of Jamaican law they are then subject to the Constitution.  International agreements
that have not been incorporated into domestic law cannot be invoked before the Courts and have no
direct effect under Jamaican law.  Private individuals may not invoke WTO provisions directly beforenational courts.  The main trade-related laws are listed in Table II.1.
3. The legislative branch is comprised of the Senate and the House of Representatives, which,
together with the Monarch's representative (the Governor General), constitute the Jamaican
Parliament.  The Senate has 21 members:  13 chosen by the Prime Minister and eight by the leader of
the opposition, who are appointed by the Governor General.  The House of Representatives has60 members, each representing a constituency.  Parliament sits for a maximum of five years, before
general elections must be held.  However, Parlia ment may be dissolved, and a general election called
by the Governor General, on advice of the Prime Minister or if a majority of members of the House of
Representatives support a no-confidence motion against the Government.
                                                     
1Constitutionally, the Governor General is empowered to prorogue or dissolve Parliament.
2A third party, the National Democratic Movement (NDM) was created in October 1995.
3This is a constitutional lower limit;  there is no upper limit.
4Article 50 of the Constitution states that a law voted by Parliament, which turns out to be incompatible
with sections 13 to 26 of the Constitution, may prevail over these sections, provided it has been approved by amajority of at least two thirds in both the House of Representatives and the Senate.Jamaica WT/TPR/S/42
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Table II.1
Trade laws and regulations and main provisions
Law/Regulation Application/provision
The Constitution The Prime Minister holds the power to conclude international
treaties.
The Trade Act, 1955 Contains main trade regulations.
The Customs Act Basis for changing and collecting duties.
The Customs Tariff (Revision)(Amendment) Resolution, 1995 New import duty rates, according to Phase II of CET reduction
schedule.
Construed as one with The Customs Tariff (Revision) Resolution,
1972.
The Customs Duties (Anti-Dumping and Subsidies) Act,  1959 Regulates application of anti-dumping and countervailing measures,
as well as the use of subsidies. A new Act is in the process of being
drafted.
The Revenue Board Act Regulations regarding different trade issues, i.e. preshipment
inspection.
The Excise Duty Act
Export Industry (Encouragement) Act Income tax and tariff exemptions for exporters.
Jamaica Free Trade Zones Act Establishment of free-trade zones.
Patents Act
Trademarks Act Registration of trade marks
Copyrights  Act Copyright legislation
Standards Act Regulates standards and labelling.
Weights and Measures Act Regulates the hygienic condition and registration of premises
The Fair Trading Act, 1993 Regulates business practices to ensure competition and fair trading.
Source: WTO Secretariat based on information provided by the Jamaican authorities.
4. The law-making process starts with the introduction of bills (Draft Acts of Parliament).  Bills
may be introduced in either the House of Representatives or in the Senate, except for bills dealing
with finance ("Money Bills"), which must be introduced in the House.5  Members of Parliament and
Ministers have the right to introduce bills in the House, except that "Money Bills" must be introduced
by a Minister.  Ministers introduce "Public Bills", aimed at giving effect to policy measures designed
by a public sector body.  Representatives may introduce "Private Bills".  After its introduction in theHouse, a bill goes through several stages:  it is presented and published in a "first reading", debated in
a "second reading", examined and amended by a committee ("committee stage") 
6, presented by the
Speaker of the House ("report stage"), and accepted or rejected in a "third reading".  Once passed by
the House, the bill is placed before the Senate, where a similar procedure is followed.  After Senate
passage, the bill is presented to the Governor General for Royal Assent, where after it becomes an Act
of Parliament.
5. The administration of justice is vested in the Judicial Branch, which functions independently
in a manner based on English common law.  A Resident Magistrate is established in every parish to
deal with minor civil and criminal cases.  The Revenue Court, established in 1971, is a superior court
and deals with cases under the Customs Act, the Excise Duty Act, the Income Tax Act, the Valuation
Act, the Land Development Duty Act, the General Consumption Tax Act and the Transfer Tax Act.
The Supreme Court is composed of a Chief Justice, a Senior Judge and fourteen judges.  It adjudicates
                                                     
5According to Section 55 of the Constitution, they must be introduced by a Minister in representation
of the Governor General.
6The Committee may comprise the whole House or a "Select Committee".  No voting is done at
this stage.WT/TPR/S/42 Trade Policies Review
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both in criminal and civil cases and on interpretation of the Constitution.  The Supreme Court, which
deals with the more serious cases, is not the final appellate court:  the (Jamaican) Court of Appeal,
consisting of a President, the Chief Justice (who sits only in certain circumstances) and six judges, is
the first court of appeal;  the Judicial Committee of the Privy Council, is the final court of appeal and
sits in London, England with jurisdiction to hear and determine appeals in civil and criminal cases
from the Jamaican Court of Appeal.
(ii) Policy-making and administration
6. Under the Caribbean Community and Common Market (CARICOM) Agreement, it is
expected that Jamaica will increasingly coordinate all aspects of its trade policy, investment issues,
and foreign affairs, with its CARICOM partners.  Policies dealing with areas such as services and
restrictive business practices are also subject to coordination efforts.  Agricultural policies arecoordinated to some extent under the Regional Transformation Programme (RTP).  Greater
coordination is anticipated in the proposed CARICOM Single Market, as outlined in the Draft
Protocol on Agriculture.
7. The Ministry of Foreign Affairs and Foreign Trade deals with international trade issues, acts
as a coordinator in trade policy matters and is responsible for engaging in bilateral and multilateraltrade and investment negotiations.  It handles the coordination of WTO matters, deals with
CARICOM policy and negotiation issues, and with all matters related to the Free Trade Area of the
Americas (FTAA).
8. The Ministry of Industry and Investment  is, inter alia , in charge of trade facilitation, export
promotion, import and export licensing (via the Trade Board), industrial development, investment
incentives, state trading, CARICOM issues, and the administration of free zones (Table II.2).  Under
the Ministry of Industry and Investment, the Jama ica Promotion Corporation (JAMPRO) is in charge
of investment and export promotion policies, incl uding export financing.  The newly created Ministry
of Commerce and Technology deals with distributive trade, consumer affairs, anti-dumping,
competition policy, intellectual property protection (trade marks, marks and patents, and copyrights),
technical regulations and standards, and utilities regulation, telecommunications and technology.
Table II.2
Ministries and agencies dealing with trade
Government Ministry/Agency Area of responsibility
Ministry of Foreign Affairs and Foreign Trade International trade, foreign affairs, WTO coordination, CARICOM affairs, FTAA,
international air agreements, law of the sea.
Ministry of Finance and Planning Economic planning and monitoring, monetary policy, banking and currency
management, regulation of financial sector, bank inspection, insurance, finance,budget preparation, taxation, debt management, debt equity conversion, loansnegotiations, capital development fund, finance administration.
      - Customs Department Tariffs, other customs duties, import controls, customs valuation, customs
administration, etc.
      - Planning Institute of Jamaica (PIOJ) Economic planning and monitoring, including international trade matters and
negotiations.
Ministry of Industry and Investment Industrial development, commercial business development, incentives schemes, trade
facilitation, export promotion, development of micro industry, development of agro
industry, free zones, motion picture industry, marketing and advertising, investmentpromotion, the Trade Act, import and export licensing, Industrial and ProvidentSocieties Act,  motor vehicles policy.
         - Jamaica Promotions Corporation (JAMPRO) Investment promotion, export promotion.
Table II.2 (cont'd)Jamaica WT/TPR/S/42
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Government Ministry/Agency Area of responsibility
Ministry of Commerce and Technology Distributive trade, CARICOM trade, consumer affairs, marks, trade marks, patents,
copyright, merchandise trade, technology issues, anti-dumping, utilities regulation,
telecommunications.
         - Fair Trading Commission Fair Competition Act, restrictive trade practices, Registration of Companies Act,
Business Names Act.
         - Bureau of Standards Standards, weights and measures.
Ministry of Agriculture Agricultural research, product inspection, agricultural commodities, sugar industry,
banana industry, livestock
         - Veterinary Board Veterinary services, pimento marketing, fisheries, forests and plant protection.
Ministry of Mining and Energy Geological survey, geology, bauxite marketing and joint ventures, minerals and
quarries.
Ministry of Environment and Housing Environment, marine pollution, wildlife protection.
Office of the Prime Minister Strategic policy planning and review, economic development policy coordination,
social development policy coordination, land policy, science  and technology,
privatization, information, broadcasting.
Source: Information provided by the Jamaican authorities.
9. The Ministry of Finance and Planning is responsible for tariff policy, for all fiscal policy
issues, including administration of the Revenue Board Act, and has ultimate authority over monetary
and exchange rate policy.  It is also responsible for policy and regulations governing financial and
professional services, and administers bilateral investment treaties that contain incentive schemes.Within the Ministry, the Customs Department administers the Customs and General Consumption Tax
Acts.
10. Other Ministries involved in foreign trade include the Ministries of Agriculture;  Mining and
Energy;  and Environment and Housing.  The Office of the Prime Minister is responsible for tourism.
11. The Bank of Jamaica is in charge of monetary and exchange rate policy, and supervises the
financial sector;  it reports to the Ministry of Finance, which retains ultimate responsibility.
(iii) Advisory and review bodies
12. The Trade Coordination and Policy Committee plays an advisory role in matters related to
trade policy formulation and implementation.  It also assists in reviewing the arrangements linked to
Jamaica's export trade, as well as in assessing whether full advantage is taken of prevailing marketaccess opportunities.  The Committee, which meets monthly, is chaired by the Minister of State in the
Ministry of Foreign Affairs and Foreign Trade and has representatives from both the private and the
public sectors.
7
                                                     
7The private sector institutions and sectoral associa tions that participate in the Trade Coordination and
Policy Committee include:  the Textiles and Apparel Institute, the Jamaica Agricultural Society, the Jamaica
Manufacturers Association, the Jamaica Chamber of Commerce, the Shipping Association of Jamaica, the
Agri-business Council of Jamaica, the Private Sector Organization of Jamaica and the Jamaica Confederation ofTrade Unions.  The government bodies participating in the Committee are:  the Ministry of Foreign Affairs and(continued …)WT/TPR/S/42 Trade Policies Review
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(2) TRADE AND INVESTMENT POLICY OBJECTIVES
13. The National Industrial Policy for the period 1996 to 2010 was formulated by the Planning
Institute of Jamaica and is aimed at improving the efficiency of the Jamaican economy and the quality
of life, including environmental upgrading.  Its go als include annual GDP growth rates of between 6%
and 7.5%;  reducing unemployment from the current rate of 16% to 9%;  and tripling the value of
exports.  The Plan targets five strategic clusters:  tourism, shipping and berthing, agro-processing,apparel, and bauxite and alumina, to be promoted through investment in infrastructure, technology,
and machinery and equipment.  It highlights the n eed to revise the current system of incentives
(Chapter III(3)(iii)) in  the light of Jamaica's rights and obligations under the WTO, and to make the
system compatible with the incentive schemes of other CARICOM countries.
8
14. The Government's main trade policy objective is to develop a broader exports base, less
dependent on traditional exports.  The authorities are concerned about the competitiveness of certain
Jamaican products, particularly clothing, into the U.S. market, especially vis-à-vis Mexico.9  For this
reason, Jamaica is seeking NAFTA-parity treatment.  A broader policy goal is the accession of
CARICOM to wider regional integration schemes like the NAFTA, or the Free Trade Area of the
Americas (FTAA).10  Another trade policy concern is the future of the Lomé Agreement after the
expiry of Lomé IV in 2000:  although the Government is aware that there is decreasing international
support for preferential arrangements, it is worried that its elimination might widen Jamaica's trade
deficit.
(3) TRADE RELATIONS
(i) World Trade Organization
15. Prior to independence, Jamaica applied GATT de facto as member of the metropolitan
territory of the United Kingdom.  Following independence, on 6 August 1962, Jamaica became a
GATT contracting party on 31 December 1963, with its obligations under GATT retroactive to the
date of independence.  Jamaica became a WTO Member on 9 March 1995 and applies at least MFN
treatment to all its trading partners.
16. Jamaica is in the process of incorporating the results of the Uruguay Round into domestic
legislation where necessary.  An example is the introduction of an Anti-dumping Act, which willincorporate WTO legislation regarding anti-dumping measures.  New Patent and Trademark Acts are
being drafted, and the Copyright Act is in pr ocess of amendment to conform with the WTO
Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Under the GATS,
Jamaica made initial commitments on tourism, business (including professional), educational, health
related, recreational, transport and financial services, and participated, with offers, in the continuednegotiations on telecommunications and financial services.  Table II.3 presents the status of Jamaica's
notifications to the WTO.
                                                     
(… continued)
Foreign Trade, the Ministry of Agriculture, the Ministry  of Mining and Energy, the Ministry of Industry and
Investment, the Ministry of Commerce and Technology, the Ministry of Finance and Planning, and the AttorneyGeneral's Department.
8National Industrial Policy, pp. 58-59
9Reflected in a decline of exports of apparel from Jamaica in 1996.  This result could also have been
caused, however, by rising labour costs, the high cost of capital and a real currency appreciation.
10Planning Institute of Jamaica (1997), p. 3.4.Jamaica WT/TPR/S/42
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Table II.3
Notifications to the WTO, as at 1 June 1998
Requirement Periodicity Document symbol Comments
Agreement on Implementation of  Art.
VI of the GATT 1994
Art. 18.5Art. 16.5once G/ADP/N/1/JAM/1, 16.08.95 New Customs Act is being
drafted. 1959 Customs Actcurrently applied.
Competent authority for anti-
dumping investigations is Anti-Dumping Advisory Board
G/ADP/N/2/Add.1, 12.07.95 No action taken
G/ADP/N/4/Add.1/Rev.3, 25.07.96 No action taken during
1 January – 30 June 1995
G/ADP/N/9/Add.1/Rev.1, 25.07.96 No action taken during 1 July -
31 December 1995Art. 16.4 semi-annual
G/ADP/N/35/Add.1/Rev.1, 27.05.98 No action taken during 1 July -
31 December 1997
Agreement on Textiles and Clothing
Art. 3.1Art: 3.2 (b)once G/TMB/N/69 24.02.95
G/TMB/N/69/Add.1 27.11.95
G/TMB/N/69/Add.2 23.01.96
G/TMB/N/146 23.01.96Remaining restriction, quotas
and minimum import prices
abolished from 1.1.96
Art. 6.1 once G/TMB/N/33  6.03.96 Retains right to use transitional
safeguards
Art. 6.9 once G/TMB/N/190a, 11.10.96 Memorandum of Understanding
between the US and Jamaica
regarding export restrictions of
cotton and man-made fibrepyjamas and nightwear
Article XVII:4(a) and Understanding onthe Interpretation of Art. XVIIannual  (30.6) G/STR/N/1/JAM, 5.07.96 Provides information on
organizations with sole trading
privileges
G/STR/N/3/JAM, 05.05.98 Updates information
Agreement on Implementation of Article
VII of the GATT 1994
Art.20.1Art.20.2
Art.4Art.5.2ad hoc G/VAL/2/Rev.1, 13.10.95 Article 20.1 (delayed
application of the provisions ofthe Agreement), Article 20.2
(delayed application of the
computed value method),paragraph 2 of Annex III
(reservation concerning
minimum values), paragraph 3
of Annex III (reservation
concerning reversal ofsequential order of Articles 5
and 6), and paragraph 4 of
Annex III (reservationconcerning application of
Article 5.2, whether or not the
importer so requests).
Agreement on Import Licensing
Procedures  Art. 8.2 (b)once G/LIC/N/1/JAM/1, 11.7.96 Laws and regulations (Trade
Act 1955, Section 11)
Art. 7.3 ad hoc Replies to questions
Agreement on Subsidies andCountervailing Measures
Art. 32.6
Art. 25.12once
onceG/SCM//N/1/JAM/1, 16.08.95
G/SCM/N/18/Add.1, 05.08.96New Customs Act is being
drafted. 1959 Customs Act
currently applied.
Competent authority forsubsidies and countervailing
duty  investigations is Anti-
Dumping Advisory Board
Art. 25.1 semi-annual G/SCM/N/4/Add.1, 14.07.95 No countervailing actions
during 1 July -
31 December 1994
Table II.3 (cont'd)WT/TPR/S/42 Trade Policies Review
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Requirement Periodicity Document symbol Comments
Agreement on Sanitary and
Phytosanitary Measuresonce G/SPS/N/JAM/1, 12.07.96 Regulations on standards
Agreement on Rules of Origin once G/RO/N/4 Jamaica maintains no non-
preferential rules  of origin.
Art.5.1 and Par.4 of Annex II 7.08.95
Agreement on Preshipment InspectionArt.5once G/PSI/N/1/Add.4,  9.10.96 Regulation on PSI. Section 19
of the Revenue Board Act andSection 257 of the Customs Act
Agreement on Technical Barriers toTradeonce G/TBT/CS/N/38 Acceptance of the WTO TBT
Code of Good Practice
29.04.96
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif. 96.216, 12.07.96 Standard Specification for Jerk
Seasoning
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.97.84 12.03.97 Standard Specification for Gin
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.97.85 12.03.97 Standard Specification for Rum
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/N otif.97.86 12.03.97 Amendment for Standard
Specification for Appliance
Protection
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.97.87 12.03.97 Standard Specification for
Brewery Products
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.97.88 12.03.97 Labelling of Paper Tissue
Products
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.97.89 12.03.97 Standard Specification for
Energy Labelling of Appliancesand Products
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif .97.103 26.03.97 Standard Specification for the
Labelling of Cigarette Packages
Art.2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif .97.178 29.04.97 Standard Specification for the
Labelling of Retail Packages of
Pesticides
Art. 10.6 once G/TBT/Notif.98.208 24.04.98 Standard Specification for the
Labelling of Textiles and
Related Products
Art. 2.9.2, 2.10.1, 5.6.2, 5.7.1 once G/TBT/Notif.98.265 Standard Specification for Rice
Agreement on Agriculture
Art. 10, 18.2 once G/AG/N/JAM/1 01.05.98 Jamaica did not apply export
subsidies and did not supplyfood aid during 1995, 1996 and
1997
Agreement on Safeguards
Art. 12.6 once G/SG/N/JAM/1 14.05.98 Jamaica does not have any laws,
regulations or administrativeprocedures relating to safeguard
measures
Agreement on Trade-Related Intellectualproperty
Art. 65.2 once Transition period for developing
countries
Art. 70.8, 70.9 Patent protection for
pharmaceutical products
a The recision of the restraint measure agreed between Jamaica and the United States was notified by the United States
(G/TMB/N/191/Add.1, 31 October 1996).
Source: WTO Secretariat.Jamaica WT/TPR/S/42
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(ii) Regional and bilateral agreements
(a) CARICOM
17. Jamaica is a founding member of the Caribbean Community and Common Market
(CARICOM).  CARICOM is the result of the Treaty Establishing the Caribbean Community (Treaty
of Chaguaramas), which was signed on 4 July 1973, and entered into force on 1 August 1973, as the
successor to the Caribbean Free-Trade Area Agreement (CARIFTA).11  CARICOM has 15 members12
and three areas of activity:  economic integration  (the Caribbean Common Market);  cooperation in
non-economic areas and operation of certain common services;  and coordination of foreign trade
policies.  CARICOM was notified under GATT Article XXIV as an interim agreement for the
formation of a customs union;  it was reviewed by a GATT Working Party, which adopted its report
on 2 March 1977.13  The initial stage of the Agreement lasted almost 18 years during which
CARICOM was a preferential trading area first a nd, subsequently, a free-trade area.  This lengthy
transition period was covered by special provisions in the Agreement.  The move towards integration
was given a boost in 1991 with the endorsement of the Caribbean Single Market and Economy, which
is expected to result in the free movement of goods, services, persons and capital.  The CARICOM
Treaty was amended in 1997 with the signature of the Protocol Amending the Treaty Establishing theCaribbean Community, Protocol I.  The Protocol restructures the Organs and Institutions of
CARICOM to deepen the process of integration, a nd sets the foundations for the Single Market and
Economy.  Protocol I has been ratified by some CARICOM countries, and is currently applied
provisionally.  Protocol II, concerning the right of establishment, provision of services and movement
of capital, was signed in July 1997.  Jamaican national legislation is consistent with Protocol II, with
no amendments needed.
18. The Conference of Heads of Government is the main policy-formulation and decision-making
body of the Community, and is its final authority.  The Conference is also responsible for the
conclusion of treaties and agreements with international organizations and with States.  Decisions are
taken by consensus.  The Bureau of the Conference of Heads of Government was created in
October 1992 to initiate proposals and secure prompt  implementation of CARICOM decisions.  The
Bureau is composed of the current, outgoing and ingoing Chairmen of the Conference, andCARICOM's Secretary General.
19. The Community's second main body is its Council of Ministers, which is responsible for
decisions related to the functioning of the economy and the single market.
14  The two principal
Community bodies are assisted by:  the Counci l for Trade and Economic Development (COTED),
which deals with trade and economic development issues;  the Council for Foreign and Community
                                                     
11CARIFTA was founded in 1968 and notified to GATT under Article XXIV.  Jamaica was not among
the founding members, which were: Antigua and Barbuda, Barbados, Guyana and Trinidad and Tobago (WTO,Analytical Index, pp. 860).
12The founding members were: Barbados, Guyana, Jamaica, and Trinidad and Tobago.  The Bahamas,
Belize, Dominica, Grenada, Montserrat, St. Lucia,  and St. Vincent acceded to the Treaty establishing
CARICOM in May 1974;  Antigua and Barbuda, and St. Kitts and Nevis joined in July 1974.  The first non-English speaking country to join CARICOM was Suriname, which was followed by Haiti, in July 1997.  TheBahamas is a member of the Caribbean Community, but not of the Common Market (WTO, Analytical Index,Article XXIV, pp. 862 and 870;  and Inter American Development Bank (IADB), Periodic Note on Integration,July 1997).
13BISD 24S/68.
14The Community Council of Ministers replaced the Common Market Council.  It held its first meeting
in Nassau, the Bahamas, on 9-10 February 1998.WT/TPR/S/42 Trade Policies Review
Page 28
Relations (COFCOR);  the Council for Human and Social Development (COHSAD);  and the Council
for Finance and Planning (COFAP), which deals with economic policy coordination and financial and
monetary integration issues.  Additionally, the Community has several institutions responsible for the
coordination of policies in specific sectors, including agriculture, education and health.  The
Secretariat is the main administrative body of the Community;  its services meetings, carries out
studies on economic matters, and assists the members in the fulfilment of their commitments.  TheSecretary General is appointed by the Conference, on the recommendation of the Council, for a period
of no more than five years, and may be reappointed for an additional five-year term.  The Secretariat
is based in Georgetown, Guyana.
20. CARICOM began operations as a Customs Union on 1 January 1991 when the Common
External Tariff (CET) went into effect.  Under the CET, imports from CARICOM States, or thosepartially produced from extra-regional materials and transformed in a CARICOM State, are exempt
from tariffs;  imports from third countries are subject to import duties, which currently range to 25%,
or 30% for industrial products (according to the Phase of implementation of the CET in each
individual country) and to 40% for agricultural g oods.  The CET Schedule sets a gradual reduction for
ceiling rates, to be implemented between 1995 and 1998.
15  By 1 January 1998 the ceiling rate on
imports of industrial goods was to be lowered to 20% (Phase IV) (Table II.4).16
Table II.4
CARICOM tariff reduction programme
Phase Date of implementation Tariff ceiling for industrial goods (%)
Phase I 1 January 1993 - 31 December 1994 30 – 35
Phase II 1 January 1995 - 31 December 1996 25 – 30
Phase III 1 January - 31 December 1997 20 – 25
Phase IV 1 January 1998 20
Source: CARICOM Secretariat, Common External Tariff, 1 January 1998.
21. The CET applies in principle to all extra-CARICOM imports.  However, Article 32 of the
CARICOM Treaty foresees the reduction or suspension of the CET in cases where a good is not
produced in sufficient quantity within CARICOM to meet demand.  Furthermore, national exceptions
to the CET are allowed, including for Lists A, B, C and D (Chapter III (2)).
22. Article 13:1 of the Treaty of Chaguaramas al lows CARICOM members to apply quantitative
restrictions or duties to products included in Annex I of the Treaty.17  Safeguard measures may be
applied for a period of 18 months, with prior Council authorization, when imports from other
members cause a substantial drop in the demand of a domestically produced good.  Affected membersmust be compensated.  Additionally, the Community Council is entitled, under Article 56 of the
Treaty, to temporarily suspend the application of th e CET or of any measure of internal liberalization
                                                     
15A 35% ceiling rate for industrial products and 40% for agricultural goods was set under a Special
Conference held in October 1992 and applied since January 1993.
16As of 1 January 1998, Phase II had been implemented by all members, with the exception of Antigua
and Barbuda, which was to move directly to Phase III.  Phase III had been implemented by Barbados, Grenada,
St.Vincent and the Grenadines, Suriname (with four exceptions), and Trinidad and Tobago.
17Organization of American States (1997).Jamaica WT/TPR/S/42
Page 29
if it considers this to be necessary to develop a certain industry in a member State.18  Export subsidies
are not allowed, in principle, with the exception of subsidies on certain agricultural products.  Export
taxes are also prohibited.  No incentives for exports to other countries are allowed, and under
Protocol IV, currently under negotiation, members may refuse to grant preferential access to imports
that benefit from tax breaks in another member State.  There has been an attempt to harmonize
standards across CARICOM members;  there are currently regional standards for 72 products.19
Rules of origin requirements must be me t for products to enjoy CARICOM treatment
(Chapter III(2)(iii)).  There are no provisions preventing double taxation among the CARICOM
States, but eleven States, including Jamaica, have signed the Intra-Regional Double Taxation
Agreement.
23. Trade among CARICOM countries has been limited by an inadequate infrastructure.  Efforts
to enhance trade, encourage integration and pool capital have been made since 1991.  These include
the implementation, in April that year, of a system of securities cross-trading among Jamaica,
Trinidad and Tobago, and Barbados, and the establishment of a Regime for CARICOM Enterprises
(CER).  The CER was aimed at drawing resources from any participating State to an enterprise of
another State in order to integrate production and capital at a regional level and develop strongermultinational enterprises.  This regime is no longer in operation.
24. Dispute settlement procedures are defined in Articles 11 and 12 of the Treaty.  Members are
encouraged to find bilateral solutions to their disputes.  If this is not possible, the dispute is brought to
the Council for Trade and Economic Development, which then calls for the setting of a Tribunal
composed of three referees.  The plaintiff and the defendant are allowed to appoint one referee each
from a roster maintained by CARICOM's Secretary General.  The two referees choose a third, who
acts as President.  The Tribunal studies the dispute and informs the Council of its conclusions.  There
is no time limit.  The Council, through majority vote, may make recommendations to the member
affected by the Tribunal's conclusions.  If the member does not comply with the recommendations, the
Council may, by majority vote, authorize any member  to suspend its obligations with regard to the
non-complying member.  Under Article 12.9, CARICOM members may not use any other dispute
settlement mechanism, including that of the WTO, for trade disputes among themselves.
20
25. Under the CARICOM Single Market and Economy (CSME), members are expected to
coordinate their commercial relations with third countries.  Although individual members are in
principle entitled to conduct an independent trade policy, the CSME is geared towards achieving
harmonization.  Members are expected to coordinate and harmonize their exchange rate and monetary
policies, as well as tax and incentives regimes.  The ultimate goal is to achieve economicconvergence, which may lead to the adoption of a common currency.  The main aspects of the CSME
are expected to be fully implemented by December 1999.
26. Under Protocol II for the consolidation of the CSME modifications were made to the
CARICOM Treaty to remove restrictions on the right of establishment, the provision of services, and
the movement of capital.
 21  Regarding services, Protocol II includes standstill, national treatment and
rollback provisions.  Members are given a year from the date of entry into force of the Protocol, to
                                                     
18Additionally, Guyana maintains a special sectoral safeguard on the importation of oil products from
the Caribbean Common Market.
19Organization of American States (1997).
20Organization of American Sates (1997).
21Under the Treaty of Chaguaramas, there was no engagement regarding the free movement of natural
persons.WT/TPR/S/42 Trade Policies Review
Page 30
present a programme for the removal of existing restrictions on the provision of services.  Although
banking and insurance are included in the commitments, Protocol II allows for the exclusion of
certain financial services from national treatment.
27. Prior to Protocol II, CARICOM had no specific  engagement regarding services, except that
any measure taken by a member had to be notified to the Council for Trade and Economic
Development, and could not be more restrictive than existing legislation.  Under Protocol II, capitalmovements are subject to national and MFN treatment and to standstill and rollback commitments;
the coordination of foreign exchange policies is encouraged.  The goal is to achieve total freedom of
capital flows, as well as currency convertibility in all member States.
28. Protocol II also introduces changes to the Tr eaty of Chaguaramas to allow members to adopt
safeguard measures for balance-of-payments purposes.
22  Safeguards for balance-of-payments
purposes must be non-discriminatory, last not more than 18 months, and may include quantitative
restrictions on imports, restrictions on services, restrictions on capital movement and on payments and
transfers needed for the provision of services.  Th ey must be notified to the Council for Finance and
Planning and to the Council for Trade and Economic Development.  The balance-of-payments
situation of the member concerned will be assessed through periodic consultations.  All findingsrelated to foreign exchange, monetary reserves a nd balance of payments provided by the CARICOM
Committee of Central Bank Governors, must be  accepted.  The Protocol also introduces the
possibility of adopting safeguards when difficulties arise for the exercise of rights under the Treaty.
Safeguards may be applied to resolve the difficulties in a specific sector or in a region.  In line with
the WTO, the Protocol introduces security exceptions and special provisions for less-developed
countries, for whom some of the obligations under the CARICOM Treaty may be waived.
(b) Bilateral agreements between  CARICOM and other countries
29. CARICOM has signed preferential bilateral trade agreements with Colombia and Venezuela.
Additionally, CARICOM intends to negotiate bilateral trade agreements with the Andean Community,
the Dominican Republic and with the Central American Common Market.
30. The CARICOM-Colombia Agreement on Trade, Economic and Technical Cooperation was
signed on 24 July 1994 and is currently being renegotiated.  Colombia granted unilateral preferentialaccess to its market for four years to a group of products originating in CARICOM;  after this period
the preferential trade scheme is to become reciprocal, taking into account development differences.
Only the four more developed countries (MDCs) of CARICOM, namely Barbados, Guyana, Jamaica,
and Trinidad and Tobago, will be required to grant reciprocal treatment to Colombia.  Colombia
identified a list of 227 products (Annex I of th e Agreement) for which imports from the CARICOM
would be duty free as of 1 January 1995, the date of the official entry into force of the Agreement.
23
Additionally, there would a phased, three-year tariff reduction for a list of 207 products (Annex II),starting from 1 January 1995.  Finally, a third group of products, included in Annex III, would qualify
for preferential treatment in the fourth year afte r the entry into force of the Agreement, subject to
negotiations between the parties.
24  Colombian imports from CARICOM, other than those listed in
Annexes I, II and III,  receive MFN  treatment.  Non-tariff barriers are to be phased out.  It was
                                                     
22Article 28 of the Caribbean Common Market Annex is replaced by Article 37c(bis), which draws on
the WTO Understanding on Balance-of-Payments Provisions of the GATT 1994.
23The share of preferential imports in Colombia's total imports from CARICOM was 73% in 1995
(WTO 1996).
24Goods in these Annexes include processed foods, fresh produce, furniture, handicrafts and garments.Jamaica WT/TPR/S/42
Page 31
initially agreed that duties on a group of Colombian exports to Jamaica and the three other MDCs
would be eliminated as of 1 January 1998.  In December 1997, CARICOM and Colombia agreed to
postpone this part of the Agreement to 1 June 1998.  During this period the list of Colombian products
to be granted preferential access to the four CARICOM countries would be decided.  The phased
reduction of duties on products included in the negotiated list, other than those subject to the
elimination of tariffs on 1 June 1998, will take place over a four-year period commencing1 January 1999.
31. The scope of the Agreement with Colombia goes beyond merchandise trade and includes
provisions regarding standards, services, trade financing, transport, and technical cooperation in
environmental policies, agricultural development and research.  There are no specific commitments,
however, in these areas.  The Agreement includes a safeguard clause in case of injury or threat ofinjury to domestic production, or for balance-of-payments reasons;  there is also provisions for the
Parties to apply anti-dumping or countervailing measures.  However, disputes regarding subsidies and
anti-dumping are to be taken to the WTO.  A CARICOM-Colombia Joint Council on Trade,
Economic and Business Cooperation is responsible for the administration of the Agreement.
32. The CARICOM-Venezuela Agreement on Trade and Investment was signed in October 1992
and entered into force on 1 January 1993.  It is a one-way preferential agreement aimed at promoting
CARICOM exports to Venezuela, by giving some products duty-free access or phased reductions in
tariffs.  The phased reductions were concluded on 1 January 1996, and currently CARICOM products
included in Annexes I and II of the Agreement receive duty-free treatment.
25  Other CARICOM
exports enter Venezuela under MFN conditions.  Any change in CARICOM's tariff structure is
subject to consultations with Venezuela.  The Agreement is also aimed at promoting investment in the
region and facilitating the creation of joint ventures.26  A safeguard clause may be applied by
Venezuela in case of injury to domestic production or in case of balance-of-payments difficulties.
Safeguard measures may be applied for no longer than one year and must be approved by the
CARICOM/Venezuela Joint Council on Trade and Inve stment.  The signatories are allowed to apply
measures to counter unfair trade practices, such as export and domestic subsidies and dumping.
Disputes may be resolved through the use of th e Joint Council, whose recommendations are not
binding.
(c) Caribbean Basin Initiative II (CBI II)
33. The Caribbean Basin Initiative (CBI) was initiated in 1984 by the United States under the
Caribbean Basin Economic Recovery Act (CBERA) to provide duty-free entry to products from the
Caribbean and Central America.27  The programme was revised in 1990 (CBI II) and was given an
indefinite duration, becoming a permanent part of U.S. law.28  CBI II currently benefits 24 countries in
the region, including Jamaica.  It is estimated that some 18.5% of imports from the area enter the
                                                     
25Goods in these Annexes include fresh produce, confectionery, cosmetics, jams and jellies, medicines,
wooden furniture, horticultural products, spices, processed foods and toilet preparations.
26This is to be implemented through bilateral treaties between Venezuela and each CARICOM
member.
27A waiver to its obligations under Article I of the GATT was granted to the United States by the
CONTRACTING PARTIES of the GATT 1947 on 15 February 1985 for the period 1 January 1984 to30 September 1995 to implement the Caribbean Basin Economic Recovery Act, under which CBI wasestablished.  A request for renewal of the waiver for ten years was presented by the United States to the WTO
Council for Trade in Goods on 13 September 1995.  It was approved by the Council on 26 September 1995
(G/C/M/5).
28WTO document G/L/25, 15 September 1995.WT/TPR/S/42 Trade Policies Review
Page 32
United States under the CBI.29  Other features of the CBI II include economic assistance to exporters
from beneficiary countries, which allows them to reduce costs with respect to other exporters.
34. A wide range of Jamaican products are eligible for benefits under CBI II.  They must,
however, satisfy strict origin criteria.  Goods must  be either manufactured, produced or grown in a
CBI beneficiary country, or, if this is not the case, substantially transformed in one.  In this case, at
least 35% of the cost of the merchandise must be attributable to direct processing in one or morecountries qualifying for CBI benefits.
30  Materials imported from the United States and used in the
production of the exported good, may count for up to 20 percentage points of the 35% threshold.
Origin is also conferred on goods manufactured from material imported from Puerto Rico and the
U.S. Virgin Islands.  In this case, imports may account for the whole of the 35% requirement.
Articles assembled in Jamaica (or any other beneficiary) containing 100% U.S. components aregranted duty-free access to the United States, except for textiles and apparel, which are subject to duty
on the value added in Jamaica.  The goods must be exported directly from Jamaica to the United
States.
35. A number of products are excluded from duty-free treatment under CBI II.  These are:  textile
and apparel items subject to textile agreements;  footwear, handbags, luggage, leather wearingapparel, work gloves, and flat goods;  tuna prepared or preserved in airtight containers;  petroleum or
petroleum products;  sugar syrup and molasses;  and watches and watch parts.
36. A bill to temporarily give certain products from CBI countries similar access to that given to
Mexico under NAFTA was defeated in November 1997.  The proposal would have granted imports of
textiles and apparel meeting NAFTA rules of origi n, or manufactured in a CBI country with material
cut or manufactured in the United States,  duty-free and quota-free access to the U.S. market.
37. As a CBI country, Jamaica benefits from the "Caribbean Basin Special Access Programme for
Apparel:  TSUS 807A".  This is a quota system th at allows for a guaranteed access level to the
United States for a few categories of apparel items cut in the United States or made from U.S. fabric
but assembled in Jamaica or other CBI States.
 31  Allowed assembly operations include sewing,
gluing, laminating, riveting and soldering.  The programme also allows entry of apparel items
manufactured in CBI countries but not cut in the United States or made from U.S. fabric.  In this case,"designated consultation levels" are negotiated.  Under the system, each apparel item enjoys a
"minimum guaranteed access" or "trigger point" each year;  maximum levels are subject to annual
item-by-item negotiations.  Items cut in the United States or made from U.S. fabric are allowed higher
guaranteed access levels and are subject to a special certification system.  There are two other access
levels, which fall under the standard category:  one for items made from a mix of U.S. and non-U.S.inputs, and another one for items made only from non-U.S. inputs.
                                                     
29WTO document G/L/25. The reference year is 1994, in which U.S. imports from CBI beneficiaries
entering under the scheme totalled US$2.1 billion, out of total U.S. imports from the area of US$11.5 billion.
30Included in the cost calculation are: material inputs  from any beneficiary country;  direct labour costs,
and depreciation of machinery and equipment;  engineering,  design, research and development costs;  inspection
and testing costs.  Excluded from the cost calculation are: insurance, advertising, administrative salaries,
business profits, commissions, and any other costs not related directly to the development or production of aspecific product.
31Material must be purchased in the United States by the importer and cut into components there.  The
components are then shipped for assembly in the CBI country and subsequent re-import into the United Statesunder TSUS item 807.001.Jamaica WT/TPR/S/42
Page 33
(d) Lomé Convention
38. Jamaica is a beneficiary of the Lomé IV Convention, which was signed on 15 December 1989
for a period of ten years, and amended following the mid-term review process concluded in 1995.32
Products originating in Jamaica are generally granted duty-free access to the EU (manufactures) orconditions more advantageous than MFN treatment.  Rules of origin for preferential entry to the EU
under Lomé IV stipulate that agricultural goods be wholly produced in an African, Caribbean orPacific (ACP) country and that at least 50% of th e value added of manufactured goods originate in an
ACP country or jointly in an ACP and EU country.
33
39. Jamaica and other Caribbean countries may benefit from some changes in rules of origin
requirements agreed at the mid-term review of Lomé IV in 1995.  These now allow for cumulation
with Colombia, Costa Rica, Cuba, El Salvador, Guatemala, Honduras, Nicaragua, Panama andVenezuela.  The possibility of cumulation with Colo mbia and Venezuela is particularly interesting for
Jamaica and other CARICOM countries as they have free-trade agreements with those two countries;
this may encourage joint ventures and combined production schemes.  Certain products from ACP
countries may benefit from Stabex, an ECU 1.8 billion fund for the stabilization of export earnings
from certain agricultural commodities, in case of price or output fluctuation.  Products of interest toJamaica include:  cocoa beans, fresh bananas and mangoes.  Jamaica, as an exporter of mining
products, may make use of SYSMIN (Special Financing Facility), to stabilize incomes of mining-
exporting countries in case of production disruptions.
34
40. Other features of the Lomé Convention that c oncern Jamaican include the Rum Protocol, the
Sugar Protocol and the Banana Protocol.  The Rum Protocol, gives duty-free access to the EU to a
certain quantity of rum every year.  Through the Suga r Protocol, annual export quotas are agreed for
ACP producers.  Jamaica particularly benefits from the special undertakings in sugar, for which theEU pays guaranteed prices.  The Banana Protocol gives preferential access to the EU to bananas
produced in ACP countries.  Some aspects of the EU Banana Import Regime have been found
incompatible with the EU's obligations under WTO (section (4)).
41. In 1996, Jamaica was allocated ECU 60 million under the Second Financial Protocol of the
Lomé Convention IV for the period 1996-2000, a 30% increase with respect to the 1990-95 period.The funds are to be used in programmes for poverty alleviation and economic infrastructure, as well
for a Private Sector Development Programme.
35
(e) CARIBCAN
42. Jamaica enjoys preferential access to the Canadian market through CARIBCAN, a
programme for trade, investment and industrial cooperation between Canada and the Commonwealth
                                                     
32The European Union was granted a waiver (under Article XXV:5) to obligations under Article I:1 of
GATT 1947, on  9 December 1994, and up to 29 February 2000.  However, following the Uruguay Round
Understanding in respect of Waivers of Obligations under GATT 1994, the waiver should have terminated by
end 1996.  On 9 September 1996, the EU asked the Council for Trade in Goods for an extension of the waiveruntil 29 February 2000 (WTO document G/L/107).  The case was submitted to the General Council, andapproval was granted on 14 October 1996 (WT/GC/M/15).
33Rules of origin requirements vary from product to product.  A complete list of the requirements by
tariff heading may be found in The Courier N° 155, Jan-Feb 1996, pp. 117-144.
34In 1996, ECU 5.9 million were disbursed from SYSMIN resources for continuation of the project for
the Negril/Ocho Ríos Sewerage Schemes.
35Planning Institute of Jamaica (1997), p. 26-6.WT/TPR/S/42 Trade Policies Review
Page 34
Caribbean countries.  CARIBCAN became effective in June 1986 and provides duty-free access to
Canada for almost all imports from the beneficiary countries.36  The programme is unilateral.  Goods
excluded from duty-free access (textiles, clothing, footwear, handbags, leather garments), are subject
to Canada's General Preferential Tariff or to the British Preferential Tariff.37  To qualify for duty-free
access to Canada, products from the Commonwealth Caribbean countries and territories must meet
the requirement that 60% of their ex-factory price  originates in any beneficiary country or in Canada.
43. CARIBCAN includes safeguard provisions that allow Canadian producers recourse to the
Canadian Tariff Board in case duty-free imports from the beneficiary countries are deemed to cause or
threaten injury.  The Canadian Tariff Board holds public hearings to review the complaint, in which
all the parties involved in the dispute may be represented.  Upon completion of the hearings, the
Board decides whether to retain or withdraw the duty-free rates.
44. Jamaican exports benefiting from CARIBCAN are mostly processed and fresh vegetables.
Alumina, which accounts for some 80% of Jamaica's exports to the Canadian market, was given
duty-free access to Canada prior to the creation of CARIBCAN.
(f) Generalized System of Preferences (GSP)
45. Jamaican products are eligible for the Generalized System of Preferences (GSP) schemes of
Australia, Bulgaria, Canada, Czech Republic, th e European Union, Hungary, Japan, New Zealand,
Norway, Poland, Russia, the Slovak Republic, Switzerland and the United States.
(g) Association of Caribbean States (ACS)
46. Jamaica is one of 25 members of the Associa tion of Caribbean States (ACS), together with
the other CARICOM States, and Colombia, Costa Ri ca, Cuba, the Dominican Republic, El Salvador,
Guatemala, Honduras, Mexico, Nicaragua, Panama  and Venezuela.  The ACS was initiated on
29 July 1994 and is aimed at coordinating trade policies to boost trade within the region andstrengthen regional development.  The ACS's interim Secretariat is located in Port of Spain, Trinidad
and Tobago.
(h) Free Trade Area of the Americas (FTAA)
47. The FTAA was launched at the Summit of the Americas in Miami, United States, in
December 1994.  A total of 34 countries from the western hemisphere agreed to construct a free-tradearea by 2005.  Twelve Working Groups were created to compile information, identify problems and
prepare for negotiations;  they deal with Market Access;  Customs procedures and rules of origin;
investment;  standards and technical barriers to trade;  sanitary and phytosanitary measures;
subsidies, anti-dumping and countervailing duties;  smaller economies;  government procurement;
                                                     
36The beneficiary countries and territories are:  Anguilla, Antigua and Barbuda, Bahamas, Bermuda,
Barbados, Belize, British Virgin Islands, Cayman Islands,  Dominica, Grenada, Guyana, Jamaica, Montserrat, St.
Kitts and Nevis, St. Lucia, St.Vincent and the Grenadines, Trinidad and Tobago, and the Turks and CaicosIslands.  Canada was granted a waiver to its obligations under Article I of the GATT on 28 November 1986(L/6102).  The waiver was renewed for ten years by the WTO General Council on 14 October 1996
(WT/GC/M/15).
37As of 2 February 1998, the scope of  CARIBCAN was expanded to include methanol, lubricating oils
and travel goods, which were previously excluded from the programme.Jamaica WT/TPR/S/42
Page 35
intellectual property;  services;  competition policy;  dispute settlement.  Jamaica acts as coordinator
of the Group on Smaller Economies.
(i) San José Oil Facility
48. Jamaica, along with other oil-importing countries from Central America and the Caribbean,
benefits from the 1980 San José Agreement.  Under the Agreement, beneficiaries enjoy guaranteed oil
supplies from Mexico and Venezuela under preferential conditions, which include trade credits atconcessionary rates for the equivalent of 20% of their oil imports.
(j) Bilateral trade agreements
49. Jamaica has signed bilateral trade agreements with:  Canada, China, Costa Rica, the
Czech Republic, the Dominican Republic, Hungary,  Mexico, Nigeria, Norway, the United States
(textiles), the Republic of Korea, and with the former USSR (now applicable with the Russian
Federation) and the former Yugoslavia.  These agreements vary in nature and scope and are generally
aimed at facilitating trade.
(4) T
RADE CONSULTATIONS AND DISPUTES
50. To date, there have been no cases involving Jamaica directly, either as plaintiff or defendant,
under the GATT or WTO dispute settlement mechanisms.  However, Jamaica's exports of bananas tothe EU under Lomé (along with those of other AC P countries) were the subject of the dispute under
the WTO.  The European Union's regime for importation, sale and distribution of bananas was
challenged by Ecuador, Guatemala, Honduras, Mexico and the United States.
38  The Panel Report,
circulated in May 1997, found the EU's import regime and licensing procedures to be inconsistent
with WTO provisions, and that the GATT Article XXV waiver obtained for the Lomé Convention
covered its inconsistency with GATT Article XIII, but not its licensing procedures.  In June, the EU
appealed certain rulings and legal interpretations contained in the Panel Report.  The Appellate Body
confirmed most of the Panel findings, but reversed its interpretation regarding the waiver of GATT
Article XIII, as well as the findings that certain aspects of the licensing regime violated GATT
Article X and the Import Licensing Agreement.  The Panel Report, as modified by the Appellate
Body, was adopted on 25 September 1997.
51. Jamaica has held bilateral consultations with the European Union, Canada, and the
United States outside of WTO dispute settlement system.  They involved seafood, and technical
regulations and standards (with the European Union), and textiles (with Canada and the
United States).  Other consultations have involved mainly agricultural exports, but also some
manufactured products, such as cigarettes and rum.
(5) INVESTMENT POLICY
52. Foreign investment is not defined in Jamaican law and there is no domestic legislation dealing
with investment.  However, investment is protected under common law and by legislation related to
investment schemes.  The Fair Trading Act of 1993 is aimed at ensuring competition and the
observance of fair business practices.  In general, foreign investment is regulated by the provisions
contained in the different multilateral and bilateral agreements signed by Jamaica.  The scope offoreign investment is defined in each Bilateral Investment Agreement (BIT);  generally, it includes:
                                                     
38WTO document WT/DS27.WT/TPR/S/42 Trade Policies Review
Page 36
assets, shares, tangible and intangible property, claims of money and intellectual property.  The
principle of non-discrimination among types of investors is generally applied;  specific regulations
contained in BITs may, however, provide for except ions.  Most BITs contain provisions dealing with
expropriation, compensation, government procurement,  protection from strife, dispute settlement, as
well as standstill and rollback clauses.  Similarly, although the principle of national treatment to
foreign investors is in general recognized, in prac tice it is regulated by the regime set out in the
BITs.39
53. As noted, JAMPRO is in charge of handling fo reign investment.  Since the Exchange Control
Act was abolished in 1992, there are no specific restrictions regarding foreign exchange, or the
importation of capital goods or technology.  There are no restrictions for the obtention of loans from
the domestic financial system, in local or foreign currency, by foreign investors.  However,investment projects that are engaged in exports may enjoy tax and import duty concessions under the
Export Incentives Encouragement Act (Chapter III(3)(iii)).
 40  JAMPRO does not currently apply any
screening process for foreign investors, as was the case in the past.41
54. Following the repeal of the Exchange Controls Act in 1992, investment restrictions were
abandoned.42  Foreign companies may invest through the establishment of a branch office, by
incorporating a local subsidiary, by establishing a joint venture or a partnership, or through the
acquisition of a local company.  The most common practice is incorporation, which is ruled by the
Jamaica Companies Act.  Companies are required to be incorporated with a share capital.  A
minimum of two shareholders is required for private companies;  for public companies the minimum
is seven.43  Companies to be listed on the Jamaican Stock Exchange must have at least
100 shareholders.  A stamp duty of 1% of the value of the authorized share capital is levied.  Branches
of companies incorporated abroad may be opened in accordance with the Companies Act;  they must
register with the Registrar of Companies within a month of their establishment in Jamaica.  The
acquisition of shares of existing Jamaican companies is freely allowed to foreign investors, who pay a
                                                     
39IADB (1996), p. 241.
40U.S. Department of State (1996).
41Non-resident investment was screened by JAMPRO, favouring areas where:  (i) foreign exchange
earnings would be generated;  (ii) the investment would save foreign exchange by using domestic raw materials
or components;  (iii) the investment had the potential to create employment and to allow for the transfer of
technology;  (iv) the investment allowed for industry linkages;  (v) the investment had an import substitutioneffect.
42Prior to 1992, the following areas were reserved for local investors:  internal distributive trade;
restaurants and catering;  internal transport;  hairdressi ng and dry cleaning services;  legal, auditing, accounting
and architecture services;  entertainment;  mass media;  real estate development;  advertising and public
relations;  quarrying;  automobile and other repair services;  agricultural products, garments, handicrafts,printing and publishing for the domestic market.  Although there is currently no regulation stating that certainsectors or activities be reserved exclusively for the State,  some restrictions apply to:  (i) investment projects thataffect national security (atomic energy, weapons, narcotic drugs, etc.);  (ii) investment projects that involve theuse of and/or the manufacture of items banned under the 1955 Trade Act, or under Notice to Importers No. 3087
and Notice to Importers No.  3113;  ( iii) any activity that contravenes the Convention on International Trade in
Endangered Species of Wild Fauna and Flora;  (iv) any investment project that includes activities that have anegative impact on the environment, (v) any investment project that includes an activity in conflict withJamaica's foreign policy;  (vi) any project that goes against public morals;  (vii) any project that involves theimportation of toxic or solid waste materials;  (viii) investments involving any other activity specified underJamaican laws, IADB, (1996), p. 239).
43Private companies are defined in the Companies Act as those where share sales are restricted
(typically requiring a prior offering to existing shareh olders) and for which the public subscription of shares is
prohibited.  Public companies are those not subject to any share sale restriction (Farrel, et. al. (1997), p. 7).Jamaica WT/TPR/S/42
Page 37
transfer tax and stamp duty in the same fashion as domestic investors.  The transfer of shares of
companies listed on the Jamaica Stock Exchange is exempt from transfer tax and stamp duty.  There
is no law governing joint ventures, which are subject to ad hoc arrangements.
55. The right of property is upheld by the Constitution, subject to some limitations.44
Expropriation of land may take place under the Land Acquisition Act, which provides for
compensation on the basis of market value.  45  Expropriation may take place before compensation is
paid, but in that case interest for the period between the expropriation and the compensation
settlement must be paid.  Jamaica has signed bilateral agreements for the reciprocal promotion and
protection of investments with Argentina, China, France, Germany, Italy, the Netherlands,
Switzerland, the United Kingdom, and the Unit ed States.  Bilateral agreements with
Belgium/Luxembourg, Canada, Costa Rica, Cuba, Korea and Russia are currently under negotiation.Investment issues are covered in CARICOM's agreements with Colombia and Venezuela.  Jamaica is
a member of the Convention on the Settlements of Investment Disputes between States and Nationals
of Other States administered by the World Bank.
56. Foreign investment profits receive normal national treatment and (except in the free zones)
are subject to a 25% tax rate for individuals and 33
1/3% for companies under the Income Tax Act
(Table II.5).46  Dividends are subject to the applicable rate of 25% of 331/3% withholding tax, except in
some special cases where the investor may be tax exempt.  Tax breaks for reinvestment exist in
relation to the bonus issue of shares.  Companies covered under this legislation are granted a tax credit
equivalent to 25% of the nominal value of the shares issued.  Investment in equipment is also
generally subject to taxation unless exemption is obtained under the Income Tax Act or other
legislation granting incentives.  There is no capital-gains tax;  there is, however, a 7.5% tax on
transfers of land, shares, stock and debentures.47  Stamp duty must be paid on transfers of shares and
land;  the rates are between 1% and 5.5%.
57. Jamaica has signed and ratified double taxation agreements with Canada, CARICOM, China,
Denmark, Germany, Israel, Norway, Sweden, Switzerland, the United Kingdom and the
United States.  An agreement with France awaits ratification by France and an agreement with Italy
awaits ratification by both parties.  These double taxation treaties provide for  income tax rates fornon-residents lower than 25%, on certain types of income.  To benefit from this, the non-resident
taxpayer must obtain a certificate from the Commissioner of Income Tax.
48
                                                     
44These refer to the right of expropriation when the application of a certain law requires it (in cases of
unpaid taxes, rents, mortgages or fines, or when decided by a judge), when expropriation is necessary for the
fulfilment of an activity, or when the property has been bought with public funds.
45 Market value is as at the date of notification of expropriation by the Commissioner of Lands.  Any
dispute regarding the value of the compensation is settled in Court.
46Building societies and insurance companies are taxed at 30% and 7.5% respectively.
47The transfer of shares and other securities listed on the Jamaica Stock Exchange is free from both the
transfer tax and the stamp duty.
48In the case of U.S. shareholders of Jamaican companies, the U.S.-Jamaica Tax Treaty allows for a
reduced withholding tax rate of 10% (Farrell, et al. (1997)).WT/TPR/S/42 Trade Policies Review
Page 38
Table II.5
Taxes on profits and investmenta
Taxed item Type of tax Rate Comment
Profits Income tax 25% (individuals);
33 1/3% company profit
tax; 30% building societies;
7.5% life insurancecompaniesUnder the Income Tax Act. Capital gains on stock, shares and
securities are exempt, if they do not exceed 50% of total
income. Capital allowances for industrial buildings, plant and
machinery (20%), non residential buildings (2.5-5%), motorvehicles (12.5%), investment allowance for basic industry
20%).
Benefits Income tax 25% Including allowances and other concessions.
Dividends Withholding tax 25% of 331/3% Shareholder or company may be tax exempt if dividends are
from approved investments
Reinvestment Income tax 331/3% Tax credit granted equivalent to 25% of bonus issue of shares
for qualified companies.
Remittances Withholding tax 33 1/3% for companies;
25% for individualsRemittances defined as income remitted outside Jamaica.
Royalties Income tax 25% Under the Income Tax Act.
Services contracted
outside JamaicaIncome tax for
personnel;
General
Consumption Tax(GCT) for services25% for personal income;
15% CGT for services.Services include technical services, personnel and other items.
Services must be utilized in Jamaica to be subject to CGT.
Investment intangible assetsProperty tax
Transfer tax
Stamp duty
Income taxRates vary according to
whether it is commercial or
residential property.
Transfer tax : 7.5% ofasset's market value.
Income tax: 25%.Property tax when asset is land.
Income tax for investment in manufacturing and agriculture;
tax relief for investment in tourism possible under Hotel Act
and Resort Cottages Act.
a Generally applied taxes. Special provisions may apply if there is a double taxation treaty in force.
Source: Information provided by the Jamaican authorities.
58. The United States is the main foreign investor in Jamaica.  The direct investment position of
the United States in Jamaica amounted to US$1.4 billion in 1995.49  This figure includes investment in
the free zones.  U.S. investment is mainly in th e following areas:  bauxite/alumina, marketing of
petroleum products, banking, tourism, data proces sing, office machines sales and distribution, food
and related products, and light manufacturing (mainly apparel assembly).  Investment in the apparel
industry, particularly in the free zones, has been triggered by tariff advantages under the TSUS807AProgramme.
50  Annual inflows of foreign direct invest ment (FDI) into Jamaica have oscillated
between US$57.1 million in 1989 and US$166.7 million in 1995, totalling US$749 million in the
period.51  For 1996, preliminary figures point to inflows of US$175 million52;  royalty and license fee
payments to non-residents totalled US$63.8 million.  Since the beginning of the decade, the lion's
share of investment has been in the apparel sector and in services other than tourism.  However, mostof the stock of FDI is in the bauxite/alumina sector, banking and tourism.
                                                     
49U.S.  Department of Commerce (1996).
50Commonwealth Secretariat (1995), p. 59.
51IMF (1996).
52UNCTAD (1997).