WORLD TRADE
ORGANIZATIONWT/TPR/M/42/Add.1
12 April 1999
(99-1436)
Trade Policy Review Body
29-30 October 1998
TRADE POLICY REVIEW
JAMAICA
MINUTES OF MEETING
Addendum
Outstanding Responses to Questions
The following communication, dated 24 March 1999, was received from the Permanent
Mission of Jamaica with the request that it be circulated to Members.
_______________
Import Licensing
How many actual tariff lines are affected by this  licensing requirement?  Are all goods not included in
the 39 HS headings freely imported in so far as licensing is concerned.
The current list of items requiring an import licence covers 29 tariff headings.  One hundred
and one tariff lines are actually affected (the majority to these falling under the headings 87.02-87.04
for motor vehicles).
Are the licence application fees "ad valorem" fees?  What are the rates of these fees?  Is Jamaica
aware that under Article VIII.I(a) of GATT 1994 such fees and charges should be limited to the
approximate cost of services rendered?  The WTO has determined that it is not valid to base such feeson the value of the goods being imported.  Can Jamaica explain this apparent discrepancy?
The current fees charged by the Trade Board for the processing of import licence applications
range to a maximum of J$776.25 (approximately US$21).  These are not considered " ad valorem "
fees.  However, it should be noted that the Government of Jamaica has recently approved new fees on
the basis of services rendered which are to be implemented in 1999.
Are all automobile dealers subject to this inspection fee of J$60,000 (about US$1,700)?  What is
involved in the inspection to make it so expensive?
The Government of Jamaica (GOJ) requires that automobile dealers are inspected and
certified annually.  The Ministry of Commer ce and Technology has res ponsibility fo r the GOJ's
Motor Vehicle Import Policy and therefore coordinates the inspection and certification process.  TheWT/TPR/M/42/Add.1
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current cost for annual inspection and certification is J$60,000 per annum and this fee is applicable to
both new and used car dealers.
The fee charged represents a contribution by dealers to the process of the management and
regulation of the sector.  This regulatory process works to the benefit of the vendor, the consumer and
the Government by ensuring fair competition, re venue protection, consumer protection, road safety
and environment protection.  Inspections of dealers are carried out on an annual basis by four
Government Departments.  These include:  Island Traffic Authority, the Ministry of Labour, Welfare
and Sports, the Ministry of Transport and Works and the Ministry of Commerce and Technology.
Inspections are completed to ensure the technical co mpetence of the servicing facilities maintained by
dealers and that prescribed standards are maintained in respect of the availability of showrooms, spare
parts and the servicing of warranty, repairs and after sales services.  The fees for the annual GOJ
inspection and management process are collected by the Ministry of Commerce and Technology asthe central body and directly placed into the GOJ's Consolidated Fund.
Jamaica has instituted a permit and licensing system for any undertaking in Jamaica and its
territorial waters.  The licence is subject to a fee.  How much are such fees and on what basis are they
assessed?  Has Jamaica found this permit sy stem to be an effective environmental tool?
The NRCA Act actually requires that permission be obtained before undertaking prescribed
categories of enterprises, development, constructi on and/or modification anywhere in Jamaica or its
territorial sea.  New operations within the prescribed categories are required to obtain a permit.
Licences are also required for the discharge of trade effluent and sewage effluent for new
operations or the modification of works associated with such discharges.  It is also intended to require
existing operations to apply for licences on a phased basis commencing in January 1999.  Both thelicence and permit are subject to the payment of fees.  The permit fee is a one-time payment of
J$15,000 (approximately US$406) and the licence fee, which is valid for five years, is J$5,000
(approximately US$136).  There is also a fee of J$1,000 (approximately US$27) for processing the
applications.  These fees and the basis of their assessment are under review.
The Permit and Licence Systems are still in the early stages of implementation.  Monitoring
and review of the systems are ongoing.  Regulations to review them are being drafted.  It is therefore,
considered too early to assess their overall effectiveness.  New operations acknowledge the need for
such systems and are complying with the requirements.
Tariffs and other levies and charges
According to Table III.7 additional stamp duties rate on "String beans raw, cooked, preserved
(frozen) packed for retail, and not packed for retail is 86% … is 86% correct?
This is a further clarification to the response provided during the Trade Policy Review.Item No. 0710.203 – "String Beans for Industry"  was disaggregated from item No. 0710.204 -
"String Beans, other" in the last revision of the CET to the "String Beans for use in Industry".  The
aggregate rate of 86% of Customs Duty and Stamp Duty should not have been applied to the item but
should have been reduced to 80%.  This adjustment will take place in January 1999.
Intellectual Property
Are Jamaica's procedures for the registration of design consistent with Articles 25 and 26 of the
TRIPS Agreement?WT/TPR/M/42/Add.1
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The Design Act of 1957 pre-dates the TRIPS Agreement and in order to fulfil our obligations
under TRIPS and bilateral commitments, this legislation governing industrial designs (and the
legislation governing industrial property in general), is being revised.  A new Designs Act is currently
being drafted.
Agriculture and Food Products
Can the Government of Jamaica provide an estimate of the total amount of support provided under
the preferential interest rebate scheme/programme?
The Government of Jamaica provided support to  the Agricultural Credit Bank of nine million,
four hundred and thirty-eight thousand, three hundred and fourteen (J$9,438,314.00) Dollars
(approximately US$256,000) for the period 1 May 1997 to 31 March 1998 for the implementation of
the Interest Rebate Programme for farmers.
Maritime Transport Services
Are the incentives to be provided under the maritime transport policy consistent with Jamaica's
commitment on maritime transport services, notably on national treatment.
The Shipping Act, which was passed in July 1998, is limited to the regulatory aspects of
shipping and it was decided that matters of a commercial and developmental nature would be
incorporated in separate legislation.
In this regard the Shipping Incentives Act, which presently provides incentives to government
controlled ships, will be reviewed along with the Cargo Preference Act.  The incentives that will be
granted under the revised legislation will be considered in relation to Jamaica's WTO commitments.
We note that Jamaica has made an MFN exemption for cargo reservation to limit this service to
signatories of the UN Convention on Code on Liner Conference.  Will the Government considerreviewing this policy to extend MFN treatment to non-signatories?
The legislation governing cargo reservation in Jamaica namely the Cargo Preference Act will
be reviewed shortly and the policy governing its operation including matters related to the MFN
exemption for cargo reservation will be considered.
Licensing Services
(i) How do licensing requirements for various services affect the ability of service providers to
take advantage of the liberalization bound in Jamaica's Schedule?
(ii) Can Jamaica provide more details on how these licensing systems work and whether they are
operated in accordance with GATS disciplines, including Article VI (domestic legislation)?
(iii) Please provide information on Jamaica's plan to liberalize and bind the above-listed and
other services sectors not included in Jamaica's schedule of initial commitments or financial
services or telecommunications commitments.
The Government of Jamaica is willing to review this matter within the context of negotiations
on trade in services scheduled for 2000.  However, it should be noted that any licensing regime
currently in operation is for administrative purposes and does not constitute a protective measure.WT/TPR/M/42/Add.1
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Financial Services
We would welcome news that Jamaica is prepar ed to table its acceptance of the WTO Financial
Services Agreements (the Fifth Protocol).  Jama ica has included commitments for financial services
(banking, securities, insurance) in its schedule of initial commitments, further expanded by an offer in
connection with the recent WTO negotiations on financial services.  While the commitments are quiteexpansive for mode-3 commercial presence (100% foreign ownership), Jamaica has declined to
include commitments for mode-1 cross border or mode-2 consumption abroad.  We urge Jamaica to
consider expanded market access and national treatment commitments for this sector.  In practice, do
financial services companies have the ability to provide services through all three modes of supply?
The commitments made by Jamaica under the Financial Services Agreement (The Fifth
Protocol) are currently being reviewed with a view to signing the Agreement by the deadline of
29 January 1999.
Jamaica's commitments on market access and national treatment in the financial services
sector will be considered in the context of the negotiations on Trade in Services scheduled to be held
in 2000.
Australia has noted the high tariffs on imported wines and beers.
The Government of Jamaica takes note of the concern expressed by Australia.
Referring to the crisis in the financial sector and the measures employed by the Government of
Jamaica to address it including the resort to internal debt:
(a) What is the current situation in Jamaica in light of the difficulties in the financial sector …?
The following table provides a summary of assets and liabilities of the financial institutions as
at 30 September 1998.
Financial Institutions
(J$ billion)
Total Assets Total Liabilities
Commercial banks 162.5 151.2
Publica26.5 27.4
Publicb64.1 59.5
Private 71.9 64.3
Building Societies 46.1 42.1
Publica10.6 11.4
Private 34.3 30.7
Merchant Banks/Finance Houses 17.3 14.9
Publica9.1 9.0
Publicb1.7 1.4
Private 6.5 4.5
Total Banking Assets 224.2 208.2
Insurance Companies 26.0 49.9
a FINSAC intervened:  to be merged into Union Bank.
b FINSAC intervened:  not a Union Bank merger entity.
Source: Bank of Jamaica.WT/TPR/M/42/Add.1
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Financial Sector Restructuring
The economic developments experienced by Jamaica over the past six years expose
significant problems within the banking and insurance industries, as evidenced by capital shortages
and asset quality problems at several financial institutions.  These problems arose in part from
asset/liability mismatch, weak management practices, the interrelationships between affiliated banksand insurance companies and weaknesses in the regulatory system.  These problems were masked
during the period of high inflation, but became especially acute in 1996/97 when inflation was
drastically reduced.
Since 1993, the Minister of Finance, pursuant to powers vested in him under the amendments
to the Banking Act, the Financial Institutions Ac t and the Bank of Jamaica Act, has intervened in
12 financial institution groups.  In October 1995, the Financial Institutions Services (FIS) was formed
to be the government vehicle for resolution of the failed banks.  Between October 1995 andOctober 1997, FIS acquired the assets and assumed the liabilities of two financial groups.  The assets
acquired included loan portfolios, real estate and equities.  Depositors of the first intervened group
were paid 90% of their deposit liabilities as at the time of closing.  This payment was made over
18 months.  Depositors of the second interval group were repaid 100% of their deposit liabilities at the
time of closing.  This payment was made over six months.  The net deficit between the value of assetsacquired by FIS and the liabilities assumed was J$8,500 million.  Of this amount, approximately
J$6,500 million was financed by debt issued by the Central Government.  Currently, FIS exists as a
legal entity;  however, its operations have been merged with FINSAC.
In January 1997, FINSAC was created in response to the liquidity and solvency problems to
continue with the restructuring and reorganization of the financial sector.  Through FINSAC,ten institutions, which included banks, insurance companies and non-core businesses were intervened.
FINSAC's participation in the restructuring of the financial sector can be divided into three phases:
intervention, rehabilitation and divestiture.
Phase I:  Intervention
Since its creation, FINSAC has acquired an equity interest in ten financial institution groups
in order to rehabilitate these entities and protect depositors.  The following table lists the financial
institution groups intervened by FINSAC.
Financial Institution Groups Intervened by FINSAC
Group Core business
NCB Group Banking
Eagle Group Banking and Insurance
Horizon Banking
Citizens Banking
Workers Banking
Island Victoria Banking
Life of Jamaica Insurance
Mutual Life Insurance
Island Life Insurance
Dyoll Life Insurance
Note: With the exception of Workers Group, FINSAC holds a controlling share of equity in the banking groups including the Eagle
Group.  It has offered assistance to the insurance groups to various degrees without acquiring a majority share.
Source: FINSAC.WT/TPR/M/42/Add.1
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The Government's support to the financial sector, through FINSAC, has resulted in the
protection of 1.5 million deposit accounts with a value of J$68,700 million and 569,000 individual
insurance policies with a value of J$174,400 million.
Phase II:  Rehabilitation
FINSAC has developed three specific rehabilitation strategies for each of the following
sectors:  banking, insurance and non-core business.
For the banking sector, FINSAC has hired third-party consultants to aid in the reorganization
of the sector.  FINSAC has recapitalized the entities.  As part of the recapitalization, all
non-performing loans have been transferred to FINSAC.  As the final stage in the rehabilitation phase,
FINSAC has decided to merge Citizens Bank/Horizon, Eagle Commercial Bank, Island Victoria Bank
and Workers Bank, into the "Union Bank" to give the new entity critical mass.  Union Bank, with
total assets of J$26,500 million, will be the third largest bank in Jamaica.  Union Bank will initially bemanaged by TransAmerican Financial Services, a United States bank management and consulting
firm, and is expected to be divested by the close of 2000.
In the insurance sector, a similar approach will be taken.  The Government will work to
restructure existing institutions, return them to thei r core business of selling life insurance policies and
improve the profitability of the industry by creating strong, properly capitalized and viable firms.Crown Eagle Life, Mutual Life and Dyoll Life will be merged into "Independent Life".  Independent
Life will also assume responsibility for the management of pension funds currently under the
management of these entities.
Non-core businesses are being divested as soon as they are rehabilitated.  Hotels are the major
portion of the non-core businesses and are expected to be divested in 1999.
Phase III:  Divestiture
As the second phase of its intervention progresses, FINSAC will gradually begin the process
of returning the assets that it has accumulated into private hands.  FINSAC has divested five major
entities and various real estate holdings, earning revenues of US$16.3 million at 30 November 1998.
Nine major hotels and five financial institutions are the major entities left to be divested.  FINSACintends to pursue an aggressive divestment path for these remaining assets commencing in 1999.  The
divestment process will be undertaken in a structured manner so as to avoid any further depression in
market prices.
FINSAC's assets consist of holdings in financial institutions, real estate and non-performing
loans.  FINSAC's liabilities consist of debt issued for the purpose of capitalizing the institutions.  The
collection of non-performing loans, proceeds from the divestment of real estate and proceeds from the
divestment of the financial institutions are the sources of funds for FINSAC.  The uses of fundsconsist mostly of interest and principal payments of debt issued to recapitalize the entities.  The
shortfall in collection of non-performing loans and divestment proceeds will be financed by the
Government.
The value of FINSAC's total assets at 30 September 1998 as reflected on the books of its
subsidiary and associated companies were J$126,770 million.  Since March 1997, FINSAC hasassumed J$20,000 million in non-performing loans.  In this non-performing loan portfolio, there are
approximately 18,000 debtors.  The top 100 debtors account for 69% of the total portfolio.  FINSAC
has established the non-performing loan work-out unit, which is composed of six work teams, to focus
on the top 300 debtors.  Third party collection agencies are contracted to collect the smaller loans.WT/TPR/M/42/Add.1
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FINSAC, with the advice of international consultants, has conservatively estimated that at least 35%
of non-performing loans can be successfully collected.
The following table provides a summary of total assets owned by FINSAC at September
1998.
FINSAC's Assets
(J$ million)
Assets ValueaEstimated date of realization
Financial Institutions 100,848 1999-2002
Non-Performing Loans 20,000 1999-after 2002
Real Estate 5,997 1999-2002
Total 126,770
a As reflected on the books of its subsidiary and associated companies.
Source: FINSAC.
At 30 September 1998, FINSAC's total liabilities were J$77,081 million.  The following table
provides information on the liabilities of FINSAC.
FINSAC's Liabilities
(J$ million)
Amortization for next five years
Liability OutstandingaAmount 1999 2002 2003 2004 2007
Bonds 42,426 154 28 5,190 1,200
Advances from Bank of Jamaica 19,326 2,056 12,353
Notes and Other Payables 8,995 53 38 143 660 155
Advances from Government 6,334
Total Amortizations 77,081 53 192 2,227 5,850 13,708
a No liabilities mature in 2006.
Source: FINSAC.
(b) How has the internal debt been financed …?
The internal debt has been financed essentially by revenue and refinancing of maturing debt
by way of new borrowings.
(c) What measures is the Government taking to prevent a reoccurrence of this crisis?
Legislation and Regulation
Currently, the deposit-taking financial sector is regulated by The Financial Institutions Act
(1992) (the "Financial Institutions Act"), The Banking Act (1992) (the "Banking Act");  The Building
Societies Act and related Bank of Jamaica (Building Societies) Regulations 1995 (the "Building
Societies Act") and the Bank of Jamaica (Industrial and Provident Societies) Regulations 1995 (the
"Industrial Provident and Societies Act").  The Financial Institutions Act and the Banking Act,implemented in 1993, provide for, among other th ings, a standardized legal framework for the
operations of commercial banks and other licensed deposit-taking intermediaries, including minimum
capital adequacy standards.  In addition, these Acts provide the Bank of Jamaica, in certain instances,WT/TPR/M/42/Add.1
Page 8
and the Minister, in others, with the means to take actions such as issuing cease and desist orders and
assuming temporary management of such institutions when there is evidence of unsound banking
practices.
In order to strengthen the existing regulatory framework, and in light of the difficulties in the
financial and insurance sectors, amendments to The Banking Act, The Financial Institutions Act, The
Building Societies Act and The Industrial and Provident Societies Act were passed by Parliament in
October 1997.  These amendments give the Government and Regulator a wider range of sanctions and
greater powers of intervention to use with respect to troubled financial institutions.
The Deposit Insurance Act 1998, designed to protect depositors through the establishment of
a deposit insurance fund, was passed by Parliament in March 1998 and the Jamaica Deposit Insurance
Corporation formally commenced operations on 31 August 1998.  Deposit insurance covers deposits
of all entities supervised by the Bank of Jamaica up to a maximum of J$200,000 per depositor.
Amendments to the Bank of Jamaica Act, which will give the Bank of Jamaica increased
autonomy, have been tabled in Parliament and are under deliberation.
Between 1995 and 1996, the Bank of Jamaica disseminated eight "Standards of
Self-Governance" to the supervised institutions relating to Capital Management, Credit Risk
Management, Foreign Exchange Risk Management, Internal Control and Real Estate AppraisalManagement.  A standard in Conglomerate Risk Management is expected to be issued during 1999.
Credit and Provisioning Regulations
Regulations which provide specific legal guidelines for credit classification and related
provisioning requirements have been disseminated and discussed with the industry and are in final
draft stage.  Among other things, these regulations codify the Bank of Jamaica's approach toclassifying credit into defined loan categories and also stipulate specific provisioning levels.  Banks
have been requested to comply with the requirements and full legal implementation is expected by
early 1999.
Capital Adequacy Regulations
Regulations addressing minimum risk-based capital standards for licensees have also been
drafted by the Bank of Jamaica and discussed with the industry.  These regulations introduce the
concept of Tier I and Tier II capital utilized by  regulators internationally, define the eligible
components and provide the framework for assigning risk weights to on- and off-balance-sheet items.
The minimum risk weighted capital ratio to be ma intained will be 10%, and supervised institutions
currently below this level will be allowed up to 31 December 1999 to comply.
Qualifications of Auditors Regulations
The Bank of Jamaica has drafted regulations which specify the standards for auditors in
undertaking an external audit of a supervised financial institution.  Among other things, such criteria
relate to the independence, experience and academic qualification of the external auditors.  The
proposed regulations will also require prior notification to the Bank of Jamaica of proposed
appointments.
Year-2000 Compliance
Supervised institutions set a deadline of 31 December 1998 to ensure that all mission critical
systems are year-2000 compliant and that all conversions are at least 80% complete by that date;  theWT/TPR/M/42/Add.1
Page 9
Bank of Jamaica is currently in the process of ch ecking the supervised institutions' compliance.  A
deadline of 30 June 1999 has been set to achieve full conversion and implementation of all systems.
The licensees have also been required to develop contingency plans in the event that systems should,
for whatever reason, fail to function at the start of the year 2000.  The Bank of Jamaica has been
monitoring the progress of the supervisee through monthly status reporting and on-site reviews ofrespective programmes.
Money Laundering Act
In an effort to combat the problems of drug trafficking, the Government passed the Money
Laundering Act in late 1996, which took effect during 1998.  The legislation makes money laundering
a criminal offence.  In addition, financial institutions (broadly defined to include banks, merchant
banks, building societies, insurance companies, securities dealers/advisors, cambios  and co-operative
societies) are required to report cash transactions of US$10,000 or over conducted through accountsof their customers, and establish and implement programmes, procedures and systems for detecting
suspicious transactions.  Legislation is in Parliame nt with regard to the implementation of a suspicious
transactions reporting regime.  In addition, the reporting threshold will be adjusted.  Regulations
providing for the specific measures to be implemented by financial institutions have also been issued.
In what sectors, especially referring to services , do you think Jamaica has a comparative advantage?
Jamaica has a comparative advantage in many of the services subsectors.  Important amongst
these are:
Tourism
This includes traditional tourism, as well as newer areas such as environmental tourism, and
areas linked to health, for example spas, recuperation and certain types of surgery.
Information Technology
The data processing segment of this sector is now well developed in Jamaica where
considerable experience has been gained in the provision of high-quality services to overseas markets.
Efforts are now underway to expand into the more advanced areas of services in this sector.
Business Services/Consultancy
Jamaican business service providers are increasingly gaining recognition for the provision of
high-quality, low-cost services in this area.
Offshore Distance Education and Training
The development of this area has been facilitated by the adherence to high standards by local
participants bodies thereby gaining for themselves accreditation by several well renowned universities
and institutions of learning in North America and Europe.  A popular model is that of established
colleges abroad offering non-residential or partially residential courses jointly with local colleges.
In the area of distance learning, most of the development has been associated with the
University of the West Indies where they are seeking to expand the capacity and range of courses
offered.WT/TPR/M/42/Add.1
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Entertainment and Sport
Paramount in this area is the music industry.  In addition to having world class artistes and
performers, Jamaica, because of its location, scenic beauty and up-to-date equipment, is able to offer
modern facilities for the production of audio and video material and for film making.
In general, the comparative advantage of Jamaica is attributable to several factors, including:- highly literate workforce which, if necessary, is easily trained;
- competitive wage rates resulting in labour costs which are comparatively low;
- proximity to the North American market;
- good air and sea transport links;
- modern infrastructure;  and
- well developed telecommunications facilities, notwithstanding the existence of
monopoly provider.
Important factors in attracting increased levels of FDI are political and macroeconomic stability and
security within society.  What is the current situation regarding personal security in Jamaica and how
has this situation affected FDI?
There is no empirical evidence to support the assumption that personal security is a major
factor influencing the flow of FDI to Jamaica.  In fact, based on the profile presented by crimestatistics, investors, both local and foreign, do not constitute a particularly high-risk group.  This is
largely because crime experienced is often related to drugs, crime, and disputes over turf, and tends to
be localized, the spatial dispersion showing heavy concentrations in certain inner city communities.
There is also, disturbingly, an increasing element connected to domestic violence.
Even so, the Government of Jamaica considers any threat to the personal security of investors,
and workers of any other group within the society, unacceptable.  Consequently, a number of
initiatives were implemented to address crime.  These include:
- the setting up of an anti-crime task force;
- increased community policing, focusing on the beat and foot division with the
presence of increased numbers of uniformed police officers in strategic businessareas.
The result of these and other measures has been encouraging.  Statistics available for 1997
show that relative to 1996 there was a decline of some 10% in crime overall and 15.7% in major
crimes.
It is a distressing fact that the spectre of crime and violence worldwide has now assumed
alarming proportions.  Nevertheless, in order to maintain the investor-friendly climate to which
Jamaica is committed, the Government is firm in it s resolve to continue and indeed to intensify
efforts, not only with respect to macroeconomic stability where there have been successes, but also in
the area of security.
What is the Jamaican Government doing to prepare the different export sectors to compete in a less
protected market?WT/TPR/M/42/Add.1
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The National Industrial Policy (NIP) adopted in March 1996 sets out the policies and
programmes that underpin the Government of Jama ica's vision for the economy.  The NIP focuses on
stimulating investment and growth.
Export competitiveness is central to the success of the NIP.  The NIP concentrates on
five industrial cluster groupings – agriculture, manufacturing, tourism, information technology andentertainment (music).  Each is headed by an Advi sory Council that is private-sector-led, with the full
participation and support of the Government of Jamaica.  These Councils are developing five-year
plans in which export competitiveness plays a major role.
It is recognized that central to export competitiveness is export development through
productivity.  This involves the implementation of a number of initiatives to enhance productivity
such as, inter alia , public sector reform and the strengthening of support services;  legislative review;
research and development;  technological development and human resource development (HRD)which are critical and on-going.
Targets and initiatives have been grouped as follows:
- market penetration
- export diversification
- product design/quality- productivity
- organization
- investment
- inter-sectoral linkages
There is an annual review mechanism through which adjustments are made to take account of
the dynamic international environment.
The approach of the Government is to assist firms to modernize their operations and to ensure
that the proper trade remedy institutions are in place to provide a fair trading environment.
Establishment of the Ministry of Commerce and Technology
A major step in facilitating export competitiveness was the establishment in January 1998 of a
Ministry of Commerce and Technology.  This Mini stry's mandate is to develop and enhance global
competitiveness of Jamaican goods and services by facilitating and stimulating domestic and
international commerce;  fair competition and trade, and the application of the results of scientific
research to increase economic activity.  In order to fulfil its mandate, it recognized that Jamaica must
embrace its role as part of the liberalized world economy.  To achieve this, the Ministry, in
conjunction with line ministries/agencies and private sector bodies, have consulted on a number of
initiatives geared towards:
- stimulating international and domestic commerce;
- enhancing the need for a technology-driven government and private sector;
- the development of a modern telecommunications policy;- review and updating legislation to facilitate business;- implementing an import monitoring regime and facilitating enforcement of standards;- consumer advocacy.WT/TPR/M/42/Add.1
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Public Sector Reform Programme
A number of reform programmes have been introduced in the public sector with a view to
increasing its efficiency and effectiveness.  Reform measures which have either so far been introduced
or are to be introduced, include deregulation, reform of tax administration, establishment of new
entities such as the Securities Commission, the Fair Trading Commission, the Office of Utilities
Regulation, reform of the Customs Department, th e reorganization of JAMPRO and the revision of
legislation such as the Companies Act.
Review of legislation
The following legislation, inter alia , have been tabled with a view to implementing the WTO
Agreements as well as to facilitate public sector modernization:
Intellectual property:   the impetus for the current reform of intellectual property laws comes from the
necessity to implement the Agreement on Trade-Related  Aspects of Intellectual Property (the TRIPSAgreement) and the bilateral Agreement of Intellectual Property between Jamaica and the United
States of America.  A Bill to amend the Copyright Act to include integrated circuits and a provision
for seizure by Customs of infringing products was introduced to Parliament.  Other intellectual-
property-related legislation, which have been revised to make them consistent with the TRIPS
agreement, include the Layout Designs (Topographies) Bill and the Trade Marks Act.
Trade remedy legislation :  A new bill to revise the 1959 Customs Duties (Dumping and Subsidies
Act) was passed in February 1999.  The bill serves to ensure that current legislation is consistent with
Jamaica's obligations under the WTO Understanding on the Implementation of Article VI of the
GATT 1994.
Three bills administered by the Jamaica Bureau of Standards (JBS) – the Processed Foods
Act, the Standards Act and the Weights and Measures Act – have obtained Cabinet approval for
amendment.  These three acts will give the JBS powers of seizure and increase penalties.  The
Processed Food Act will permit the privatization of laboratories and the implementation of the Import
Monitoring Programme.
The old Companies' Act of 1965 is now obsolete given the new business environment which
has emerged.  The new Companies' Act takes account of the need to stimulate investment, achieve
greater levels of corporate democracy, provide a ve hicle for greater employee stakeholding in firms,
and to provide improved safeguards for the protection of all interests.
Compliance and Enforcement Service
Discussions with the private sector revealed mounting concern at the low level of compliance
with a wide range of rules and regulations governing areas falling under the purview of the Ministry
of Commerce and Technology.  In addition to the legislative measures outlined above, the Ministryhad established a Compliance and Enforcement Service that supports and coordinates the activities of
the agencies falling under it with respect to the enforcement of regulations and statutes.
The Service will also review regulations, many of which have been on the Statute Books for
some time to evaluate their relevance and their ef fectiveness as well as whether they need to be
reviewed in the light of the provisions of the World Trade Organization (WTO) and the Government'spolicy of liberalization.  The Service will, therefore, also advise on amendments to Orders and
Regulations that may be necessary to make it more effective.WT/TPR/M/42/Add.1
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Using technology wherever appropriate, the Compliance Service would take a cohesive and
holistic approach to identify, investigate and enforce the various regulations.  This would be
facilitated by a centralized database with international links and efficient management of resources
used in inspection and analysis procedures.  Overseas liaison on compliance issues would be
developed especially within CARICOM.
Research and development
The emphasis in this regard is on the application of science and technology as a means of
stimulating and increasing production and productivity;  enhancing the competitiveness of Jamaican
exports of agricultural and industrial goods and increasing the benefits from the latest technology in
terms of job creation, education and increased investment.
The Scientific Research Council (SRC) has led the thrust for the development of technology
and scientific research.  Work is currently being conducted on developing value-added products fromlocal products such as sorrel, yam, cassava and mushroom.  Tests are being done on a fruit cake for
diabetics using a non-nutritive sweetener.
Markitech, the marketing arm of the SRC, is responsible for the commercial development and
marketing of these value-added products.
Human Resource Development
Recognition of the critical role education has to play in the development process has led to
improvements in the area of human resource develo pment (HRD).  In this regard, special emphasis is
being placed on enhancing the role of science- and knowledge-based education and information
technology as a means of facilitating the development of Jamaica's services sector.  The Caribbean
Institute of Technology (CIT) was recently established and will assist greatly in improving Jamaica'sattractiveness as a destination for information technology (IT) investment.
Public/Private Sector Collaboration
A number of public/private sector consultative mechanisms have been established in order to
facilitate dialogue on trade and trade-related matters.  The bodies include:
- the Trade Facilitation Board;
- the Trade Co-ordination and Policy Committee;  and
- the Investment Facilitation Board.
A number of operational committees with strong private-sector involvement have been
established dealing with, inter alia , distributive trade, electronic commerce and CARICOM matters.
At the regional level, the CARICOM Advisory Committee (CAC) was established to ensure
the fullest possible consultation with the private sector on CARICOM matters.  The Ministries of
Foreign Affairs and Foreign Trade, Agriculture and Industry and Investment play an active role in thisbody.  The Committee has developed an action plan for implementation in 1999 that includes
activities to familiarize Jamaican businessman with the provisions of the Treaty of Chaguaramas and
regulations governing CARICOM trade.
The opinion has been expressed that the lack of competition in sectors such as textiles and clothing is
due to a large extent to the over-valuation of the Jamaica's currency.  The decision of the GovernmentWT/TPR/M/42/Add.1
Page 14
not to devalue in its efforts to control inflation appears to have led to increased production costs.  It
would be useful to hear the views of the Jamaican delegation on this.
Imports of apparel and clothing increased 114% between 1992 and 1996.  Market penetration
(as measured by the ratio of imports to domestic production) has increased from 15:1 in 1992 to 37:1
in 1996, i.e. in 1996 every $1 worth of apparel loca lly produced competed with $37 worth of imported
apparel products.  Therefore the local market is dominated by imports and the ability of imports to
compete locally is no way compromized by exchange rate policy.
In fact, according to the IMF's IFS series, the real exchange rate (RER) index over the period
has appreciated by over 44% from 127.8 in 1992 to 70.9 in 1996.  Hence, by maintaining a stable
nominal exchange rate, Jamaica's exchange rate mechanism is, according to the RER, making imports
cheaper than domestic goods.
To further try to link increases in production cost solely to exchange rate policy again seems
inappropriate as many other factors apart from exchange rates have impacted on production costs.
High interest rates, even though decreasing, have a compounding impact on current and future
production costs.  Wages and utility rates have been increasing, which further add to production costs.
It would be useful to be informed of the NIP and the various special regimes for exports with
reference to the strategies geared toward attracting greater flows of FDI to Jamaica.
The National Industrial Policy (NIP) outlines Jamaica's industrial policy, which is essentially
geared at fusion into the global economy through improved competitiveness.  This plan has four
components:
- macroeconomic strategy;
- industrial strategy;- social policy;  and
- environmental policy.
The implementation of the plan is to take place over three phases.  The first phase involves
achieving social stability through instruments including a social contract.  The second stage involves
the achievement of growth with stability, while the third stage involves aggressive export promotion.We are officially in the second stage of this process.
For details of the NIP, please refer to Jamaica's Trade Policy Review documents
WT/TPR/S/42 and WT/TPR/G/42.
With regard to special regimes, the NIP has commissioned:
(a) The Single Entity Export Processing Free Zone legislation which allows foreign
investors to achieve all the benefits of being in a free zone without being forced to locate in
the free zone.  This increases the locational choice for the investor and improves theinvestment conditions.
(b) The export financing special window operated by the Ex-Im bank.  This window
supports pre-shipment financing of exports and export credit insurance schemes.  This makes
it easier for firms to export, and particularly because the domestic market is not large enough
to support the operations of large multinationals, this supports efforts to attract foreigninvestment.WT/TPR/M/42/Add.1
Page 15
When will Jamaica submit data for inclusion in the WTO Integrated Data Base?
Jamaica is making efforts to submit its import and tariff data to the Integrated Data Base
(IDB) as soon as possible.
Do Jamaica's labour laws contribute in any way to the high level of unemployment?
Jamaica's labour market is regulated by several labour laws.  There is a National Minimum
Wage Act, which seeks to protect non-unionized work ers from exploitation by their employers.  The
minimum wage is recommended by the Minimum Wag e Advisory Commission and taken to Cabinet
by the Minister of Labour.  If the recommendation is approved by Cabinet, it is ratified by Parliament.
The current rate is J$800.00 or approximately US$21.33 per week.1  The Holidays with Pay Order
regulates the granting of holidays, that is, vacation and sick leave with pay, while the Maternity Leave
Act makes provisions for female workers to get leave during their period of confinement.2  T h e
Labour Relations and Industrial Disputes Act (LRIDA) regulates the relations between workers andemployers and includes provision within the conciliation and arbitration machinery for the
stabilization of industrial relations.  Conciliation services are provided by the Ministry of Labour
while the Industrial Disputes Tribunal (which is quasi-judiciary) is a public arbitration body.  The
Employment (Termination and Redundancy Payments) Act outlines the minimum compensation in
cases or redundancy, and minimum periods of notice that should be given for termination ofemployment contracts.  The Act also stipulates how redundancy payments should be calculated.
There is also a Trade Union Act, which regulates the operations of trade unions.
In addition to the above, there are other laws , which are not labour laws, to which employers
and employees have to adhere.  These include:
- the National Insurance Act.  Under this Act, each employee is obliged to contribute
2 ½% of their pay up to a ceiling of $250,000.00 to the National Insurance Fund
while the employer is required to contribute a similar sum on behalf of the worker.
The objective is to provide social security benefit for workers;
- the Human Employment and Resource Training (HEART) Act, which stipulates that
employers should pay 3% of their gross payroll to the agency established under thisAct;
- the National Housing Trust (NHT) Act, which specifies that employees should
contribute 2% of their gross pay, while employers should contribute 3% towards a
fund to provide houses for contributors.
Perusal of the labour laws has not revealed factors which can be clearly identified as
contributing to unemployment.
What are the structural causes of unemployment and how does the Government of Jamaica intend to
address these problems through the social partnership?
Structural causes of unemployment refer to changes in the economy which have led to
persons becoming unemployed.  Some of these changes can be linked to globalization.  Some of the
factors contributing to unemployment in Jamaica are:  (a) the inability to secure NAFTA parity, which
has led to a diversion of trade and investment from the CARICOM region to Mexico;  (b) localcompanies restructuring their operations in order to in crease efficiency and output.  This restructuring
                                                     
1 Jamaica has a floating exchange rate.  This figure was calculated at the rate of J$37.50 to US$1.00.
2 Confinement refers to the birth of a child after 28 weeks, whether it is living or dead.WT/TPR/M/42/Add.1
Page 16
has led to workers becoming unemployed through redundancy;  and (c) difficulties in the financial
sector, which have resulted in a number of workers being made redundant.
To address the structural problems in the economy, the Government of Jamaica hopes to get
all the relevant parties to agree to a social partnership, which will include the private sector, labour,
and the Government.  In this agreement, the Government will play a leadership role as it hopes toprovide a favourable economic environment through a mix of anti-inflationary macroeconomic
policies.  In addition, the Government will end eavour to control the growth of money supply and
encourage investment and growth.  It is hoped that  members of the private sector will agree to hold
prices stable and that workers and employers will  establish a new relationship, which will involve
developing co-planning and problem solving approaches to increase productivity and competitiveness.
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