RESTRICTEDWORLD  TRADE
ORGANIZATIONWT/TPR/S/42
 29 September 1998
(98-3730)
Trade Policy Review Body
TRADE POLICY REVIEW
JAMAICA
Report by the Secretariat
This report, prepared for the  Trade Policy Review of Jamaica, has been drawn
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as
required by the Agreement establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), sought clarification from the Government of Jamaica on its trade
policies and practices.
Document WT/TPR/G/42 contains the policy statement submitted by the
Government of Jamaica.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Jamaica.Jamaica WT/TPR/S/42
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CONTENTS
Page
SUMMARY OBSERVATIONS   xi
(1) ECONOMIC ENVIRONMENT   xi
(2) TRADE POLICY REGIME AND OBJECTIVES  xii(3) TRADE POLICY BY INSTRUMENT xiii
(i) Border measures xiii
(ii) Measures affecting exports, production and trade  xiv
(iii) Measures by sector   xv
(iv) Services  xvi(v) Conclusions xvii
I. THE ECONOMIC ENVIRONMENT   1
(1) M
AIN FEATURES OF THE JAMAICAN ECONOMY   1
(2) R ECENT ECONOMIC PERFORMANCE   3
(i) GDP and employment   3
(ii) Prices   6(iii) Monetary policy   7(iv) Exchange rate policy   8(v) Public finances  10
(3) E
XTERNAL PERFORMANCE AND TRADE PATTERNS  12
(i) Balance-of-payments  12
(ii) Evolution, composition and direction of trade  15
(4) E CONOMIC OUTLOOK  19
II. TRADE AND INVESTMENT POLICY REGIME:  INSTITUTIONAL
FRAMEWORK  20
(1) I NSTITUTIONAL STRUCTURE OF TRADE AND INVESTMENT POLICY
FORMULATION  20
(i) Form of Government  20
(ii) Policy-making and administration  22(iii) Advisory and review bodies  23
(2)
TRADE AND INVESTMENT POLICY OBJECTIVES  24WT/TPR/S/42 Trade Policies Review
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(3) T RADE RELATIONS  24
(i) World Trade Organization  24
(ii) Regional and bilateral agreements  27
(4) T RADE CONSULTATIONS AND DISPUTES  35
(5) I NVESTMENT POLICY  35
III. TRADE  MEASURES  39
(1) OVERVIEW  39
(2) M EASURES DIRECTLY AFFECTING IMPORTS  39
(i) Registration requirements  39
(ii) Temporary entry  40
(iii) Rules of origin  40(iv) Tariffs  42(v) Other levies and charges  52(vi) Tariff quotas  58(vii) Customs  valuation  58
(viii) Preshipment inspection  59
(ix) Import prohibitions and licensing  59(x) State trading  60(xi) Countertrade  62(xii) Standards and other technical requirements  62(xiii) Government procurement  63
(xiv) Anti-dumping and countervailing duty actions  64
(xv) Safeguard actions  65
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  65
(i) Registration and certification requirements  65
(ii) Export licensing  65
(iii) Export subsidies and tax and duty incentives  66
(iv) Export insurance  70(v) Export financing  70(vi) Export promotion  71(vii) Free-trade zones  71
(4) O
THER POLICIES RELATING TO PRODUCTION AND TRADE  72
(i) Adjustment assistance  72
(ii) Assistance for research and development  73(iii) Assistance to small enterprises  73(iv) Tax incentives  74Jamaica WT/TPR/S/42
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(v) Interest rate subsidies and guarantee facilities  75(vi) Price controls  76(vii) Competition policy  77(viii) Protection of intellectual property rights  78
(ix) Environmental policies  81
IV. SECTORAL TRADE POLICIES  84
(1) O
VERVIEW  84
(2) A GRICULTURE AND FOOD PRODUCTS  84
(i) Market access  89
(ii) Sanitary and phytosanitary regulations  90
(iii) Domestic support  91(iv) Export assistance  92(v) Crop production and livestock  93
(3) F
ORESTRY AND FISHERIES  99
(i) Forestry  99
(ii) Fisheries  99
(4) C ONSTRUCTION 100
(5) M ANUFACTURING 100
(i) Market access 102
(ii) Incentive schemes 105(iii) Textiles and clothing 105
(iv) Other industries 109
(6) M
INING 109
(7) S ERVICES 112
(i) Tourism 113
(ii) Financial services 115
(iii) Transportation 123
(iv) Telecommunications 125(v) Public Utilities 126
REFERENCES 130
APPENDIX TABLES 133WT/TPR/S/42 Trade Policies Review
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CHARTS
Page
I. THE ECONOMIC ENVIRONMENT
I.1 GDP growth rates, by sector, 1991-97   2
I.2 "Competitiveness" profile, 1990-96   6
I.3 Annual percentage change of money supply, 1991-97   8
I.4 Exchange rates of the Jamaican dollar, 1990-97   9I.5 Sources of fiscal revenue, 1996  12I.6 Balance of payments, 1990-97  14I.7 Product composition of merchandise trade, 1992 and 1996  16
I.8 Merchandise trade by main origin and destination, 1992 and 1996  18
III. TRADE  MEASURESIII.1 Distribution of MFN tariff rates, 1997  47
III.2 Average tariff rates on agricultural products by HS chapter, 1997  48III.3 Average tariff rates on manufactured products by HS chapter, 1997  49
IV. SECTORAL TRADE POLICIES
IV.1 Average tariffs by ISIC classification, 1997  85
IV.2 Agricultural GDP by subsector, 1992 and 1997  86IV.3 Exports of unprocessed agricultural products, 1992 and 1997  86IV.4 Agriculture production index, 1990-97  88IV.5 Sugar production, exports and prices, 1992-97  94IV.6 Volume of production in selected crops, 1992-97  96
IV.7 Value of selected exports of manufactured commodities, 1992-97 101
IV.8 Manufacturing GDP by subsector, 1992 and 1997 102IV.9 Services GDP by subsector, 1992 and 1997 112Jamaica WT/TPR/S/42
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TABLES
Page
I. THE ECONOMIC ENVIRONMENT
I.1 Major features of the economy, 1995-97   1
I.2 Economic performance, 1970-97   5
I.3 External performance, 1991-97  13
II. TRADE AND INVESTMENT POLICY REGIME:  INSTITUTIONAL FRAMEWORKII.1 Trade laws and regulations and main provisions  21
II.2 Ministries and agencies dealing with trade  22II.3 Notifications to the WTO, as at 1 June 1998  25
II.4 CARICOM tariff reduction programme  28
II.5 Taxes on profits and investment  38
III. TRADE  MEASURES
III.1 CARICOM rules of origin  41
III.2 Lists of exceptions to the CET  43III.3 Bound duties and charges  44
III.4 CARICOM rate treatment and period of application  46
III.5 Main features of the Jamaican tariff schedule, 1997  46III.6 Applied and bound MFN tariffs by stage of processing and degree of substitutability, 1997  50III.7 Aggregate tariff and Additional Stamp Duty on Customs Warrant Inward  53III.8 Special consumption tax (applied on domestically produced and imported goods)  55III.9 General consumption tax  56
III.10 Import prohibitions  59
III.11 Commodity boards  61
III.12 Investment incentives available in Jamaica  66III.13 Estimates of revenue forgone under the EIEA, 1992-96  68III.14 Major indicators of free-zone activities, 1992-96  72
III.15 Summary of complaints to the Fair Trading Commision, 1993-97  77
III.16 Patents recorded, 1996-97  79III.17 Jamaica's status in international and regional environmental treaties  82
IV. SECTORAL TRADE POLICIES
IV.1 Trade and tariff data for agricultural products, 1997  87
IV.2 Import and export regulations for selected agricultural products  91
IV.3 Sugar exports by destination, 1992-97  93IV.4 Production of sugar cane and its derivatives, 1992-97  94IV.5 Farmgate prices of selected traditional export crops, 1992-97  96IV.6 Performance indicators of the construction sector, 1992-97 100IV.7 Manufacturing output, 1992-96 102
IV.8 Trade and tariff data for industrial products, 1997 103
IV.9a Structure of clothing exports, 1993-97 106IV.9b Textile/clothing exports to the U.S. market 1996/97 106IV.10 Clothing exports under quota, 1996-97 108IV.11 Alumina and bauxite sector performance 1992-97 111IV.12 Production of industrial minerals, 1992-97 112
IV.13 Summary performance of tourism, 1992-97 114
IV.14 Banking and insurance:  contribution to GDP and employment, 1992-97 116WT/TPR/S/42 Trade Policies Review
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IV.15 FINSAC, loans and investment, actual and projected, 31 March 1998 116IV.16 Minimum capital requirements for financial institutions 118IV.17 Key prudential indicators of commercial banks and licences under the Financial
Institutions Act, 1996 and 1997 119
IV.18 Key prudential indicators of building societies, 1996 and 1997 120
IV.19 Top ten stocks by market capitalization, 1996 and 1997 123IV.20 Ports:  ship traffic and cargo flow, 1992-1996 125IV.21 Telecommunications indicators, 1992-97 126IV.22 Telecommunications and transport:  contribution to GDP and employment, 1992-97 126
IV.23 Output and distribution of electricity, 1992-97 127
IV.24 Volume and value of petroleum imports, 1993-96 128Jamaica WT/TPR/S/42
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APPENDIX TABLES
Page
AI.1 Exports by destinations, 1991-96 135AI.2 Imports by origin, 1991-96 136
AIII.1 List of items on which suspension of the CET under Article 32 of the Common Market Annex
has been granted for an indefinite period subject to review by the Council (List A), 1997 137
AIII.2 Items on which minimum rates have been agreed by the CARICOM Council (List C), 1997 140AIII.3 Goods classified as "cost of living" under Jamaica's Customs Tariff (Revision) (Amendment)
Resolution, 1995 147
AIII.4 Total charges levied on selected items 150
AIV.1 Jamaica's MFN tariff by ISIC category, 1995 152
AIV.2 Jamaica's trade by ISIC category, 1996 155Jamaica WT/TPR/S/42
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SUMMARY OBSERVATIONS
1. In the past twenty years, but
particularly since 1985, the Jamaican
economy has become relatively open and
liberal, with few restrictions to trade.  A
liberalization process engaged in theframework of CARICOM has gone hand-in-
hand with commitments under the multilateral
trading system.
(1) ECONOMIC ENVIRONMENT
2. After average GDP growth of 5%
between 1962  and 1973, the Jamaican
economy underwent  a period of declining
output and large internal and external
imbalances that lasted until the mid-1980s.
Although a more outward looking strategy wasinitiated somewhat earlier, it was not until
1985 that Jamaica started a comprehensive
programme of structural reform and
liberalization, aimed particularly at restoring
external balance and reducing state
intervention in the economy.  The process of
structural reform, supported by IMF andWorld Bank programmes and by debt
rescheduling, was continued and strengthened
during the 1990s, when price controls were
dismantled, several public enterprises
privatized, import duties reduced and the roleof the private sector in economic activity
enhanced.
3. GDP grew at an average rate of some
2½% in the decade following 1986.  Monetary
discipline served to help bring inflation downfrom 80% in 1991 to around 9% in 1997.
However, the consequent high interest rates
and real appreciation of the currency,
combined with a financial sector crisis, again
slowed growth and led to an economicdownturn in 1996 and 1997.
4. After a period of budget surplus
between 1990 and 1995, resulting from an
improvement in tax collection, reductions in
expenditure and income from privatization, the
fiscal balance deteriorated in 1996, to a deficit
of 7.2% of GDP in fiscal 1996/97 and 9.5% in1997/98.  The main reasons for this increasewere the reduced rate of economic activity
stemming from the financial sector crisis
(leading to lower tax revenues) and increases
in government spending resulting from higher
interest payments and a growing public sector
wage bill.
5. The economy is very dependent on
trade, with external transactions in goods and
services representing over 100% of GDP.
Tourism has been the main earner of foreign
exchange since 1983, followed by exports ofbauxite/alumina and clothing;  these three
sectors account for 75% of foreign earnings.
The relatively low degree of export
diversification and strong dependence on
imported oil, inputs and capital goods, meansthat Jamaica is vulnerable to external shocks.
Jamaica's heavy reliance on a single market,
the United States, for exports of manufactures,
and on the United Kingdom for exports, under
preferential terms, of sugar and bananas, adds
to this vulnerability, especially since rising
unit labour costs and an appreciatingcurrency have affected competitiveness.
Despite guaranteed access levels for certain
products, exports of clothing to the
United States have been losing market share to
other more competitive producers during thepast few years;  in the case of bananas,
preferential access could be affected by the
recent ruling of a WTO Panel regarding the
EU's banana import regime.
6. Net private transfers, particularly
remittances from Jamaicans working abroad,
play an important role in the economy.  The
surplus on current transfers, of some
US$ 640 million in 1997, helps finance the
large trade deficit.  Jamaica's imports ofgoods are twice as large in value as its
exports.  Net capital inflows allowed an
increase in foreign exchange reserves in most
of the past ten years; more recently, they have
also been encouraged by high interest rates,
contributing to the real currency appreciation.WT/TPR/S/42 Trade Policies Review
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(2) TRADE POLICY REGIME AND
OBJECTIVES
7. The National Industrial Plan for the
period 1996 to 2010 seeks to achieve annual
GDP growth of between 6% and 7.5%, to
reduce unemployment and to triple the valueof exports.  It targets five strategic clusters in
which Jamaica has traditionally had a
comparative advantage:  tourism, shipping
and berthing, agro-processing, apparel, and
bauxite and alumina.  These are to bepromoted through investment in infrastructure,
technology and machinery and equipment.
The Plan aims at encouraging the
development of skills in areas with higher
value added and technological content,through the use of a number of incentives.
8. A major trade policy concern is the
loss of export competitiveness due to high
production costs and the erosion of
preferential market access, as well as real
exchange rate appreciation.  The authorities
are particularly concerned about exports ofclothing to the U.S. market, which have lost
market share vis-à-vis Mexico and other
lower-cost producers  A policy goal is to
achieve NAFTA-treatment for CARICOM
products.  Another trade policy concern isJamaica's access to the EU market and the
expiry of Lomé IV in 2000.
9. Jamaica, formerly a GATT
contracting party, became a WTO Member on
9 March 1995.  In the Uruguay Round,Jamaica bound all its industrial tariffs at a
uniform ceiling rate of 50% and its
agricultural lines at 100%;  other duties and
charges were bound at 15%, with few
exceptions.  Jamaica is also in the process ofamending its domestic legislation, where
necessary, to give effect to obligations
undertaken in the Uruguay Round.  An Anti-
dumping Act is currently under preparation.
New Patent and Trademark Acts are being
drafted, and the Copyright Act is in the
process of amendment to conform with theWTO Agreement on the Trade-related Aspects
of Intellectual Property Rights (TRIPS), as
well as with the Bilateral Intellectual PropertyRights Agreement with the United States.
Legislation with respect to trade secrets and
layout design is expected to be implemented
shortly.
10. Under the GATS, Jamaica made
commitments on tourism, business (includingprofessional), educational, health related,
recreational, transport and financial services,
as well as in the subsequent negotiations on
telecommunications and financial services.
11. To date, Jamaica has not been
involved directly, as either plaintiff or
defendant, under the GATT or WTO dispute
settlement mechanisms.  However, Jamaica's
exports of bananas may be affected by the
recent WTO dispute settlement funding thatthe EU's import regime and licensing
procedures were inconsistent with certain
WTO provisions.  Jamaica has held bilateral
consultations with the European Union,
Canada, and the United States regarding
technical regulations and standards, seafood,
and textiles.
12. Jamaica is a founding member of the
Caribbean Community and Common Market
(CARICOM).  CARICOM has been moving
towards greater integration since 1991, when
the Caribbean Single Market and Economy(CSME) was endorsed.  Jamaica adopted
CARICOM's Common External Tariff (CET)
in 1991.  In 1993, a four-phase schedule of
CET rate reductions was implemented, with
the goal of lowering the maximum tariff formost goods other than agricultural products to
20% in 1998.  A further step towards
integration was taken in 1997 under two
protocols amending the Treaty Establishing
the Caribbean Community;  these are expectedto lead to the free movement of goods,
services, and capital, while further steps are
taken to liberalize the movement of persons.
Schedule I of the CARICOM Treaty allows a
few national exceptions to the duty free entry
of goods from other CARICOM member states.
Jamaica maintains milk and cream (fresh,evaporated or condensed) on this list;  imports
of these products from other CARICOM
countries are subject to the CET.Jamaica WT/TPR/S/42
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13. CARICOM has preferential trade
agreements with Colombia and Venezuela.
Under the Agreement with Colombia,
Jamaica, as a CARICOM medium-
development country, binds duty-free access
bilaterally as of 1 June 1998 on a number ofproducts that de facto already receive MFN
duty free treatment, on an unbound basis.
Phased, bound duty reductions will be
extended from 1 January 1999 on another
group of products, including some thatcurrently pay MFN customs duties.  The
Agreement with Venezuela offers unilateral
preferential treatment for CARICOM exports.
14. Foreign investment is regulated by the
provisions of bilateral investment agreements,which generally incorporate the national
treatment principle.  To date, agreements exist
with Argentina, China, France, Germany,
Italy, the Netherlands, Switzerland, the United
Kingdom and the United States, while bilateral
agreements with Belgium/Luxembourg,
Canada, Costa Rica, Cuba, Korea and Russiaare under negotiation.  Investment issues are
also covered in CARICOM's agreements with
Colombia and Venezuela.  There are no
restricted areas for foreign investment;
screening practices, used until recently, havebeen abandoned.
(3) TRADE POLICY BY INSTRUMENT
(i) Border measures
15. Since the mid 1980s, when Jamaica
engaged in a process of trade liberalization,import duties have been lowered from rates as
high as 200% to the current maxima of 30%
for industrial products and 40% for
agricultural goods.  Jamaica adopted the
CARICOM's Common External Tariff (CET)in 1991 for all goods, except a group of mainly
agricultural products (List A) and industrial
goods (List C).  Under CARICOM Jamaica has
engaged in tariff reductions to a ceiling,
possibly to be achieved during 1998, of 20%
for industrial products other than those
included in its list of exceptions.  As aconsequence of this liberalization effort,
Jamaica currently has an unweighted averageMFN tariff of 10.9%.  Protection is higher for
agricultural products, with an average rate of
20.2%, while industrial imports face an
average tariff of 8.4%.
16. Tariffs and other price-based
measures are currently the preferred tradepolicy instrument. Jamaica does not use other
measures, such as prior import deposits,
minimum import or export prices, variable
import levies, import surveillance, local-
content requirements, or restrictions forbalance-of-payments purposes.  Jamaica's
tariff structure offers higher levels of protection
to goods with high value added and to
agricultural products.  Inputs, whether raw
materials or capital goods, are generallygranted duty-free access.  Final goods that are
substitutes for domestic production normally
face the highest CET rates, from 20%  to 25%.
Exceptions to the CET, including motor
vehicles and some electrical appliances, are
charged import duties of up to 30%.
17. In addition to tariffs, Additional Stamp
Duties on Customs Warrants Inward are
levied on certain imports, including some
agricultural products, alcoholic beverages,
tobacco products, and aluminium products.
Border charges for agricultural products arecalculated on an aggregate level including the
tariff, and they range from 65% to 90% The
additional stamp duty on alcoholic beverages
is 34%, while tobacco products are subject to
a rate of 56% rate, and aluminium products torates of 20% to 25%..
18. The General Consumption Tax (GCT),
introduced in 1991, is applied on all imported
and domestically-produced goods, except
those exempted or zero-rated.  The rate formost products is 15%.   Motor vehicles are
generally subject to higher GCT rates than
other goods, with rates reaching a peak of
176.92%.
19. Jamaica has delayed the application
of the WTO Agreement on the Implementation
of GATT Article VII (on Customs Valuation),in accordance with the provisions of the
Agreement, and  has until end-1999 to bringWT/TPR/S/42 Trade Policies Review
Page xiv
its valuation system into conformity with its
WTO commitments;  it is in the process of
implementing the changes required.  The
valuation system currently applied is based on
the Brussels Definition of Value. Reference
prices are sometimes used, especially onimports of meat and other foods, clothing,
footwear, and used motor vehicles.
20. The Jamaica Bureau of Standards
(JBS), under the Ministry of Commerce and
Technology, is in charge of developing andcontrolling standards.  It also assesses the
conformity of applied standards with ISO
standards, as well as their WTO conformity.
Jamaica has about 500 local standards,
including 100 technical regulations.  Anumber of compulsory standards have been
notified to the WTO.  Jamaica is in the process
of harmonizing standards, labelling and
packaging with other CARICOM members.
21. Jamaica is not party to the plurilateral
Agreement on Government Procurement.
Government procurement is not included inthe scope of CARICOM, although an action
plan to create a central regional information
coordinating agency has been launched.
Procurement for Jamaican governmental
agencies is regulated by the FinancialAdministration and Audit Act (FAA).  Ministry
of Finance and Planning guidelines are used
for the procurement of supplies.
22. Anti-dumping legislation is being
brought into conformity with the relevantprovisions of the WTO Agreement on the
Implementation of Article VI of the GATT,
1994 (Anti-Dumping Agreement);  this
exercise is expected to be completed before the
end of 1998.  The Anti-Dumping AdvisoryBoard is in charge of conducting
investigations with respect to the dumping of
goods, as well as for the possible application
of countervailing measures.  Some
investigations have taken place, but Jamaica
has never made use of anti-dumping
measures;  nor has it applied countervailingduties on imports.23. Although licences are still needed for
the importation of some products, particularly
motor vehicles and some agricultural
products, in general terms licensing is not
used as an instrument for the protection of
local production, but for health andenvironmental reasons.  Quantitative
restrictions were eliminated in the mid-1980s.
(ii) Measures affecting exports,
production and trade
24. Jamaica applies no export taxes.
There are no export bans, but a system of
export licensing for products representing
over half of Jamaica's exports, including
bauxite/alumina, is in effect.  There are no
export quotas or specific export performancerequirements.
25. Jamaica applies a wide range of
incentive schemes; these generally include tax
concessions and duty-free access for imports
of inputs and capital goods.  Some schemes
are geared at promoting exports, such as
measures under the Export IndustryEncouragement Act (EIEA) and Foreign Sales
Act. Others are designed to promote the
development of some specific industry, such as
the Hotel Incentives Act or the Bauxite
Encouragement Act, while still others aremore broadly applied to a  whole sector, such
as the Modernization of Industry Programme.
The Government plans to eliminate these
incentive schemes by the year 2003, when
Jamaica, as a developing country, is expectedto comply fully with the disciplines of the WTO
Agreement on Subsidies and Countervailing
Measures.  The elimination of these schemes
will be facilitated by Jamaica's programme of
tariff reductions;  duty concessions granted bysome schemes have, in some cases, already
been eroded or wiped out by the elimination of
tariffs on non-competing inputs and capital
goods.
26. The establishment of free zones is
regulated through the Free Zone
Encouragement Act, which has now beenextended to cover single-entity zones, namely,
firms located outside the three existing FreeJamaica WT/TPR/S/42
Page xv
Zones.  Companies in Free Zones must export
at least 85% of their production;  activity is
concentrated in textile and clothing
production.
27. Most price controls and food subsidies
have been eliminated, and only the prices ofcertain basic products and services, including
water, electricity, domestic kerosene and bus
fares, remain under administration.  Business
practices are regulated by the Fair
Competition Act.
(iii) Measures by Sector
(a) Agriculture
28. The agricultural sector, including food
processing, beverages and tobacco, accounts
for some 16% of GDP.  Agricultural exportsare dominated by traditional products,
especially sugar, bananas, cocoa, citrus and
other fresh fruit and vegetables, which
accounted for almost 16% of domestic exports
in 1996.  Processed foods, beverages and
tobacco are an additional 14% of exports.
29. Jamaica is a net importer of
agricultural products;  in 1996 imports were
almost one third greater in U.S. dollar value
than exports.  The main imported agricultural
products are cereals and preparations of
cereals, dairy products and eggs, meat, sugarand sugar products, beverages and spirits,
vegetable oils and fats, and fish.  Until
deregulation in the mid-1980s, Commodity
Marketing Boards acted as single traders for a
number of crops, including cocoa, coffee,bananas, coconut and sugar;  these are now
open to private trading.  Quantitative
restrictions on the importation of agricultural
products were dismantled in the mid-1980s
and replaced by tariffs and additional stampduties.  All  imports of fresh fruits and
vegetables, plants and plant parts require an
import permit, issued by the Plant Quarantine
Department of the Ministry of Agriculture.
30. Agricultural tariffs vary between 0
and 40%, with inputs normally subject to low
rates or granted duty free access.  In 1997,Jamaica's simple average MFN tariff on
agricultural products was 20.2%.  Imports of
fruit, vegetables and sugar face above average
tariffs, while non-competing imports, either for
final consumption or as inputs, face lower
rates.  A wide range of agricultural importsare subject to additional stamp duties, which,
applied on the c.i.f. value plus the tariff, can
raise the level of protection to up to 90%.
Beverages and spirits are subject in addition
to a special consumption  tax.
31. Sugar is Jamaica's main agricultural
export, with a value of some US$ 100 million
in 1997.  Jamaica's sugar exports are directed
mainly to two markets: the United Kingdom
and the United States, under preferentialmarket access and price arrangements.
Exports of sugar to the European Union are
subject to a regular annual quota of
126,000 tonnes and  a supplementary quota of
30,000 tonnes.  The regular quota has been
filled every year, while the degree of use of the
supplementary quota has varied.  The SugarIndustry Authority (SIA) is in charge of
handling specialized market arrangements and
of granting export licences.
32. Bananas are Jamaica's second largest
agricultural export, to a value ofUS$45 million in 1997.  The main market for
Jamaican bananas is the United Kingdom.
Bananas from Jamaica and other Caribbean
countries have traditionally enjoyed
preferential access to the European Unionunder the Lomé Convention.  The sector could
be affected by the ruling of the WTO Dispute
Settlement and Appellate Bodies that certain
import practices by the EU contravene WTO
rules.
(b) Manufacturing
33. The 1997 MFN tariff on imports of
industrial products averaged 8.4%, with a
peak of 30%.  The highest tariffs are applied
on products where there is significant
important domestic production, such as
clothing and apparel articles, leather goods,and soap, toiletries and detergents.  The
manufacturing sector has a number ofWT/TPR/S/42 Trade Policies Review
Page xvi
incentives, including income tax exemptions,
and import duty concessions on production for
export outside CARICOM.
34. Textiles and clothing are the main
earners of foreign exchange in manufacturing.
Some 84% of exports go to the United States,with guaranteed or designated access quotas
for a group of clothing products under the
framework of the Bilateral Textile and Apparel
Agreement signed between Jamaica and the
United States in 1994.  The Agreement appliesto textile manufactured products of cotton,
wool, or man-made fibres.  Quotas are applied
on 20 products grouped in eight categories,
and are generally not filled.  Most companies
benefiting from these programmes operate inFree Zones, particularly the Montego Bay
Free Zone.  Jamaica also has a textile and
clothing arrangement with Canada, dealing
with managed access under a quota system for
underwear.
(c) Mining
35. The mining sector is the second most
important generator of foreign exchange, after
tourism;  its contribution to GDP was 9.4% in
1996, up from 8.8% in 1992.  Bauxite and
alumina production accounted for over 50% of
Jamaica's merchandise exports, generatingforeign exchange earnings of US$ 726 million,
in 1997.  Other mining products of importance
include non-metallic materials, such as
limestone/lime, marble  and gypsum.  However,
as a capital-intensive activity, the sectoremploys only about 6,000 people.  There are
no government controls on mining production,
and prices are market-determined. Although
there are no restrictions on the importation or
exportation of minerals, all exports ofminerals require a permit from the Ministry of
Mining.
(iv) Services
36. The services sector is the largest and
fastest growing in the Jamaican economy.  It
accounts for over 55% of GDP (including
government services) and employs around60% of the total employed population;tourism receipts are almost equal to those
from merchandise exports (US$ 1.4 billion).
Activity in the sector has been largely
liberalized, with few restrictions remaining.
Market access is relatively open in most of the
services sub-sectors;  national treatmentapplies for providers of services in most areas.
Financial services and telecommunications
have undergone major reforms in the past
years, with now a strengthened regulatory
framework.  In telecommunications,privatization had led to a temporary monopoly
in the provision of basic telephony services,
which is expected to be dismantled by 2013.
37. Under the General Agreement on
Trade in Services (GATS), Jamaica scheduled"horizontal" commitments regarding
commercial presence and the movement of
natural persons for all sectors included in its
Schedule.  Specific commitments were
scheduled in business services (including
professional services, computer and related
services, research and development services,real estate and other business services);
educational services; financial services;
health related and social services; tourism and
travel-related services; recreation, cultural
and sporting services; and transport services.Jamaica presented a Schedule of Specific
Commitments in the Negotiations on
Telecommunications. 
 Jamaica also submitted
an offer in the Negotiations on Financial
Services.  The commitments in professionaland other business services, including
computer services generally accord national
treatment;  employment of foreigners
("presence of natural persons") is subject to
the relevant domestic legislation.  For someservices, (e.g. tax agents) an economic needs
test may be required. There are no broad
restrictions with respect to national treatment:
total foreign ownership is allowed in all
sectors.  The last area where foreign
ownership was limited, insurance, was
liberalized in the WTO Negotiations onFinancial Services, concluded in December
1997.Jamaica WT/TPR/S/42
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(v) Conclusions
38. Jamaica's economy has undergone a
dramatic process of liberalization and
deregulation  since  1985,  particularly during
the 1990s.  The financial crisis of the
mid-1990s has, however, contributed to arecession out of which the economy is only
now beginning to emerge.  Dependence on a
limited number of exports and markets, and on
tourism,  keeps  the  island's  economy  highlyvulnerable to both domestic and external
shocks;  in this context, the rising domestic
cost structure and adjustment to changes in
external markets for textiles, clothing and
bananas are cause for possible concern.Jamaica needs both domestic economic
stability and open access to markets for its
exports in order to progress.