WORLD TRADE
ORGANIZATIONWT/TPR/M/85
15 August 2001
(01-4022)
Trade Policy Review Body
5 and 7 June 2001
TRADE POLICY REVIEW
OECS-WTO MEMBERS
Minutes of Meeting
Chairperson:  H.E. Mr. Pekka Huhtaniemi (Finland)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVES OF
THE OECS-MEMBERS 4
III. STATEMENT BY THE DISCUSSANT 19
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 24
V. REPLIES FROM THE REPRESENTATIVES OF THE OECS-WTO
MEMBERS AND ADDITIONAL COMMENTS 34
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 43ANNEX RESPONSES PROVIDED BY THE OECS-WTO MEMBERS TO
ADVANCE WRITTEN QUESTIONS 45
ANNEX I RESPONSES PROVIDED BY ST. KITTS AND NEVIS TO ADVANCE
WRITTEN QUESTIONS 64WT/TPR/M/85
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review of the OECS-WTO Members (Antigua and Barbuda,
Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines) was held on
5 and 7 June 2001.  The Chairperson welcomed H.E. Hilroy Humphreys, Minister of Trade, as head
of the Antigua and Barbuda delegation, H.E. Osborne Rivière, Minister of Trade, as head of the
Dominica delegation and Ambassador Mr. G. Willia ms;  H.E. Elvin Nimrod, Minister of Foreign
Affairs and International Trade, as head of Grenada delegation;  H.E. Sam Condor, Minister ofForeign Affairs and International Trade, as head of St. Kitts and Nevis delegation;  H.E. Julian Hunte,
Minister of Foreign Affairs and International Trade, as head of St. Lucia delegation, and Ambassador
Mr. E. Laurent;  and H.E. Conrad Sayers, Minister of State, Ministry of Foreign Affairs and
International Trade as head of St. Vincent and the Grenadines delegation;  as well as the
representatives of St. John's, Roseau, St. Georges, Basseterre, Castries and Kingstown.
2. The Chairperson introduced the discussant, H.E. Ms. Michèle Pranchères-Tomassini of
Luxembourg, and reminded Members that the discussant would, as usual, speak in her personal
capacity.  In accordance with the established procedure, the discussant had made available in advance
an outline of the main issues she intended to ra ise. This was contained in document WT/TRP/D/64.
3. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The Reports by the Government of the OECS-WTO Members were
contained in document series WT/TPR/G/85, and those of the WTO Secretariat in document series
WT/TPR/S/85.  Copies of advance written questions submitted by Canada; the European Union;
Hong Kong, China;  Japan; and the United States had been transmitted to the delegations of the
OECS.  Replies to these questions are reproduced in the Annex.WT/TPR/M/85
Page 4
II. OPENING STATEMENTS BY THE REPRESENTATIVES OF THE OECS-WTO
MEMBERS
4. The representative of Grenada, speaking on behalf of the OECS-WTO Members, said that the
Trade Policy Review (TPR) exercise could not have come at a more opportune moment, since the
Eastern Caribbean States (ECS) were in the process of articulating a comprehensive economic
strategy.
5. The economies of the Eastern Caribbean were small, dependent, vulnerable, and open, and
primarily single sectored.  The combined population of the OECS was 450,000.  In 1999, the
economies shared a mere 0.0061% of world exports. Bananas, the largest merchandise export of these
economies, amounted to no more than 0.86% of world exports of that commodity.  While the
economies of the ECS might have experienced fairly good economic growth, the chronic problem of
unemployment and persistent poverty remained a nd deserved immediate attention.  Unemployment
was as high as 20% in some of the member States and poverty ranged from 20% to 30%.
6. A recent World Bank document noted that "income inequality in the subregion is quite high"
and that:  "The remaining two-thirds of poor households might be termed conjunctionally poor
i.e. those unable to achieve satisfactory incomes, due to low human capital and/or the economic
environment, including internal and external shocks.  As alluded to at the outset, incomeinsecurity/volatility as a result of shocks is particularly important in the subregion given the small
size, limited economic diversification and openness of the countries and their extreme vulnerability to
unfavourable natural phenomenon (hurricanes, severe storms and volcanic activity)."
7. He recalled that the interdependent nature of the global economy and the ultimate objectives
of the rules and requirements was the economic advancement of all peoples.  Members should never
lose sight of this objective in the rule-making process and in the application of the global economic
system requirements.  If the stringent application of the requirements of the global trading agreementwould lead to more disadvantaged countries and more impoverished peoples of the world, then
Members should pause and reflect on the fundamental objective of the global economic system.  This
was not to say that there should not be greater gainers from global economic integration.  However,
there should not be greater losers, certainly when contrasted with their initial position before the
global trade discipline.  The globalization and liberalization of trade ought not to be viewed as ends inthemselves, but rather as means to achieving the economic advancement of the peoples all over the
world.  In spite of the difficulties faced, the economies of the Eastern Caribbean had pursued prudent
economic policies a monetary policy directed at maintaining a strong dollar so as to provide a more
certain economic environment conducive to economic activity;  and a fiscal policy aimed at
generating surpluses to finance capital investment while at the same time generating employment.
8. In the pursuit of sound economic policies the economies were constantly faced with a number
of dilemmas.  The process of trade liberalization had proved to be in sharp conflict with the need to
raise revenue, and had forced the economies of the ECS to take compensatory revenue-enhancing
measures to mitigate the harshness of the decline in revenue following trade liberalization.  The
economies of the Eastern Caribbean had also engaged in meaningful economic reform.  In some of theECS a number of state-owned enterprises had been privatized and public sector reform had been
undertaken.  The banana industry of the Windward Islands had been undergoing a process of
restructuring, as a result of the DSB rulings.  The economies were currently in the process of
deepening and broadening the financial sector with the establishment of a regional stock exchange in
the near future.  The ECS hoped that this would complete the financial integration of the economies
into the global financial market. In this regard, a regional market for government papers would be
operation in the near future.  There had been a phased reduction in tariffs as part of commitments in
the CARICOM arrangement.  At the same time, the economies had begun the process of removingWT/TPR/M/85
Page 5
quantitative restrictions and instituting a regime of tariffication.  In a very practical way the
economies of the Eastern Caribbean had taken the bold step of de-monopolising thetelecommunications sector, and set in motion a process of liberalization leading to the practical
coordination of sector policy and the establishment of a coherent regional regulatory framework for
the sector. Policy expectations were that liberalization of the telecommunications sector might be
followed by similar processes with respect to other utilities in the economies.  As part of the opening-
up of the ECS economies there had been efforts aimed at implementing measures that would allow thefree movement of labour and capital in the Eastern Caribbean.  The process of free movement of
labour and capital also extended to the wider Caribb ean region, including the rights of establishment.
Complementary policy measures had also been adopted to liberalize current and capital account
transactions, and all the economies, operating under a common central bank, had long attained
Article VIII status.
9. With respect to trade policy, the OECS Members were committed to pursuing a policy course
ensuring investment in the economies and employment to their people so as to eradicate the scourge
of poverty.  While pursuing this policy objective within the context of the global economy there was
the unquestionable need to be accorded greater measures of special and differential treatment.  The
special need of the OECS economies was recognized  at the level of CARICOM as well as in all of
their hemispheric external economic negotiations, through non-reciprocal treatment at least for an
extended period.  The ECS would continue to form ulate policies aimed at attracting foreign direct
investment to stimulate economic growth and employm ent, and to close the savings-investment gap in
the economies on a sustainable basis.  Particular attention would be given to the services sector in
general, and to the tourism industry in particular;  the aim would be to create an environment that
would be conducive to investment with the granting  of concessions to participating foreign investors.
10. All the ECS economies had had problems with  the implementation of their respective
obligations under the WTO Agreements, which were primarily associated with the lack of
institutional capacity, by no means restricted to the implementation of the WTO Agreements but
rather affecting the entire spectrum of economic management and governance.  Almost singularly as a
result of the lack of capacity, some of the economies of the Eastern Caribbean had been unable to
implement some of their commitments under the WTO.  The issue of the lack of capacity had notbeen given the relevant prominence when attemp ting to fully understand the exact nature of the
difficulties faced by small island developing economies like the ECS.  Thanks to the generosity of
Canada, through a fully funded project, the ECS were attempting to build capacity in the field of trade
policy.  The objectives of the trade policy project was, inter alia , the development of a coherent
international trade policy and the strengthening of the OECS capacity to meet their obligations underregional and international trade agreements.  Attempts were also being made to bring institutional
rationality to the various institutions handling matters  related to international trade.  Simultaneously,
there was a programme of legislative reform to  bring laws in line with WTO commitments and
regional agreements.  Looking to the future the OECS economies anticipated posting moderate
economic growth spurred on by tourism, information technology, financial services, construction and,to a lesser extent, agriculture.  The construction sector was likely to be influenced by public sector
projects as well as projects associated with the tourism industry.  While there would be a continuing
role for agriculture, the future of the sector was less certain, especially in the context of the
developments in the European Union banana regime.  In this context, there would be greater efforts to
alleviate poverty.
11. Both fiscal and monetary policies were expected to be in line with the immediate past trends.
The Governments of the Eastern Caribbean would cont inue their prudent fiscal management in order
to generate surpluses so as to facilitate public sector investment in their respective economies.  At the
general macroeconomic level, policy would be guided by the recognition of the close relationship
between productivity and employment in order to better manage aggregate demand in the system,WT/TPR/M/85
Page 6
while stemming pressure on the balance-of-payments. In conclusion, the OECS Members were happy
to be part of this Trade Policy Review, and had learnt a lot from it.  They hoped that WTO Memberswould better understand the peculiar conditions under which the OECS economies had tried to
survive, and their situation.  These economies were small and little could be done to increase their
size, therefore they needed to be treated differently from the larger economies.
12. The representative of Antigua and Barbuda said that his country attached great importance to
the WTO Trade Policy Review Mechanism.  This was an important exercise which promoted
understanding of Members' trade policies and priorities while providing them with the opportunity to
explain their domestic imperatives.  This was the first time that Antigua and Barbuda and the other
OECS Members had participated in this process.  Antigua and Barbuda was confident, however, that
in spite of their small size and level of development, the OECS would make every effort to comply
with their WTO obligations.
13. He welcomed the opportunity to highlight his country's main concerns, in particular its
vulnerability as a small island developing state with limited financial and human resources and
institutional capacity.  A concern that had to be taken into consideration more fully, if benefits derived
by small Members were to meet their WTO obligations and commitments.
14. Antigua and Barbuda appreciated the important role played by the WTO in advocating a rule-
based and transparent international trade environment.  However, in Antigua and Barbuda's view
there was a need for clear flexibility and special and differential treatment for small developing States
with regard to implementation of WTO rules.
15. Antigua and Barbuda had attempted to faithfully comply with all its obligations.  However,
the trade division of his Ministry had a total staff of four individuals dealing with the WTO, the
Cotonou agreement, the Free-Trade Area of the Am ericas (FTAA), the CARICOM single market and
economy, and day-to-day issues.  This situation explained why implementation was such an importantissue.  In this respect, he expressed his delegation's gratitude for the assistance provided by Canada
and the Inter-American Development Bank in the area of  implementation of the WTO Agreements.
16. With regard to the substance of the Secretariat Report, Antigua and Barbuda welcomed the
WTO Secretariat's clear recognition of the vulnerability of Antigua and Barbuda and of the OECS.
The Report had highlighted the high cost structures and the effects of diseconomies of scale.  Thesefundamental and inherent constraints to economic development were compounded by frequent natural
disasters, i.e. five hurricanes over a six-year perio d.  The Secretariat Report also stated that export-
oriented production had only occurred in sectors where trade preferences were available.  Given the
emergence of a globalized economy where trade preferences were rapidly eroding, and the inherently
high cost structure in the OECS, it was incumben t upon the international community to answer the
question of what the OECS islands would produce once their preferences would be eliminated, or why
an investor would choose to invest in a high cost location when faced with a world of low cost
alternatives.  If silence was the only answer to these questions, then the OECS marginalization would
be assured.  During the process of diversifying their economy in an attempt to meet the challenges of
globalization, the OECS remained highly dependent upon tourism and financial services, sectors ofdiversification suggested by the international co mmunity.  While tourism was their largest foreign
exchange earner it was highly dependent upon cruise ships arrivals and also highly vulnerable to the
effects of natural disasters.  Antigua and Barbuda was also encouraged to diversify into the financial
services sector where the OECS faced the possibility of economic sanctions as a result of the OECD
harmful tax initiative.
17. Increasingly, small States, including Antigua and Barbuda, had become vulnerable to trade
and economic policy shift in the developed world.  The banana dispute, the impact of the EuropeanWT/TPR/M/85
Page 7
Union's "Everything but Arms" proposal on the suga r and rice industries, and the OECD harmful tax
initiative were undermining the traditional foundations of their economies.  Antigua and Barbudacalled upon the international community to recognize that a process of globalization that marginalized
small developing States would in the long term serve to undermine the confidence in the multilateral
trading system.  Antigua and Barbuda did not ask for the process of globalization to be retarded or
halted, but rather sought a process of globalizati on that recognised small States' inherent weaknesses,
and that created incentive systems for disadvantaged areas to attract foreign investment, in the sameway as developed WTO Members used such incentives to attract investment into disadvantaged
regions of their own countries.  The time had come for Members to globalize their attitude to inherent
disadvantages faced by small island developing States.  Antigua and Barbuda called on the WTO and
the World Bank to develop mechanisms that addressed the barriers to investment in disadvantaged
small States.  Antigua and Barbuda thanked the Secretariat, and the World Intellectual PropertyOrganization for its assistance in helping it to meet its obligations under the TRIPS Agreement;  it
hoped to benefit from future interventions.  Antigua  and Barbuda attached great importance to market
liberalization, and would strive harder in the future to work towards compliance with its WTO
obligations.  However, in the light of its resource constraints Antigua and Barbuda would continue to
require technical assistance.
18. The representative of Dominica said that when the possibility for a Trade Policy Review of
Dominica was first presented by the Secretariat in 1999, Dominica saw a very unique and valuable
opportunity to do two things.  First, a trade polic y review would create the opportunity to undertake
an internal assessment and stocktaking of the development and implementation of trade policy in
Dominica and of the trade policy measures, it had used over the years.  Second, the exercise would
provide the opportunity to demonstrate to the rest of the world its special and unique circumstances
and the context within which these policies were developed and implemented.
19. The information required was very detailed and extensive.  The process extended Dominica's
resources to the limit and demonstrated in a vivid and dramatic way the enormous problems that small
States faced when trying to engage and participate in the WTO process.  The experience highlighted
that there was a need, inter alia , for targeted technical assistance to small States if they were to meet
their WTO obligations.
20. Notwithstanding its many difficulties, Dominica was able to take advantage of the trade
policy review process to carry out its own internal review of the trade sector, identify the sources of
its strengths and weaknesses, and at the same time assess the appropriateness of the policy measures
adopted over the recent past.  The results of the internal examination together with the useful
interaction with the Secretariat during the process were contained in  Dominica's Government Report.
21. However, the main economic indicators used for the economy of Dominica, such as GDP per
capita and the contribution of certain sectors to GDP , gave a distorted and misleading picture of the
actual situation and of the prospects of an economy that, in reality, had few development options.
Reliance on such indicators led to quite misleading conclusions with dangerous implications for
international policy as it related to particular groups of countries, especially small States.
22. The preparation of its Government Report had provided Dominica the opportunity to
articulate to the rest of the world the basics underlying the policies it pursued.  This was reinforced by
the discussions with, and the draft Report by the Secretariat.  While the Report was an accurate
representation of the trade policies implemented by Dominica, more needed to be said.
23. Dominica was part of the multilateral trade system, and a founding Member of the WTO.
Examination of the reports would indicate clearly that Dominica had demonstrated its commitment to
participating effectively in the multilateral tradin g system to the extent of its administrative andWT/TPR/M/85
Page 8
institutional capabilities.  Since the 1990s, Dominica had been pursuing structural trade reform and
economic diversification in response to globalization and trade liberalization and in an effort toachieve greater integration into the world economy.
24. Policy in this area had and would continue to focus on the development of institutional and
legislative framework to reposition Dominica's trade sector to reap the benefits of globalization and to
overcome the numerous challenges that would undoubtedly emerge as the process continued.
Dominica was ensuring that domestic producers were given the opportunity to undertake thenecessary structural reforms in order to be better positioned to face increased competition.
25. Dominica was actively involved in developing closer CARICOM and OECS economic
integration through participation in the creati on of a CARICOM and OECS single market and
economy.  Dominica saw the CARICOM single market  as an instrument to facilitate sustained
economic development and to assist in the stimulation of investments and, by extension, in jobcreation.  A strong and forward-looking regional economic integration movement was therefore
crucial to the attainment Dominica's economic development goals.
26. The major strategic objective of these actions was to facilitate the accelerated emergence of
modernized, more diversified and resilient economic structures.  These would be supportive of
genuinely profit-oriented private sector investment, which were less reliant on access to guaranteedexport markets and more compatible with the imperative of ecological sustainability and the realities
of the rapidly emerging liberalized global trading environment.
27. To a large extent the economic restructuring experienced thus far had been more in response
to external pressures.  There had been little programmed implementation of a consistent set of policy
initiatives geared towards facilitating the emergence of a more resilient and diversified structure of
production and exports.  Dominica recognized this weakness and was addressing it.
28. The necessary institutional mechanisms were in the process of being established.  The
allocative decision-making process would be restructured to allow for greater integration between
economic and physical planning operations, improved interface between budgeting and planning
functions.  Dominica would also seek to institut ionalize policy dialogue between the public and
private sector and the rest of civil society.
29. Dominica's report gave further details on measures taken and to be taken in the area of fiscal
consolidation, industrial and investment promotion, poverty alleviation, and the sectoral programmes
in agriculture and tourism.
30. However, while Dominica had taken all these steps to secure its further economic
development, it was critically important to make the point very clear.  Dominica was a small island
developing State, and it faced very unique and peculiar disadvantages that characterized small States.The economic development of Dominica could not be fully realized without addressing the structural
and institutional difficulties it faced which profoundly affected the process of its economic growth
and stability.
31. Dominica's difficulties had been well documented in numerous studies, and included
smallness, remoteness, vulnerability to natural di sasters, scarcity of human, natural and financial
resources, openness, limited institutional capacity, and limited diversification.  The consequences of
such difficulties were:  diseconomies of scale, diseconomies of scope, high unit costs of input factors
and transport costs leading to high cost production.WT/TPR/M/85
Page 9
32. Furthermore, Dominica's export capabilities were weak, and the production base was very
narrow.  While there was growth in the services sector that area was in its infancy.  The infrastructurebase was still very weak.  Sustainable development in the tourism sector was constrained by the
inadequacy and sub-optimal use of existing airport facilities.  The internal transport and
communications network remained particularly vulnerable to the effects of adverse weather
conditions.
33. Most of Dominica's trade had been preferential trade either through the non-reciprocal
arrangements with the EU or the free-trade area within the Caribbean Community (CARICOM).
Dominica faced an erosion of these preferential margins because of MFN tariff liberalization.
34. The domestic policies outlined would not go very far if they were not supported by the
international development, trade, and financial institutions of the world, such as the WTO.  WTO
support would include agreement on transition periods of sufficient length to enable Dominica toundertake the necessary reforms. Dominica needed lo nger periods to comply with certain specific
regulations.  This could also include exemption from commitments in certain areas.
35. There was also a need for a formal recognition of the difficulties faced by small States
because of their vulnerabilities and structural disadvantages.  Such recognition needed to be translated
in the creation of a distinct category for small island developing States or economies and theappropriate language enshrined in the WTO Agreements.  The WTO Agreement, as it stood, did not
speak to the very real issue of small States.
36. Action needed to be taken wherever possible to reduce or remove exports barriers for the
small variety of goods that Dominica exported.  Dominica had heard of increased market access for
goods from developing countries resulting from the Uruguay Round, but in many cases this was not
meaningful access, particularly in the area of agriculture where tariff peaks and tariff escalations
posed a major problem for small developing countries.
37. Increased participation of small States in the WTO and international trade discussions was
also needed.  Dominica did not have a mission in Geneva, however it recognized that it was no longer
an option to be in Geneva:  a country simply had to be there to safeguard its interests in the global
economy.  However, the costs associated with such  a venture was far too great for contemplation in
the near future.  Negotiations were under way in agriculture and services, two sectors of greatimportance to Dominica.  However, Dominica had not been participating as wished therein.  If a
round was launched in Doha it would face further demands.
38. Finally, more resources needed to be channelled for technical and financial cooperation
measures to ease the transition of small economies into the multilateral trading system.  Dominica
looked forward to mechanisms that would bring it the benefits of integration while addressing theconstraints it faced as a small and developing country.
39. The WTO needed to create room for all its Members, including Dominica and the rest of the
OECS, whose circumstances necessitated a certain measure of policy space and latitude to pursue
economic development goals.  Dominica recalled that the preamble to the WTO Agreement
recognized that there was a need for positive efforts designed to ensure that developing countries and
especially the least developing among them secured a share in the growth in international trade
commensurate with the needs of their economic development.
40. Dominica, along with the OECS, faced the major task of preparing itself to meet the
competitive challenges associated with liberaliza tion and the dismantling of preferential arrangements
on which its economy had traditionally relied.  Dominica recognized the issues that were currentlyWT/TPR/M/85
Page 10
most relevant to the establishment of a sustainable growth path and the alignment of Dominica's
economy environment with the realities of the globalized market. Dominica had outlined its approachto dealing with those issues.
41. Dominica hoped that it had provided the TPR body with a greater understanding of its trade
policies, priorities, and domestic imperatives.
42. Some measure of success was registered as a result of Dominica's efforts. There were
promising prospects for the offshore financial services.  The tourism sector continued to grow andDominica was establishing itself as the premier eco-tourism destination in the Caribbean. Dominica
had a comparatively modern communications system, which with the coming liberalization would
experience increased efficiency and lower costs.  This, together with a reformed education system to
take into consideration the demands of the information age, and an adaptable and trainable labour
force, would help Dominica to take full advantage of the future.
43. But this was not the entire story.  Recognizing that its future depended largely on
management of its natural and other resources, the Government had taken the responsibility to
establish Dominica as the model of sustainable development for small island developing States in the
Caribbean.  With this in mind, Dominica promised a totally different development picture on its next
review in six years.
44. The representative of Grenada stated that his Government attached great importance to the
Trade Policy Review, a mechanism that provided the opportunity to assess the extent to which
Members were complying with their WTO commitments and aimed at promoting transparency and an
understanding of the trade policies and priorities of individual Members while providing the country
under review with an opportunity to explain its trade policies and relations. Grenada made, and would
make, every effort to comply with its WTO commitments and obligations.
45. The optimistic forecasts in the macroeconomic studies made at the conclusion of the Uruguay
Round of the income and trade gains that would result from the liberalization measures had proved to
be illusory.  A large number of developing countries, including Grenada, found that their exports were
not growing.  As a result, far from becoming integrated in the world economy, they were facing the
prospect of marginalization.
46. Grenada, as a small island developing nation, was endeavouring to rise to the triple challenges
of globalization, trade liberalization, and poverty eradication, and to seize whatever opportunities the
first two challenges presented. Survival in this new economic order largely depended on Grenada's
ability to be more internationally competitive in the era of globalization and trade liberalization.
However, in order to be internationally competitive and reap the benefits that trade liberalization
presented, Grenada as a developing country was constrained by:  (i) smallness and openness of itseconomy;  (ii) vulnerability to natural disasters;  (iii) limited resources (financial, human and
technical);  (iv) high rates of poverty and unemployment, and (v) lack of the private sector to exhibit
dynamism.
47. One of the Government's major objectives over the medium term was the reduction of
poverty.  A national poverty assessment survey conducted in 1999 by the Caribbean DevelopmentBank (CDB) found that 32.1% of the population still lived in a state of poverty;  thus, over the
medium term, the Government's priority was to reduce that figure.  With Grenada's limited resources,
it would be extremely difficult over the medium term to participate effectively in meeting its
international obligations, without serious hardship to  its economy.  Therefore, Grenada would need all
the assistance possible from the developed countries and international organizations.  In allnegotiations at the multilateral level, Grenada had sought to place the issue of vulnerability on theWT/TPR/M/85
Page 11
agenda, but until more recent times these arguments had in the main fallen on unreceptive ears.
Grenada wished to take this opportunity to stress the need to inscribe the issue of vulnerability and theneed for special and differential treatment on the global agenda.
48. Notwithstanding its economic difficulties, Grenada was committed to pursuing economic
policy towards liberalization.  Grenada had embarked on a phased reduction of external tariffs;  tariffs
had been lowered under the various phases of the CARICOM CET.  The tariff was based on the
Harmonized commodity description and coding sy stem (HS 96).  The simple average MFN tariff
in 2000 was 11.2%.  Grenada had also reduced the number of items requiring import licence, which
was used mainly for administrative purposes.  Negotiations were currently under way for the
tariffication of the items where quantitative restrictions were applied, and which would be in
compliance with the GATT.
49. Under a regional initiative, Grenada and four other OECS countries had taken the bold step of
de-monopolizing the telecommunication sector.  In October 2000, the Eastern Caribbean
Telecommunications Authority (ECTEL) was established, to move forward to liberalize completely
the market as from April 2001.  Grenada made commitments under the GATS and under market
access  where bypass of the exclusive operator (Cable and Wireless Grenada Ltd.) was not permitted
until 2006.  However, with the liberalization of the sector as of April 2001, the process had startedearlier.
50. Grenada was further pursuing vigorous policies for the promotion of investment, by gradually
removing restrictions that were applied previously to foreign direct investment and providing an
environment conductive to investment.  Foreign investors could have 100% ownership of business
and there were no restrictions applied on the free movement of capital and profits.  Further, Grenada
did not apply levies or taxes on exports or grant subsidies or maintain countervailing duties on
imports.
51. Grenada pursued trade liberalization not only within the context of its WTO obligations but at
the regional and hemispheric level as well.  CARICOM members were in the process of creating a
single market economy leading to the significant deepening of the regional integration;  Grenada was
an active member of that process.  Regional integration would result in the free movement of goods
and the movement of services, the unrestricted movement of capital, the movement of selectedcategories of skills, and the right of CARICOM nationals to set up business in any CARICOM
country, i.e. the right of establishment.  Gren ada together with other CARICOM members had also
concluded and signed trade agreements with Venezuela, Colombia, the Dominican Republic, and
Cuba.  Grenada was a member of the Association of Caribbean States (ACS) aimed at expanding
regional trade relationships.  Grenada, together with its CARICOM and hemispheric partners, wasalso engaged in the negotiations of a Free-Trade Area of the Americas (FTAA).
52. The increasing marginalization of developing countries like Grenada in international trade
and their inability to take full advantage of the mu ltilateral trading system was attributed to financial
constraints and lack of adequacy trained personnel, in adopting the legal and institutional framework
required for the effective administration and implementation of the complex set of substantive andprocedural rules, which the multilateral trading system had created. Therefore, the future programme
of work would have to be directed towards achieving the main WTO objectives in trade and economic
development by integrating developing countries into the multilateral trading system through,
inter alia :  (i) capacity-building through technical assistan ce, to enable developing countries to device
full advantage from rights and obligations created by the system;  (ii) removing the existingasymmetries and anomalies in the rules, which put developing countries in a position of serious
disadvantage in competing in the international mark ets;  (iii) finding solutions to the problems and
issues with regard to the implementation of the WTO Agreements;  and (iv) ensuring that countriesWT/TPR/M/85
Page 12
whose economies were adversely affected as a result of decline in prices were appropriately
compensated.
53. Special and differential treatment had to be accorded to Grenada and other developing
countries, if they were to succeed in the global economic environment.  If developing countries were
treated equally in the international economic arena, their chances of survival would be minimal, in
light of their economic  vulnerability and lack of capacity.  As a result, they would not obtain the
benefits of economic growth and improved standards of living from trade liberalization.  Thus, LDCsand developing countries should be required to undertake commitments and concessions to the extent
consistent with their individual development, economic and trade needs or their administrative and
institutional capabilities.  Special and differential treatment should take the form of:  recognizing of
the peculiar condition of developing countries and of LDCs;  ensuring that countries whose
economies were adversely affected as a result of decline in prices were appropriately compensated;longer time periods for the implementation of obligations;  and technical assistance.  Even if the
playing field was level, there was the equally critical factor of unequal participation in the game.  The
economy of Grenada could never be economically equal in that sense.
54. Grenada was fully committed to the multilateral trading system and was making every effort
to implement the Marrakesh Agreement, within its constraints.  Thus, Grenada requested that theinternational community recognize the special circumstances of small developing countries.
55. The representative of St. Kitts and Nevis said that his Government was convinced that this
peer review could only improve the quality of national and international public debate on the issues
and ensure an adequate evaluation of the impact of policies on the world trading system by taking into
account not only the opportunities but also the constraints of particular relevance to a small State like
St. Kitts and Nevis.
56. It was customary to assume that WTO membership automatically led to benefits for all
countries, regardless of size and level of development.  St. Kitts and Nevis' experience, however,
suggested that the obligations imposed bore tremendous responsibility, costs and risks which did not
necessarily accord with the benefits for a State of 40,000 persons, a GDP of US$300 million and total
government revenue of US$92 million to meet all the expenses a modern State was expected to
undertake and whose contribution to world trade was so minuscule, less than 0.0002%.  Recently, theWorld Bank and UNCTAD estimated that it cost US$10 million just to implement the TRIPS
Agreement. This sum was equivalent to 14% of th e annual budget of St. Kitts and Nevis for the year
2000.  This high cost of implementation applied equally to some of the other WTO agreements, such
as customs valuation and sanitary and phytosanitary measures.  It was important to remember this size
factor since it was never fully appreciated when compliance with WTO obligations was considered.
57. Notwithstanding its human and financial limitations, St. Kitts and Nevis had a track record of
commitment to an open multilateral system before and since joining the WTO in 1996.  This stemmed
essentially from the basic importance of foreign trade to its economy.  A trade policy that enlarged
access to markets and made this access more secure, as well as strengthening the multilateral system,
constituted a priority for St. Kitts and Nevis.  St. Kitts and Nevis had demonstrated this commitmentin its participation in the multilateral round and built-in agenda negotiations since becoming a
Member of the WTO.  Moreover, in the face of severe threat to the fiscal stability from the onslaught
of hurricanes, St. Kitts and Nevis had kept faith with the multilateral system and did not impose new
nor intensify existing restrictions on payments and transfers for current international transactions;  it
did not introduce any multiple currency practices;  and it did not impose new nor intensify existingimport restrictions for balance-of-payments purposes.  St. Kitts and Nevis' trade regime had been
characterized by the following:  almost total liber alization of the capital account;  low average tariff
rates by international standards;  quantitative restrictions limited just to a few items;  an absence ofWT/TPR/M/85
Page 13
anti-dumping and countervailing measures;  and no use of the safeguard mechanism since 1993.
These features reflected the structural openness of St. Kitts and Nevis.  In addition, import and exportcontrols had been kept to the minimum and, except for a few sensitive products, controls were applied
mainly for health, safety or security reasons. The trade regime of St. Kitts and Nevis was not designed
to pick or identify winners through investment sc hemes and did not contain any anti-export bias since
the objective was to focus on foreign exchange earning activities.  This historical openness had been
positive, and had fostered the shift from a dependence on single-crop agricultural exports to a morediversified economy with an emphasis on services.
58. In the last decade St. Kitts and Nevis had continued to pursue the liberalization of its trade
and the deregulation of its economy as evidenced by its unilateral opening, participation in
CARICOM, and the adoption of the commitments ne gotiated within the framework of the Uruguay
Round.  Tariff policy had been essentially governed by revenue concerns and the need to provide thepopulation with basic foodstuffs and other essential items at affordable rates.  As a result, tariffs were
never high enough to afford any real widespread protection to infant industries. This was particularly
evident when in 1993 CARICOM introduced a revised common external tariff.  The 1993 revised
CET would have meant an increase for St. Kitts and Nevis in a number of areas, since the existing
tariff schedule had lower rates, especially in manufacturing.  St. Kitts and Nevis was granted aderogation from the 1993 CET to maintain the lowe r rates on a range of items for cost-of-living
considerations.  The maximum tariff for most industrial goods was 25%, and 66.6% of all tariff lines
carried rates of 10% or lower.  St. Kitts and Nevis had implemented the first three phases of the CET
reduction in spite of the difficulties faced.  The slower pace at which St. Kitts and Nevis was
implementing the CET reduction schedule was due mainly to its revenue constraint.  The revenue
implications were fundamental as St. Kitts and Nevis obtained much of its revenue from tariffs.
Further, the social implications of tariff reduction and the consequential loss of revenue as well as thesensitivity of fiscal restructuring had to be carefully considered.
59. St. Kitts and Nevis had experienced some difficulty with interpretation of the WTO bindings.
It was never its intention to bind other duties and charges.  St. Kitts and Nevis was merely supplying
information on its other duties and charges in response to a request from the Secretariat.  This was for
the purpose of transparency only.  This misunderstanding illustrated the extreme capacity constraintswhich confronted small states when acceding to the WTO.
60. As St. Kitts and Nevis integrated more into the world economy, its government and private
sector were confronted with an expanding array of policy and competitiveness challenges.  St. Kitts
and Nevis continued its efforts at improving trade and investment regimes, building supply-side
capacities, and enhancing the competitiveness of the private sector.  This task was challenging as itrequired major steps towards strengthening the basic human and institutional capacities in the whole
economy.  A major development challenge lay in the promotion of non-traditional products in
manufacturing, agricultural and services output.  It  was a source of concern to St. Kitts and Nevis that
insufficient attention had been paid to the plight of small States in terms of according special and
differential treatment.
61. The extreme vulnerability of small island States resulting from their exposure to economic
volatility caused by high export commodity dependence, the high costs of environmental changes and
impact for small island developing countries, the curse of smallness in terms of building
competitiveness, and the disastrous effects of natural disasters were not considered.  Neither were the
adjustment policies, domestically and internationally, which were needed to facilitate their smoothand gradual integration into the world economy, sufficiently recognized.  In fact, the larger demand
for international regulation of trade, in terms of environmental norms, intellectual property rights,
tighter consumer standards, and contingent protection in the form of anti-dumping and countervailing
duties in a context of reciprocity in trade between developing and developed countries, had placed anWT/TPR/M/85
Page 14
additional burden on small States insofar as developing capacity for trade policy formulation and
implementation was concerned.  As small island-states struggled to respond to the new challengesarising in the sphere of multilateral trade, they al so aimed to strengthening their institutional capacity
and to adopt an approach to trade-capacity development that would address some of the trade-related
constraints, which impacted on trade and investment policy and performance.  However, the costs of
participation in the multilateral and hemispheric trading processes, the difficulties of obtaining
revenue and the fragility of small island States' economy were realities that confronted them, and theycould only succeed if the international institutions like the WTO understood the special circumstances
of micro States, and were sufficiently flexible in their approach in designing appropriate measures.
62. St. Kitts and Nevis recognized that the WTO agenda for the next few years was extensive and
complex. The built-in agenda contained a large number of issues which the Uruguay Round
Agreements made necessary to deal with in greater detail.  There were also implementation issues thathad to be tackled. St. Kitts and Nevis therefore requested that some accommodation be extended so as
to permit it to undertake some of the implementation measures.  This would require lower levels of
commitment and exemptions from certain commitments, extended phase-in periods, and financial and
technical assistance to comply with their WTO commitments.  St. Kitts and Nevis was attempting to
comply with its duties and obligations responsibly, and its participation in the review mechanismunder the new disciplines and Agreements of the Uruguay Round was the proof of this  commitment.
63. The representative of St. Lucia welcomed his country's first Trade Policy Review not only
because it provided the opportunity to restate St. Lucia's commitment to the WTO multilateral trading
system, but also because it provided a forum to explain the difficulties faced by small island
economies, like St. Lucia, in their efforts to fulfill their WTO obligations.
64. St. Lucia hoped that this Review would not simply be a barrage of criticisms for perceived
shortcomings but instead would equip the OECS to operate more effectively within the rules of aliberalized trading system.  First, St. Lucia was a small country with a very young population.  As a
result, St. Lucia possessed limited human, administrative, and institutional resources. This impeded its
ability to participate effectively in the WTO.  Second, St. Lucia's economy was minuscule, extremely
vulnerable to natural disasters, with no mineral wealth and bedevilled by sporadic economic activity.
Consequently, it was difficult for St. Lucia to enjoy the type of economies of scale that allowedproduction of goods and services that could compete with those of larger and more developed
Members.
65. St. Lucia's economic activity focused on very few sectors, namely:  agriculture, mainly
banana production, manufacturing, tourism, and recently financial services.  In the last few years,
attempts had been made at major structural reforms.  In fact, this Trade Policy Review came at a timewhen strenuous efforts were being made to tr ansform St. Lucia's economy from one dominated by
agriculture to one led by the services sectors, mainly tourism and financial services.  These changes,
coupled with international economic turmoil, had resulted in a reduction of St. Lucia's economic
growth rate in last year and a half.  St. Lucia was working assiduously to stabilize its economic
situation.
66. At the macroeconomic level, St. Lucia was a ttempting to reduce the unemployment rate and
to maintain a stable rate of inflation, in the face of continuing threats from countries it had grown to
believe were its allies.  Despite the changing economic environment and difficult economic
circumstances, St. Lucia had in good faith endeavoured to comply with its WTO obligations. Its
presence at the Trade Policy Review, notwithstanding the exceedingly high cost, was testimony to thiscommitment.  St. Lucia believed that it would be much richer as a result, since the WTO would come
to view small island developing States in a much bette r light than in the past.  This was all part of the
learning curve.WT/TPR/M/85
Page 15
67. In the area of intellectual property, St. Luci a had enacted new legislation to promote and
protect intellectual property rights and a WTO TRIPS Review in April 2001 had applauded the workdone.  In the Customs field, the valuation procedures based on the WTO Agreement on Customs
Valuation had also been adopted.  A Bureau of Standards had been established, though it suffered
from the lack of resources, particularly manpower and scientific equipment. St. Lucia and other OECS
Members had taken a collective stance to dismantle the monopoly in the telecommunications sector.
Legislation had been enacted, which liberalized the industry effective from 1 April 2001. St. Luciaextended MFN treatment to all its trading partners, the major ones being the United States, Japan, the
EU, and other CARICOM member countries.  In 1999, imports were 68.9 % of GDP. St. Lucia
granted duty-free access to CARICOM-produced g oods, and, with CARICOM States, was in the
process of creating a single market and economy which would significantly deepen the economic
integration process in the region.  As a member St ate of CARICOM, St. Lucia was party to free-trade
agreements with Venezuela, Colombia, the Dominican Republic, and Cuba.
68. Regarding WTO notification obligations, St. Lucia had only been able to make a few
since 1995, this had been a direct consequence of its severe financial and human resource constraints.
St. Lucia was in the process of putting mechanisms in place to address this problem.  In trade-related
legislation, due to a lack of administrative capacity St. Lucia had not yet been able to undertake thecomprehensive review needed to ensure its compa tibility with WTO rules.  However, the Government
had decided to utilize its own resources to contract a  foreign law firm to begin this exercise before
year-end.  The degree of liberalization that St. Lucia had achieved thus far had had a serious impact
on its economy as a result of the reduction in tariffs on international trade, which accounted for 56.8%
of total government revenue in 1999.  In this respect, it had been estimated that with the adoption of
Phase Four of the CARICOM CET, which would further reduce applied tariffs, St. Lucia would
experience a reduction of approximately $5 million in revenue from import duties and consumptiontax.
69. The need to diversify agriculture, to reorganize the banana sector to meet the challenges of a
new banana market, occasioned by the WTO ruling on the trading arrangements under which it
exported bananas to Europe was, in St. Lucia's opinion, cruel and unfair treatment.  The experience of
St. Lucia and the other OECS banana exporting countries with the WTO dispute settlementmechanism had been unfortunate and bitter.  St. Lucia had discovered that, even though they were the
most likely to be affected by the WTO rulings, they had hardly had a voice in the judicial process, and
that their sovereign right to choose their representatives to the proceedings was questioned, and two of
them were ejected.  Subsequently, the unfavourable DSB ruling on the European marketing
arrangements had destabilized the banana industry as it had led to a loss of confidence among farmers,again resulting in a loss of revenue due to decreased production.  Given the impact of WTO
obligations and rulings on the social fabric of its fragile economy, St. Lucia had to raise the clarion
call for the WTO to awaken and take cognizance of the particular and peculiar needs and
circumstances of small island economies.  The pace and extent of trade liberalization could not be the
same for those who were only able to crawl as for those who leaped.
70. St. Lucia appreciated the technical assistance that the WTO had already extended through
training courses, and the establishment of a WTO reference center.  However, more was needed to
strengthen St. Lucia's capacity to comply with its WTO obligations.  For example, as a result of the
changes in customs valuation, undervaluation had become one of the biggest problems confronting
St. Lucia's customs authorities.  Technical assistance was needed in order to develop the capacity todetect and prevent these incidents of customs fraud.  Another of the challenges facing St. Lucia was
its inability to afford a resident mission at the WTO in Geneva.  For a small developing country, the
cost of such representation was prohibitive, and the human resources for an effective presence were
scarce. St. Lucia had considered joint representation with the other OECS countries, but this had
proved to be difficult.  One way in which the WTO might assist in this dilemma would be for itsWT/TPR/M/85
Page 16
larger and more wealthy Members to come together and provide the facility of an office complex in
Geneva that would house the representatives of small countries at concessionary rates, similar to oneat the United Nations in New York.  St. Lucia also expressed its sincere appreciation for the efforts by
the WTO Secretariat and the Commonwealth Secretariat, inter alia , to establish a facility to service
and support non-resident missions.
71. St. Lucia reiterated its commitment to the WT O, and to a rule-based liberalized trading
system.  However this system had to take into account the circumstances of all its Members, and inparticular the smallest and most vulnerable so as to ensure that they did not feel that the system
excluded them at critical moments.  If there was not a clear recognition of the unique circumstances of
small island developing States, which precluded them of taking advantage from the new trade
opportunities, small island-developing states would feel excluded.
72. Every country had the right to development and improved welfare.  If this fundamental WTO
objective was not to be frustrated than the peculiar situation of small island-states had to be
accommodated within the regulatory system.  Shoul d the one-size-fit-all approach apply to small
island-states, it would result in further marginalization.  St. Lucia was aware of the efforts made to
launch a new round of negotiations.  St. Lucia co uld not justify its unequivocal support unless the
problems which had been plaguing it since the end of the Uruguay Round were ironed out. It would
be futile to participate in a system with regulations  and procedures that turned out to be onerous and
burdensome, retarding economic development rather than  giving a fair opportunity to all to enjoy the
successes of the new world trading order.  Armed with the faith that equality could be achieved, St.
Lucia's dream of progress could be realized in a spirit of mutual cooperation in which small nations
could realize the status of true partners in the global trading system.
73. The representative of St. Vincent and the Grenadines said that as a small island developing
State it was committed to the process of trade liberalization and integration into the new global
economy as well as to the need to place on the agenda of the WTO the special and differential
treatment required to survive on such an uneven playing field.
74. While St. Vincent and the Grenadines, like other Members, had not realized trade benefits as
a result of the Uruguay Round Agreements, it recognized that the process of trade liberalization was
inevitable, and serious attention was being paid to the restructuring of its economy.  St. Vincent andthe Grenadines had participated in the Trade Policy Review exercise, and honoured its obligations for
transparency and review of its trade policies within the framework of well-meaning commitments to
the WTO disciplines.
75. The Government of St. Vincent and the Grenadines had come to this exercise only two
months after assuming government as a result of general elections preceded by nine months of intensenational debate on the social and economic challenges facing the country.  It was cognisant of the
scepticism especially in the agricultural sector, of the usefulness of the WTO in representing the trade
and development interest of small States.
76. The erosion of trade preferential arrangements with its traditional partners, as exemplified in
the banana dispute, had shaken the foundations of the economy, created widespread rural poverty,
disenfranchisement, and a myriad of social and economic problems.
77. Nevertheless, as St. Vincent and the Grenadines identified alternative productive activity in
which some level of international competitiveness could be achieved, believed that the WTO
multilateral framework might be the best arena to integrate its fledgling economy into the global
trading environment.WT/TPR/M/85
Page 17
78. St. Vincent and the Grenadines therefore welcomed the Trade Policy Review exercise with its
sub-regional partners to explain the difficulties experienced in bringing its domestic trade regime intocompliance with the WTO.  The pressure of domestic circumstances forced St. Vincent and the
Grenadines to use the TPR exercise as an opportunity to highlight concerns of special interest to small
vulnerable States with limited resources.  These conc erns needed to be taken fully into account if the
benefits and gains from trade were to be commensurate with the high cost and the share weight of the
commitments assumed by St. Vincent and the Grenadines as a WTO Member.
79. As a small island developing State, St. Vincent and the Grenadines recognized the need to
strengthen its domestic institutions and empower the private sector to take advantage of the trade
opportunities created by the multilateral trading system.  In this regard, attempts were being made at
diversifying the production and export base and creating an environment conducive to attracting and
increasing investment.
80. St. Vincent and the Grenadines was committed to  the continuation of its trade liberalization
programme, which preceded the Uruguay Round.  During the Uruguay Round, transparency,
predictability and guarantee of access to St. Vincent and the Grenadines' market were enhanced
through ceiling bindings of its tariffs on all agricultural and industrial products.  As a result of the
Uruguay Round, an automatic licensing system and unilateral reduction in tariffs far below the boundrates had provided liberal access to the St. Vincent and the Grenadines market for all its WTO trading
partners.  More recently it had also made offers under the GATS.  This liberal and open stance was
reflected in a simple average MFN tariff in 2000 of 10.9%.  The average tariff on agricultural imports
was 18% and 9.6% on non-agricultural imports.  The Government had also implemented the
Agreement on Customs Valuation in its comprehensiv e Customs Administration Act.  Additionally, a
new operational manual for the Port Authority had modernized the operations of the several ports of
entry.  The foreign exchange control reforms, comp rehensive tax reforms, and the enactment of a Fair
Competition Act, all intended to reduce transaction and business costs, provided a level playing field
for investors and encourage competition and efficiency for the benefit of the consumer.  St. Vincent
and the Grenadines had also operationalized a National Economic Transformation Programme,
popularly known as the first 100-days plan, and the first phase was already in the process of
implementation. This programme outlined a wide range of policies, which would be used as catalystsin the process of macroeconomic transformation and growth.  The programme would focus on an
aggressive export-oriented, private-sector-led development strategy.
81. The changing nature and volatility of international economic relations and the relatively
greater vulnerability of small economies in th e new global environment made it mandatory for
St. Vincent and the Grenadines to redouble its reliance on an outward-looking approach to trade anddevelopment.  This facilitated its participation in  the deepening and widening regional integration
process as a means for its survival.  St. Vincent and the Grenadines was therefore committed to the
creation of the CARICOM single market and economy at the regional level, and of the Free Trade
Area of the Americas (FTAA) by the year 2005.  These initiatives would allow it to build the capacity
and create the conditions to facilitate adequate responses to the new requirements of universalefficiency and global competitiveness, and further required that St. Vincent and the Grenadines create
the institutional capacity to implement the commitments and obligations undertaken under bilateral
regional and multilateral trade agreements.
82. The Economic and Social Transformation Pr ogramme would be implemented on a sound
institutional framework, including social partnership between the Government, the private sector, andlabour, including trade unions, to constitute a Tripartite Committee.  The primary objective of this
group was the achievement and maintenance of sustainable macroeconomic growth and development
through a process of cooperation in economic management among the three major partners.  A broad-
based National Economic and Social Advisory Council, composed of public and private sectorWT/TPR/M/85
Page 18
officials, NGOs and other civil society partners would act as the prime mover in the Economic
Transformation Programme.  A Cabinet Comm ittee on the Economy comprising ministers and
technical experts from the main economic growth sectors was established.  Overall direction would be
provided by this Cabinet Committee to the Transformation Programme.  This institutional framework
would allow greater private sector participation and initiative in the national effort to achieve
international competitiveness, especially in areas that could serve as catalysts for the diversification of
the production and export base, and the modernization of the economy.  In this respect, the WTO-related matters had been given high priority in all of the committees established.  St. Vincent and the
Grenadines relied heavily on a limited number of trained officials to provide technical guidance in this
area.
83. The Government of St. Vincent and the Grenadines had also embarked upon a thorough fiscal
review of the economy, and therefore confirmed that as the least fortunate of the OECS Memberspresent its economy faced an economic policy dilemma.  The unilateral reduction in tariffs consistent
with the WTO principles had severely eroded the revenue base required for public sector investment
in social services and amenities.  Since tariffs and other border taxes constituted the main revenue
source to government, reduction in this revenue placed greater strain on the economy, and
compromized its ability to provide the economic and social infrastructure for investment, employmentcreation, and business development.  Coupled with the reduction in government revenue was the high
per capita cost of administration, both in the public and private sector.
84. The small size of St. Vincent and the Grenadines economy did not provide the economies of
scale for competitive market development, resulting in the creation of natural monopolies and
oligopolies.  This hindered the transfer of welfare benefits from suppliers to consumers.  The lack of
institutional capacity was also a characteristic of the small and financially strapped economies, like
St. Vincent and the Grenadines.  It was unable to attract technical expertise and, where developed,was unable to retain them.
85. St. Vincent and the Grenadines appealed to the WTO to place the concept of special and
differential treatment for small and vulnerable developing States firmly on the agenda and work
programme of the Committee on Trade and Development.  St. Vincent and the Grenadines' experience
in Seattle, and more recently in Quebec, had indicated that countries participating in the liberalizationprocess had to assure their critical constituency that the multilateral framework was concerned with
the just, equitable distribution of wealth while ensuring the development of the people and the
preservation of the environment.
86. St. Vincent and the Grenadines required extended time periods for implementation of the
Uruguay Round Agreements, as well as technical and legal support in the areas of intellectualproperty, anti-dumping and subsidies.  One important objective of the GATT and the WTO was the
achievement of a sustainable level of growth and development by all countries. Therefore, technical
assistance and support for implementation of extended time periods, as well as for preferential
arrangements and non-reciprocal agreements, historically important to its trade, had to be maintained
if St. Vincent and the Grenadines was to achieve a smooth transition into the liberalized globaleconomy and sustainable growth and development as promised by the WTO.  In this respect, St.
Vincent and the Grenadines requested the support of  WTO Members for the granting of a waiver for
the Cotonou Agreement signed between the ACP countries and the European Union.WT/TPR/M/85
Page 19
III. STATEMENT BY THE DISCUSSANT
87. The discussant (H.E. Ms. Michèle Pranchères-T omassini, Luxembourg) said that the OECS-
WTO Members had committed themselves to a process which, once begun, implied a review of their
trade policy every six years.  She welcomed this collective decision, the political signal of a long-term
commitment to the WTO, a commitment which also reflected an investment on the part of these
states:  an obligation of result.  A synergy had been developed with the trade policy review officials
that had helped to establish contacts with the WTO, and which extended beyond  the scope of formalaccession to a multilateral organization.
88. None of the six OECS was permanently represented in Geneva:  there was an obvious
communication problem.  Members remembered that the tense moments of the banana dispute had led
to the arrival of Saint Lucia on the WTO scene.
89. The multilateral framework offered by the WTO could work to the advantage of small
countries, and in particular the small island developing countries like the OECS.  In this regard, she
hoped that the TPR would contribute to identify ways  to help the ECS to achieve optimum integration
of their economic development into the international trading system.  The TPR should also be an
opportunity for Members to hear OECS concerns.
(i) Economic and institutional environments
90. World trade had played a predominant role in the history of these six island-countries.  Their
first TPR coincided with the preparations in Geneva of the World Conference against Racism to be
held at the end of August in Durban (South Africa), and which would address the issues of slavery
and colonialism, Members could not but recall the historical burden carried by these countries:  these
were sensitive and complex issues that Members had to bear in mind.
91. In a way these six states had been subjected to the effects of globalization for five centuries.
Nowadays, they were among the first countries to suffer the less favourable effects of globalization:global warming had led to an increase in the violence of cyclones and contributed to soil erosion.
This added vulnerability was devastating for all the economies under review. Usually, because of
these threats people would leave their country of origin, particularly when the standard of living and
of education increased their mobility.  In the case of the OECS, expatriation seemed to play only a
marginal role:  in spite of the environmental th reats, in spite of the persistent poverty and
unemployment, there seemed to be social stability and cohesion, which undoubtedly had contributed
to the consolidation of these countries as a tourist destination, a major source of income, and to the
attraction of foreign investment in general.
92. In this context, the educational system seemed to be one of the strong points of the OECS.
With the knowledge-based economy taking over, even from the niche economy, the level of educationof local populations added to the competitive advantage of a foreign investment.  How far was it
possible to go?  What was the cost of educating elites abroad?
93. While access to information technologies was seen as a priority, the on-going liberalization of
the telecommunications market might conceal more di fficulties than it might actually resolve, owing
to the geographical environment and exposure of distribution networks to natural disasters.  Whatcould be more eloquent than the technological gap revealed by Dominica's telephone penetration rate
of 69% for a population of which 30% under the poverty threshold.  Apart from lower rates, what
developments could be expected from deregulation in terms of increased access to information?  As
shown by the example of the customs administratio ns, the computerization battle was far from won.WT/TPR/M/85
Page 20
94. The steady development of infrastructure would continue to place a burden on public
finances, and this raised the question of how the authorities intended to deal with the prospect ofstructural indebtedness.  Had there been any common thinking, for example, about how to improve
the efficiency of government procurement?  Was there an environmental component in public
investment planning?
95. The fiscal dependence of these countries on tariffs and other import taxes monopolized and
provided subsistence for human resources which could otherwise be mobilized by the public orprivate production sector.  This should provide food for thought.  To what extent might this
administrative overload, which impeded the development of a more diversified economy, be due to
the countries' adherence to the CARICOM CET.  While the CET was clearly designed for countries
with a strong potential for exporting manufacture d goods, the OECS members import virtually all of
their manufactured goods.  Consequently, the OECS had to apply the CET with a system ofexemptions that was not only complicated in itself, but that varied from country to country.  Did the
OECS members intend to negotiate with their CARICOM partners, a system of CET exemptions that
was easier to manage, more transparent, and hence more favourable to trade, as the Secretariat Report
suggested?  Had the possibility of a single reduced tariff been considered?  If any progress was to be
made, the situation on the spot had be carefully examined, and she commended the efforts made inthis connection by the Trade Policy Review officials to identify technical cooperation needs.
96. While political and administrative structures were undeniably complex, economies of scale
were often made unfeasible by the fragmented geographical structure.
97. However, the devotion to sovereignty as an indication of a strong feeling of individualism
constituted the strength of small countries.  This spirit of independence was also reflected in the
cautious approach to the transfer of powers that th e development of common institutions such as the
OECS Secretariat or the CARICOM negotiating machiner y could involve.  Add to this the tensions on
the employment market and the problem of rehabilitating farmers on the one hand, and the shortage of
labour, particularly in the Leeward Islands, on the other hand, and the problems of the eastern
Caribbean archipelago began to bear a strong resemblance to the crisis caused by the impact of
globalization on the nation-states, particularly in Eu rope.  While the member States of the European
Union could afford the luxury of discussing their institutional choices here, for reasons of scale, therewas a pressing need for economic and social results, as expressed by the Prime Minister of
Luxembourg, Mr. Jean-Claude Juncker.
(ii) Trade policies
98. Several of the Government Reports revealed with satisfaction how the preparations for this
Review had improved inter-institutional cooperation.  When Dominica and St. Lucia, for example,had to agree on a justification for prohibiting the importation of shaving brushes from a given WTO
Member, as in so many other cases, they were in the process of putting their trade policy to a very
simple and very direct test.  Likewise, when a country was asked to identify its technical assistance
needs, it should be entitled to ask for a prior evaluation of those needs.  This should be a mutually
rewarding exercise for everyone.  In this spirit, she urged the OECS members to allow all of thedifferent divisions of the WTO Secretariat to use the data collected during the current Review to
enhance their understanding of the OECS specific problems.
99. The OECS integration, through the WTO, in a rules-based trading system, their regional
integration efforts (OECS, CARICOM, FTAA and extension of the bilateral agreements), the
historical links they had cultivated with the Commonwealth or la Francophonie, not to mention theirpartnership with the European Union, suggested that there was a consensus on the need to takeWT/TPR/M/85
Page 21
advantage of the development opportunities available to them.  To what extent were they truly
available?  Should they be used indiscriminately?
100. An archipelago made up of small, independent multi-island States should not underestimate
the importance of building alliances.  This required a permanent balancing act as was only too clear
when it came to defending closer ties with Cuba. Regrettably, there were some missing links:  what
about trade with the French departments of Martinique and the Guadeloupe?
101. It was true that the actual impact of the extended network of alliances had been mixed:  (i) As
shown by CARICOM's position with respect to the WTO or the FTAA, integration in that community
seemed to be decisive.  Had internal coordination in the OECS been strengthened as a result?
(ii) Partnership with the EU continued to be of major importance, and progress would hopefully be
made in accepting the consistency of the Cotonou agreements with the WTO rules.  If there were
problems relating to payment deadlines, they might be linked to excessive conditionality, but theywere probably, above all, a result of the major crisis affecting the European executive, due precisely
to accounting problems, a crisis that had been fatal to European Commission President Jacques
Santer.  It would take time for the European Commission to strike a satisfactory balance between
efficiency in the field and corresponding accounting efficiency at home.  (iii) In the area of duty-free
market access, the European "Everything but Arms" initiative launched at the third United NationsConference on Least-Developed Countries could result in a competitive disadvantage for the OECS
Members.  However, the phased approach for sensitive products, in particular sugar and bananas,
should help to temper these concerns, particularly, and this was the main argument for such an
initiative, since banana production did not exhaust the preferential quotas allocated, even in the new
agreement on the EU banana regime.  The purely theoretical competition from the LDCs was nothing
to worry about:  she was more worried at the tendency to prejudge, somewhat hastily, the potential for
development of banana production, in particular, and agriculture, in general.  The survival of theOECS depended on the preferential regime for agricultural exports towards the European Union.
(iv) Participation in agreements providing for duty-free access to the U.S. and Canadian markets for
manufactured goods made sense in the framework of CARICOM, but was not necessarily relevant to
the OECS – or else it led, as would seem to be the case at present, to the development of a
manufacturing industry through free zones, where the comparative advantages were far from obvious.In the short-term, however, for lack of any better solution, this was a means of rehabilitating the
workers who had lost their jobs in the declining agricultural sector.  In the long-term, the loss of
traditional knowledge, and in the short-term, desertion of the land without any prospects for
substitution, was a source of concern.  The development of free zones with export-oriented industries
seemed to be taking place at the expense of the development of small enterprises.  But couldindividuals be encouraged to take risks when they were threatened with ecological disasters?  (v) As
regards the non-reciprocal generalized preferential access agreements, their value appeared to be
limited.  Moreover, it was unclear what the impact of the enlargement of the European Union would
be.
102. At the WTO, as in other institutions,  often what was demanded was so out of proportion with
the realities on the spot that the commitments made, but not respected, often resulted in tension or
complacent inertia.  This explained the problems invo lved in special and differential treatment and in
technical assistance.  Implementation was one of the WTO's major problems.  She hoped that efforts
made, like in the OECS case, to outline, with the Secretariat and the WTO Members, solutions that
were adapted to local situations, would help to establish the general framework for a new round ofmultilateral negotiations, a round in which technical cooperation and capacity-building would be at
the centre of discussions.WT/TPR/M/85
Page 22
(iii) Sectoral policies
103. In spite of all these difficulties, the overall impression emerging from the OECS statements
was that there was a determination to take things in hand.  But the question remained:  should
Members  make promises they could not live up to?
104. The Secretariat had rightly pointed out that the Review had posed certain problems:  the
collection of data was not easy, and given the scale involved, statistics could be misleading, since the
critical mass to justify generalizations was lacking.   At the same time, the considerable fluctuations
caused by an isolated event, such as the decommissioning of a ship for one tourist season,
underscored the basic vulnerability of the economies under review.  The absence of any room for
manoeuvre clearly limited both the possibility of diversification and the capacity for recovery.
105. This was why the decline in traditional agriculture was a source of concern, even if she fully
recognized the need for a broad range of reforms.  The problem facing Grenada, at present, inorganizing the production and marketing of nutmeg was significant, otherwise, why would the
international press bother to discuss it?  The EU's Banana Production Recovery Plan and the Winward
Islands Strategy appeared to be the pillars of a medium-term trade strategy that would not be simple.
For reasons of scale, it would not be possible to do everything at the same time:  would market
surveys make it possible to establish priorities at this point already?
106. It was no accident that the CARICOM proposal on agriculture included the notion of multi-
functionality.  The impact of agriculture on the prevention of ecological disasters should not be
underestimated:  was it right to abandon crops that contributed to the fight against soil erosion?
107. Landscape preservation was an integral part of the development of quality tourism.  The
tourist industry needed to be diversified to take account of the competition of cruise tourism.
Customers had to be targeted:  initiatives such as the development of a network of tourist boats were
commendable.  Between cruise tourism and national tourism, the option of locally organized regionaltourism appeared to have encountered a number of problems, the most obvious of which was
transport.
108. The apparent dynamism in the tourist industry in particular called for a shared awareness of
the risk of economic destabilization linked to the spread of HIV/AIDS.
109. On the whole, the impression was that the OECS members were under pressure to strike a
balance between providing facilities to attract foreign investment and exporting the profits generated.
This problem was particularly acute when it came to managing the financial sector where, for the
most part, offshore activities remained dissociated from onshore activities.  Was there any data on
length of stay beyond the tax holiday?  And on the world market, were the diversification of financial
products, demand for products specifically focusing on development projects, and the growinginterest of institutional investors in micro-finance taken into account in developing a banking sector
oriented towards the local market?  Had any thought been given to the possible synergies between
these two sectors in the countries where the agricultural credit institutions were only just emerging?
110. Of course, this depended on Members consolidating their offshore financial services in the
face of international pressure against competitiveness based on the principle of fiscal sovereignty, andknowing that this single factor of competitiveness was now within reach of a growing number of
developing countries.
111. The impact that the financial sector had on the reputation of the OECS was a matter of
general concern.  This reputation was due, inter alia , to the introduction by the OECD in 1998, at theWT/TPR/M/85
Page 23
initiative of the Committee on Fiscal Affairs, of a system of lists identifying the "tax havens" and
classifying them according to their willingness to cooperate, implying an extension of normal
cooperation in the penal area to tax administrations and other institutions.  Luxembourg, together with
Switzerland, was able, as a member, to attend the OECD negotiations.  The OECS were not given
such a possibility:  false assumptions were made, and there was a deliberate effort to damage their
reputation, not very difficult given the media coverage involved.  Now, the trend seemed to be
reversed, and tax competition was no longer seen as automatically being unfair:  fashion played a role,even in tax-administrations-related issues.  However, the damage was done and harassment had
become customary, as reflected in the pressure on the OECS members to abolish, inter alia , what was
known as economic citizenship, as if what was common practice in other States were automatically
suspect in the case of a small underdeveloped State.  A passport from a small State could not be
rivalled in terms of traceability.
112. To revert to the subject of offshore centres, it would be interesting to know how the DSB
would have ruled if the initiative of the OECD, a nd of most of its member States, had been brought
before the WTO.  It was true that the WTO had only existed since 1995, but nevertheless, one
wondered why the States whose tax administrations felt that they had been injured had not brought
their complaint before the WTO.  Did they fear the independence of a panel ruling?  Perhaps thecreation of these defamatory lists could have been challenged.  Perhaps the nuance between tax
competition and fiscal dumping or between tax haven and tax hell might have introduced an element
of balance and conciliation in this lop-sided discussion.  But this did not happen, and frankly,
Luxembourg had not thought of it. She believed sh e was not misinterpreting the OECS thoughts when
she said that the WTO was still too recent to enter into the field of vision of the countries concerned;
and besides, legal assistance was needed to bring a case before the DSB.
113. In relation to the communication problem, if the TPR could lead to the establishment of a
permanent representation of the OECS-WTO  Members in Geneva, that would be a true achievement.WT/TPR/M/85
Page 24
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
114. The representative of Hong Kong, China appreciated the support showed by the OECS
Members to the multilateral trading system and to trade liberalization in spite of their difficulties and
capacity constraints in implementing the WTO Agreements.  Hong Kong, China urged the OECS
Members to further pursue their trade liberalizati on efforts, while recognizing the need to provide
adequate technical assistance to improve their capacity in fulfilling their WTO obligations.  Market
access for exports originating from these Members was essential to enable them to fully benefit fromthe multilateral trading system.  Hong Kong, China was ready to support initiatives to improve trade-
related capacity-building programmes.
115. Hong Kong, China noted that OECS Members applied CARICOM CET to imports from third
economies at relatively high rates of up to 20% to 35% for industrial products.  Though a four-phase
schedule of tariff reductions had been established, not all OECS Members had implemented the tariffreduction as scheduled.  Hong Kong, China encour aged these Members to speed-up the reduction
process, and to consider further lowering their tariffs as well as other duties and charges, in a pace
taking into account their own development needs.
116. OECS Members maintained an extensive system of import licensing.  Non-automatic
licensing was also applied on products subject to quantitative restrictions under Article 56 of theCARICOM Treaty and these restrictions were in practice applied to all trading partners.  For trade
facilitation purposes, Hong Kong, China encourag ed OECS Members to simplify their licensing
requirements and to speed-up the process of dismantling quantitative restrictions.
117. The OECS economies were service-oriented.  The services sectors constituted in most cases
around 75% to 80% of GDP in all OECS Members and employed an important portion of the work
force.  Members would want to take an active part in the on-going WTO negotiations on trade in
services.  A negotiating proposal submitted in early 2001 demonstrated CARICOM's interest in thisarea. Hong Kong, China welcomed this proposal, and looked forward to work closely with the
CARICOM countries in the future.
118. The representative of the European Union  encouraged the representatives from the ECS to
pursue their efforts in dealing with the impacts of the transition to new global requirements. The
Government and the Secretariat Reports indicated the specific problems and limitations their technicalassistance needs.
119. In spite of their vulnerability as small island States, their traditional mono-crop economies
and their high costs for economic and social infrastructures, the OECS Members had achieved
remarkable progress towards global and regional integration in areas such as trade, investment,
agriculture, transportation, environment and health.
120. The status of these countries as the better-off developing-country Members of the WTO was
partly due to their active participation in international trade.  The OECS Members formed part of a
group of 15 countries in the Caribbean region who were signatories to the ACP-EU Conventions.
These countries had established in 1992 the Forum of the Caribbean ACP States (CARIFORUM) as a
regional coordinating mechanism.  Relations with th e EU had been developed essentially in the areas
of technical and financial cooperation and trade. Initial steps had consisted of upgrading the ACP-EU
relationship and instituting permanent mechanisms for an EU-Caribbean political dialogue.
121. The OECS was a beneficiary of the EU regional development cooperation activities, in the
framework of programmes and projects covering the whole CARIFORUM region and through
activities that were specially designed for the sub-region.  Under the 9
th European Development FundWT/TPR/M/85
Page 25
(EDF) preparations were under way for the establishment of a Regional Support Strategy (RSS),
expected to enter into force by the first quarter of 2002, aimed at supporting the integration of thebeneficiary countries into the world economy.
122. Within this framework, the institutional and regulatory development of CARICOM and the
OECS, the enhancement of their capacity to participate in trade negotiations as well as trade and
services facilitation measures would probably be considered.  The overall impact of the EU regional
cooperation in the Caribbean had been undoubtedly positive and had contributed to advancing theintegration process and to strengthening the ec onomic links between the two regions.  Under the
recent ACP-EU Cotonou agreement, regional integration and cooperation were regarded as the
foundations of the new ACP-EU trade regime, leading to the notion of Regional Partnership
Agreements (REPAs).
123. The OECS Members enjoyed a strategic location on the main trading routes in the Western
Hemisphere, a traditional openness to trade, and qualified human resources.  These advantages
offered the prospect of a successful interaction with the world economy.  Regional integration and
cooperation could be major determinants insofar as they promoted a dynamic of complementarity and
economies of scale leading to international competitiveness and long-term sustainable economic
growth.  The integration of small developing countries into the world economy was not easy.Technical assistance was necessary to help the OECS Members to survive, and take part in the global
economic environment.
124. The EU appreciated the OECS Members' commitm ent to the multilateral trading system, the
WTO, and further trade liberalization.  In fact, the EU believed that small-sized and trade-dependent
island economies, like the OECS Members, could only benefit from a strong multilateral trading
system with predictable, transparent, and fair rule s.  The EU expressed its interest in hearing their
expectations in relation to the possible launch of a new round of multilateral trade negotiations and,more specifically, on subjects and issues they wished to see addressed.
125. The EU asked for explanations on the OECS Members' multi-layered structure when
determining and implementing trade policy rules:  (i) how the OECS thought domestic, OECS,
CARICOM and multilateral aspects could be better coordinated, and (ii) whether the OECS agreed
with the suggestion by the WTO Secretariat that the delegation of greater responsibilities to regionalstructures would allow cost savings.  The WTO notification requirements, and amendments to the
OECS national legislation to comply with the WTO Agreements had been slow due to human
resources constraints and to institutional limitations.  These countries had entered into, or were in the
process of entering into, a number of regional agreements.  The EU asked whether governments had
carried out an analysis of the resources required for these regional initiatives.  The EU wished to hearthe OECS Members' views regarding the interface between their regional efforts and the WTO, in
particular on their level of ambition, the timing and the expected benefits of all their existing or
envisaged regional arrangements, and how these agreements would dovetail with the post-Cotonou
programme.
126. Technical assistance to ensure full compliance with the WTO obligations and to achieve a
better integration into the global economy was needed.  The EU asked for further details on the OECStechnical assistance needs in the WTO-related activities.
127. The OECS Members had not yet fully implemen ted the CARICOM CET, because of its effect
on government revenue.  Replacing part of the tariffs and similar charges with indirect taxes such asthe VAT could be examined as a possible solution.  The EU asked for the OECS' views on this idea.
The OECS Members tariffs were generally bound at very high rates.  The EU therefore suggested that
the countries concerned consider the possibility of moving towards lower bindings as a positive signal
for traders and investors.WT/TPR/M/85
Page 26
128. The EU wished to be informed of any concre te steps currently being undertaken by the OECS
Members to put their legislations into conformity  with their TRIPS obligations.  The EU encouraged
the OECS to continue this process, and was prepared to further cooperate with the OECS in the
pursuit of their ambitions.
129. The representative of Japan said that although trade flows between her country and the OECS
were not significant, Japan kept good trade relationship with the OECS members.
130. As small island developing countries the OECS members had traditionally depended on
agriculture throughout the difficult weather and geographical conditions.  Japan appreciated the
OECS' efforts to maintain and promote their agricultural sector in spite of the difficulties they faced,
such as hurricanes, as well as their continuing successful process of moving from reliance on
agriculture to tertiary activities, notably tourism and offshore services.
131. The Secretariat Report stated that the OECS rema ined vulnerable to external shock as a result
of  local production patterns reflecting long-standing unilateral preferences granted to a few trading
partners.  In this respect, Japan wished to know what diversification strategies each OECS Member
was considering in order to overcome its economic vulnerability.  Japan considered that information
technology (IT) could play a key role for the development of national economies, and wished to know
whether OECS Members had any strategies to utilize IT for their economic development.
132. Japan also appreciated that OECS Members were gradually moving from an import-
substitution model towards a more open and liberal trade regime.  However, as indicated in the
Secretariat Report, import licensing was widely used by all six countries and quantitative restrictions
on a number of products still remained.
133. Some goods required import licences when imported from any country that was not an OECS
or a CARICOM member, and an import licence was required for the importation of goods such as
soap and margarine when originating from a more  developed CARICOM country or a third country.
Japan asked for an explanation by the OECS Members on how this was consistent with Article 1,
paragraph 3 of the Agreement on Import Licensing Procedures, which provided neutral application as
well as fair and equitable administration in import licensing procedures.
134. OECS Members applied a number of safeguard measures under Article 28 and 29 of the
CARICOM Treaty.  Japan requested an explanation on the consistency between the conditions for
applying safeguard measures under Article 29 of the CARICOM Treaty and the provisions under theAgreement on Safeguards, and on the consistency between quantitative restrictions on imports used
for the purpose of safeguarding balance of payments as provided by Article 28 of the CARICOM
Treaty and the WTO Agreement on Safeguards.
135. Japan expected OECS Members to make further efforts towards diversification of their
economies, and liberalization of their trade and investment regimes by reducing tariffs and other trade
barriers, while eliminating any discriminatory treatment to contribute to preserving and strengtheningthe multilateral trading system.
136. The representative of Canada said that her country had a close trade relationship with the
OECS, and was therefore pleased to assist OECS Members in capacity building and greater inter-state
cooperation in such relevant areas as trade policy development, tax administration, financial sector
supervision, economic management, and judicial reform.
137. As small States, OECS members faced real capacity limitations and challenges.  These
challenges had been compounded in recent years by rapid changes within their economies and new
pressures in the regional and global trading en vironment.  Nevertheless, the ECS had shownWT/TPR/M/85
Page 27
considerable resilience and success in managing a rapid transformation from agricultural to
service-based economies as their tourism, financial, and telecommunications sectors had expandedconsiderably. In particular, the emphasis on tourism to create jobs and generate income appeared to bebearing fruit.
138. The shift to services had been supported by the OECS’ successful investment promotion
activities, which had attracted US$1.3 billion in the period 1995-1999, mainly in the tourism sector.
However, OECS members wished to avoid exchan ging mono-crop agriculture for dependence on one
service sector, and had succeeded in developing other services areas.  For example, Antigua andBarbuda was in the process of diversifying its reliance on tourism by getting into data-processing.
139. International support and attention to assist the OECS Members in developing a broader
competitiveness agenda, including support for their very limited private sectors was necessary.  TheSecretariat had found that OECS governments, while en gaging in trade liberalization, were also still
seeking to "pick winners" through multiple production and investment incentives, including tax
concessions;  these policies often worked at cross-purposes to their trade liberalization agenda.  TheOECS members’ trade policies were to be integrated in their development policies.
140. Canada commended Dominica’s success in replacing most of its import quantitative
restrictions with import duties.  Dominica had completed the process in 1998, before all other OECS,which were to replace all quantitative restrictions with tariffs by 2005.  In Canada's view, accelerating
this shift and then progressively reducing tariffs would further open the door to the benefits of the
multilateral trading system.  The Secretariat noted that trade policies based on import-substitution
were inappropriate for the OECS' economies and co rrectly drew attention to OECS governments’
concern regarding the fiscal implications of trade liberalization.  Canada encouraged the OECS
Members to draw on the considerable technical support and advice available from international
donors agencies and new mechanisms, like the Caribbean Regional Technical Assistance Centre,largely financed by Canada.
141. The OECS members pursued active trade policies at domestic, sub-regional, regional,
hemispheric and multilateral levels;  they were working to coordinate their reforms more closely
within the OECS, had joined CARICOM members in developing the CARICOM Single Market and
Economy, and participated in the work of CARICOM’s regional negotiating machinery on trade
negotiations for the FTTA and the WTO.  However, limited capacity and resources meant that theyoften could not participate as fully as they wished.
142. Canada also supported the Secretariat’s suggestions for further strengthening of a rational
approach to regional cooperation, and delegating greater responsibilities to regional structures.Canada encouraged the OECS Members to vigorously pursue an integration policy within the OECS
and CARICOM, to reduce resources required to formulate individual trade policies.  Canada strongly
supported the role of CARICOM regional negotiating machinery in developing and coordinating trade
policy for  CARICOM members.  Closer cooperation and participation of the OECS Members in its
work, and investigative authorities on issues like trade remedies could be best set up on an OECS-wide basis, or better still, at the CARICOM regional level.
143. In 2001, the Trade Policy Review process for the OECS coincided with the national
implementation reviews for developing Members, and Canada would address intellectual-property-
related issues in that process.  Canada had submitted questions to Grenada and St. Lucia for the April
2001 TRIPS Council reviews;  these reviews were not completed and were expected in late 2001.Canada had also submitted advance questions to Antigua and Barbuda, Dominica, and Saint Kitts and
Nevis for the June 2001 TRIPS Council meeting, and looked forward to their participation in the
review process.  St. Vincent and the Grenadines’ intellectual property regime was currently under
review by Canada's officials.  Canada would subm it questions as part of the National Implementation
Review process scheduled for November 2001.WT/TPR/M/85
Page 28
144. Additional technical assistance to strengthen OECS capacity in trade-related areas was also
needed.  Canada was already providing such assist ance, and looked  forward to working closely with
the WTO, the World Bank, and the Inter-American Bank to assist OECS Members further in this
regard.
145. The representative of India congratulated the six OECS Members for their steadfast
commitment to a free and open multilateral trading system in spite of the problems they faced as small
economies. It was encouraging that these economies had adopted prudent fiscal policies with most ofthem posting current account surpluses. It was noted that their macro-economic performance in recent
years was commendable.
146. The Joint Report by the OECS Members showed the magnitude of the problems they faced as
small and more or less single sectored economies. These economies had been frequently affected by
natural disasters, and their size as well as lack of adequate human and financial resources had beencited as the main reasons for their not being able to derive maximum benefits from the multilateral
trading system. They had a combined trade defi cit of 52.9% of GDP and keeping in view the
transportation pattern and their limited production possibilities, they had not been able to have a
meaningful development of the large regional market. Joint production possibilities could be
considered as one of the means to overcome this handicap but this had not been possible so far due toa variety of reasons.
147. Being single sectored and mono-crop production economies and vulnerable to natural
disasters, these economies were also affected by the adverse movement of the international prices of
their products. It was, therefore, encouraging that these Members had initiated the process of
diversification and were now focusing on the services sectors as the engine of growth of their
economies. India noted that, at present, there was a heavy dependence on the tourism sector, but
efforts were underway to develop a vibrant financial services sector and an efficient information andtechnology sector.  However, as pointed out in the Joint Report under reference, the efforts of these
OECS Members to diversify into financial services sector had met with challenges from larger
economies.  Given the potential for development of financial services in the region, the OECS
Members had suggested that more focused attention be given to this sector in the on-going services’
negotiations.  In this respect, India wished to know how these Members intended to approach the
services’ negotiations.  It was also encouraging that the OECS Members were attempting to
modernise and diversify their agricultural sector and hence India wished to hear more from these
Members on their plans in this regard.
148. Referring to the Joint Report, India noted the public policy dilemma faced by the OECS
Governments in the context of trade liberalization through the process of tariff reductions and
tariffication of quantitative restrictions. While quantitative restrictions, meant for protection of theinfant industries, were proposed to be tariffied by the end of 2005, the Governments faced the
dilemma that such a move would considerably st rain the governments’ financial resources since,
given the narrow production base, most of the government revenue was dependent on international
trade and transactions. In this regard, India commended the call by the Heads of Governments for a
review of the fiscal regime of the OECS Members and for the examination of the possibility of
implementing a system of value-added tax and requested the OECS Members to give details of the
review process and the likely time-table for implementation of the value-added tax system.
149. India supported the request of OECS Members for special consideration being given to them
taking into account their vulnerability and lack of capacity. India noted that the Joint Report of the
Governments as well as the Secretariat Report clearly identified the technical assistance needs of the
OECS Members. India supported this request of tech nical assistance and stated that this would enable
these Members to effectively participate in the work of the WTO and to derive meaningful gains from
the multilateral trading system for the welfare of their peoples.WT/TPR/M/85
Page 29
150. India was strongly encouraged by the good macro economic performance of the six OECS
WTO Members under review and noted with satisfaction that in spite of domestic pressures, theseMembers had steadily taken steps to bring their trade regimes in line with the WTO rules.  India
hoped that this would be facilitated and encouraged by the WTO and its Member States.  In this
context, India supported the OECS Members’ call for strong support from WTO and its Member
States for taking note of their concerns and extending adequate technical assistance. Finally, it hoped
that with the support of the international community and as a result of the initiatives being taken bythe six OECS Members, they would be able to effectively overcome their economic difficulties in the
very near future.
151. The representative of Mauritius recalled that the TPR was mainly a transparency-exercise.  In
this regard, the level of attendance of the present meeting seemed to demonstrate that the OECS trade
policies were totally transparent as only few delegations were seeking clarifications thereof.Although, it preferred not to interpret the low level of attendance as another form of marginalization
of the small island-Members, Mauritius was disappointed that only few Members were present, and
willing to listen.
152. Members currently engaged in discussions on competition policy would have understood the
realities of competition policy from the perspective of six small islands, if they had attended thepresent meeting.  Grenada had stated that:  "in orde r to be internationally competitive and to reap the
benefits of trade liberalization Grenada, as a developing country, was constrained by:  (i) smallness
and openness of its economy;  (ii) vulnerability to natural disasters;  (iii) limited financial, human and
technical resources;  (iv) high rates of poverty and unemployment, and (v) lack of private sector to
exhibit dynamism".  These ideas were not taken up in other WTO debates.
153. The OECS were full-fledged WTO Members.  Mauritius identified with most of their
concerns, and believed that, if the WTO continued with the one-size-fits-all approach, these countries,like Mauritius, were six potential candidates for further marginalization.
154. Although, Mauritius fully shared Dominica's view  that GDP per capita and the contribution of
certain economic sectors to GDP could give a distorted and misleading picture of the actual economic
situation on the ground, and of the development options available to these small island-States.  Two
logical steps forward were to be envisaged:  (i) to revisit these indicators for the purpose of
elaborating more appropriate indicators conveying not only the empirical circumstances but also the
vulnerability of small islands;  and (ii) to place firmly on the WTO agenda the vulnerability of the
small island-States.
155. The defensive attitude shown by the OECS-Members in expressing their concerns resulted
from the fear of lack of competitiveness and loss of trade preferences.  The banana dispute had shownthe implications of these issues.
156. In the on-going agriculture negotiations Mauritius was fighting for the survival of its sugar
industry.  This was also the case for the OECS.  Mauritius supported the discussant's statement with
regard to the granting of a waiver for the Cotonou agreement.  Preferences granted by preferential
agreements were insignificant from a world standpoint, but remained vital for the countriesconcerned.
157. This TPR exercise would fail, if it could not lead to the sensitization of the wider  WTO
Membership to the concerns of the small island-developing states.  The low level of attendance of the
present meeting justified, a redistribution of the WTO negotiating rights in favour of small Members
as advocated by St. Lucia.WT/TPR/M/85
Page 30
158. The representative of Venezuela said that although the existing trade flow was not significant,
Venezuela intended to further develop its trade relations with the OECS Members in spite of
difficulties relating to means of transportation.  In the last 20 years Venezuela's cooperation with the
OECS had taken the form of, inter alia , the 1992 Agreement on Trade and Investment, which
provided unilateral preferential treatment to the CARICOM as well as to the countries under review.
These Members had also made efforts to be full y integrated into the multilateral trading system
notwithstanding their limitations as small developing island countries.  The WTO and, in particular itsdeveloped Members, had to provide necessary cooperation to allow OECS Members to successfully
complete their reforms and development proces s in compliance with their WTO commitments.
159. The representative of Cuba recognized the efforts by the OECS Members in international
trade, and was interested in increasing trade flow with the OECS, and strengthening Cuba's trade
relations in enterprise as well as in government sectors.
160. Cuba was satisfied with the Economic Cooperation and Trade Agreement signed with the
Caribbean Community (CARICOM) on 5 July 2000, invo lving the OECS and providing not only for
the opening of markets for an important number of exports items, and for negotiations on a trade
regime in services but also for investment and intellectual property promotion.
161. Based on the GSP treatment, and to stimulate their social and economic development,
relatively less developed CARICOM countries did not apply reciprocity to Cuba;  in the course of
2001, Cuba would shape-up a free trad e arrangement with the CARICOM.
162. Better market access for goods and services originating from the OECS, and effective
implement GSP to the small island economies had to be ensured.  Cuba also pleaded for increased
WTO technical assistance as well as for early granting of the waiver for the Cotonou agreement to
allow these economies to gradually face the challenges of international trade.  A solution to the issue
of representation of the OECS in Geneva to allow them to closely follow and participate in the WTOactivities had also to be found.  Cuba hoped that the Secretariat would continue to support this
process.
163. The representative of the Dominican Republic said that the OECS Members were signatories
of the free-trade agreement between the CARICOM and his country, signed in 1998 and entered into
force in 2001.  Dominican Republic asked how the OECS were preparing for the entry into force ofthis agreement, which was a preliminary step to the entry into force of the FTAA.
164. As single-crop exporters, the ECS faced serious diversification challenges.  The WTO rules
did not facilitate such a diversification.  Through waivers to the Agreement on Subsidies and
Countervailing Measures (SCM Agreement), the OECS  might be able to implement the appropriate
policies to diversify their economies.  The lack of representation in Geneva was another seriousproblem.  The raising of sea levels as a result of the global warming was a problem which, although
not yet tackled in the WTO, was of concern for all Caribbean tourism industry as it could lead to the
flooding of their beaches.  In the case of the Dominican Republic the tourism represented 30% of its
foreign currency supply.
165. Like Mauritius and Cuba, the Dominican Republic believed that a waiver to the Cotonou
agreement should be granted.  The Domincan Republic recognized the leadership showed by the
OECS Members in breaking down the teleco mmunications monopoly, a barrier to their
competitiveness and to the emerging of new info rmation sectors, and believed that the ECS would
take better advantage of their high qualified human capital.WT/TPR/M/85
Page 31
166. The representative of the United States said that close historic relations, based on
geographical proximity and strong commercial ties existed between the United States and the ECS.
The Caribbean constituted the United States' "third border".  Personal and family ties joined
Americans with the Caribbean region, which could be seen in the region's extraordinary influence on
the U.S. arts and popular culture as well as in the political ideals of democratic government and the
open society that all of the ECS had come to share.  Many of the more than 200 million tourists a year
to OECS countries were from the United States.
167. Building on strong physical and human resources, the ECS had already achieved an average
income of US$4,800 per capita.  The economic growth rate in most of the OECS countries for the last
three years had been 4% per annum.  The U.S. supported the efforts made by the ECS to expand their
economic base, enhance intra-regional economic integration and improve their citizen's standards of
living.
168. The Bridgetown Summit committed the United States and the signatory Caribbean nations to
a Plan of Action in trade and economic development, the environment, and justice and security.  To
help implement this plan the U.S. had established a Caribbean Regional Program (CRP), which
recently opened offices in Bridgetown.  The economic programmes foreseen in this Plan targeted
telecommunications reform, information technology, trade reform, financial services, and exportcompetitiveness for accelerated development.  The CRP also recognized the special needs of these
nations in dealing with hurricanes and tropical storms which periodically hit the Caribbean.
169. The U.S. Caribbean Basin Initiative (CBI) had been open to all of these countries since it was
created in 1984.  Designed to encourage economic revitalization and export diversification, the CBI
provided unilateral free access to the U.S. market fo r most exports from eligible countries.  Recently,
CBI programme included more products and substantially greater market access for apparel;  the
benefits of this programme were the most generous  of any U.S. non-reciprocal preferences.  Building
on the success of CBI, together with the OECS and CARICOM, the U.S. was working toward the
prosperous, open and democratic hemispheric community envisioned in the FTAA.  The United States
was committed to completing the FTAA, and was pleased that the Eastern Caribbean States had been
active participants in the process.  At the Summit of the Americas in Quebec City, all 34 heads of
State pledged to conclude negotiations on the FTAA no later than January 2005.
170. At this meeting, the U.S. President explained why free trade was one of his top priorities:
"Free and open trade creates new jobs and new income.  It lifts the lives of all our people, applying
the power of markets to the needs of the poor.  It also spurs the process of economic and legal reform.
And open trade reinforces the habit of liberty that sustains democracy over the long haul".  Over time,
all countries would benefit from a generally stronger hemispheric economy that would increaseopportunities for trade, investment and tourism throughout the region.  This was particularly evident
for the Caribbean region, as the natural bridge between the Americas.
171. The United States strongly shared with OECS Members the view that trade-related technical
assistance was critically important in helping their countries implement WTO Agreements, negotiate
further agreements, and integrate themselves more fully into the global economy and the multilateral
trading system.  The United States looked forward to working closely with the Secretariat and the
Inter-American Development Bank in strengthen the OECS' capacity in these areas.
172. The OECS Members had managed to obtain a reasonable standard of living, but faced a
challenge in achieving substantially higher rates of sustainable broad-based economic growth.
Exports and tourism provided revenues vital for economic growth, while breaking into new exportmarkets continued to be difficult.  In tourism i ndustry, where comparative advantages were apparent,
further growth had been constrained by intense regional competition and the unmet needs forWT/TPR/M/85
Page 32
infrastructure investment.  Long term international competitiveness had been reduced and high cost
economies had emerged.  The relatively high costs of transportation and telecommunication serviceshad further constrained growth.
173. As the Secretariat report pointed out, two stated goals of the trade and investment policy of
the OECS countries, namely:  increased liberalization and ensuring that domestic suppliers can
compete had been overcome by an array of policies that seemed contradictory.  Most OECS Members
had bound their entire tariff schedule, applied tariffs and customs taxes remained high.  The CETapplied rates of up to 20-35% for industrial products and 40% for agricultural goods.  This tariff
structure, further complicated by the extensive ex ceptions for each member, appeared ill-suited to
most service-based OECS Members.  Import licensi ng was required for imports of certain products
and price controls were used by all OECS Members for a wide range of products.  These practices
created additional barriers to commerce and discouraged trade and investment.
174. The OECS Members had devoted considerable efforts and resources trying to attract foreign
investment in the tourism sector.  While th ey had all made commitments under the GATS, in
particular in hotel construction and management, these commitments needed to be expanded in the
tourism sectors as part of the effort to attract investment.  While most of the OECS Members had
recently taken steps to enhance competition in the telecommunications sector by ending the monopolyin the provision of basic services, commitments in this and other service sectors should be expanded
further to attract investment in these areas.  Tariff reductions on goods related to these industries
would further enhance investment potential.
175. Observance of WTO provisions could help the OECS in making necessary reforms and in
better utilizing trade to foster growth and development.  Making the changes necessary to implement
their WTO obligations would help them benefit more from the multilateral trading system.
Specifically, the OECS had lagged behind in making their WTO notifications and had notincorporated WTO rules fully into their domestic statutes.
176. Although the degree to which OECS-WTO Members had amended or introduced domestic
legislation to reflect the TRIPS Agreement varied considerably, no country had completed the
process.  Another area that required improvement was transparency in government procurement.
177. The OECS Members had benefited considerably from intensive participation in international
trade, which had allowed their tourism sector to grow.  The United States welcomed the use by
developing countries of their physical and human resources to achieve such results and supported and
encouraged the OECS Members to pursue trade liberalization efforts using WTO provisions and
obligations as a framework.
178. The representative of Jamaica  said that the presence of six Ministers, demonstrated the
importance the Caribbean region attached to their WTO membership as well as to its consequences
and implications.  Jamaica, like the OECS, was part of the CARICOM, and fully shared their view of
the importance of the WTO for the Caribbean region as well as for individual and collective trade and
economic prospects.
179. Regarding the Secretariat Report, Jamaica would have hoped that the particular circumstances
of the OECS Members would have received more nuance treatment in some areas.  Some of the
characteristics identified in the OECS Government Reports and the Secretariat Reports begged for a
policy response recognizing the special characterist ics and vulnerability of the small economies.  A
primary objective should be to ensure that, in terms of trade rules, Members take into account the
highly open nature of the OECS economies;  their extremely high levels of import penetration, onaverage 68.4% of GDP;  the large and persistent deficits in external current accounts;  their highWT/TPR/M/85
Page 33
dependence on trade taxes as a source of revenue;  their severe diseconomies of scale and scope,
applicable to production and trade and to administration as well as to their narrow range of domesticproduction and limited opportunities for diversification;  volatility of income and earnings;  resource
constraints in negotiating and implementing agreements, including the lack of representation in
Geneva;  and susceptibility to and disproportionate economic impact of natural disasters.  In the light
of these circumstances, Jamaica believed that the efforts by the OECS Members to participate in the
multilateral trading system, and to meet their WTO commitments deserved the highestcommendation.
180. The situation of these countries required renewed efforts by the WTO to address the
constraints cited through measures anchored in the principle of special and differential treatment and
specifically directed towards meeting technical assistance and policy-related needs.
181. The Secretariat Report (para. 61) stated that:  "The tariff structure is firmly based on an
import substitution model ill-suited to most OECS  Members given that their economies are service
based and import intensive."  While it appreciated and understood the disadvantages associated with
traditional import substitution policies, Jamaica noted that imports already accounted for almost 70%
of the OECS GDP on average, and thus the existing tariff structure rather than encouraging active
import substitution seemed to merely facilitate the retention of a very narrow and minimal base ofdomestic goods production.  The alternative clearly would be to have economies totally devoid of any
goods output and totally dependent on tourism and in some cases one or two other service industries.
Jamaica wondered what this might mean for continuing or even increased vulnerability. Jamaica
therefore suggested that the special circumstances of  small economies, typified by the OECS, be taken
into account in the future.
182. Regarding St. Lucia's statement, did the dangers of the one-size-fits-all approach, Jamaica
noted that the WTO counted among its Members a major player with a population of 275 million,with a GDP of US$9,000 billion, and a country like St. Kitts and Nevis, which registered a population
of 44,000 and a GDP of US$305 million. Jamaica ther efore believed that, under such circumstances,
Members had an obligation to reflect seriously on the meaning of the term "level playing field" in the
rule-making process.
183. The representative of St. Lucia said that the OECS had hoped to see a larger attendance at the
TPR meeting.  He added that as mono-crop economies, the OECS shared Mauritius' views with regard
to the negotiations on agriculture.  He noted also th at the Secretariat had initially erred in computing
GDP per capita of the OECS;  although the error had been corrected (WT/TPR/S/85/Corr.1) this had
nevertheless led to the assertion that these economies were among the better-off developing countries.
The OECS faced the challenges of, inter alia , extreme smallness, massive structural unemployment
and poverty, and unstable and declining earnings from their principle exports.  Therefore the OECS
were not better-off  but rather among the most vulnerable and marginalized of the developing
countries.  Consequently, without special recognition of their difficulties and accommodation of their
constraints, the OECS would not be able to partic ipate effectively in the global trading system.  The
OECS Members hoped that this TPR would help not only the OECS Members to appreciate that they
were part of the global trading system but also other WTO Members to take recognisance of  the
special circumstances the OECS faced.
184. The Chairman said that, based on his experience, the level of attendance of the present
meeting was normal, and that major trade players,  representing two thirds of world trade, were
present.  With regard to the issue of representation of the OECS in Geneva, discussions had takenplace with the Director-General and the issue was under consideration by the Secretariat.  He
suggested that the Secretariat take into account the Geneva Foundation as a possible partner when
considering possible solutions to this issue.WT/TPR/M/85
Page 34
V. REPLIES FROM THE REPRESENTATIVES OF THE OECS-WTO MEMBERS AND
ADDITIONAL COMMENTS
185. The Chairperson invited the representative of Grenada, speaking on behalf of the OECS-
WTO Members, to focus his responses on three main themes:  (i) economic environment;  (ii) trade
policies and measures;  and (iii) sectoral policies and measures.
(i) Economic environment
186. The representative of Grenada, speaking on behalf of the OECS-WTO Members, said that the
six OECS Members varied in population from the smallest St. Kitts and Nevis with a population of
44,000 to the largest St Lucia with a population of 144,000.  The total population of the OECS was
540,000.
187. Besides being small the economies remained highly vulnerable to the effects of climatic
conditions and external shocks;  movements in the exchange rate between the pound sterling and theU.S. dollar had significant effects on the earnings of the banana and sugar production of the OECS
members.  The same currency fluctuation had severely affected tourists arrivals from the United
Kingdom.  Climatic conditions affected every sphere of economic activity as well as the infrastructure
as it was common for hurricanes to devastate the social and economic infrastructure. For example, in
1998 the only airport in St. Kitts was completely destroyed, while in Antigua and Barbuda over 60%of its tourism plant was also destroyed.  In many cases hurricanes had led to the loss of almost an
entire year's GDP, and to the constant need to re build the infrastructure of the economies resulting in
apparent economic growth.  However, the growth resulting from infrastructure rebuilding was without
economic advancement while the rebuilding effort had to be financed largely by debt, which created
an additional debt burden on the OECS economies.  There was therefore no better case for debt relief.
188. All of the above clearly demonstrated the OECS acute vulnerability as, unlike larger countries
that suffered similar natural disasters, the OECS economies, being smaller, were less resilient. Inlarger countries the damage from natural disaster s could be localized but in the OECS case the
damage was country wide, and depending on the expanse of the disaster, region wide.
189. The OECS countries remained also highly dependent on a single economic activity, whether
banana or sugar production, in some cases, or tourism in others.  Strenuous attempts were currently
being made to diversify the economies with attention given to the services sector.  The OECSmembers had also attempted to diversify agricultural exports but had met with severe difficulties in
penetrating large developed-country-markets.  In turn, this had led to the disenchantment of farmers
and consequently had frustrated the process of agricultural diversification in the region.  Nonetheless,
the OECS countries had continued with the process of agricultural diversification and would seek
assistance from WTO Members in overcoming sanitary and phytosanitary as well as marketingbarriers to product and market diversification.
190. The fiscal account of all the OECS members was characterized by a heavy reliance on
international trade taxes.  On average, over the period 1994-99, international trade taxes had
accounted for 82.84 % of total tax revenue in the OECS Members.  The reliance on international trade
taxes reflected the smallness of the economies and the consequent limited scope of taxation.  Taxablecapacity was simply limited and this increased the vulnerability of these economies.  The heavy
reliance on international trade taxes had posed an acute policy dilemma for all of the countries of the
OECS.  On the one hand they were committed to the progressive liberalization of trade in the form of
tariff reductions, on the other hand tariff reduction eroded the tax base upon which they relied for
financial resources for public administration and economic management.WT/TPR/M/85
Page 35
191. As a result of this fundamental policy dilemma, all of the OECS had had to adopt a gradual
posture to further reduction in the external tariffs.  Given the structure of the economies and theirlimited taxable capacity, there was a practical limit to the reduction of tariffs and, until the OECS
found alternative means of raising the required revenue for public administration and macroeconomic
management, tariff reductions would be practically constrained.  In fact, most of the economies that
had already reduced tariffs had had to resort to measures that would compensate for the decline in
revenue.
192. Faced with this policy dilemma the OECS Members had begun studying the feasibility of
introducing a value-added tax.  A regional committee comprising representatives of the OECS
Secretariat, the Eastern Caribbean Central Bank (the central bank of the OECS), and the Caribbean
Development Bank had been established and had begun work in this area.  In addition, through the
Eastern Caribbean Central Bank the economies were embarking on a programme of fiscal reform,which included matters related to expenditure management and control (both current and capital),
revenue generation (including tax and non-tax revenue) and financing.  Best practices with respect to
the inland revenue departments, customs, and other agencies of the public administration had been
drafted.  The attempts at fiscal reform had been generously supported by Canada.  The OECS hoped
that other WTO developed-country Members would demonstrate similar generosity.
193. The OECS had traditionally granted concessions to investors.  This was absolutely necessary
to attract investment to spur on economic growth, increase employment, and reduce the level of
existing poverty in their economies, a fundamental policy objective of the OECS governments.
Suggestions had been made about the apparent lack of consistency between the main trade and
investment policies of the OECS.  However, on closer examination this inconsistency was more
apparent than real.  The basic objective, as correctly stated by the WTO Secretariat:  "is to enhance
living standards through a more liberal trade environment in which they can compete".
194. The OECS' experience had been that no investment flows were attracted to the economies as a
result of a reduction in tariffs, in fact the opposite had been experienced.  Whatever investment
flowed to the economies, resulted directly from the granting of incentives to investors.  Had there not
been these incentives, the OECS felt that invest ment would not have occurred and unemployment and
poverty would no doubt have been further aggravated.
195. The free zones in the OECS economies were duty-free regions within the customs territories
set aside for manufacturing and other value-added industries solely for exports outside of the
CARICOM region.  The goods entering or originating in the free zones were not permitted to enter
the customs territories of the OECS without the payment of relevant duties.
196. The OECS member States were pursuing deeper regional and hemispheric arrangements as a
means of facilitating their integration, on a sustainable base, in the multilateral trading system.
Among the OECS member States there was an attempt to establish a single market and economy,
working on the base of a common currency and the partial similarities of their economies.  A number
of activities were also conducted on a joint basis, i.e. common approaches to education reform in the
context of human resource development, the devel opment of the telecommunications sector, and the
management of the environment especially in the context of tourism development.
197. The countries of the OECS pursued deeper regional and hemispheric trading arrangements as
a mechanism for engagement in the global trad ing environment with the full recognition of the
peculiar difficulties faced by their economies.  Thus, in all of their external negotiations, the OECS
had consistently argued for special and differential treatment as a basis for their participation in anytrading arrangements.  This was the case for both the CARICOM agreement, which contained explicit
provisions recognizing the peculiar circumstances facing the OECS economies, and for the agreementWT/TPR/M/85
Page 36
with the European Union, which provided for pref erential treatment to the OECS.  Other bilateral
arrangements between the CARICOM and other hemi spheric countries contained provisions to take
into account the special circumstances of the economies whereby the OECS member States were
accorded special and differential treatment.
198. The OECS Members had been severely handicapped by a lack of institutional capacity, as
result of which they had not been able to fully implement all their WTO obligations, and were lagging
behind in the WTO notification requirements and in the implementation of some of the WTOAgreements.  However, the lack of institutional capacity raised the issue of technical assistance to the
OECS, which had already been raised on several occasions.  A special programme of technical
assistance should be developed to meet the needs of the OECS.  Such a programme should include,
inter alia , capacity building in the areas of customs administration, legal drafting, trade policy
formulation and management, standards, and trade negotiation.
199. The OECS were aware that efforts were being made to launch a new round of negotiations.
In this regard the OECS could not justify their unequivocal support to this initiative unless the
problems of implementation of the Uruguay Round Ag reements and Decisions, raised by developing
countries, were satisfactorily addressed and resolved.  It would be futile to participate in a system
whose regulations and procedures turned out to be onerous and burdensome, retarding economicdevelopment rather than giving a fair opportunity to all to enjoy the success of the new world trading
system that was envisaged.  At the closing of the Uruguay Round, Members had been told by the
WTO Director General that everyone would benefit from the liberalization process.  However, the
experience of the OECS over the last six years had been otherwise.  They had not been beneficiaries
of the trade liberalization process.  Instead, they might have been made worse off.
200. The discussant regretted the low attendance by other WTO Members to the meeting.  The
busy schedule of meetings in Geneva, particularly other WTO meetings, was likely to be the
explanation of the limited attendance to TPRB meetings.  Considering the limited resources of a
number of Members, it would be important to envisage a way to improve the scheduling of meetings
to foster direct contact between the revised countries and other representatives to the WTO.  The
participation in TPRs of WTO staff from other divisions should also be encouraged to improve the
understanding among the Secretariat of the problems specific to the countries under review.
201. She said that the OECS delegations had not had the opportunity to experience to a great
extent the multilateral framework in Geneva, nor to attend other organization's meetings, i.e. the ILO
International Labour Conference where issues of primary importance to the OECS relating to health,
employment, and agriculture were under discussion.  She proposed that small delegations receive
written questions in advance, and maximize their presence in Geneva by visiting other organizationsand meeting with officials of other WTO Divisions, who could also attend TPRs meetings.
202. This TPR exercise had helped the OECS Members to better spell out their technical assistance
needs:  St. Kitts and Nevis had stressed the administrative requirement necessary to implement the
TRIPS Agreement, while Antigua and Barbuda would have to employ a consultant to bring its
legislation into conformity with the WTO Agreements. This was a disaster.
203. The representative of India said that many of the points stressed by the OECS applied to other
developing-country Members.  Their statement should therefore be circulated to all Members.
204. The representative of Haiti shared the assessment and concerns expressed by the OECS
regarding the forthcoming round of negotiations.  Implementation-related issues had to be tackled and
resolved.  Notwithstanding the scarcity of their resources, the OECS were an example thatgovernments could work for the welfare of their population, and could achieve a great deal.  SpecialWT/TPR/M/85
Page 37
attention had to be paid to small countries with highly vulnerable economies;  Mauritius had pointed
out that if the problems faced by small economies continued to be ignored, the number of LDCswould increase.  Haiti was an LDC in the Caribbean region.  Therefore, it pleaded, like the OECS, for
technical assistance and for differential treatment be granted to these economies.
205. The representative of Cuba appreciated the ECS' efforts and shared all their concerns.
Technical assistance was necessary. However, decisions needed to be taken to support the OECS
efforts to fully integrate the multilateral trading system.  Cuba considered that special and differentialtreatment had to be applied, and that the Doha WTO Ministerial Conference would provide an
exceptional opportunity to show the necessary political will in this regard.
206. The representative of Barbados had any doubt about the difficulties that small countries
experienced, and hoped that Members would better appreciate the OECS difficulties.  A work
programme should be developed for small economies under the auspices of the General Council.  As aresult of the TPR exercise, developed countries should become aware that special and differential
treatment for small developing countries could not be limited to technical assistance, a promise and
seldom a reality.  Longer transition periods were also needed if small economies were to benefit
economically from technical assistance.
207. The representative of the European Union said that all the points raised in this TPR would be
reported in detail to Brussels.  The EU reiterated the need for better scheduling of  WTO meetings.
208. The representative of Mauritius said that her delegation, like the EU, wished to stress that the
Secretariat could not control nor was it responsible for attendance of meetings.  Mauritius wished to
convey, through the Chairperson, the suggestion that the Trade Policy Reviews be rethought so as to
achieve more active participation of Members.  The presence of six Ministers warranted a greater
presence.  Mauritius appreciated that delegations disposed of limited human resources.  However,
there was a need for collective thought of what could be done to improve attendance.  She agreed withthe Chairperson that about two thirds of world tr ade was present.  However, the QUAD trade partners
represented only four votes in the WTO as opposed to six OECS Members.  The issue was not only in
terms of share of world trade but also in terms of votes.
209. The representative of Jamaica said that the attendance of the TPR meetings had not been low,
when larger and more influential Members were under review.  This was one of the problems that
small countries encountered in the WTO, although the WTO was of equal importance, if not more
important to small countries.  Trade for the six OECS Members represented 85% of their GDP on the
average, and was therefore vital.
210. The Chairperson said that in his view, if th e low attendance of the TPR meetings continued
the interest of Ministers to attend would diminish, and as a result the TPRs would lose their influence
on trade policies of the countries under review.  The WTO Chairpersons, including the Chairman of
the General Council, would discuss the possible remedy to improve the attendance of the TPR
meetings, i.e. avoid the overlapping of WTO meetings.  In addition, meetings in the WTO, held
within the preparatory process of the Qatar Ministerial Conference, tended to derail all other
processes.
211. The representative of Canada said that the TPR process was larger than the TPR meetings.
Every point raised in the present meeting would be  taken into consideration in the formulation of
Canada's technical assistance programme in the Eastern Caribbean region.
212. The representative of India echoed the sentimen ts expressed regarding the requirement of the
presence of Members in this important TPR exercise. India had made such an effort. India alsoWT/TPR/M/85
Page 38
proposed that the Secretariat schedule the TPR meetings in the periods when no other meetings were
planned and that the opening statements of countries under review, both on the opening day and underthe three themes on the second day, be circulated for information of Members.
213. The representative of the Secretariat  said that those who had been associated with the trade
policy review process over the last couple of years had noticed that there had been a significant
change in the way the reports were presented, and the way they were prepared.
214. In this instance, there had been five separa te missions to the OECS, and two fully funded
seminars to help in the capacity-building process.  The use of Trade Policy Reviews as part of the
capacity-building exercise was appropriate, and was increasing;  for example, the Secretariat would
hold a full one-year programme in the preparation of its Trade Policy Review of Haiti.
215. The association of trade policy review exercise with technical cooperation was being
strengthened:  a staff member of the Technical C ooperation Division had been involved in the OECS
TPR process;  the Technical Cooperation Division would also be involved in a number of TPRs
planned for 2001-02, i.e. Haiti, Uganda and Malawi. Furthermore, a joint programme was under way
whereby the Trade Policy Reviews would become the leading instrument for the identification of
technical cooperation needs and priorities, and subseque ntly for their delivery.  In this framework, a
joint seminar was organized for four countries in Kampala (Uganda).
216. Statements made in the TPR meetings as well as the Reviews themselves were distributed
widely within the Secretariat, a meeting was held between the delegations of the countries under
review and the Director-General and a detailed report of each TPR meeting was prepared for the DG,
who attached particular importance to TPR follow-up as a means of identifying Technical
Cooperation needs.
217. With regard to the matter of scheduling WTO meetings, as raised by India, he recalled that
TPRB meetings were scheduled a year in advance, and were usually the first on the meetingscalendar.  Pursuant to the WTO guidelines on arrangements for scheduling of WTO meetings
1, the
need to avoid overlapping with the existing schedule of meeting should be taken into consideration
when convening WTO meetings (including informal meetings).  Unfortunately, these guidelines were
sometimes observed in the breach;  the attention of the Director-General had been drawn to this issue.
The Secretariat had made efforts to have those rules implemented, i.e. the meeting for the TPR ofGabon scheduled for 25 and 27 June 2001 had been rescheduled to 26 and 28 June 2001 to avoid
overlapping with a senior officials meeting of the General Council to be held on the 25 June 2001.
218. Attendance at TPR meetings had increased over the last two or three years. Further
consultations would be held on this issue, including between the Chair of the TPRB and the Chair of
the General Council, and between the TPR Division and the Director-General.
219. Regarding dissemination of results of the OECS TPR, the Chairman's concluding remarks
would become part of the press release and be published on Internet, becoming accessible to the
world.  The TPR documents would be published and wi dely distributed, free copies made available to
delegations, and then put on sale worldwide.
220. Pursuant to the Rules of Procedure for the TPRB, which provided that written questions be
made available a week in advance to allow time to prepare replies, the Secretariat requested Members
to submit their written questions at least a week in advance of the meetings.  The one-week deadline
                                                     
1 WT/L/106.WT/TPR/M/85
Page 39
was respected by certain delegations but most submitted their written questions only one or two days
before the meeting.
(ii) Trade policies and measures
221. The representative of Grenada, speaking on behalf the OECS Members, said that the OECS
had not yet been able to formally incorporate all WTO obligations into domestic legislation as a
result, inter alia , of the extensive and complex requirements of the Uruguay Round Agreements that
had overburdened their legislative agenda, and the lack of capacity in legal draftsmanship.Nonetheless, the OECS continued to make every reasonable effort to implement their WTO
obligations.
222. While there was a schedule for the implementation of a phased reduction in the CET, some
OECS countries had had to derogate from the schedule primarily as a result of revenue considerations.
However, efforts were being made by the OECS members that had not yet implemented phase IV ofthe scheduled reduction to do so in the future.  When acceding to the WTO, some OECS Members, in
response to pressure from some developed Members, had bound their tariffs at very low rates.
Questions had been raised regarding the complexi ty of the CET in relation to the OECS tariff
bindings.  The OECS considered this as an issue that posed obstacles to deepening the process of
regional integration. Some of the OECS had moved to implement the transaction value method ofcustoms valuation.  The experience so far had been  one of chronic under-invoicing resulting in the
loss of significant revenue to the governments.  OECS Members that had not introduced the
transaction value method were taking due cognisance of the negative revenue implication for those
that had applied this method.  This was one of the identifiable areas in which the economies of the
OECS would require technical assistance in order to enhance their capacity to apply this method
without suffering the loss of revenue in the process.
223. The OECS, as part of the CARICOM arrangement, were also in the process of adopting a
common approach to the harmonization of standards, which would be achieved with the establishment
of the Caribbean Regional Organisation for Standards and Quality (CROSQ).  The standards bureaux
of the OECS had met in St. Lucia in the week of 1 June 2001 to begin the process of harmonization.
The board of directors of CROSQ would comprise all heads of bureaux in the region.  In the area of
government procurement the OECS, again as part of CARICOM, had agreed to examine thepossibility of introducing a government procurem ent regime within the context of the CARICOM
single market and economy.  It should however be noted that most of the sizable procurements were
already subject to strict rules by virtue of the fact that they were externally funded;  procurement of
supplies i.e. toilet paper, pens, pencils and other office stationery was on a tendering basis, publicly
advertised, and subject to a strict tendering process.  However, given the small size of the OECScountries Members, these procurements were minimal in terms of value.  With respect to export
measures, the OECS were in the process of reviewing all such measures as part of the exercise aimed
at articulating a comprehensive development strategy.  Discussions and consultations had already
taken place on the development strategy, and included international financial institutions and donor
countries.  Intellectual property matters were currently under review in the WTO, some OECSMembers had already undertaken the IP review.  By the end of 2001, all OECS members would have
completed such a review.
224. The representative of India said that the difficulties encountered by the OECS countries in
implementing the transaction value method of customs valuation were faced by a number of
developing countries, including India.  India was in the process of looking for its own solution.  Some
developing countries had been granted a one- or two-year waiver by the Committee on Customs
Valuation to implement the transaction value method;   the OECS might wish to consider this option.WT/TPR/M/85
Page 40
225. The representative of the European Union said that in the Committee on Market Access,
Members were attempting to complete the Integrated Data Base (IDB) containing tariffs and trade
data by Members.  In that process, regional reviews to identify technical problems faced by
developing countries had been undertaken.  The OECS Members could agree for the Secretariat to
transfer trade and tariff data collected in this TPR exercise to the IDB.  The complex tariff policy
adopted by the OECS raised the question of whether a more simplified, transparent, and a uniform
tariff structure including less reliance on other duties and charges would be more advisable.
226. The representative of the United States said that, like Canada, the TPR had involved officials
from the U.S. capital, who were interested in this TPR proceedings.  The United States looked
forward to receiving the OECS replies under this section as well as to its written questions.
227. The delegate from St. Lucia (Ms. K. A. Brown) said that the OECS had taken note of the EU's
statement.  With regard to the tariff structur e, the sub-regional, regional, hemispheric, and
international integration processes, which would take the OECS into the multilateral trading system,
provided for a certain degree of complexity in tariff  structure.  If the WTO rules were more flexible,
and took into account the vulnerability and particular situation of the OECS market structure, that
would facilitate the adoption of a more transparent system.  With regard to the multiplicity of layers in
the OECS tariff structure, the OECS were only  attempting to become more competitive towards
sustainable development in the framework of the multi lateral trading system.  With regard to data and
tariffs data, the OECS would supply relevant data in due course.
228. The delegate from Dominica (Mr. Irwin Laroque) said that data on the CARICOM tariffs
were provided to the Inter-American Developing Bank.  Dominica drew Members' attention to the
importance of the tariff in generating revenue for basic social services.  The complexity of tariff
structures also derived from the differences and levels of development among the CARICOM
countries.
(iii) Sectoral policies and measures
229. The representative of Grenada, speaking on behalf of the OECS Members said that the OECS
Members were aware of the necessity to diversify their agricultural production to reduce their reliance
on bananas or sugar, which were subject to declining prices and whose future had become
increasingly uncertain.  However, finding viable new crops posed particular challenges related,inter alia , to OECS climatic conditions and difficult terrain, and the small size of the OECS domestic
market:  agricultural production had to be directed at external markets, although valuable linkages
with the tourism industry were possible.  As sm all island developing countries, the OECS Members
would not necessarily be able to produce adequate  volumes to benefit from economies of scale, which
were indispensable to be internationally competitiv e.  As a result, even if the OECS could identify
crops that they could produce successfully, access to foreign markets on a satisfactorily preferential
basis was necessary in order to be competitive.  Diversification would only be successful if
undertaken alongside existing sugar and banana production, including further development of agro-
processing activity.  The difficult issue of technical barriers to trade needed to be resolved.
230. The manufacturing sector in the OECS was very small and efforts were being made to
enhance its further development.  The OECS had also sought to diversify beyond the agricultural
sector, and had paid particular attention to services including the financial and information technology
sectors.
231. The services sector, which was an area that the OECS hoped to further develop in the future,
had grown to be of added significance to their economies.  The OECS had already liberalized thetelecommunications sector as the first major step  towards its development, and recognized thatWT/TPR/M/85
Page 41
telecommunications served as an industry itself and a platform for other industries. Through this
strategic interpretation of telecommunications, the OECS had moved decisively ahead withliberalization.  In some economies new licences, e.g. for the provision of Internet access and the
establishment of call centers, had already been issued for other service providers.  The OECS hoped
that these steps would start the process of competition in the telecommunication sector, and believed
that there would be no turning back from this approach.
232. The development of financial services was also being actively pursued;  in this connexion
legislation had been passed in most of the OECS economies to prevent the inappropriate use of the
offshore financial sector, and efforts were being made to develop stronger forensic accounting
capacity to detect inappropriate activities.
233. The OECS Members asserted their sovereign right to establish national tax regimes that did
not violate multilateral obligations they might have assumed.  They emphasized the need for globaleconomic coherence in policies promoted by financial and trade organizations and institutions, most
notably the OECD, in facilitating the progressive integration of vulnerable, small island developing
States into the global economy.  In this regard, the OECS drew attention to the OECD harmful tax
guidelines, which were not only an affront to their national sovereignty but also posed a serious threat
to the development of the OECS service sector while undermining efforts towards economicdiversification.  Therefore, the OECS welcomed recent positive statements by the United States and
hoped that other OECD countries would follow.
234. The OECS looked forward to a future when they could engage in economic activities which
offered prospects for a competitive advantage.  This would significantly assist in achieving their basic
policy objective of enhancing living standards through a more liberal trade environment, in which the
OECS could compete.
235. The discussant noted that the UNCTAD, the IMF were present, but not the OECD.
236. The representative of Canada said that, through the Trade Policy project, her delegation
supported capacity-building activities relating to agriculture and services.  Canada wished to work
jointly with the Secretariat so as to avoid duplication.
237. The representative of India appreciated the prompt replies provided by the OECS in relation
to  their sectorial policies.
238. The delegate from St. Lucia (Ms. K. A. Brown) said that with regard to the EU's question, the
OECS requested that the necessary time be granted for the information to be provided to the IDB.
239. The representative of St. Lucia, speaking on behalf of the OECS-WTO Members said that the
first TPR exercise had provided the OECS Members an opportunity to express their concerns.  The
OECS were making a special effort to comply with their WTO obligations.  However, as smallcountries they faced particular problems.
240. The OECS were dependent on customs duties to generate revenue, which was needed for
balance-of-payments purposes, i.e. to ensure a capital account surplus to take care of social
infrastructure.  In reducing tariffs there had been a reduction in the OECS revenue-earning capacity.
As a result, it had become difficult to provide a satisfactory explanation to the civil society on benefitsderiving from WTO membership.  Nevertheless, the OECS Members would pursue efforts to be an
integral part of the WTO.WT/TPR/M/85
Page 42
241. The experience in bananas had not been encouraging.  The OECD initiative on harmful tax
practices was destabilizing, and was an offence to the OECS sovereignty.  The multilateral tradingsystem could not discriminate against the less fortunate.  Developed Members reaction with regard to
granting of special and differential treatment s eemed disproportionate.  The OECS thanked the
representatives of Mauritius, India, Cuba, the Dominican Republic, and Canada for their support.WT/TPR/M/85
Page 43
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
242. We have had two days of frank and constructive discussion on the OECS-WTO Members'
trade policies and practices.  Jointly and individually, these Members made forceful presentations of
the special challenges they face due to their small size and populations, diseconomies of scale, high
infrastructure and social costs, and vulnerability to external shocks.  As a result, and despite the
number of Members attending the meeting itself, I am certain that all WTO Members will have gained
a better appreciation of, and will no doubt pay greater attention to, the problems and difficulties ofthese economies.  Members noted that, even given such difficulties, OECS-WTO countries had shown
strong economic performance in recent years.  However, the Members under review pointed to the
still significant number of people living in poverty and the pressing need to address this problem.
243. Many WTO Members attributed much of the overall economic accomplishments of the
OECS-WTO countries to their general openness and historical participation in international trade, awell educated labour force and stable, well-functioning institutions.  WTO Members encouraged these
countries to continue in their path to diversify th eir economies, particularly with a view to reducing
their vulnerability.  Some WTO Members considered that continued emphasis on developing the
service sector offered the best growth opportunities, while other Members considered that agriculture
would, and should, remain a key sector of the economies.
244. Members of this Body recognized the efforts made by OECS-WTO Members to further
liberalize their economies, particularly through tariff reductions in the framework of their
participation in CARICOM.  Concerns were expr essed, however, with respect to the persistence of
quantitative restrictions, wide-spread import licensing requirements, and the use of safeguard
measures.  Members also noted that, although reduce d, tariffs remained relatively high, but took the
point that this was mainly for revenue purposes;  some suggested that a more simplified tariff
structure might be more appropriate.  Some Members also suggested alternative revenue sources, witha Member proposing the adoption of a Value-Added Tax, the feasibility of which OECS countries are
already studying.  Members also invited OECS-WTO countries to lower their tariff bindings to rates
closer to the currently applied rates, and thus improve the predictability of their import regimes.
245. Members were appreciative of the effort and progress made by OECS-WTO countries to meet
their WTO notification requirements and bring their domestic legislation into line with WTOAgreements.  Several Members also encouraged the countries under review to improve their
commitments in the WTO with respect to services, putting them at a level comparable with their
current, relatively liberal practices.  Concerns were voiced with respect to the negative economic
effects of being singled out as tax havens in other fora.
246. This Review has made clear the extent to which complying with WTO rules is constrained by
limited human resources.  In this regard, I believe th is review has played an important role in helping
OECS-WTO countries conduct their own internal re views of the trade-related policies and practices
they follow, and of the resources at their disposal to carry them out.  Although, as a result, means
might be found to make a more efficient use of those resources, including through ongoing initiatives
for greater regional cooperation, the inescapable conclusion is that at this juncture the countries underreview need the support of the international co mmunity to participate more effectively in the
multilateral trading system.  Acknowledging this, there were widespread expressions of support from
Members for additional technical assistance to OECS-WTO countries.  I hope the work undertaken
throughout this review to identify the trade-related needs of these countries will lead to concrete steps
to address these, including through a permanent presence in Geneva.
247. Several Members were understanding of the request by the OECS-WTO Members for special
consideration for them, anchored in the principle of  special and differential treatment granted in theWT/TPR/M/85
Page 44
WTO to developing countries.  While noting the problem posed to OECS-WTO Members by the
erosion of preferential margins, some Members expressed support for an early granting of the waiverfrom WTO rules for the Cotonou Agreement.
248. Specific questions were also asked the OECS-WTO Members on:
• compliance with WTO notification requirements;
• improvements to customs valuation and administration;
• import licensing procedures;
• use of quantitative restrictions;
• administration of price controls;
• binding of "other duties and charges" in the WTO;
• export assistance and promotion activities;
• harmonization of standards and standards bodies;
• the role of commodity boards;
• transparency in government procurement;
• protection of IPRs;
• investment incentive schemes, and their coverage;  and
• legislation, access conditions and incentives in specific service sectors.
249. Apart from the questions addressed to the OECS-WTO Members as a group, specific
questions were directed to individual OECS-WTO countries, including:
• to Antigua and Barbuda, on incentives schemes, free trade zones, imports of reconditioned
vehicles, telecommunications and the functioning of the International Ship's Registry;
• to Dominica, also on incentives schemes;
• to Grenada, on tariff bindings and the application of the general consumption tax;
• to St. Kitts and Nevis, on labelling standards and the functioning of the International Ships
Registry;
• to St. Lucia, on investment limitations in certain sectors;  and
• to St. Vincent and the Grenadines, on incentives for non-hotel tourism activities.
250. Members appreciated the oral and written responses and explanations provided by the
delegations of the OECS-WTO countries.
251. We look forward to receiving answers on still outstanding questions.
252. In conclusion, it is my sense that this Review has amply fulfilled its main objective of
assessing in a collective manner the trade policies and practices of the OECS-WTO Members,
particularly in the context of their development needs and objectives as well as of the external
environment.  The Members under review reaffirmed  their full commitment to the multilateral trading
system, and the presence of the six Ministers has been strong testimony to this.  But we have also
been made aware of the problems and difficulties hindering the fuller participation of the OECS-WTO
Members in the system.  Addressing these issues could be important for a greater participation of
OECS-WTO Members in the multilateral trading system, which would not only help the Members
reviewed take greater advantage of trading opportuni ties to foster growth and development, but also
enrich and be of benefit to the system as a whole.  In this respect, I am convinced the WTO offers the
best framework in which these Members can participate as equal partners with larger economies in the
global market.WT/TPR/M/85
Page 45
ANNEX
DRAFT RESPONSES PROVIDED BY THE OECS-WTO MEMBERS
TO ADVANCE WRITTEN QUESTIONS
RESPONSE TO QUESTION FROM HONG KONG, CHINA
B. Standards and Technical Regulations (WT/TPR/S/85, p. 29, paras. 113-116)
We note that regional standards developed by  the CARICOM Common Market Standards Council
(CCMS) are not mandatory.  We also note that  there is no OECS-level common policy concerning
standards or technical regulations, and particularly technical regulations are issued exclusively at a
national level.  We are interested in knowi ng if the OECS has any plan for harmonisation of
standards and technical regulations in order to facilitate international trade.
Yes.  This is work being done under CARICOM Single Market and Economy Programme.
At the CARICOM level there is work on the ha rmonisation of standards through the CARICOM
Common Market Standards Council (CCMSC), which is to be replaced by the CARICOM Regional
Organisation Standards and Quality.  The CCMSC is responsible for the region's cooperation on
standards management, which involves the development of regional standards and the harmonization
of standards.
REPONSE TO QUESTIONS FROM THE EUROPEAN UNION
Trade Policy Regime
(2) Policy Objectives and International Relations
(i) World Trade Organization
We note that OECS Members, although committed to multilateral rules and liberalising trade, still
have doubts about the benefits of participating in the multilateral trading system within the WTO
framework. With view to a WTO New Round th e EU has taken such concerns into serious
consideration.  It has modified its strategy to better meet the interests of developing countries and to
convince them about the need and the benefits of the multilateral system.  We would be very interested
if the OECS Members could specify what subjects they would like to see addressed in a New Round of
trade negotiations and if they have additional suggestions on how the concerns of countries like the
OECS could be best reflected in a New Round.
We welcome this statement that the EC has modified its strategy to better meet the interest of
developing countries and to convince them about the need and the benefits of the multilateral system.
We seek clarification with regard to particular changes in policy adopted by the EC which addresses
the needs of developing countries, particularly the most vulnerable such as the OECS.
We are aware that efforts are being made to launch a new round of negotiations.  We cannot
justify our unequivocal support to this initiative unless we first iron out the problem which have been
plaguing us since the end of the Uruguay Round.  It would be futile to participate in a system whose
regulations and procedures turned out to be onerous and burdensome, retarding economic
development, rather than giving a fair opportunity  to all to enjoy the successes of the new world
trading order that is envisaged.WT/TPR/M/85
Page 46
The mandated negotiations in services and agriculture address principal sectors of importance
to us.  In order to alleviate our growing marginalization in the multilateral trading system, ourinherent vulnerability as Small Island Developing States (SIDS) must be recognized and addressed.
(paras. 35, 41, 42, 43)  The Report states that meeting WTO notification requirements and amending
national legislation to conform to the WTO Agreem ents, albeit with considerable differences among
the OECS countries, has been somewhat slow partly due to human-resource constraints and
institutional limitations.  At the same time the OE CS-WTO Members have entered into or are in the
process of entering into a number of regional agreements. Is there any analysis on the economic
impact of these initiatives?  What are conseque nces in terms of human resources and technical
capacities in key ministries and needs for capacity building?
Yes, some work has been done, but no studies on the economic impact of these agreements
have been  undertaken.
OECS Members are engaged in simultaneous negotiations in several fora which pose
monumental challenges given our capacity constr aints.  All OECS-WTO Members are non-resident,
without resources in Geneva and very limited human resources and technical capacity.  OECS
Members have been unable to participate effectively in the multifaceted WTO process and to fulfill
our commitments within the timeframe specified in the Uruguay Round Agreements (URAs).  The
extensive regulatory and notification requirements of the URAs impose a heavy burden on our already
over stretched administrations.  The provision of technical assistance measures and enhanced
flexibility in WTO rules are imperative if we are to successfully integrate to multilateral trading
system.
(2) (ii) Regional agreements
(para 50) We would be interested to know how far the OECS-WTO Members progressed in the areas
defined in the FTAA Working Group on Smaller Economies (Mexico City, 14-16 October 1997).  Inthat occasion, participants stressed the critical role of technical assistance in the FTAA process and
highlighted the importance of training on multilateral and regional trade issues.
A response will be provided later.
(3) The OECS Members, the WTO, and Technical Cooperation
The Secretariat Report as well as the Government Report confirm that technical assistance is viewed
by the OECS-WTO members as a critical need for ensuring full compliance with their WTO
obligations and for assisting them in achieving fu ller integration into the global economy and the
multilateral trading system.  It would be useful to know if the OECS has undertaken efforts to specify
and inventory its Technical assistance needs in the various areas of WTO activities.
Technical assistance is a necessary though an insufficient measure for facilitating fully
integration into the multilateral trading system.
The OECS countries have not undertaken to specify and inventory technical assistance needs.
We are, however, aware that we require such assistance in a range of areas including, but not
limited to SPS, TBT, SCM, and Custom Valuation.
The EU is interested in the efforts being made  to modernise and simplify customs and other trade
procedures.  We would appreciate views on progress being made, difficulties encountered, and needs
in terms of technical assistance to support trade fa cilitation.  Would the OECS share our view that ifWT/TPR/M/85
Page 47
this issue is to be addressed in future negotiations in the WTO, there should be a strong
developmental component and that capacity  building will need to be increased?
OECS Member are making strenuous efforts to modernize and simplify custom and trade
procedures.  Because of our capacity and other constr aints we have been experiencing difficulties.  It
is essential therefore that technical support be made available in this area.
Further details of progress to date, the difficulties encountered and our technical assistance
needs in this area will be submitted in due course.
III. MARKET ACCESS IN GOODS
(2) Tariffs and Other Price-Based Measures
We would be grateful if the OECS-WTO Members could inform us about their views on developing
the regional (CARICOM) approach to several issues , in particular customs valuation, anti-dumping
and countervailing, government procurement?
CARICOM Member States including OECS Members have already agreed to a regional
approach to Custom Valuation, Anti-dumping  and Countervailing Duty, and Government
Procurement.
The Report points out that some of the OECS countries have not fully implemented the CARICOM
CET. There are still many exemptions. In additi on, there is a customs service charge applied at
different rates across these countries and in some cases there is non-automatic licensing.  The most
frequent reason mentioned for not fully implementing the CET is the effect on government revenue.
Does the OECS share our view that replacing part of  the tariffs and similar charges by indirect taxes
such as VAT could be examined as a possible solution ?
OECS Member States have taken a formal decision to examine the possibility of introducing
a VAT.
(ii) MFN import duties
(para 66) The Report states that "As at early 2001, three of the countries under review had reached
Phase IV of the [CARICOM CET] implementation process", i.e. Grenada, St. Lucia, St. Vincent and
the Grenadines.  The Government Reports, however, stipulates that all OECS, accept for
Antigua/Barbuda had reached this phase as of January 2001.  Could the OECS-WTO Members please
explain what the exact situation is?
Grenada, St. Lucia and St. Vincent and the Grenadines have already implemented Phase IV of
the Common External Tariff )CET).  Dominica will implement Phase IV on July 1, 2001.  Antigua
and Barbuda will implement Phase IV on August 1, 2001.  St. Kitts and Nevis is presently on Phase
III and is currently undertaking a fiscal review which will inform  its future position.
(para 70) The Report refers to "a simplified tariff structure, with fewer rates, accompanied by the
elimination of discretionary tariff concessions", as a means for enhancing transparency, streamlining
administrations, and reducing economic distortions.  Given the variety of different schemes
(exemptions), could the OECS-WTO members indicate whether they have reflected on that and intend
to adapt their systems in the future ?
A study is to be undertaken by CARICOM to review the CET and the Rules of Origin and
such matters are likely to be considered.WT/TPR/M/85
Page 48
(para 74) Tariffs are bound at very high rates, i.e. 100% for agriculture and between 50% and 70%
for most non-agricultural goods.  Do the OECS-WTO Members agree that moving towards muchlower bounds could be an argument for giving a signal to traders and investors?
OECS Members are co-ordinating policies towards progressive liberalisation at the regional
level within CARICOM.
(iv) Other duties and charges
We would be grateful if the OECD (sic)-WTO Me mbers could give an overview where they stand with
regard to introducing or re-introducing value-added tax schemes.
OECS Member States have taken a formal decision to examine the possibility of introducing
a VAT.
(3) Non-tariff measures
(ii) Safeguards
(para 96) The Report states that most OECS countries have maintained safeguards under Article 29
of the CARICOM Treaty.  Can OECS Members please indicate when such measures have been
imposed and provide information on duration, form and product coverage of such measures since
1995?  Do OECS Members consider that these measures need to be notified to the WTO Committee
on Safeguards under Article 12 of the WTO Agreement on Safeguards?
OECS Members are engaged in consultation within CARICOM  with a view to rationalizing
our regional and sub-regional arrangements with our WTO commitments.  We are cognizant of the
fact that any safeguard measure imposed after the entry into force of the WTO Agreement must
comply with the provisions of both the Agreement on Safeguards and Article XIX of the GATT 1994.
Article 12 of the Safeguards Agreement requires extensive notifications.  OECS-WTO Members are
subject to severe capacity constraints have limited our ability to fulfill all our notification obligations
which must be recognized and addressed through, inter alia , WTO rules defining policy flexibility
instruments which are appropriate to our level of development and inherent vulnerability.
IV. OTHER MEASURES AFFECTING TRADE
(2) Export measures
(para 110) The Report states that "incentives linked with exportation are, however, in place:  some
benefits under the respective Fiscal Incentives Acts are granted to enclave enterprises exporting all oftheir production;  relief from income tax is gr anted to manufacturing enterprises on the profits
accruing from exportation, provided that the enterprise is not enjoying another tax holiday."  Can
OECS Members please elaborate on the eligibility criteria for these incentives?  Do OECS Members
consider that these incentives are subsidies contingent upon export performance in accordance with
Article 3.1(a) of the WTO Agreement on Subsidies and Countervailing Measures?
OECS Members are in the process of reviewing all fiscal incentives.  In due course we will
provide a more detailed response.
(3) Standards and Technical Regulations
(para 115) It seems that there is a lack of coherence between the texts and Table IV.1:  a) one
standard adopted in Antigua/Barbuda is not listed in the table, b) Considering the Secretariat’s reportWT/TPR/M/85
Page 49
for St Lucia, there are less standards in the text (32) than in Table IV.I (34).  Could Antigua/Barbuda
and St Lucia please explain the differences?
At the time of the WTO's officials visit to Antigua and Barbuda, the Antigua and Barbuda
Bureau of Standards indicated that one Standard had in fact been declared. i.e. "Standards for Writing
Standards" (this standard actually lists the steps involved from standard generation to Gazette by the
Ministry of Legal Affairs).  On further investigation, it was discovered that the above standard had in
fact not been Gazetted.  The Ministry of Legal Affairs is presently working on correcting thissituation.
Table III.5 in St. Lucia's report is correct.
WT/TPR/S/85/GRD (para 114) We woul d be grateful if Grenada could indicate in which fields it has
adopted ISO standards as Grenadian national standards.
The fields which Grenada has adopted ISO Standards as National Standards are:a) Environmental Audit System
b) Quality Management Systems
c) Environmental Management System
WT/TPR/S/85/GRD (para 116) Coul d Grenada please explain what  is meant by saying that
‘standards comply with international standards’.  Are these standards identical?  Are they aligned?
When we say that Grenada standards comply w ith international standards we mean that they
are identical to ISO standards.
WT/TPR/S/85/GRD (para 118) Refere nce is made to the fact that ‘compulsory standards are
implemented through (technical) regulations’.  Does  that mean that a technical regulation is adopted
to impose a voluntary standards?
No.
WT/TPR/S/85/GRD In which fields com pulsory standards are implemented ?
Labelling of Commodities (general principles), Specification of labelling of commodities
(labelling of pre-packaged goods), specification of products manufactured from textile, Specification
of the labelling of commodities-(labelling of pre-p ackaged foods), Specification for the labelling of
textile articles, Requirements for the labelling of Brewery products )Beer, Stout, Shandy, and Malt),
Quality, Specification for Wheat flour, Specification of toilet tissues, specification for pneumaticpassenger tyres, Specification of new pneumatic tyres for highway commercial vehicles
(4) Market competition
(iv) Intellectual property rights
As developing countries, OECS-WTO Members should implement the TR IPs Agreement by 1
st
January 2000.  We would appreciate it if the OECS-WTO Members, in particular, Antigua and
Barbuda, Grenada, and St. Vincent and the Grenadines, could you inform us of any concrete steps
currently being undertaken in order to put their legislation in conformity with the TRIPs obligations.
In Antigua and Barbuda's case, Copyright and Related Acts Law, and Trade Mark Act based
on the World Intellectual Property Organization  (WIPO) model has been drafted and is expected to
be tabled in the Parliament by the end of the year.  Geographical Indicators and Patent Acts are beingprepared.WT/TPR/M/85
Page 50
At present Grenada is working in conjunction with WIPO to make its legislations compatible
with the TRIPs obligations.  Recognizing our lack of financial and technical resources to prepare
legislation, Grenada has requested assistance from WIPO.  WIPO is in the process of preparing model
legislation for Grenada.  As soon as it is completed, we will make the necessary domestic
arrangements.
St. Vincent and the Grenadines is requesting the assistance of WIPO to bring its domestic
legislations into conformity with the TRIPS Agreement.
III. MARKET ACCESS IN GOODS
(2) Tariffs and other Price Based Measures
(i) Customs Valuation
Paragraph 18
Could OECS-WTO Members explain why there is  no harmonisation in their customs valuation
procedures?  What plans do OECS-WTO Members have to adopt the 'transaction value' method as
prescribed by the Customs Valuation Agreement and by when?”
Grenada and Antigua and Barbuda are investigating this matter and are seeking technical
assistance.  The OECS countries are experiencing serious under invoicing and will require technical
assistance with implementation.
WRITTEN QUESTIONS FROM JAPAN
General Questions concerning Trade and Investments
Do appropriate juridical procedures in dispute settlement on trade and investment exist in each
OECS member state or in the OECS region, which ensure “due process” for foreign companies?
Yes.
Are there any measures which offer preferential  treatments to the U .S. companies or the EC
companies in comparison with Japanese companies?  If there are, until when will they continue?
Some OECS Member have entered bilateral investment treaties with the U.S. and certain EC
Members States which provide special regime governing the treatment covered investments and are
consistent with our WTO obligations.
Are there any inquiry points that respond to questions concerning the laws and systems of investment
or trade in each OECS country?
Ministries with responsibility for Trade, Ministries of Legal Affairs, Trade and Investment
promotion Agencies.
When laws and regulations concerning trade and inve stment are amended, how much time is required
for such amendments to be made known to public, including foreign companies, before they come into
force?WT/TPR/M/85
Page 51
Draft bills are published in the Official Gazette prior to enactment  in Parliament.  All laws
and regulations which are passed into law are immediately published in the Official Gazette uponentry into force..
Each OECS country is making efforts to diversify its economy, which has traditionally depended on a
few agricultural products.  Please explain in detail the strategies for diversifying the economies of
each OECS country.  When foreign companies invest in new industries and products in OECS
countries, what conditions are imposed?  When a tourism company stations a Japanese person as a
guide and interpreter for Japanese tourists, what co nditions are imposed? In such a case, how much
is the fee to obtain a one-year visa?  Japan considers that it would play a key role for the development
of national economies.  Does each of the OECS countries have any strategies to utilize it for their
economic developments (for example, opening a web-site for tourist information which includes hotel
reservations, as well as providing services through the use of IT to foreign banks and insurancecompanies).
A written response will be provide later.
What merit can be considered if foreign companies, which already have their branches in the United
States, extend their investments into OECS countries?   (What sort of international division of labour
is considered between the U.S. and OECS countries.)
Foreign companies which already have their branches in the United States and wish to extend
their investment into OECS countries are welcome, just as are other foreign companies, provided
these companies comply with local laws and regulations.
Report on OECS-WTO Members by the Secretariat (WT/TPR/S/85)
III. MARKET ACCESS IN GOODS
(2) Tariffs and other price-based measures
Other duties and charges(p. 24, Table III.8)
According to the Table, only St. Kitts and Nevi s bound other duties and charges which comprises
customs service charge and consumption tax as “ODC” in the WTO.  Japan considers that the
binding of ODC contributes to the improvement of  transparency in customs duties, and therefore
would like to know the opinion of countries other than St. Kitts and Nevis on this issue.  Do thecountries other than St. Kitts and Nevis have any plan to bind them in the WTO in the future?
OECS Members are cognizant of the fact that WTO rules require that other duties and charges
shall be recorded in respect of all tariff  bind ings.  OECS-WTO Members will continue to endeavour
to comply with all WTO obligations.
(3) Non-tariff measures
Quantitative import restrictions and licensing
(p. 25, paragraph 87)
The Report states “goods are divided between product s that require an import licence when imported
from any country that is not an OECS member and goods that require a licence when imported fromWT/TPR/M/85
Page 52
any country that is not an OECS or CARICOM member”.  Is this measure consistent with Article 1,
paragraph 3 of the Agreement on Import Licensing Procedures, which prescribes neutral applicationas well as fair and equitable administration in import licensing procedures?
Article 1.3 of the Licensing Agreement provides that rules for import licensing procedures
shall be neutral in application and administered in a fair and equitable manner.  WTO jurisprudence
confirms that the administration of separate regimes in itself does not constitute a violation.  The
creation of a customs union requires that duties and other restrictive regulations of commerce (exceptwhere necessary those permitted under, inter alia , Article XI and XIII) are eliminated with respect to
substantially all the trade in products originating in such territories.  Import licenses procedures with
respect to our CARICOM partners are in accordance with our CARICOM obligations.
The CARICOM Treaty has been notified to the WTO Committee on Regional Trading
Arrangements.  The CARICOM arrangements provide special and differential treatment for its lessdeveloped members which include all OECS Members under Article 56.  This is a feature we would
like to see more broadly reflected in WTO rules applicable to  these small economies which are all
vulnerable SIDS.
Significantly, Article 1.2 of the Import Licensing Agreement recognizes that an assessment of
the WTO compatability of administrative procedures used to implement import licensing regimesmust take into account the economic development purposes and financial and trade needs of
developing country trade Members.
(p. 25, paragraph 88)
According to the Report, under the CARICOM Treaty, import licensing is required for the importation
of soaps, margarine, shortening and oils when the source is a more developed CARICOM country
(CARICOM MDC) or a third country.  Is this measure consistent with Article 1, paragraph 3 of the
Agreement on Import Licensing Procedures, which prescribes neutral application as well as fair andequitable administration in import licensing procedures?
See answer to question 8.
(pp. 25-26, paragraph 89 and 90)
According to the Report, OECS countries may impo se quantitative restrictions on imports not only
from CARICOM MDCs but also all trading partners.  Is this measure consistent with Article 13 of theGATT, which prescribes non-discriminatory administration of quantitative restrictions?
Article XIII of the GATT 1994 is essentially an application in specific situations of the
general principals stated in Article I to which Article XXIV of the GATT 1994 is a permissible
exception we note that Article 1.2 of the Import Licensing Agreement requires that Members ensure
that administrative procedures used to implement import licensing regimes conform with the GATT1994, including the provision of Article XII.
See also answer to question 8.
Safeguards
(p. 26, paragraphs 95 and 96)
According to paragraph 95, Article 29 of the CARICOM Treaty allows quantitative import
restrictions on the imports from other CARICO M members.  On the other hand, according toWT/TPR/M/85
Page 53
paragraph 96, several OECS countries seem to appl y import quotas on the importation of beer and
malt not only from CARICOM MDCs but also from third countries on the basis of Article 29.  Does
this mean that Article 29 of the Treaty can be applied in the countries outside CARICOM?  Are the
conditions for applying the quantitative import restrictions under Article 29 of the Treaty consistent
with the Agreement on Safeguards in the WTO?
The Report evidences a consistent misinterpretation of  the articles under which import
restrictions may be applied under the CARICOM Agreement.
The import restrictions currently imposed on beer are applied by virtue of Article 56, which
provides for Special and Differential Treatment to CARICOM LDCs, including all OECS Members.
On the other hand, Article 28 is a Safeguard Mechanism available to all CARICOM Member States.
The aforementioned provision for Special and Differential Treatment provides a model which
the OECS  recommends for consideration by the WTO in developing appropriately sensitive s&dtreatment which also addresses the special needs of its more vulnerable members.
(p. 26, paragraph 95)
According to the Report, Article 28 of the C ARICOM Treaty permit a member to introduce
quantitative restrictions on imports for the purpose of safeguarding its balance of payments.  Is this
measure consistent with Article 12 of the GATT?
OECS Member States are WTO developing country Members.  We recognize our
obligations under the GATT 1994 to comply with the Provisions of Article XVIII, Section B with
respect to balance-of-payments measures affecting trade in goods of other WTO Members.  Article 28
of the CARICOM Treaty details our specific co mmitments within the CARICOM custom union.  The
CARICOM Treaty has been notified to the WTO Committee on Regional Trading Arrangements.
(p. 26, paragraph 97)
According to the Report, CARICOM’s free-trade agreements with Colombia and with the Dominican
Republic allow the application of temporary bilateral safeguards.  Are these safeguards also applied
to the third countries?
No.
Report on Antigua and Barbuda by the Secretariat (WT/TPR/S/85/ATG)
(p. 17, paragraph 70)
According to the Report, reconditioned vehicles from Japan and Korea are restricted because freon is
used in their air-conditioning system.  Is it correct to understand that reconditioned vehicles from
countries other than Japan and Korea are also restricted if freon is used in their air-conditioning
system?
In keeping with the Montreal Protocol, vehicles with air-conditioning systems using freon
refrigerant must be retrofitted to an ozone safe refrigerant at the port of St. John's regardless of the
country of origin of the vehicle..WT/TPR/M/85
Page 54
(p. 34, paragraph 154)
According to the Report, an International Ship’s Registry is in operation under the Merchant
Shipping Acts.  Please provide an explanation in concrete terms on the content of the system of
registry (for example, the required conditions for registry)
This information will be supplied in writing at a later date.
Concerning mode 3 of the Antigua and Barbuda’s GATS Schedule of Commitments on maritime
transport services, there is a reservation based on the Merchant Shipping Acts referred in thisparagraph.  Please explain in detail the limitation arising from this reservation.
This information will be supplied in writing at a later date.
Report on Dominica by the Secretariat (WT/TPR/S/85/DMA)
(p. 20, paragraph 79)
According to the Report, shaving brushes manufactured in or exported from Japan are prohibited for
import due to health and safety reasons.  Please explain “health and safety reasons” in concrete
terms.
The restriction is left over from colonial legislation.  We only became aware of it during the
TPR exercise.  As far as we aware it has  never been applied and it is not now enforced.  It appears to
have been due to "health and safety reason" reasons at the time of enactment.  This will be reviewed.
Report on Grenada by the Secretariat (WT/TPR/S/85/GRD)
(p. 20, paragraph 77)
According to the Report, quantitative restrictions are applied on a number of imports from third
countries and CARICOM MDCs.  Is this measur e consistent with Article 13 of the GATT?
See answers to questions 10 and  12 above.
Report on Saint Kitts and Nevis by the Secretariat (WT/TPR/S/85/KNA)
(p. 28, paragraph 128)
According to the Report, National Bureau of Standards plans to establish labelling standards, which
are likely to be mandatory.  Please explain the contents of these standards as well as the present
situation concerning the establishment of these standards.
The standard applies to the labelling of all prepackaged goods to be offered for retail sale to
the consumer or for catering purposes and sets out the requirements for the information  to beincluded on the labels, the method of display of such information, and where necessary, the wording
to be used.
(p. 41, paragraph 197)
The Report states that the limitations, which apply to ships under 1600 net tons, do not apply to ships
over 1,600 net tons engaged in international trade, and that such ships may be registered in St. Kittsand Nevis regardless of the nationality of its owners.  Does this mean that there is no limitation forWT/TPR/M/85
Page 55
registry in the case of ships over 1,600 net tons engaged in international trade?  Please provide an
explanation in concrete terms on the content of the system of International Ship Registry, which the
Government is in the process of establishing by formulating legislations.
A written answer will be provide later.
Report on Saint Lucia by the Secretariat (WT/TPR/S/85/LCA)
(pp. 12-13, paragraph 44)
According to the Report, the investment activities reserved by Cabinet for nationals of St. Lucia is
listed.  Is there any plan to amend this list?
The matter is under review.
(p. 13, paragraph 45)
According to the Report, despite the reservations for nationals mentioned in paragraph 44, trade
licenses may be granted to non-national companies or persons in cases where local investment hasnot been sufficiently forthcoming or where the appropriate technology is not available locally.  Has
the application of such exceptions been previously experienced?
Yes, application of such exceptions have frequently been experienced.
(p. 20, paragraph 72)
According to the Report, shaving brushes manufactured in or exported from Japan are prohibited.
Please explain the reason for their prohibition in concrete terms.
See answer to question 17.
(p. 40, paragraph 174 and Table AIV.1)
Please explain the contents of the services called “transhipment services” and “free zone
operations”, which St. Lucia commits to in its GATS Schedule of Commitments
A written response will be provided at a later date.
Report on Saint Vincent and The Grenadines by the Secretariat (WT/TPR/S/85/VCT)
(p. 34, paragraph 169)
The Report states “[I]n order to attract investment in plant and facilities, the Government intends to
revise the Hotels Aid Act to include incentives for non-hotel tourism activities”.  Kindly give a
detailed explanation concerning the contents of the revised legislation as well as the planned schedule
for the legislative process.
A response to this enquiry will be presented subsequently.    WT/TPR/M/85
Page 56
(p. 35, paragraph 174)
Concerning the mode 3 of the market access in the Antigua and Barbuda’s GATS Schedule of
Commitments on maritime transport services, there is a reservation based on the Exchange Control
Act.  Please explain in detail the limitation arising from this reservation.
This question cites Antigua and Barbuda and Barbuda's  Schedule of Commitments.  We
assume that the current placement of this question is in error.
(p. 35, paragraph 174 and Table AIV.1)Please explain the contents of the services called “transhipment services” and “free zone
operations”, which St. Vincent and the Grenadines commits to in its GATS Schedule of Commitments
A response to this enquiry will be presented subsequently.    
WRITTEN QUESTIONS FROM THE UNITED STATES
SUMMARY OBSERVATIONS(I) INTRODUCTION
(para. 4)
The entry into force of the WTO has brought new rules that are yet to be fully incorporated in the
domestic statutes of all the OECS members and most of them have lagged in meeting their notification
obligations.  What steps are OECS  -WTO members taking or considering taking to incorporate WTO
rules into their statutes and to make the required notifications?
OECS Members have adopted legislation in implementing their WTO commitments.  OECS-
WTO Member States will require technical assistance to enable Members to further discharge their
obligations.
I. THE ECONOMIC ENVIRONMENT
(1) Main Economic Developments
(i) Introduction
(para. 5)
The small size of the domestic markets is an issu e in the production of goods.  OECS members have
tried to address this through participation in the integrated regional market being created by
CARICOM.  What concrete steps are being taken to make further progress in CARICOM towards a
more widely applicable common external tariff?
We draw attention to the fact  that a  study is being undertaking by CARICOM to review the
CET.WT/TPR/M/85
Page 57
(ii) Structure of the economies
(para. 9)
The economies of the OECS-WTO Members are dominated by service activities, which accounts for
around three quarters of GDP, with tourism accounting for over half of GDP in some countries.
What  steps are these countries taking to seek flexibility in labour markets and the provision of
transport services to ensure the competitiveness of the tourism sector?
CARICOM Members are in the process of establishing a CARICOM Single Market and
Economy.  The OECS Members States are co-ordinating a approach top progressive liberalisation in
the context of the mandated negotiations at the CARICOM level.
(2) Developments in Trade and Investment
(para. 30)
Net foreign investments in the OECS area tota led U.S. $1.3 billion in 1995-1999, with the single
largest area for investments being tourism, in pa rticular hotels and resorts.  Are the tax and customs
duty concessions granted in OECS members to prom ote hotel development available to all investors
in the sector?
Yes.
II. TRADE POLICY REGIME
(1) Introduction
(para. 34)
Domestic implementation of OECS members WTO commitments has been somewhat slow, with most
countries lagging in their WTO notifications and in the process of legislative reform required for the
implementation of the WTO Agreements.  What st eps are OECS -WTO Members taking to speed up
their implementation of WTO Agreements and notifications?
Same as the answer to question 1.
(2) Policy Objectives and International Relations
(para. 37)
The Secretariat Report notes that two trade policy objectives of OECS countries - increased
liberalization and ensuring that domestic suppliers can compete - have given way to an array of
specific policies which complicate trade and raise costs.  This seems contradictory.  What steps areOECS-WTO Members taking or consider ing taking to remedy this situation?
We do not consider increasing liberalisation and ensuring domestic suppliers can compete to
be contradictory.  We are undertaking a review of national policies in light of the continuing regional
and sub-regional thrusts.WT/TPR/M/85
Page 58
(para. 39)
Despite increasing regional policy coordination, in dividual national economic plans show limited
synchronisation or diverge in regionally agreed disciplines.  While, in general the OECS economies
are moving towards a more open trading environment, they are doing so very gradually.  What steps
are being taken to speed up this process?
Assessment of the regional integration process must take into account our capacity
constraints.
(i) World Trade Organization
(para. 42)
Participation of OECS Members in the WTO has been limited, including in areas of particular
economic importance to th em like services.  OECS countries have made only few commitments in
their GATS Schedules. With respect to their WTO notifications, all countries are behind.  What stepsare OECS -WTO Members taking to expand their commitments?
All six OECS-WTO Members are non-residents.  The reasons for this speak to our specific
constraints.
Our policy approach to the mandated negotiations are being co-ordinated at the regional level.
(3) The OECS Members, the WTO and Technical Cooperation
(para. 57)
The Secretariat Report notes the importance of trade-related technical cooperation in relation to
support for domestic implementati on of WTO commitments.  What are the OECS Members doing to
incorporate trade and WTO issues into their deve lopment strategies?  What steps are the OECS
members taking to prioritise their technical assistance needs?
The OECS countries have not yet  undertaken a detailed inventory of our  technical assistance
needs.  We are increasingly aware that we require such assistance in a range of areas including, butnot limited to SPS, TBT, SCM, and Custom Valuation.
III. MARKET ACCESS IN GOODS
(1) Introduction
(para. 60)
The Common External Tariff (CET) applies at relatively high rates of up to 20-35 percent for
industrial products and 40 percent for agricultural goods.  The tariff structure appears to be based on
an import-substitution model ill-suited to most OECS Members, given that their economies are
service-based.  What are the OECS Members doing to reduce the CET and to create a simplified tariff
structure with fewer rates and elimination of discretionary tariff concessions?
OECS Members can appreciate and do understand the disadvantages associated with
traditional import substitution policies.  It should be noted that imports already account for almost
70% of OECS GDP on average, and thus the existing tariff structure rather than encouraging active
import substitution, would seem to merely facilitate the retention of an very narrow and minimal baseWT/TPR/M/85
Page 59
of domestic goods production.  The alternative clearly would be to have economies which are totally
devoid of any good output and totally depended on tourism and in some cases on one or two otherservice industries.  What might this not mean in light of our inherent vulnerability and increasing
marginalization in the multilateral trading system.
(2) Tariffs and Other Price-Based Measures
(para. 75)
The Secretariat Report notes that some OECS Members’ WTO bindings are in conflict with CET
rates.  In Grenada, for example the CET has resu lted in applied tariffs exceeding bound rates for
certain products, such as frozen boneless meat, pum pkins, sweet peppers, inedible tallow, soybean oil,
beer, and some juices.  Has Grenada notified WTO members of this situation so that it can be
rectified?  If not, when will Grenada do so?
Responses will be provided in due course.
The Report also suggests that Grenada assesses a 25 percent General Consumption Tax on imports,
but applies a 10 percent GCT to domestic pro ducts and like products from CARICOM members.
Please confirm this interpretation.  If this is the case, how does Grenada justify this internal tax
system in light of its GATT Article III national treatment obligations?
Responses will be provided in due course.
(3) Non-Tariff Measures
(i) Import prohibitions, restrictions and licensing
(b) Quantitative import restrictions and licensing
(para. 88)
Licensing is required for the importation of soaps, margarine, shortening and oils when the source is
a more developed CARICOM country or a third coun try, under Schedule IX of the CARICOM Treaty.
These and some other goods are subject to priority  sourcing from CARICOM.  Additionally, in some
countries, licenses are required for imports of ce rtain clothing products from non-CARICOM sources
and there is priority sourcing of these products  from other CARICOM St ates.  Could the OECS
Members explain how the licensing system operates and how it is consistent with Article XI of the
GATT?
Article 1.3 of the Licensing Agreement provides that rules for import licensing procedures
shall be neutral in application and administered in a fair and equitable manner.  WTO jurisprudence
confirms that the administration of separate regimes in itself does not constitute a violation.  The
creation of a customs union requires that duties and other restrictive regulations of commerce (except
where necessary those permitted under, inter alia, Article XI and XIII) are eliminated with respect to
substantially all the trade in products originating in such territories.  Import licenses procedures withrespect to our CARICOM partners are in accordance with our CARICOM obligations.
The CARICOM Treaty has been notified to the WTO Committee on Regional Trading
Arrangements.  The CARICOM arrangements provide special and differential treatment for its less
developed members which include all OECS Members under Article 56.  This is a feature we would
like to see more broadly reflected  in WTO rules applicable to  these small economies which are allvulnerable SIDS.WT/TPR/M/85
Page 60
Significantly, Article 1.2 of the Import Licensing Ag reement recognizes that an assessment of the
WTO compatability of administrative procedures used to implement import licensing regimes musttake into account the economic development purposes and financial and trade needs of developing
country trade Members.
(4) Government Procurement
The Secretariat paper cites transparency in procur ement as one element that requires improvement
and notes that this fact has been recognized by the OECS countries.  Has there been a response fortechnical assistance to implement a government procurement regime at a regional level?
Yes, there has been a response to a regional approach.  CARICOM intends to undertake an
assessment of the possibility of a government procurement regime within the context of the
CARICOM Single Market and Economy.
V. OTHER MEASURES AFFECTING TRADE
(1) Introduction
(para. 103)
A regionally harmonized, but complex web of incentives is in place, mainly in the form of income tax
exemptions and the waiver of tariffs and other duties and charges on imports.  Some of these
programs, however, have local content-requirements  and in some cases provide support contingent
on exportation.  Could the OECS Members explain how the exemptions and duty waiver system
operates and how it is consistent with  obligations under the SCM Agreement?
OECS Members are in the process of reviewing all fiscal incentives. Further information will
be subsequently.
(3) Standards and Technical Regulations
(para. 114)
There is no OECS-level common policy concerning standards or technical regulations and all OECS
members have their own Bureau of Standards.  What are the OECS Members doing to increase
cooperation with each other in the standards area?
At the CARICOM level there is work on the harmonisation of standards through the
CARICOM Common Market Standards Council (CCM SC), which is to be replaced by the
CARICOM Regional Organisation Standards and Quality.  The CCMSC is responsible for regionalcooperation on standards management, which involves the development of regional standards and the
harmonization of standards.
(4) Market Competition
(i) Marketing boards and price controls
(para. 117)
Most OECS members have state enterprises that perform the function of marketing boards.  What are
the OECS Members plans to further curtail the monopoly rights of these enterprises?WT/TPR/M/85
Page 61
The GATT 1994 contains a number of rules aimed at preventing trade distortion including,
most notably, Article XVII.  The Understanding on the Interpretation of Article XVII of theGATT 1994 was concluded with the aim of the notifi cation system with respect to State Trading
enterprises including marketing boards.  OECS Memb ers intends to conduct a review of our policies
with regard to the submission of notification to the Council of Trade in Goods.
(para. 118)Price controls are used by all OECS Members for a wide range of products.  What are the OECS
Members’ plans to reduce the products subject to price control?
OECS Members recognize the importance of ensuring an equitable, fair trading system which
addresses the needs of the most vulnerable defined in both global and national terms.
(iii) Assistance to activities
(para. 123)
Assistance to manufacturing and some service activities  by OECS members is sizeable, with up to
40 percent of potential fiscal revenue foregone in the OECS area under some kind of fiscal incentive
scheme or import duty concessions.  What are the OECS Members’ plans to change the level andnature of this assistance?
OECS Members are in the process of reviewing all fiscal incentives.  OECS Members are
coordinating our policy approach to the development of GATS rules within CARICOM.
(iv) Intellectual Property Rights
(para. 132)
No country has completed the process of amending or introducing domestic legislation to reflect the
TRIPS agreement.  What is the status of OECS Me mbers’ plans to comply with the TRIPS agreement?
St. Lucia and Dominica are well advanced at meeting their obligations under the TRIPS
Agreement.  In Antigua and Barbuda's case, Copy right and Related Acts Law, and Trade Mark Act
based on the World Intellectual Property Organization (WIPO) model has been drafted and is
expected to be tabled in the Parliament by the end of the year.  Geographical Indicators and PatentActs are being prepared.
At present, Grenada is working in conjunction with WIPO to make its legislation compatible
with the TRIPs obligations.  Recognizing our lack of financial and technical resources to prepare
legislation, Grenada has requested assistance from WIPO.  Thus WIPO is in the process of preparing
model legislation for Grenada, As soon as it is completed, we will make the necessary domesticarrangements.
St. Vincent and the Grenadines is requesting the assistance of WIPO to bring its domestic
legislations in conformity with the TRIPS Agreement.
V. INVESTMENT AND MARKET ACCESS IN SERVICES
(1) Introduction
(para. 134)
No OECS member has made commitments under the Financial Services agreement.  Are the OECS
Members planning to make such commitments in the future?WT/TPR/M/85
Page 62
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM.
(para. 142)
Clearly the OECS insurance regimes are much more liberal in practice than their GATS commitments
would indicate.  We urge the OECS countries to co nsider more ambitious GATS bindings extending to
both on-shore and off-shore activities.  Please clarify if an insurance license granted in one OECS
country allows insurance to be provided in other OECS countries.  Please define "agencyarrangements."
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM Information on insurance licensing and definition of " Agency arrangements" will be
provided subsequently.
(para. 143)For what reason are foreign companies in An tigua and Barbuda, Dominica, Grenada, St. Kitts and
Nevis and St. Lucia subject to higher minimum capital requirements than domestic companies?
Response will be provided at a later date.
(c) Offshore financial services
(para. 145)
A report by the G-7 Financial Task Force on Money Laundering (FATF) named Dominica, St. Kitts
and Nevis, and St. Vincent and the Grenadines. as "non-cooperative countries" and urged them to
improve their anti-money laundering  regime. What  steps are these OECS Members doing to regulate
and monitor offshore banks more closely?
(3) Telecommunications
(para. 146)
The United States is encouraged by the evidence of liberalization in the telecommunications sector
and supports the ongoing efforts toward liberalization in the region.  We look forward to reviewing
the implementation process.  The United States suggests that any new schedules of commitments bind
the new regime in place.
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM.  OECS Members underscore the importa nce of granting recognition and credit for
autonomous liberalization.
(para. 147)
The United States was pleased that five OECS Members took steps as of 31 March 2001 to enhance
competition in the telecommunications sector by ending the monopoly in the provision of basic
services.  Have new licenses been issued yet?
Yes.WT/TPR/M/85
Page 63
(para. 150)
The United States supports the ongoing services liberalization to which the OECS Member countries
have committed under CARICOM.  Have all OECS Member states implemented the Protocol II?
What steps are being taken to ensure that, as part of a regional trade agreement, Protocol II is
compatible with GATS Article V?  What is the time frame for liberalization of services among the
member states?
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM
(5) Tourism
(para. 156)
The United States was pleased that all six OE CS Members made commitments under the GATS in
hotel construction and management as well as in recreational and sporting services. Are the OECSMembers planning to expand their commitments in the tourism sector?
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM.
(6) Transport
(para. 160)
The United States was pleased that most of the OECS Members made commitments under the GATS
in maritime transport.  Are the OECS Members planning to expand their commitments?
OECS Members are coordinating our policy approach to the mandated negotiations within
CARICOM.WT/TPR/M/85
Page 64
ANNEX I
RESPONSES PROVIDED BY ST. KITTS AND NEVIS
TO ADVANCE WRITTEN QUESTIONS
QUESTIONS FROM THE UNITED STATES
REPORT ON SAINT KITTS AND NEVIS
II. TRADE POLICY REGIME
(4) Investment Policy
(para. 56)
What are the four types of enterprises which may qualify for tax holidays?  For the sake of continued
transparency, please notify all incentives and tax concessions which enterprises may receive that are
related to earnings from exports.
Please refer to the Fiscal Incentives Act No. 17 of 1974.
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) Measures Directly Affecting Imports
(para. 72)
Do any of the import duty concessions and exemptions depend on whether or not an enterprise
intends to export its end product?
Fiscal Incentives Act grants incentives to all manufacturing industries.
(para. 96)
Could you please provide the legislation related to anti-dumping and countervailing duties?
The External Trade Order chapter 338.
(2) Measures Directly Affecting Exports
(paras. 108-111)
It seems that many of the incentives under the Fiscal Incentives Act are dependent on exportation of
goods.  Can you please provide full notification of all of the incentives under this Act which are
dependent or related to enterprises exporting their products?
See Fiscal Incentives Act No.17 of 1974.
(para. 110)
Can you please provide further information on the export financing guarantee scheme provided by the
ECCB?  Under what terms is the pre-  and post-shipment financing provided?WT/TPR/M/85
Page 65
PRE-SHIPMENT FINANCE GUARANTEE SCHEME
Purpose of the Pre-Shipment Finance Guarantee Scheme
Under the PSFGS, financial institutions can advance working capital to bona fide exporters to
purchase for their business:
• Locally manufactured inputs
• Raw materials of indigenous or foreign origin
• Finished goods due for export by export trading companies
All credit(s) extended under the PSFGS must be made via demand loan facility and each
credit issued must be based on a promissory note.  The maximum term of repayment for credit
provided to finance consumer and durable goods is 180 days and for capital goods, the period is 360days.
POST-SHIPMENT DISCOUNT GUARANTEE SCHEME
Purpose of the Post-Shipment Discount Guarantee Scheme
Under the PSDGS, the exporter is allowed to discount  up to 80% of the total gross invoice
value of each export shipment on presentation to his lender/bank of documentary proof that theshipment has been made. The PSFGS and PSDGS work best together.  When the Schemes are used
together the working capital derived from the discounting mechanism will first be used to retire any
notes maturing under the PSFGS. Surplus funds made available by utilizing the Post ShipmentDiscount Guarantee Scheme help to improve the working capital of the exporter, and also provides
lower financing charges.
(para. 111)
What sorts of export promotion and marketing services are provided?  Are these services available to
all enterprises in all industries?
In plant technical assistance is provided to attend trade fairs and mount export promotion
missions.  These services are available to enterprises in all industries.
(3) Measures Affecting Production and Trade
(para. 118)
Please provide full notification of the benefits available for enclave enterprises which relate to tax
holidays and other tax concessions, as these tax benefits seem to relate directly to exportperformance.
See Fiscal Incentives Act No.17 of 1974.
IV. MARKET ACCESS IN SERVICES
(1) Overview
(para. 158)
Please describe the regulatory requirements of St. Kitts and Nevis’ commercial code.  What are the
licensing requirements for purchasing land under the Alien Landholding Act?  Please list the small
business service opportunities reserved for Kittitian and Nevisian nationals.
St Kitts and Nevis has no commercial code.WT/TPR/M/85
Page 66
Under the Alien Land Holding Act application for a license is made to the Ministry of lands
and housing.
The small business service opportunities reserved for Kittitian and Nevisian nationals include
the following: Non-ethnic restaurants, Hotels- fift y rooms or less, Travel Agencies, Tour Operators,
Tour Guides, Taxi Drivers and Car Rental.
(iii) Insurance
(para. 178)
Does St. Kitts and Nevis plan to schedule insuran ce commitments to bind current market practice?
We are reviewing our commitments in the GATS.
What are the registration requirements for insurance companies?
For a company to register it must have a paid up share capital of EC$ 2000 dollars or its
equivalent.  The company must have an Actuarial Certificate from a certified Actuary stating that thecompany is solvent. Registration is done with the Registrar and once approved the application for
licensing follows.
What are the licensing criteria for firms operating in the domestic market?
Having met the registration requirements a potential insurance company would apply to the
Inland Revenue Department to obtain a license. There is a fee of EC$4,500 per annum payable for lifeand non-life insurance licensing and an EC$300 per annum for marine licensing.
Are foreign firms accorded national treatment when registering or applying for a license?  Are the
registration/licensing criteria transparent?
(para. 179)
What are the licensing criteria for firms operating in the offshore market?  Are the licensing criteria
transparent?  Please describe the scope of the restricted and unrestricted licenses.  What activities
are included under each type of license?
Firms operating in the offshore market would register with the general registrar of companies
and are guided by the requirements set within that framework.
Restrictions are related to the operations of the company.  A company having registered must
operate within its confines.  Therefore a company that has registered to operate locally cannot then
branch out to another region having not had such license.
(5) Tourism
(para. 189)
Please describe the scope and rationale for the withholding tax.  Does St. Kitts and Nevis plan to
eliminate the 50-room threshold for foreign investment?
St. Kitts and Nevis is currently reviewing its commitments under the GATS.WT/TPR/M/85
Page 67
(para. 190)
Does St. Kitts and Nevis plan to schedule commitments  on travel agency and tour operator services?
Such services will help support the increase of hotel capacity.
St. Kitts and Nevis is currently reviewing its commitments under the GATS.
(para. 192)
Please describe the investment incentives offered for establishments of at least 10 rooms.  The
Secretariat’s report indicates that incentives on these establishments are available for both local andforeign investors; however, market access for foreign investors is limited to hotels in excess of 50
rooms. Please explain this discrepancy.
The investment incentives are as described in para 192, tax holiday and exemption from
import duties on construction material and equipment.
There is no discrepancy.
Does St. Kitts and Nevis provide for duty-free entry of equipment, supplies and other materials that
are needed by conference organizers to conduct international conferences and seminars efficiently?
The need has not arisen.
QUESTIONS FROM THE GOVERNMENT OF CANADA
WTO SECRETARIAT REPORT WT/TPR/S/85/KNAIV. Market Access in Services;  (1) Overview;  paragraph 158
The Secretariat Report states that St. Kitts and Nevis’ horizontal commitments under the GATS
includes the reservation of a number of small business service opportunities for nationals.  The room
limitation on hotel and resort development is mentioned as an example of this policy, but a
comprehensive listing of other included service activities is not provided.  Please provide additional
information on other service activities covered by this limitation.
The following is a list of service activities reserved for nationals:
Non-ethnic restaurants
Hotels- fifty rooms or less
Travel Agencies
Tour Operators
Tour GuidesTaxi Drivers
QUESTION FROM JAPAN TO ST KITTS AND NEVIS
REPORT ON SAINT KITTS AND NEVIS BY THE SECRETARIAT (WT/TPR/S/85/KNA)
(p. 28, paragraph 128)
According to the Report, National Bureau of Standards plans to establish labelling standards, which
are likely to be mandatory.  Please explain the contents of these standards as well as the present
situation concerning the establishment of these standards.WT/TPR/M/85
Page 68
The standard applies to the labelling of all pre-packaged goods to be offered for retail sale to
the consumer or for catering purposes and sets out the requirements for the information to be includedon the labels, the method of display of such information, and where necessary, the wording to be used.
(p. 41, paragraph 197)
The Report states that the limitations, which apply to ships under 1600 net tons, do not apply to ships
over 1,600 net tons engaged in international trade, and that such ships may be registered in St. Kitts
and Nevis regardless of the nationality of its owners.  Does this mean that there is no limitation forregistry in the case of ships over 1600 net tons engaged in international trade?  Please provide an
explanation in concrete terms on the content of the system of International Ship Registry, which the
Government is in the process of establishing by formulating legislations.
The nationality requirements do not apply to ships over 1,600 tons as long as it is a seagoing
ship engaged in foreign trade and not constructed more than twelve years before the year in whichapplication for registration is made.
Legislation regarding the International Ship Registry is in the process of being drafted.
__________