RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/139 
11 October 2004  
 
(04-4172) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
JAMAICA 
 
Report by the Secretariat 
 
  
 
This report, prepared for the second Trad e Policy Review of Jamaica, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Jamaica on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Angelo Silvy (tel. 022 739 5249), Ms . Ulla Kask (tel. 022 739 5627), and 
Mr. Raymundo Valdés (tel. 022 739 5346). 
 
Document WT/TPR/G/139 contains the policy statement submitted by Jamaica. 
 
 
Note: This report is subject to restricted circul ation and press embargo until the end of the meeting 
 of the Trade Policy Review Body on Jamaica. Jamaica WT/TPR/S/139 
 Page iii 
 
 
CONTENTS 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) I NTRODUCTION          v i i  
 (2) E CONOMIC ENVIRONMENT         v i i  
 (3) T RADE AND INVESTMENT POLICY FRAMEWORK      v i i  
 (4) M ARKET ACCESS IN GOODS        viii 
 (5) O THER MEASURES AFFECTING TRADE  ix 
 (6) S ECTORAL POLICIES  ix 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC DEVELOPMENTS  1 
 (i) Economic structure and reform 1  (ii) Production and employment 2 
 (iii) Fiscal policy 4 
 (iv) Monetary and exchange rate policy 6  (v) Prices 8 
 (vi) Balance-of-payments 8 
 (3) T
RADE AND INVESTMENT FLOWS  10 
 (i) Developments in merchandise trade 10 
 (ii) Trade in services 15  (iii) Foreign Direct Investment 15 
 (4) O
UTLOOK  16 
II. TRADE AND INVESTMENT POLICY REGIME 18 
 (1) O VERVIEW  18 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  19 
 (i) General legal and institutional framework 19  (ii) Trade and investment policy objectives 20 
 (iii) Trade policy formulation and implementation 21 
 (iv) Investment and business framework 23 
 (3) I
NTERNATIONAL RELATIONS  26 
 (i) World Trade Organization 26 
 (ii) CARICOM and re lated agreements 28 
 (iii) Other preferential agreements 32 
 (4) T RADE RELATED TECHNICAL ASSISTANCE  34 
III. TRADE POLICIES AND PRACTICES BY MEASURE 36 
 (1) O VERVIEW  36 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  37 
 (i) Procedures 37 
 (ii) Customs valuation 39 
 (iii) Rules of origin 39  (iv) MFN tariff structure 40 
 (v) Tariff escalation 43 WT/TPR/S/139 Trade Policy Review 
Page iv 
 
 
  Page 
 
 (vi) Tariff bindings 44 
 (vii) Tariff preferences 45  (viii) Tariff concessions 46 
 (ix) Other charges affecting imports 46 
 (x) Import prohibitions, restrictions and licensing 49  (xi) Contingency measures 52 
 (xii) Standards and technical requirements 55 
 (xiii) Sanitary and phytosanitary measures 58 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  60 
 (i) Registration and procedures 60 
 (ii) Export taxes, charges and levies 60  (iii) Export prohibitions, restrictions and licensing 60 
 (iv) Duty and other tax concessions including export free zones 62 
 (v) Export promotion, finance, and insurance 65 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  69 
 (i) Price controls and competition policy 69 
 (ii) Incentives and other government assistance 71 
 (iii) State trading, state-owne d enterprises, privatization 75 
 (iv) Government procurement 80  (v) Intellectual Property Rights 84 
IV. TRADE POLICIES BY SECTOR 89 
 (1) O VERVIEW          89 
 (2) A GRICULTURE AND RELATED INDUSTRIES  90 
 (i) Main features 90 
 (ii) Policy objectives, instruments, and legal framework 94 
 (3) M INING AND MINERAL PROCESSING  102 
 (4) O THER MANUFACTURING  105 
 (i) Overview 105  (ii) Incentive schemes and market access 107 
 (iii) Textiles and clothing 107 
 (5) E
LECTRICITY  109 
 (6) S ERVICES  111 
 (i) Overview 111 
 (ii) Financial services 111  (iii) Telecommunications 121 
 (iv) Transportation 127 
 (v) Tourism 131 
REFERENCES   135 
APPENDIX TABLES  139 Jamaica WT/TPR/S/139 
 Page v 
 
 
  Page 
CHARTS 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Merchandise trade by product, 1998 and 2002      12 
I.2 Merchandise trade by main origin and destination, 1998 and 2002    14  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Frequency distribution of MFN tariff rates, 2004      43 
III.2 Tariff escalation by ISIC 2-digit in industry, 2004      44 
 IV. TRADE POLICIES BY SECTOR 
 
IV.1 Agriculture production (including fisheries) index, 1998-02 91 IV.2 Exports of agricultural products, 1998 and 2002 93 
IV.3 Manufacturing GDP by subsector, 1998 and 2003 106 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Basic economic indicators, 1998-03 3 I.2 Financial accounts of the Central Government, FY 1998-03 5 
I.3 Main monetary indicators, 1998-03 7 
I.4 Balance of payments, 1998-03 9 I.5 Trade in services, 1998-02 15 
I.6 Jamaica FDI stock, 1980-02 16 
I.7 FDI Inflows, 1998-02 16 I.8 Jamaica's medium-term economic outlook 17
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
III.1 Summary analysis of Jamaica's MFN tariff and MFN including stamp duties tariff, 2004  41 
III.2 Selected items for which MFN a pplied rates exceed bound rates    45 
III.3 Import prohibitions         49 
III.4 Goods subject to licensing, September 2003       51 
I I I . 5  E x p o r t  l i c e n s i n g           6 1  III.6 Legislation notified as containing export subsidies      62 
III.7 Export financing by EX-IM Bank        66 
III.8 Fiscal incentives available in Jamaica       72 III.9 Other incentives available in Jamaica       74 
III.10 Commodity boards         76 
III.11 Public sector entities         77 III.12 Concessions and privatization operations since 1998      79 
III.13 National Contracts Commission endorsed contracts, 28 June 2000 to 28 May 2004  80 
III.14 Government procurement methods        84  
III.15 Membership in intellectual property protection treaties, February 2004    85 
III.16 Overview of IPR protection, May 2004       86 WT/TPR/S/139 Trade Policy Review 
Page vi 
 
 
  Page 
IV. TRADE POLICIES BY SECTOR 
 
IV.1 Estimates of crop production, 1998-03  91 IV.2 Legislation governing agricultural sector 94 
IV.3 Import and export regulations for selected agricultural products 97
 
IV.4 Agricultural projects in Jamaica 99 
IV.5 Public entities in the agriculture sector 102 
IV.6 Operators in the bauxite and alumina sector  103 
IV.7 Bauxite and alumina sector performance, 1998-03  104 
IV.8  Manufacturing output and GDP, 1998-02 106 
IV.9 Apparel exports, 1998-03 108 
IV.10 Output and distribution of electricity, 1998-03 110  
IV.11 Financial sector:  selected indicators ,1997-03 112 
IV.12 Distribution of commercial bank loans and advances, 1998-02 114 
IV.13 Key prudential indicators of commercial banks, 1998-03 115 IV.14 Loans disbursements by developing banks, 1998-02 118 
IV.15 Telecommunications and transport:  contribution to GDP and employment, 1998-03 122 
IV.16 Telecommunications indicators, 1993-02 122 
IV.17 Ports:  ship traffic and cargo flow, 1998-03
 129 
IV.18 Summary performance of tourism, 1999-03 132 
 
 
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
AI.1 Merchandise exports and re-exports by group of products, 1998-02 141 
AI.2 Merchandise imports by group of products, 1998-02 142 
AI.3 Merchandise exports and re-exports by trading partner, 1998-02 143 
AI.4 Merchandise imports by trading partner, 1998-02 144 
II. TRADE AND INVESTMENT POLICY REGIME 
AII.1 Summary of Jamaica's notificati ons to the WTO, 1998-April 04 145 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Mandatory standards introduced in Jamaica, 1998-June 2004 148 
IV. TRADE POLICIES BY SECTOR 
AIV.1 Summary of Jamaica's specific commitm ents in individual service sectors 151 
 Jamaica WT/TPR/S/139 
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SUMMARY OBSERVATIONS 
 
(1) INTRODUCTION  
1. Jamaica has made significant efforts 
to liberalize its trade and investment regime 
since its first Review in 1998, reflecting the importance of trade to its economy.  Non-tariff trade barriers are low and applied MFN tariffs have been reduced to an average of 
8.6%, although aggregate duties on certain 
agricultural products have increased.  Legislative and institutional improvements that facilitate trade have been adopted, and have enhanced transparency, including in various key service activities.  In contrast, 
monopoly arrangements have been prolonged 
in the electricity industry.  Contingency legislation has been introduced and in use since 1998. 
2. Economic growth has been slow and 
per capita income has stagnated, while both 
the agricultural and manufacturing sectors appear to be in secular decline.  The causes are complex but a key factor has been the heavy burden imposed by the public debt and the fiscal constraints this creates.  Reassessing 
the numerous tariff and other tax exemptions 
currently in use could ease those constraints, and result in more neutral and transparent measures to promote growth.  Change in this direction could be facilitated by regional and 
multilateral initiatives to reduce market 
distortions.  Jamaica could also enhance the predictability of reforms for traders and investors by increasing its multilateral commitments. 
(2) E
CONOMIC ENVIRONMENT  
3. The Jamaican economy has 
undergone a period of slow expansion since 1998.  Employment growth was also sluggish and productivity declined.  Growth has been affected by a number of factors, particularly 
the increasing burden of the public debt, as 
well as monetary tightening, an appreciating real exchange rate, and a difficult international context.  High crime and relatively high operating and capital costs may also be partly  behind the slow growth.  
Addressing Jamaica's modest economic performance thus requires a multi-pronged approach, of which trade policy is a 
component. 
4. The high and growing public debt is a 
main contributor to the persistently large overall fiscal deficit, and constrains the authorities' policy choices.  Debt interest 
payments have not been offset by primary 
surpluses.  The level of debt also strains internal and external balances which, in turn, could have an impact on trade policy.  Moreover, the overall fiscal deficit remains a problem despite attempts to address it, 
including through IMF Staff-Monitored 
Programmes. 
5. Domestic demand declined between 
1998 and 2000, reflecting tighter macroeconomic policies aimed at reducing 
inflation and the fiscal deficit.  Subsequently, 
demand expanded, suppor ted by remittances 
from abroad.  Investment growth has also picked up some but savings remain well below investment, resulting in a structural deficit on the external current account. 
6. During the period under review, total 
merchandise trade grew at an annual rate of 1.9%, but the merchandise trade deficit increased by almost two thirds as exports declined and imports rose.  While exports of 
primary products expanded, those of 
manufactured goods contra cted dramatically, 
due mainly to a sharp decline in apparel exports to the U.S. market. 
(3) T
RADE AND INVESTMENT POLICY 
 F RAMEWORK  
7. Broad trade policy and development 
goals continue to be set with reference to the National Industrial Policy (NIP) 1996-2010.  A New Trade Policy (NTP) was adopted in 2001 to support the objectives of the NIP.  The 
NTP's three key objectives are:  to expand and 
diversify exports;  to reduce the share of imports relative to output;  and to increase the  WT/TPR/S/139 Trade Policy Review 
Page viii 
 
 
flow of net positive returns from foreign 
investment. 
8. Jamaica is an original and very active 
Member of the WTO.  It is a strong supporter 
of special and differential treatment for 
developing countries within the WTO, while advocating increased participation in and use of the multilateral trading system by developing countries.  Jamaica participated in 
the GATS negotiations on telecommunications, 
and on financial services but, as at mid 2004, it had not ratified the Fifth Protocol, on financial services.  Jamaica has not been involved as either plaintiff or defendant in the Dispute Settlement Mechanism but has 
participated as a third party in several panels, 
mostly concerning issues that might affect its preferential margins to export markets. 
9. Jamaica's trade policy is designed and 
implemented within the framework of the 
Caribbean Community and Common Market 
(CARICOM).  Through its participation  in 
CARICOM, Jamaica has concluded preferential trade agreemen ts with Colombia, 
Cuba, the Dominican Republic, Costa Rica, and Venezuela.  Jamaica's exports benefit 
from non-reciprocal preferential trade 
arrangements offered by a number of developed countries, and it faces the challenge of adjusting to an environment in which preferences are being increasingly eroded. 
10. Jamaica's investment regime is open 
to foreign investors.  Investors may benefit 
from a number of incentives, including import duty and tax concessions.  Since its last Review, Jamaica has continued to make 
progress in simplifying regulations and 
procedures to create a more investment-friendly environment. 
(4) M
ARKET ACCESS IN GOODS  
11. Since 1998, Jamaica has taken steps 
to facilitate trade.  These have included 
customs modernization and computerization 
programmes, which have resulted in a shorter time for customs clearance.  Jamaica has also ceased to use reference prices, and adopted the WTO definition of transaction value for 
customs valuation. 
12. Tariffs are the main instrument of 
border protection, and an important source of 
fiscal revenue.  In the context of reductions in 
CARICOM's Common External Tariff, Jamaica's simple average MFN tariff fell to 8.6% in 2004.  However, tariffs on certain vegetables have been increased from 40% to 
100%.  Average tariff protection for 
agricultural products (WTO definition) remains substantially higher than for non-agricultural products:  18.1% and 6.7%, respectively.  In several cases, tariff escalation 
is negative from raw materials to semi-
processed goods, which may inhibit the 
production of intermediates.  Virtually all imports from CARI COM members enter 
Jamaica duty free. 
13. Jamaica has bound all its tariff lines, 
thus increasing the predictability of its trade 
regime.  However, the gap between applied and bound tariffs remains wide, and applied rates are above their bound levels for a number of products.  Other duties and charges on most tariff lines are bound at 15%, with 
some, particularly agr icultural products, 
bound at higher rates. 
14. In addition to tariffs, certain other 
charges, including a customs user fee and the stamp duty, are applied exclusively on 
imports, considerably increasing border 
protection for some products.  Also, for a number of products, an additional stamp duty is levied on the customs value plus tariff in a compound manner.  For example, vegetables 
subject to a 100% tariff are also subject to an 
additional stamp duty of 80%, which, following the official methodology, results in an aggregate import duty of 260%.  Taking into account the additional stamp duties, the average aggregate import duty on agricultural 
products (WTO definition) increases by almost 
one third. 
15. Domestic taxes are levied on both 
imports and domestically produced goods.  To raise government revenue, some tax Jamaica WT/TPR/S/139 
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exemptions were eliminated in 2003, and an 
excise duty was re-introduced on tobacco products in 2003. 
16. Since its last Review, Jamaica has 
introduced national legislation on contingency 
measures in order to protect domestic producers.  In 2001, Jamaica imposed its first anti-dumping measure, on imports of ordinary Portland grey cement, and in 2002 it imposed 
anti-dumping duties on inorganic fertilizers.  
Jamaica's first safeguard, on Portland grey cement, was imposed as a provisional measure in 2004. 
17. Import licensing applies to products 
with a potential impact on the environment, 
health, and safety.  Imports of oils and fats 
from non-CARICOM members are subject to special conditions.  Jamaica has adopted a new system of controls to ensure food safety and taken steps to streamline its sanitary and 
phytosanitary legislation.  Jamaica is also 
participating in efforts within CARICOM to establish a regional organization for standards and quality control. 
(5) O
THER MEASURES AFFECTING 
 T RADE  
18. Numerous schemes are in place aimed 
at encouraging domestic  production in general 
or exports in particular .  Four were notified to 
the WTO as providing export subsidies.  Given Jamaica's fragile fiscal position, it could be 
important to establish empirically whether the 
benefits of the incentives system outweigh its costs, especially because the latter could be high and include forgone fiscal revenue, reduced transparency, and the encouragement 
of rent seeking and vested interests, which 
might make reform difficult. 
19. Jamaica applies no export charges.  
Export prohibitions apply to a small number of goods, including spirits and wines.  Some products are subject to export licensing, 
including some of Jamaica's major exports 
(bauxite and sugar). 20. Jamaica has modernized and extended 
the coverage of its competition policy legislation;  this is an important step as competition can be limited in small economies.  
The State continues to play a role in certain 
commercial activities.  Administered prices are applied to utilities and certain services. 
21. Improvements have been made to the 
institutional framework for government 
procurement;  preferences may be given to 
Jamaican suppliers through the use of offsets.  Jamaica is not a party to the Plurilateral Agreement on Government Procurement. 
22. Jamaica's intellectual property 
legislation has been amended to align it more 
closely with WTO rules and it has become 
party to four international conventions and treaties.  Its IPR legislation was reviewed by  
WTO Members in 2001. 
(6) S
ECTORAL POLICIES  
23. Agricultural production is mainly 
oriented to domestic markets, with the exception of some traditional export crops such as sugar, bananas, and coffee.  The sector's share in GDP has been decreasing and, because of its role in poverty reduction 
and importance for employment, it is 
considered sensitive.  As such, it benefits from 
a range of support measures, including high import duties.  Some Jamaican farmers may be affected by distortions in world markets, but 
others benefit from the preferential access to 
otherwise heavily protected third markets;  this latter group could suffer from significant restructuring costs in the case of reductions in preferential margins. 
24. Jamaica is one of the world's largest 
producers of bauxite and alumina, and mining is by far the largest non-service export activity.  The sector is internationally competitive and has benefited from rising world mineral prices in recent years.  Since 
1998, changes have been introduced to 
modernize the fiscal regime applied to these producers, and further regulatory modifications are being considered. WT/TPR/S/139 Trade Policy Review 
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25. The share of the manufacturing sector 
in GDP and employment has declined in recent years.  Manufacturing production is oriented mainly to the supply of domestic and 
regional markets.  The textiles and clothing 
industry used to be a large exporter to the United States but its importance has declined sharply, apparently due to high capital and operational costs (including for electricity) as 
well as competition from foreign producers. 
26. The electricity industry is mostly in the 
hands of one private operator, which was granted a new licence in 2001 giving it an exclusive right to transmit and distribute electricity throughout Jamaica for 20 years.  It 
was also granted an exclusive right to add 
generation capacity until 2004.  The authorities are reviewing the industry's legal framework. 
27. In the services sector, privatization 
and liberalization have continued.  In part as a 
result, market access conditions in most 
service activities are now considerably more liberal than those specified in Jamaica's GATS Schedule, particularly in financial services and telecommunications. 
28. The performance of the financial 
services sector has improved since 1998.  Following the 1996 financial crisis, the sector has consolidated through a series of mergers, and its regulatory framework has been 
strengthened.  Although mergers have 
translated into a financially healthier but smaller number of banks, the domestic cost ofcapital continues to be high, with interest rate 
spreads at some 17 percentage points in early 2004. 
29. The telecommunications sector has 
undergone numerous changes since Jamaica's 
previous Review, including the full liberalization of the market in 2003, ten years earlier than originally scheduled.  A new Telecommunications Act has been enacted, 
and the agreement with the incumbent 
renegotiated.  The latter terminated the previous monopoly in fixed telephony.  New  
legislation is being prepared to govern the sector in its fully liberalized phase. 
30. In air transport services, the 
administration of one of Jamaica's two 
international airports was given in concession in 2003 but restrictions remain on foreign ownership of domestic airline companies.  In maritime transport, the authorities have 
sought more efficient delivery of port services 
through investment  and management 
concessions to private enterprises. 
31. Tourism continues to be Jamaica's 
main earner of foreign exchange.  The sector was affected by the 11 September 2001 
terrorist attacks, but has since recovered.  
Incentive schemes, including relief from income tax and import duties, are viewed as particularly important for attracting investment to the tourism sector.