WORLD TRADE
ORGANIZATIONWT/TPR/M/42
15 December 1998
(98-5053)
Trade Policy Review Body
29-30 October 1998
TRADE POLICY REVIEW
JAMAICA
Minutes of Meeting
Chairperson:  H.E. Mr. Ali Said Mchumo (Tanzania)
Page
1. INTRODUCTORY REMARKS BY THE CHAIRPERSON      3
2. OPENING STATEMENT BY THE REPRESENTATIVE OF JAMAICA      4
3. STATEMENT BY THE FIRST DISCUSSANT      7
4. STATEMENT BY THE SECOND DISCUSSANT     10
5. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY     14
6. REPLIES BY THE REPRESENTATIVE OF JAMAICA AND ADDITIONAL
COMMENTS    17
7. CONCLUDING REMARKS BY THE CHAIRPERSON    20
ANNEX I    22
ANNEX II    32WT/TPR/M/42
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review of Jamaica was held on 29 and 30 October 1998.  The Chairperson
welcomed the delegation of Jamaica, led by the H onourable Anthony Hylton, Minister of State at the
Ministry of Foreign Affairs and Foreign Trade, as well as Ambassador Hill, and the discussants,
Ambassador Ronald Saborío Soto (Costa Rica) and Am bassador István Major (Hungary).  As usual, both
discussants would speak in their personal capacities and not as representatives of their countries.  Inaccordance with the established procedures, the discussants had made available, in advance, outlines of
the main issues they intended to raise.
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of the
procedures for the meeting.  The report by the Government of Jamaica was contained in document
WT/TPR/G/42 and that of the WTO Secretariat in document WT/TPR/S/42;  the main issues to be raised
by the discussants were contained in document WT/TPR/D/25.  Copies of advance written questions,
submitted by five delegations (Hong Kong, China; Canada; Japan;  the European Union; and the UnitedStates) (Annex I) had been transmitted to the delegation of Jamaica.  If full replies could not be provided
during the meeting, supplementary written replies could be provided later.WT/TPR/M/42
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF JAMAICA
3. The Government of Jamaica attached great importance to the Trade Policy Review Mechanism,
which afforded an opportunity to assess the extent to which Member States were adhering to the
disciplines and commitments of the Uruguay Round Agreements.  It promoted transparency and an
understanding of the trade policies and priorities of individual States, and gave the country under review
an occasion to explain its domestic imperatives.  Jamaica was participating in this review confident thatnotwithstanding its small size and level of development, it had made every effort to abide by the
commitments and to meet the obligations it had undertaken in the WTO.  He welcomed this opportunity
to identify concerns, some of particular relevance to  small States with limited resources, that would need
to be taken into account more fully if the benefits derived by small trading partners like Jamaica were to
be commensurate with the considerable obligations they had assumed.
4. It was important to draw attention not only to Jamaica’s history of commitment to an open
multilateral trading system through its membership in the WTO but, as well, to the manifestation of thatcommitment, which was reflected in the trade data before the review body.  Jamaica had participated in
every multilateral round of negotiation since becoming a contracting party to the GATT in 1963.  But, as
for many other countries, the Uruguay Round was singular in terms of the scope of obligations and the
breadth of the commitments assumed.  However, Jamaica’s programme of trade liberalization had largely
preceded the Uruguay Round and was thus autonomous and non-reciprocal.  Unilateral measures taken
prior to the Uruguay Round included the abandonment of import licensing, with only a few exceptions for
administrative purposes;  and the elimination of quantitative restrictions, which were in some cases and
primarily in respect of sensitive agricultural products, converted to price-based equivalents.  In the
Uruguay Round, transparency, predictability and security of access were further provided through ceiling
bindings on all agricultural and industrial products.  The measures implemented unilaterally prior to theUruguay Round, commitments assumed during and since the Round, and the process of liberalization in
which Jamaica was now engaged with CARICOM partners at the regional level, had resulted in liberal
and secure access for all trading partners to Jamaica’s market.  Since the Uruguay Round, Jamaica had
also assumed obligations in the areas of Basic Telecommunications and Financial Services.
5. Jamaica’s average MFN tariff was 10.9% in 1997;  the average for agricultural products was
20.2% and 8.4% for industrial products.  Duty-free treatment for MFN imports was accorded to 55.4% of
tariff lines.
6. The openness of Jamaica’s market was reflected not only in the statistical data but in the actual
trade performance:  imports and exports of goods and services amounted to over 100% of GDP, which
was approximately US$6.1 billion in 1997.  It was particularly relevant that Jamaica's imports had been
growing much more rapidly than its exports.  Duri ng the 1990s, imports had increased in value by over
50% while exports had grown by about 20%;  the value of Jamaica’s imports was twice as high asexports. The fastest growing segment of the import bill was for consumer goods, which now accounted
for 30% of all imports and, significantly, included many agricultural food imports and other final goods.
These attracted duty at the upper range of the country’s tariff band.  Imports of food and consumer
durables had grown more than twice as fast as other imports to Jamaica during the past five years.
7. Jamaica's continued commitment to openness had been taking place during a period when the
Government’s efforts had been directed towards achieving and consolidating macroeconomic stability
and when the Jamaican economy had lagged in terms of growth performance.  Against this background,
Jamaica urged increased focus on and understanding of the need for greater consonance between
obligations assumed and the benefits derived by small trading partners in the multilateral trading system.WT/TPR/M/42
Page 5
8. Jamaica was of the view that the benefits of the necessary and desirable liberalization process,
which had been considerably deepened in the Uruguay Round, had not been equitably distributed.
Although a thorough and systematic evaluation of th e impact of the implementation of the Uruguay
Round Agreements on trading partners remained to be done, it appeared that the benefits were accruing
disproportionately to those trading partners and sectors which already had the productive capacity and a
level of competitiveness that enabled them to take full advantage of the liberalization in goods andservices.
9. This had implications not only for widening economic disparities regionally and globally but for
the continued health of the multilateral trading system, which required the broad support of all trading
partners.  It would be very difficult to maintain this support if interest groups and the general public in
these countries did not perceive that the rules were leading to fair and reasonable outcomes in specific
instances and contributing to development.  It was ap propriate to emphasize, in this forum, the need for
technical assistance to strengthen the capacity of small trading partners to meet reporting obligationsunder the WTO, and to place them in a position to fully exercise their rights.  In respect of the Dispute
Settlement Understanding, it was necessary to ensure that when the rights of small trading partners were
impaired and benefits put in jeopardy, they were able to participate effectively in the WTO judicial
process, not only as defendants but as complainants.  The liberalization process would face a diminishing
constituency in many developing countries if, through lack of resources and technical inadequacies suchas the absence of necessary legislation, they continued to be unable to utilize legitimate instruments of
relief such as anti-dumping and countervailing duties and safeguard measures.  In addition, there was the
real need to maintain time concessions for a sufficient period, also in respect of preferential arrangements
and non-reciprocal  agreements, in order to achieve as smooth a transition as possible.
10. Jamaica had made considerable progress in meeting its notification obligations and intended to
complete those outstanding by the end of 1998.  Bills were currently before the Houses of Parliament to
enact new and revised legislation on anti-dumping, subsidies and intellectual property rights, which
would incorporate Jamaica's WTO commitments.
11. The WTO Secretariat, with the financial support of a number of Members, as well as other bodies
such as UNCTAD and WIPO, had provided valuable oppor tunities for training in matters relating to the
implementation of the WTO Agreements.  Jamaica had benefited from these initiatives and believed that
this type of technical assistance should be continued and intensified.
12. Jamaica recognized the crucial importance that the rules and disciplines adopted in the WTO
could have for growth and development, and that th e fundamental basis for success must be the policies
implement in the country.  In this context, the Government of Jamaica had been focusing on policies
designed to make the productive sector more competitive.  These policies had been enshrined in the
National Industrial Policy, which was being implemented over a 15-year period to the year 2010.
13. The Government’s efforts to create a stable macroeconomic environment, as a necessary
condition for sustainable growth, had met with significant success.  The rate of inflation, which had
peaked in 1991 at 80.2%, had progressively come down, reaching 9.2% in 1997; the rate for the first eight
months of 1998 was 6.9%.  Gross National Saving s had also improved, from 16% of GDP in the
mid-1980s to 25% in the mid-1990s.  Jamaica’s exchange rate, which was market-determined, had beenexperiencing a relative degree of stability over the past three years.  At the same time a strong reserves
position facilitated discretionary intervention by the authorities, when warranted.  As of September, 1998,
Net International Reserves stood at US$617 million, representing approximately twelve weeks of imports.WT/TPR/M/42
Page 6
14. In order to maintain a low and stable inflation rate, the Government’s main monetary policy
objective was to contain the growth of money suppl y.  At the same time, cognizant of the need to
stimulate growth and to provide a lower interest rate to the productive sector, the Government had also
begun, on a phased basis, to lower the cash reserve requirement for the banking sector.  The restructuring
of the financial sector, which  after a period of rapid expansion had encountered significant problems
related to capital shortage and asset quality, was continuing.  Fiscal policy provided a challenge:a renewed effort was required to reduce the deficit and to contain expenditure.  The merchandise trade
deficit was also of concern, although it was important to note that the strength of earnings from services
such as tourism, growth in remittances, and private capital inflows had had a positive impact on the
balance of payments, which recorded four consecutive years of surplus between 1993 and 1996.
15. The Government was moving to meet these challenges and Jamaica expected, as in the case of the
global economy, that the expansion of trade in goods and services would be critical to sustained growth
and development.  However, this could only be the case if Jamaica's legitimate interest for market accessopportunities was understood and appreciated by Members in the WTO.
16. Jamaica was pursuing trade liberalization not only within the context of its obligations in the
WTO but at the regional and hemispheric level.  It was an active participant in CARICOM’s efforts to
widen economic and trade linkages with other co untries in the Caribbean Basin. CARICOM members
were in the process of creating a Single Market and Economy, which would lead to the significantdeepening of the regional integration process. Trade agreements with Venezuela and Colombia had been
concluded.  A free-trade agreement between CARICOM and the Dominican Republic had been signed
recently.  The establishment of the Association of Caribbean States was ultimately aimed at expanding
regional trade relationships. Jamaica, together with its  CARICOM and hemispheric partners, was also
engaged in the negotiation of a Free Trade Area of the Americas.
17. Jamaica welcomed the recognition given by the WTO to the special needs of the least developed
countries and fully supported the adoption of a Plan of Action aimed at assisting LDCs.  The
representative hoped that this Plan would continue to be implemented expeditiously.  Jamaica also noted
with satisfaction that the Declaration of the WTO’s Second Ministerial Conference had to some extent
recognized the problems faced by many small economies, and was further encouraged by the work thathad just begun in the Committee on Trade and Development. Jamaica would actively seek to develop
practical measures to meet their trade, financial and development needs.  It was necessary for small
economies to keep pace with changing times and the rapid evolution of new ideas. Principles of non-
discrimination and reciprocity had been enshrined in the multilateral trading system.  However, he
recalled that the objectives of the GATT and the WTO were predicated on the achievement of a
sustainable level of growth by all countries. Thus, while Jamaica did not seek a future tied to preferences,
viable alternatives needed to be elaborated.WT/TPR/M/42
Page 7
III. STATEMENT BY THE FIRST DISCUSSANT
18. The first discussant (Ambassador Ronald Saborío Soto) stated that during the 1980s Jamaica had
carried out a series of measure aimed at stabilizing the economy and during the 1990s had implemented a
series of structural adjustment measures, supported by, inter alia , the International Monetary Fund and
the World Bank.  Government intervention has been considerably reduced, and Jamaica's economy could
now be described as market oriented.
19. The success of Jamaica's deregulation process had led to the elimination of price controls for
goods and services.  In addition, tariffs had been lowered under the various phases of the CARICOM
common external tariff process:  the simple average tariff was 10.9% in 1997; more than 55% of tariff
lines were duty free; and only 6.8% of lines were currently over 35%.  The highest tariffs, which were in
the agriculture and fisheries sector, showed an average of 20.1%;  the average for the mining sector was
4.3%;  and the average for the industrial sector was 10.3%.  The most significant achievement was the
drop in inflation, from a peak of 80% in 1991 to 9.2% in 1997, through implementation of a strictmonetary policy.  This had led, however, to Jamaica's economic recession in 1996 and 1997.
20. Efficient controls had reduced public spending and increased fiscal income for the 1990s.
However this success was dampened by the banking crisis in 1996, and the subsequent fiscal deficit of
4.2% of GDP in 1996/97 was well short of the 3.1% projection for 1998/99.  Amongst the measures taken
to control the financial crisis was the establishment of FINCSAC in 1997, an agent of last resort forinstitutions experiencing financial problems.
21. The solution found for these unexpected expenses, given the strict monetary disciplines applied,
was a resort to internal debt, which rose from 24.6% of GDP in 1992, to 46% in 1996.  It was of  concern
that debt service stood at 24.8% of budget revenue for 1997.  A strict monetary policy in time of strong
fiscal need might place pressure on the Government to find funds on the capital market which, in somecases, could lead to high interest rates, which in turn  affected investment.  He was interested to know the
current situation in Jamaica in this respect, the m echanisms used to finance the internal debt, and any
measures taken to avoid the situation arising again.
22. The National Industrial Policy (NIP), established for the period 1996-2010, was aimed at
improving the efficiency of the Jamaican economy, the quality of life, and the environment.  Targets wereset for annual GDP growth of between 6% and 7. 5%, a drop in unemployment from 16% to 9% and to
triple the value of exports.  The Policy targeted five strategic sectors in which Jamaica believed it had a
comparative advantage:  tourism, maritime transport, agro-processing, apparel, and bauxite and alumina;
these were to be promoted through investment in infrastructure, technology, and machinery and
equipment.
23. In 1997, tourism represented some 13% of GDP a nd 55% of exports, but employed only 8% of
the total labour force;  maritime transport shipped more than 15 million tonnes of goods; the agriculturesector, including food processing, represented 16.5% of GDP in 1996 and employed approximately 22%
of the labour force.  Exports in this sector focussed on traditional products such as sugar, bananas and
coffee.  Exports of textiles, the second most important sector in terms of goods exports, amounted to
US$538.2 million in 1996, including exports from free-trad e zones; almost all of these exports were under
preferential arrangements.  Jamaica was the world's third largest producer of bauxite and alumina, whichcontributed around 9.9% of GDP in 1997, representing more than half of Jamaica's goods exports.
In 1996, this highly capital-intensive sector generated some US$700 million and employed 6,000 people.
The maritime transport sector was highly dependent  on these other sectors and on Jamaica's few exportWT/TPR/M/42
Page 8
products:  alumina, textiles, bananas, sugar and coffee, and tourism.  Jamaica was highly sensitive to
shocks in the markets of these few products; this was exacerbated by the strong concentration towards
three export destinations:  the United States, which accounted for 36.7% of exports, the European Union,
31.2%, and Canada, 12%.
24. With a high level of unemployment, it would seem reasonable for Jamaica to concentrate on the
most labour-intensive sectors, where it could benefit from a comparative advantage.  However, it was alsonecessary to seek diversification.  He was interested to know in which other areas, particularly in services,
Jamaica considered itself to have a comparative advantage.  He was also interested to know Jamaica's
view on the possible danger of perpetuating a fragile dependence of the economy on few markets, and
how it would face the challenge of greater diversification both of markets and products.
25. Referring to the social cooperation between the private sector and the Government within the
NIP, he asked the Jamaican delegation to explain the structural reasons for unemployment, whether the
labour laws contributed to the high level of unemployment, and how this was dealt with in the Policy.
26. The Jamaica Promotion Corporation (JAMPRO), was responsible for investment and export
promotion.  Jamaica had advanced towards an open investment policy, particularly following the waiver
of the Exchange Control Act in 1992, eliminating rest rictions on imports of capital goods, technology and
other investment restrictions.  The United States , Jamaica's main direct investor invested some
US$1.4 billion in 1995, mainly in the mining sector a nd tourism.  Important investments were also made
in the textiles sector in free-zones.  The 1996 flow of foreign direct investment was US$175 million;
there did not appear to be a growth tendency, which could be due to the high cost of labour and capital,
and possibly to security risks because of the high level of unemployment.
27. Investment, which was not expressly defined with in Jamaica's domestic legislation, was protected
under common law legislation concerning investment schemes in general. Rules for foreign investmentwere contained in various bilateral and multilateral agreements signed by Jamaica.  The net flows of
capital, in particular transfers by the large number of Jamaicans residing abroad, had had a strong
influence on the economy.  In the last few years, along with other factors already mentioned, these large
flows had led to a re-evaluation of the Jamaican dollar, to the disadvantage of the export sector.
28. The opening to foreign investment, to which Jamaica has committed itself, was an important
decision in its development policy, and he was interested in further information in this regard.  It was
necessary to accompany the opening with other important elements, such as political and macroeconomic
stability, and social safety.  He sought clarification on the current level of social safety and how this had
affected levels of foreign direct investment.  Legal security of the investor was essential to attract
investment.  Jamaica had signed bilateral investment treaties and was participating in negotiations on
regional agreements in the context of the Free Trade Agreement for the Americas (FTAA).  Strengthening
the constitutional rights to property would be partic ularly important for investors.  Rapid justice and
national treatment were also essential elements, as well as elimination of administrative difficulties, and
state investment in infrastructure.  Leaving aside labour guarantees, measures to facilitate movement of
labour would also contribute to attract investment.
29. It would be useful to hear details of the NIP, in particular the different special export regimes to
attract more foreign investment in Jamaica.  In some Latin American countries and in the Caribbeanregion major investments had been attracted through these regimes, in particular through free-zones; in
some countries exports through the regime represented some three quarters of total exports.  However, in
Jamaica exports from free zones had stagnated since 1994 and he was interested to know the reasons for
this.WT/TPR/M/42
Page 9
30. In new development schemes, an important role was played by investment in human capital.  A
better qualified labour force facilitated higher -value-added production, which added advantage in
attracting foreign investment and aided adjustment of the labour market within the economy.  A wider
range of work was available to a qualified labour force and led to increased opportunities for improving
living standards.  Therefore the quality of education was an important element in development.  He asked
how the Government of Jamaica had planned within the NIP to improve the academic education andtechnical preparation of its population.
31. Jamaica was an active participant in the WTO and, as a member of CARICOM, was gradually
dismantling its tariff peaks, under the Common Exte rnal Tariff.  While CARICOM functioned, in general,
on coordinated trade relations, members could implement an independent trade policy.  Coordinated and
harmonized exchange and monetary policies were envisaged, as well as tax and incentive regimes.  One
objective was the adoption of a common currency.  He asked whether Jamaica was now coordinating its
trade policy with CARICOM.  Jamaica was also participating in FTAA negotiations.
32. An important part of Jamaica's trade benefited from preferences under the Lomé IV Convention.
Trade in bananas under Lomé IV had been discussed widely in the WTO and had been the object of three
dispute settlement cases since the beginning of the d ecade.  Jamaica also benefited from preferential trade
with the United States under the Caribbean Basin Initiative (CBI), and had preferential access to the
Canadian market through CARIBCAN.  Jamaica had approached the United States with a request fortreatment for CBI exports equivalent to exports within NAFTA, arguing that in sectors such as textiles,
NAFTA arrangements had put Jamaican exports at a disadvantage.  He believed, however, that the lack of
competitivity in this and other sectors in Jamaica was largely due to the overvaluation of the Jamaican
currency;  the Government was resisting devaluation in order to control inflation, which was increasing
production costs, due to high labour and capital costs.  He was interested to hear comments from theJamaican delegation in this regard.
33. Jamaica's bananas, which were not competitive in comparison to other suppliers, required
preferential treatment from the European Union, its main destination.  While the reasons for preferential
treatment from both sides of the Atlantic were valid for Jamaica, and for the Caribbean in general,
preferences would inevitably be increasingly eroded through the FTAA, through the built-in agenda of theUruguay Round, or through the next round of multilateral trade negotiations.  It was clear that the
Caribbean, Central American and other members benefiti ng from preferential regimes would have to rely
on their own competitivity.  He was interested to know of any preparations to enable the different export
sectors to compete in circumstances of increasingly lower preference margins.WT/TPR/M/42
Page 10
IV. STATEMENT BY THE SECOND DISCUSSANT
34. The second discussant (Ambassador István Major) referred to Jamaica's comprehensive
programme of structural reforms and liberalization, which started in the mid-1980s and had been
continued and strengthened in the 1990s.  This programme was aimed particularly at restoring the
external balance and reducing state intervention in the economy. The most important policy elements had
provided for the relaxation and dismantling of price co ntrols;  privatization of some state enterprises and
accompanying deregulation in sectors of critical importance for development (tourism, agriculture,
banking, transportation, manufacturing);  reduction of subsidies; improvement of financial intermediation;
simplification of the tax system;  reduction of the public sector deficit;  strengthening of monetary policy;
and trade liberalization, including the reduction of customs duties and the removal of some non-tariff
barriers.  As a result of these efforts the Jamaican economy was considerably more market oriented.
35. The traditional trade pattern of Jamaican exports, however, had been relatively capital-intensive,
and, given the abundant labour force, this had at times resulted in a misallocation of resources. Jamaica'sforeign exchange earnings depended on mining and, to a certain extent, tourism activities, which were
capital intensive and hence import-intensive.  This had led to the posting of trade and current account
deficits. In an attempt to tackle this problem, the Government of Jamaica implemented the National
Industrial Policy, through which it intended to create the necessary conditions for faster economic growth
by stabilizing the economy and reducing inflation and, at the same time, facilitate the integration of thecountry into the regional and global economies and guarantee its ability to implement the commitments
undertaken in regional, bilateral and multilateral trade negotiations.
36. The comprehensive NIP was aimed at achieving accelerated growth by strengthening traditional
"winning" sectors, that is, the sectors that had performed better than average in the past, while at the same
time attempting to develop the human capital necessary for the future development of labour-intensiveindustries.  The NIP could be considered as an attempt to further develop and generate endogenous
comparative advantages.
37. The NIP emphasized "an aggressive export-orien ted, private-sector-led development strategy
coupled with a programme of efficient import substitution".  With regard to this statement it would be
interesting to hear from the Jamaican delegation what WTO-consistent steps formed part of the"programme of effective import substitution".
38. Jamaica's membership in CARICOM was another determinant of its trade policy. CARICOM had
been moving towards greater integration;  the Caribbean Single Market and Economy (CSME) had been
endorsed in 1991;  and in 1997 the CARICOM Treaty ha d been amended and two Protocols signed.  The
first of these protocols was aimed at restructuring the organization of CARICOM as an institution, while
Protocol II dealt with services, an area where member s felt that liberalization needed to be reinforced,
considering the importance of the sector for many of the members, including Jamaica.
39. Since the mid-1980s, when quantitative restrictions were dismantled, import duties had been
lowered from rates as high as 200% to the current maximum rate of 30% for industrial products and 40%
for agricultural goods. Part of this liberalization effort has been undertaken under the auspices of
CARICOM.  CARICOM members were attempting to lower the maximum Common External Tariff
(CET) levels for industrial products, in four phases, from the 1995 level of 35%, to 20%.  While Jamaicahad not yet completed the calendar of reductions, it had accomplished a substantial liberalization effort,
lowering its simple average tariff rate to 10.9% for all imports on an MFN basis, and for industrial
imports to slightly above 8%.  This was well below Jamaica's WTO bound rate of 50% for this type of
goods.  As a result of liberalization efforts, duty-free treatment was accorded to 55.4% of tariff lines for
MFN imports (59% of industrial products).WT/TPR/M/42
Page 11
40. The discussant noted that all of Jamaica's applied duties were on an ad valorem  basis.  The
Jamaican Customs Tariff contained just over 4,000 tariff lines at the seven-digit level. The current tariff
structure was under revision and Jamaica was expected to adopt a six-digit structure (HS96) when the
tariff cuts under Phase IV of the CET were implemented.  The deadline for Phase IV was 1 July 1998 and
the discussant was interested to hear when the Government planned to make the switch to the six-digit
HS system and effect the foreseen tariff reductions.
41. Additional efforts were needed to enhance market access.  A number of products, including some
of the largest import items, were exempted from the CET.  These exempted industrial products faced an
MFN tariff rate of 30%.  Imports of automobiles were also subject to a high General Consumption Tax
rate, which, added to the tariff, could result in total charges exceeding 200%.  Protection in the agriculture
sector was twice as high as for industrial products.  The average exceeded 20%, while bound levels were
at 100%.  Furthermore, imports of certain agricultural products were subject to additional stamp duties,
which raised the level of protection in some cases to rates as high as 90%.  However, Jamaica had not hadto undertake a tariffication effort in the agricultural sector as a result of the Uruguay Round, since it had
already replaced all quantitative restrictions by additional stamp duties.
42. The scope of the Jamaican import licensing system had been considerably reduced since the early
1980s when around 50% of total imports were under licensing requirements.  Licences were currently
required for imports under some 39 HS tariff headings, including motor vehicles, refined sugar and someother agricultural products.  Linked to the licensing requirement, Jamaica maintained some limitations
regarding motor vehicle dealership.  Import licen sing regimes were not harmonized among CARICOM
countries;  however efforts in this direction were currently under way.
43. More than 50% of Jamaica's total exports required export licences:  products included certain
minerals (including bauxite), agricultural products and industrial goods.
44. Jamaica's wide range of incentive schemes, aimed at promoting exports or at the development of
specific industries, included tax concessions and duty-free access for imports of inputs and capital goods.
These schemes were, in many cases, the remnants of import substitution policies, such as the accelerated
depreciation scheme applied in manufacturing.  In other cases, such as the Export Industry
Encouragement Act (EIEA), incentive schemes had been put in place to encourage exports explicitly,creating a wedge between exports and production for the domestic market.  Originally, to benefit from the
scheme producers had to export all of their production; it was subsequently extended to producers
exporting a 5% threshold.
45. By discouraging production for the domestic market, schemes like the EIEA had curtailed
competition in the domestic market, leading to higher prices than necessary, particularly in areas where
import duties were high.  Another negative effect was that industries benefiting from the scheme may
have been prevented from developing economies of scale by de facto limitations in their production. TheGovernment planned to eliminate these incentiv e schemes by the year 2003, to comply with the
disciplines of the WTO Agreement on Subsidies and Countervailing Measures.  In many cases
concessions had already been eroded or wiped out by the elimination of tariffs on non-competing inputs
and capital goods.
46. Free zones had been used to promote exports, particularly of apparel; currently there were three
main free zones.  However, single-entity zones were now being established, outside of these locations.
To operate in free zones companies were required to be incorporated and registered in Jamaica;  to export
85% of their total exports outside CARICOM (for manufacturing companies);  and to obtain the approvalWT/TPR/M/42
Page 12
of the Bank of Jamaica.  Since exports from free-zones were not accounted in national trade statistics,
Jamaican exports appeared to be understated:  free-zone exports amounted to roughly US$300 million
annually.  However, production in the zones was very import-intensive, taking place mainly under
schemes such as the Cut, Make and Trim (CMT) Programme.  Net foreign exchange earnings of free
zones was only US$55 million in 1996.  The future of the free zones in Jamaica depended to a certain
extent on regained competitiveness, which would be achieved through a real exchange rate depreciation.In the short run however this seemed to be unlikely given the Bank of Jamaica's commitment to fight
inflation.
47. Protection in the agriculture sector was higher than average; some products faced high additional
stamp duties, and licences were required for the importation of others.  Tariffs on agricultural products,
which were not included in the schedule of CET reductions, were as high as 40% under the CET or under
List A exceptions.  The applied rates, ranging between 0 and 40%, were well below the uniform bound
rate of 100%;  additional stamp duties in some cases yielded protection rates as high as 90%.  However,stamp duties per se (not considering the tariff element in the aggregate calculation) were all below the
level bound in the Uruguay Round for other duties and charges (that is 15%, except for bindings of 80%
on 55 products and three HS chapters, and the 200% bindings on three sugar products).
48. A point of particular concern was the reliance for an important part of Jamaica’s foreign
exchange earnings on relatively few agricultural products, exported at preferential conditions to a fewmarkets.  Sugar, Jamaica's most important agricultural export item, was mainly destined for the United
Kingdom and the United States, in both cases under quota arrangements and receiving preferential
treatment.  The second largest agricultural export, bananas, went mainly to the United Kingdom, also
under preferential conditions.  These were now subjec t to revision in the light of the WTO Appellate
Body ruling.
49. It had been noted that Jamaica did not grant direct export subsidies (defined by the authorities as
government financial contributions to export).  Clarification was sought whether Jamaica currently
subsidized agricultural exports in any other way, and if so, which products.
50. Most of the activities of commodity marketing boards for coconut, cocoa, coffee, bananas and
sugar had been deregulated;  these now operated mainly as providers of services, with the exception of theCoconut Industry Board, which retained some regulatory power.  Acknowledging the progress made in
this field, the discussant asked whether there were any other remaining state-trading enterprises in the
agriculture sector with special import or export rights  and, if so, whether there were any plans for further
deregulation.
51. The textile and clothing subsector was the main earner of foreign exchange in manufacturing;
over 80% of exports were to the United States.  A group of clothing products benefited from guaranteed
or designated access to the U.S. market under bilateral quota arrangements such as the TSUS807, and theCut, Make and Trim (CMT) Programme.  Jamaica had been losing market share to Mexico and other
producers and the Government considered it particularly important to obtain NAFTA-parity for Jamaican
(and other CBI) beneficiaries to the United States.  While NAFTA parity would contribute to enhanced
competitiveness, it might prove insufficient against Jamaica's loss in competitiveness due both to the real
appreciation of the Jamaican dollar and its relatively high production costs.
52. Market access for services was relatively open;  national treatment was granted for providers of
services in most areas.  The financial services and telecommunications subsectors had undergone major
reforms in the past years.  Under the GATS, Ja maica had made horizontal commitments on commercial
presence and the presence of natural persons for all sectors included in its Schedule.  Specific
commitments were scheduled in business, educational, and financial services, health-related and socialWT/TPR/M/42
Page 13
services, tourism and travel-related services, recreation, cultural, and sporting services and transport
services.  A number of commitments (e.g. transportation services and other business services) were
subject to unspecified licensing requirements in the Jamaican Schedule. He requested information about
how these licensing systems affected the potential utilization of market access commitments by foreign
services providers.
53. Jamaica had submitted an offer in the Negotiations on Financial Services: the commitments
offered in Mode 3 (commercial presence) were of a high standard, but Jamaica had not entered into any
obligations with regard to Modes 1 and 2 (cross-border supply and consumption abroad).  He requested
clarification concerning the Government’s intentions with regard to liberalization in Modes 1 and 2.
Another point of concern in the financial services sector was the domestic financial crisis, which had
prompted the Government to create the FINSAC.  Wh ile the crisis seemed to be under control, the
Ministry of Finance and the Bank of Jamaica were clearly under pressure to keep monetary policy tight,
resulting in high interest rates and an appreciating currency.  The latter two factors were contributing tothe depression of economic activity.
54. Jamaica had presented a Schedule of Specific Commitments in the Negotiations on
Telecommunications.  In this sector there was some concern that the monopoly rights, due to expire
in 2013, granted to the privately owned Cable and Wireless Jamaica were resulting in high
telecommunications fares, causing higher than need ed communication costs for all businesses.  He was
interested to know the terms of current negotiations with Cable and Wireless, and whether there was a
possibility of dismantling their monopoly on basic telephony before 2013.
55. Tourism was of utmost importance for Jamaica: it  had generated over US$1.1 billion in foreign
exchange earnings in 1997, and attracted almost 2 million tourists a year.  The sector provided some 45%
of total foreign exchange earnings, equivalent to 80% of merchandise exports, and accounted for around13% of GDP and 8% of total employment.  The appreciation of the Jamaican dollar and increased
competition from other countries in the region might have an impact on growth plans and on future
investment.
56. Jamaica’s GATS Schedule set no limitations on market access for cross-border supply,
consumption abroad and commercial presence for hotel and restaurant activities, as well as travelagencies and tour operators.  Only Mode 4 remained unbound. Similarly there were no limitations on
national treatment.
57. According to the Report submitted by the Government of Jamaica an intergovernmental task
force had been set up to revise the Copyright Act and draft new legislation on patents, trade marks and
designs, including integrated circuits.  The disc ussant was interested in receiving information on
Jamaica's progress in bringing IPR legislation into full conformity with WTO obligations and on the
major problems being encountered.WT/TPR/M/42
Page 14
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
58. Members appreciated Jamaica's strong commitment to the WTO, and its continuing efforts to
diversify and open its economy, and to improve the investment climate, particularly in view of the recent
crisis in its financial sector.
59. The representative of the United States recognized that Jamaica had sought to deepen its
structural reforms during the 1990s and to move to wards a more market-oriented economy, with prices
free of government controls, reduced import duties and an increased role for the private sector.  Inflation
had been sharply reduced through the implementation of a tight monetary policy and the maintenance of a
stable exchange rate.  However, the public sector balance had shifted from a surplus to a large deficit and
a mix of policies had resulted in high real interest rates, a substantial currency appreciation, and declining
output.  Further action might be needed for Jamaica to achieve its objective of output and employment
growth over the medium term, including simplification of the tax system and improved fiscal
administration.
60. The array of tax and customs duty incentive schemes to promote investment all provided some
form of tax or customs duty preferences;  several of these programmes might be export subsidies, which
should be notified to the WTO.  While these incentive schemes were scheduled for elimination by 2003 in
compliance with Jamaica's WTO obligations, she encouraged the Government to rationalize its tax and
customs measures more rapidly in the face of the current public sector financial situation.  Therepresentative noted that Jamaica was working to implement WTO-consistent policies on customs
valuation and intellectual property protection, and encouraged preparation towards full implementation.
She was interested to know what plans and steps were being taken to update Jamaica's sanitary and
phytosanitary standards and to bring them into conformity with WTO SPS obligations.
61. Jamaica's economy was highly dependent on external trade in goods and services;  low export
diversification and strong dependence on imported inputs made Jamaica vulnerable to external shocks.
While national treatment was provided in services, the largest and fastest growing sector, liberalization of
key services areas such as telecommunications and insurance would improve Jamaica's overall economic
position.  Measures already in progress in the telecommunications sector should have positive benefits;
continued trade liberalization and rapid implementation of WTO obligations would help to create afavourable climate for investment, improved competitiveness, and contribute to domestic economic
stability.
62. The representative of Hong Kong, China noted her country's long-standing trading relationship
with Jamaica;  total bilateral trade had amounted to US$31.7 million in 1997.  Jamaica's impressive
performance over the past decade was the result of a comprehensive programme of structural reform and
liberalization and encouraged Jamaica to consider lowering its bound tariff rates, which were
considerably higher than the average applied rates.  Recognizing Jamaica's high expectations of its inter-and extra-regional linkages, she was pleased to learn that Jamaica would continue to widen its economic
and trade linkages.  Her delegation had submitted written questions in the areas of tariffs, standards and
phytosanitary regulation, telecommunications services, financial services, and transportation services.
63. The representative of Japan noted that Jamaica's high interest rates, which discouraged
investment, and caused economic recession in Jamaica the high unemployment rate, the trade imbalance,
and the large external debt were all matters for concern.  While the NIP had shown some positive results,
including reduction of inflation from 25% in 1995 to 9.2% in 1997, and the stabilization of the exchange
rate Jamaica's evaluation of the medium-term strategy of achieving growth and stability by the end
of 1998 would be useful.  He appreciated Jamaica's contribution to strengthening the multilateral trading
system including its active participation in the Ur uguay Round as well as in the succeeding negotiations.WT/TPR/M/42
Page 15
It was noteworthy that Jamaica had committed liberalization in the financial services sector under difficult
financial situation.  He raised concerns on consistency of some measures in the services sector with
Jamaica's commitments and asked about the possibility of eliminating monopoly in the
telecommunications sector.  His delegation had also submitted written questions.
64. The representative of the European Union stated that EU relations with Jamaica were governed
by the revised Lomé IV Convention, under which Jama ica benefited from trade and services provisions as
well as special arrangements for certain commodities;  Jamaican goods had preferential access to the EU
market on a non-reciprocal basis.  This agreement would expire in 2000 and a new EU-ACP Convention
was currently under negotiation.  To avoid being penalized by the provisions of the new agreement,
Jamaica needed to continue its economic diversification policy and to improve the competitiveness of its
agricultural and industrial products.
65. Export results, particularly for agricultural and industrial exports, had fallen short of expectations
due to labour and financial costs and the strong Jamaican dollar.  The Government's reliance on highinterest rates to encourage foreign private transfers and reduce inflation had hindered local industry and
economic growth:  inflation had fallen but GDP had al so contracted.  Low inflation together with growth
could be achieved through the introduction of selective lending rates for the productive sectors and a
phased depreciation of the Jamaican dollar backed by tighter controls on monetary expansion.  While, in
the face of weak export performance, the Jamaican Government had focused increasingly on servicessectors such as tourism, shipping, and telecommunications, the EU believed that a revised monetary
policy could foster the existing growth potential in the agricultural and industrial sectors.
66. Of particular concern were the heavy government  debt and the very high cost to Jamaica's
finances of bailing out its financial sector.  In order to return to a sound financial system under private
sector management the Government needed to deal with the weak financial institutions and  strengthenthe supervision of the banking and insurance sectors.  Reduction of public-sector employment and a
reassessment of the economic role of the State could accompany these measures.
67. The representative of Mauritius drew attention to the constraints on small, island economies
arising from size, population, markets, and scarce res ources.  While both his country and Jamaica had
developed viable economies, they were highly vulnerable to external factors.  He was sympathetic toJamaica's concerns regarding international competitiven ess in the context of the new multilateral trading
system.  He also understood the importance to Jamai ca of continued preferential access, in particular
under the Lomé Convention.  With regard to WTO obligations, he noted Jamaica's intention to adopt new
legislation that went beyond obligations in certain areas.  Progress had been made in strengthening
Jamaica's institutional framework for the private sector and in establishing a partnership between the
private sector, government, and labour, which would cer tainly be beneficial.  On regional integration,
Jamaica's CARICOM commitments were aimed at furt her liberalization.  His delegation associated with
the statement made in paragraph 56 of the Policy Report by the Government of Jamaica, and with
Jamaica's view that careful consideration was required in connection with the balance between the
obligations assumed in, and the benefits derived from, the multilateral trading system by smaller WTO
Members.
68. The representative of India, noting Jamaica's identification of five strategic sectors in the context
of its export diversification policy, was interested to know how the dynamics of global competition would
be incorporated into the trade policy for these sector s.  With regard to Jamaica's participation in the
CARICOM, and the 1997 amendment to establish a sing le market and economy, she believed it would be
useful to discuss the broad objectives and trade measures currently under discussion.  She was alsoWT/TPR/M/42
Page 16
interested to know how the CARI COM Common External Tariff would be harmonized and administered
under the preferential trade arrangements with Colombia.
69. The representative of the Dominican Republic stated that reforms implemented since 1990 had
made Jamaica one of the most liberal in the Caribbean. Jamaica was to be congratulated for its efforts to
promote its international competitiveness and for facing up to the challenges of the new commercial
environment.  Steps taken to promote continuous regional economic integration were also to beencouraged:  these had led to preferential trade agreements with Venezuela and Colombia and a recent
free-trade agreement between CARICOM and the Dominican Republic.
70. The representative of Cuba stated that while Jamaica had made many macroeconomic sacrifices
and had successfully restructured it had not achieved competitiveness.  Thus, it was necessary to
strengthen the special and differential treatment for developing countries during future multilateral
negotiations.  Further, it was important to modify the Subsidies Agreement to enable developing countries
to implement certain subsidies in order to stimulate exports and ensure economic growth.  It was difficultto see how smaller economies could become competit ive without these changes both within the WTO and
the preferential schemes of the Lomé agreements.
71. The representative of Australia noted that Jamaica's tariffs remained high in a range of areas, in
particular in agricultural and food products:  the tariff on most alcoholic beverages was 30%, which
practically barred foreign beers, wines and spirits from being competitive in the market.  Australiabelieved it essential for smaller trading nations to actively participate in the WTO and encouraged
Jamaica to keep the multilateral system as its engine for trade liberalization.
72. The representative of Sri Lanka highlighted the concerns of small economies like Jamaica in the
context of current world markets.  Despite their pursuit of open and liberal trade and investment policies,
and active participation in the WTO, small economies were often forgotten in the context of WTOdeliberations.  These countries needed special understanding to enable them to fully benefit from the work
to advance their development under the multilateral trading system.
73. The representative of Barbados noted the efforts made by her country and Jamaica in widening
economic integration at the Caribbean level, and look ed forward to strengthening liberalization at the
fuller regional level.  As a small trading partner, committed to the multilateral trading system, and facing
the same challenges as Jamaica, Barbados fully agreed with, and emphasized, the need for technical
assistance to be extended to such members of the system and for concessional trading arrangements
during transitional periods.
74. The representative of Egypt stated that his country was  in the process of achieving a bilateral
agreement with Jamaica on investment and double taxa tion and looked forward to further strengthening
trade relations.  He stressed that the agreed transitional periods for developing countries to fulfil their
WTO obligations should be highlighted in this examination of Jamaica's trade policies, and urged WTOMembers to take into account the appropriate measures endorsed by the Jamaican Government within its
limited capacity to fulfil its obligations.
75. The representative of Trinidad and Tobago noted the close cooperation between her country and
Jamaica in the context of CARICOM and various other fora.  She was appreciative of the difficulties
encountered by Jamaica in working towards developing its economy and fulfilling its WTO obligations.WT/TPR/M/42
Page 17
VI. REPLIES BY THE REPRESENTATIVE OF JAMAICA AND ADDITIONAL
COMMENTS
76. The replies by the representative of Jamaica were divided into three main themes:  (i) economic
environment;  (ii) trade policy measures;  and (iii) sectoral policies.  Written responses to specific
questions were circulated to members (Annex II).  Ja maica would provide further answers in written form
within the time allowed under the TPRM.  Following  the replies, the Chairperson opened the floor to
TPRB members for further comments and questions.
(i) Economic environment
77. The representative of Jamaica appreciated delegations' interventions, many of which showed an
understanding of the difficult trade-offs and special circumstances faced by small trading partners like
Jamaica in seeking to implement WTO obligations and to improve their economic performance.
78. In recent years, Jamaica had pursued an economic policy aimed at achieving macroeconomic
stability:  inflation control and reducing volatility in th e exchange rate had been at the core of this policy
as necessary conditions for investment and other economic decisions.  Jamaica recognized the concerns
raised regarding the cost of this policy, particularly as reflected in the build-up of internal debt and
imbalance in the current and fiscal accounts;  these matters were very recently under consideration in the
Jamaican Cabinet.  Economic trade-offs were difficult choices.  Jamaica's imports of raw materials and
intermediate goods were extremely large, around 25% of GNP and more than double total exports.  Thus,Jamaica was not convinced, nor was there historical evidence in the Jamaican economy, that the
competitiveness of exports would be enhanced by currency depreciation.  Given the high import content
of production and consumption, devaluation exacerbated inflationary tendencies as labour sought to keep
abreast, and producers and merchants sought to pass on increased Jamaican dollar costs.  Furthermore, a
significant portion of Jamaica's exports were characterized by low elasticity of demand.
79. Certain options were not desirable, and collective bargaining and labour rights had to be fully
respected. Government intervention in markets that had been liberalized and deregulated was limited.
Some of the existing imbalance, noted by delegations, required a combination of monetary and fiscal
restraint, increased productivity, and enhanced cooperation amongst Jamaica's social partners.  While
such a partnership between trade unions, the private sector and the Government had not yet been agreed,
sectoral agreements had been concluded, notably in the mining sector.
80. Specific questions had been raised regarding possible distortions caused by export incentives and
the level of protection afforded to agriculture.  As a small, open economy, Jamaica necessarily sought
economies of scale on the basis of secure access to larger global markets.  Nevertheless, subsidies were
not provided for agricultural exports.  Jamaica did not believe that its agricultural trade policy was
excessively protectionist:  agricultural imports, particularly of food had been growing steadily;  imports of
these products from the United States, had grown by almost 20% in 1996.  Imports in a range of fruit andvegetables, which competed with domestic production, had shown a marked increase in recent years, and
for some products had doubled between 1994 and 1996.  Jamaica's current applied tariff levels compared
favourably with levels maintained on some agricultural products in a number of developed countries.
While the contribution of the agriculture sector to GDP had been declining, it was still important for
employment and for rural development.  Jamaica intended to continue to liberalize trade, but urgedincreased recognition by developed country members of the special needs and concerns of the agriculture
sector.WT/TPR/M/42
Page 18
81. The second discussant, referring to the notion of efficient import substitution, envisaged in the
NIP, requested clarification on how the Government of  Jamaica intended to implement this programme in
conformity with WTO obligations.
82. The representative of Jamaica recalled that prior, to the Uruguay Round many economies pursued
a policy of import substitution, with a strong focus on production for the domestic market.  In using the
term 'efficient substitution', Jamaica recognized that decisions would have to be based on efficiencyfactors, competition, and a market determined exchange rate as well as transparent border arrangements;
imports would enter the market on the basis of these factors.
(ii) Trade policy measures
83. The second discussant noted that Jamaica's import regime relied heavily on different levies,
charges and fees.  He asked for confirmation from the Jamaican delegation that, in line with the WTO
rules, they did not exceed the cost of the services rendered by the authorities.  He was also interested to
know the rationale behind the relatively high level of export licensing.
84. The representative of Jamaica noted that export licensing was not a hindrance to trade but sought
to ensure quality and was needed for statistical purposes.  With regard to the level of charges, levies and
fees, Jamaica would need to make a statistical comparison before responding to the question.
85. The representative of the United States, referring to the previous question on fees, levies and
charges, requested clarification on the consistency with GATT Article VIII of the ad valorem  import
licensing fees.  He noted that fees were determined on the basis of the domestic currency value of imports
and that the fees varied according to the value of the shipment.  He was interested to know on what basis
these fees were determined and whether the charges were an approximate value of the services rendered.
86. The representative of Jamaica recalled that quantitative restrictions and licensing on agricultural
products had been removed prior to the Uruguay Round and replacement with stamp duties on certain
sensitive agricultural products.  These stamp duties could not be related to services provided and, thus,
other fees and charges should be disaggregated.
87. The representative of Canada asked whether a date was envisaged for the entry into force of the
new draft regulations on government procurement.  W ith respect to the privatization, he noted the large
number of entities currently under consideration, and requested information on the review process beingundertaken.  With regard to Jamaica's overall agricultur al strategy, he was interested to know the role of
current trade negotiations, for example in the FTAA, in this strategy.  His delegation had raised a question
regarding the high border charge imposed on certain agricultural products;  he was interested to know
whether this question was covered in the responses regarding government reforms.
88. The representative of Japan requested further clarification on the level of stamp duty for certain
agricultural products.
89. The representative of Jamaica stated that, while he could not indicate any specific timetable for
introduction of new government procurement regulations, his Government recognized the urgency of
modernizing and updating its government procurement policy, more particularly as this was part of the
FTAA process.  He noted that once the policy issues contained in the WTO Agreements and on the
institutional framework had been resolved, Jamaica hoped to become a member of the WTO Government
Procurement Agreement.  With regard to Jamai ca's agricultural strategy in relation to the FTAA,
recognizing that much remained to be done at the WTO level, Jamaica hoped that progress might be made
in further liberalizing this sector, at least at the hemispheric level.  Clarification on the level of stamp dutyWT/TPR/M/42
Page 19
would be given in writing at a later date;  discrepancies in the figures provided required further
investigation.  Regarding the privatization process, a decision was first taken in the Cabinet on the entities
to be listed for privatization;  other government agencies and institutions also played a role.  Once the
privatization framework was in place, an enterprise team was established to review the entity and make a
preliminary estimate of its market value.  The Contract or General could be called in at any time to ensure
that the process was fair, for example in terms of the offer document put forward.  Advertisements werethen placed, offers invited, and interested parties were interviewed by the enterprise team;  following
short-listing and negotiations, a determination would be made whether the entity should be privatized.  A
report would then be made to the Office of the Prim e Minister by the relevant privatizing agency before
re-submission to Cabinet for approval.
(iii) Sectoral policies
90. The representative of Hong Kong, China noted th at her delegation's specific question regarding
Jamaica's MFN exemption for cargo reservation was not covered in the written answers provided.  Her
delegation would be happy to receive a written repl y if the question could not be addressed during the
meeting.
91. The representative of the United States, noted that Jamaica's GATS Schedule included
commitments on commercial presence, but not on cross-border supply or consumption abroad; he was
interested to know whether, in practice, foreign comp anies were able to provide services through all three
modes.
92. The second discussant, while appreciating that Jamaica's services regime was quite liberal, noted
Jamaica's caution regarding the movement of natural persons, and in the light of the country's
pro-investment policy, wondered whether there were plan s to relax the current restrictions in this respect.
93. The representative of Jamaica stated that, while his country was open to broadening access to its
market, certain legislation was designed to ensure that  qualified personnel coming into the market met the
requirements of the permit legislation.  Concerns that had been put forward regarding the movement of
natural persons along with comments on liberalizati on would be taken into account.  Under CARICOM,
Jamaica had liberalized the movement of certain categories of personnel into the economy; details of the
liberalization in this context would be supplied if requested.  Written responses to the questions onservices would be supplied at a later date.
94. The representative of Japan asked whether the telecommunications monopoly, Cable and
Wireless (C&W), would be eliminated before 2013.  He was also interested in receiving replies to his and
other delegations' services-related questions.
95. The representative of Jamaica stated that a new telecommunications policy had been tabled,
which sought to address the sector in a wider context.  However, C&W's licence was a legally binding
contract and, while the Government had entered into negotiations to find possible trade-offs, the licencecould not be eliminated unilaterally by the Government.
96. Written responses to the questions on transportation and tourism services as well as any other
outstanding questions, would be provided to all delegations within the time-limit provided.WT/TPR/M/42
Page 20
VII. CONCLUDING REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review of Jamaica was conducted by the TPR Body on 29-30 October
1998.  These remarks, prepared on my own responsibility, are intended to summarize the main points of
the discussion;  they are not intended as a full report.  Details of the discussion will be fully reflected in
the minutes.
2. The discussion developed under three main themes:  (i) economic environment;  (ii) trade policy
measures;  and (iii) sectoral policies.
(i) Economic environment
3. Members congratulated Jamaica on its structural reform, underpinned by prudent macroeconomic
management.  In consequence, inflation had been significantly reduced and the economy had become
more efficient and outward oriented.  Members note d, however, that challenges remained, including high
unemployment and a substantial internal debt;  in view of the large trade deficit, they also asked about the
competitiveness of Jamaica's exports, particularly given rising unit labour costs and recent realappreciation of the currency.  Members sought assurance on the Jamaican policy response, including with
respect to the investment environment.
4. Members welcomed Jamaica's strong commitment to the multilateral trading system and stressed
the view that Jamaica's growing regional links should  continue to complement its contribution to the
system.  They asked about the coordination of Jamaica's trade policies with CARICOM and the effect ofthe erosion of preferences on Jamaica's exports;  in this respect they inquired about efforts to diversify
both Jamaica's export product mix and markets.
5. The representative of Jamaica reiterated his country's commitment to an open, multilateral trading
system.  He felt that the benefits of the system were not always equally distributed, which should be
addressed, as otherwise it might be difficult to maintain wide-ranging support for it.  With respect toregional trade policy, he indicated the steps take n by CARICOM to deepen economic integration, and
noted that Jamaica was progressively increasing the coordination with CARICOM, with the goal of
moving to a Single Market.
6. On the issues raised by Members, the representative of Jamaica said that government policy
aimed at achieving macroeconomic stability including inflation control and reducing exchange ratevolatility;  given the high import content of Jamaican production and consumption he was not sure that
export competitiveness would be improved by currency depreciation.  With regard to diversifying export
products and markets, a number of initiatives were being taken including niche market promotion and
improved techniques for innovation and product development.  He recognized the concerns raised
regarding the build-up of internal imbalances;  these would be addressed through continued use of
disciplined macroeconomic policies, improved productivity and enhanced cooperation among social
partners.
(iv) Trade policy measures
7. Members welcomed the many trade-liberalizing measures taken by Jamaica in recent years;  these
included a lowering of tariffs, an elimination of quantitative restrictions and a reduction in the scope of
import licensing.  These measures had been integral to the creation of a more market-oriented economy,
and had also encompassed the removal of price controls, privatization and financial sector reform.  Inencouraging Jamaica to continue with these efforts, Members raised a number of questions particularly
with respect to:  high border charges, including additional duties;  customs valuation;  import and exportWT/TPR/M/42
Page 21
licensing;  anti-dumping and government procurement procedures;  the updating of standards;  and the
system of incentives, especially subsidies and tax allowances.  Questions were also posed on intellectual
property rights and competition policy, as well as on Jamaica's efforts to amend domestic legislation to
give effect to the WTO obligation.
8. In reply, the representative of Jamaica stated that his country would continue with trade-opening
measures.  Jamaica would move to Phase IV of the revised Common External Tariff (CET) and adopt thesix-digit tariff structure HS96 in January 1999.  Clarification was provided on the application of other
levies and charges, including additional duties, on imports;  there was no immediate plan to reduce them
but taxation review was in progress to simplify and improve compliance.  Jamaica's tariff schedule would
be shortly submitted to the WTO Integrated Data Base.  On customs valuation, he accepted that the
publication of reference prices would improve transparency, and he clarified aspects of the Fair
Competition Act.
9. Jamaica was actively working on amending its legislation and procedures in a number of areas,
including TRIPS, anti-dumping, standards, government procurement and customs valuation.  The
representative of Jamaica stressed the need for technical assistance to strengthen the capacity of small
trading partners to meet reporting obligations under the WTO and to fully exercise their rights.
(v) Sectoral and structural issues
10. Members acknowledged the challenges faced by Jamaica as a small island economy and
welcomed its efforts to encourage a more efficient sectoral allocation of resources.  A number of
questions arose, particularly with respect to agriculture, textiles and clothing, and services.  On
agriculture, Members asked about issues such as high tariffs, preferential interest-rate schemes and other
subsidies, and efforts to increase the role of the pr ivate sector.  With respect to textiles, some questions
arose about the industry's cost structure, particular ly with respect to labour, and about access to the
U.S. market.  On services, Members welcomed Jamaica's commitments in the GATS and encouraged a
broadening of their scope, particularly in financial services.  A number of questions were raised on
specific issues, including about "exclusive righ ts" provisions in telecommunications and the MFN
exemption in maritime transport.
11. The representative of Jamaica replied, that agricultural policies should reflect concerns about
rural development, poverty alleviation and the building of competitiveness, as well as Jamaica's WTO
commitments.  Detailed information was provided regarding milk production programmes and state
trading enterprises in the sector.  He stressed that Jamaica did not use agricultural export subsidies.
Regarding textiles, details were provided with respect to the Caribbean Basin Initiative preferential
regime.
12. The Jamaican representative noted that his delegation would provide further written answers in
some areas, including licensing, additional duties, financial services, telecommunications and tourism.
Conclusions
13. In conclusion, Members expressed appreciation for Jamaica's active participation in, and
contribution to the work of the WTO.  It is also my sense that Members strongly welcomed the many
steps that Jamaica has already taken in becomi ng a more open, outward-oriented economy that is
integrated into the multilateral system;  they acknowledged the challenges faced by Jamaica as a smalleconomy.  It is felt that a continuation of Jamaica's trade-opening efforts would consolidate the basis for
steady, sustainable growth;  in this respect, the support of Jamaica's trading partners will also be
important.WT/TPR/M/42
Page 22
ANNEX I
ADVANCE WRITTEN QUESTIONS
QUESTIONS BY CANADA
1. General
Government Procurement
While there is some degree of openness and transparency in the tendering procedures of certain
government ministries and agencies, there are others which are lacking in this regard.  What steps are
being taken or are under consideration to make government procurement procedures and practices less
selective and more transparent?
Privatization
Jamaica has made considerable progress in privatizing a range of government-owned entities.
What plans are there (and in what time-frames) for the privatization of major entities such as the Jamaica
Public Service Co, National Water Commission, Norman Manley International Airport, as well as other
government-owned bodies?
2. Secretariat Report (WT/TPR/S/42)
Agriculture and Food Products
With respect to para. 7, to what extent is Jamaica an importer of sugar?  Does Jamaica import, as
well as export raw sugar?  What are the effects of tariff duties on the domestic prices of raw and refinedsugar?
Para. 7 also indicates that products of export interest to Jamaica are generally subject to import
tariff rates above the average for the sector.  What are the effects of these higher-than-average tariffs?
According to para. 14, the Government's agricultural strategy is based on market forces,
combined with agricultural planning.  What is the main orientation of agricultural trade policy in thiscontext?  What role do current trade negotiations (e.g. FTAA) play in the Government's strategy?
According to subsection (i) Market access, the average tariff protection on agricultural products is
higher than that offered to other sectors and there is considerable dispersion of MFN rates by product
groups.  Also, additional stamp duties can raise nominal protection up to 90%.  How does this level of
protection relate to government reforms in the sector?
According to para. 18, grains imported for animal feed, a wide range of meat products, and most
fruit and vegetables face an aggregate border charge of between 70-90%, well beyond the average tariffs
for agricultural products.  Will government reforms in the agricultural sector include a reduction of this
level of protection?
Para. 26 indicates that farmers benefited until April 1997 from interest rates well below market
rates under an interest rebate program.  In May 1997, this program was replaced by a new preferential
interest rate scheme.  Can the Government of Jamaica provide an estimate of the total amount of supportprovided under this scheme?WT/TPR/M/42
Page 23
According to para. 28, the Government of Jamaica is considering the introduction of a
milk-production enhancement program, aimed at achieving milk self-sufficiency.  What expenditures is
the government planning to make to achieve milk self-sufficiency?  Will there be any price intervention?
QUESTIONS BY THE EUROPEAN COMMUNITIES
The report of the Secretariat (Chart 1.1) shows a dramatic decrease in agricultural production
in 1997. A severe drought is mentioned later in the report (p. 84) as having contributed to this decrease.What are the productions which suffered most?  Are there any other factors?  Is agricultural production
expected to recover in 1998?
Reference is made on pp. 5-6 of the report of the Secretariat to a substantial increase of
employment in the "informal sector".  Such employm ent is currently assumed to represent as much as
30% of the work force.  What kind of activities are covered by this "informal sector"?  How has the 30%
figure been computed and how does it relate to the official unemployment rate of 16.5%?
Access to preferences in the U.S. under the Caribbean Basin Initiative II is subject to "strict origin
criteria" including a minimum threshold of 35% direct cost attributable to CBI beneficiary countries
(p. 32 of the report of the Secretariat).  To what extent does the inherent complexity of such a rule hinder
access by Jamaican exporters to this preferential regime?  What kind of controls are operated by the
Jamaican and/or U.S. authorities with respect to the eligibility of products exported under this preferential
regime?  Do disputes sometimes arise in relation to the application of these origin rules?
The origin criteria applicable under the CBI II are also characterized by a 20 percentage points (in
effect a 57%) "donor country element" in favour of U.S. materials.  To what extent does this feature
operate as a disincentive for Jamaican exporters to use non-U.S. materials in their productions?  What are
the economic sectors most likely to be affected by such a mechanism?
The so-called "TSUS807A" described under para. 37 on p. 32 of the report of the Secretariat
limits the types of (assembly) operations which can be performed in Jamaica and other CBI countries for
apparel items to be eligible for guaranteed access under the system.  To what extent does this system
operate as a disincentive for Jamaican apparel exporters to further integrate their production and carry out
weaving and/or cutting themselves?
It is obvious from pp. 42 et seq of the report of the Secretariat concerning tariffs that detailed
tariff data (line by line) covering both bound and applied rates of customs duties, as well as other duties
and charges have been supplied to the WTO Secretariat for the purpose of this TPR.  However, Jamaica to
date has not made any submission to the Integrated Database (IDB).  Could we suggest that Jamaica use
the tariff and trade data collected for the purpose of the TPR to make a contribution to the IDB and fulfill
its obligations under the General Council Decision of 16 July 1997 (WT/L/225) and subsequent
conclusions of the Committee on Market Access?
One of the main features of the Jamaican tariff is that both the average and maximum applied
rates of customs duty are significantly higher than the ceiling bindings of the Uruguay Round.  The gap
between the two will further accentuate with the implementation of Phases III and IV of the CARICOM
schedule of tariff reductions.  Is Jamaica considering the possibility of rebinding its (agricultural and non-
agricultural) customs duties at lower levels?WT/TPR/M/42
Page 24
The regime of other levies and charges described on pp. 52 et seq of the report of the Secretariat
appears as particularly protective and untransparent - especially with regard to the application of
"additional stamp duties".  Could Jamaica provide more details on the concrete operation of this system?
Could Jamaica for example clarify the relationship between the "aggregate duty", the "tariff" and the
"additional stamp duty", on the one hand, and the "bound rate of duty" and "other duties and charges" in
its UR Schedule LXVI, on the other hand?
Anti-dumping and countervailing duties investigations in Jamaica are conducted by an
"Anti-Dumping Advisory Board" (p. 64 of the report of the Secretariat).  This authority appears to include
representatives of the private sector (the Jamaica Manufacturers Association and the Small Business
Association).  How can such a participation be reconciled with the impartiality and confidentiality
obligations resulting from the WTO A/D Agreement?  Is this a concern that Jamaica would be prepared to
take into consideration when reviewing its legislation to bring it into conformity with this Agreement?
QUESTIONS BY HONG KONG, CHINA
Tariffs and additional duties
(WT/TPR/S/42, p. 42, para. 9 and p. 47, Chart.III.1)
We note that while 55.4% of tariff lines are duty free, 21.4% are subject to a tariff rate of 20 to
25%.  We would like to know if Jamaica has any plan to further reduce and, as far as possible, eliminate
the tariffs.
(pp. 52-58, paras. 25-30)
Apart from tariffs, Jamaica imposes other levies and charges including Additional Stamp Duties
on Customs Warrants Inward on imports.  The Additional Stamp Duties in some cases translate into
effective protection rates of as high as 90%.  In this regard, we are interested to know whether Jamaica
has any plan to simplify the system and to reduce or eliminate such levies and charges,
Standards and phytosanitary regulations
(p. 90, paras 20-21)
It is reported that some of Jamaica's SPS standards are obsolete and need to be updated to comply
with the requirements of the SPS Agreement.  We would like to know the progress of this updating
exercise and when it will be completed.
It is mentioned that Jamaica prohibits imports of a range of agricultural products.  We would like
to know the reasons for the import ban and in particular why Jamaican authority does not adopt the less
restrictive import permit and phytosanitary certificate control which they apply to certain other
agricultural products.
Telecommunications services
(p. 113, para. 94 and pp. 125-126, paras 138-9)
We note that the provision of telecommunications services is currently under the monopoly of
Cable & Wireless Jamaica Ltd.  The exclusive right will expire in 2013.  This arrangement is beingWT/TPR/M/42
Page 25
reviewed.  We would like to know the progress of the review and whether earlier liberalization of this
sector will be considered.
(p. 126, para. 142)
There are plans to undertake a partial privatization of postal services.  We are interested to know
more about the plans and whether foreign participants will be allowed.
Financial services
(p. 121, para. 120)
In Jamaica's offer in the financial services negotiations in December 1997, banking and a number
of other financial services remain unbound for all modes of supply except commercial presence.  Does the
Government allow the supply of these services through the other three modes in practice?
(p. 121, para. 122)
We note that commercial presence in the form of  a branch or agency is required for foreign
insurance suppliers, and they are subject to higher quarterly fee payments from gross written premiumincome.  Will Jamaica consider to reflect these requirements in its Schedule?
(p. 122, para. 126)
We note that stockbroking activities are limited to broker-members and there is nationality
requirement for these broker-members.  Will Jamaica consider relaxing such requirement?
Transportation services
(p. 124, para. 134)
We note that Jamaica has made an MFN exemption for cargo reservation to limit this service to
signatories of the UN Convention on Code on Liner Conference.  Will the Government consider
reviewing this policy to extend MFN treatment to non-signatories?
QUESTIONS BY JAPAN
Tariffs
It is reported that an additional rate of 40% applies to agricultural products.  Does this mean that
"an additional rate" of 40% is applied in addition to normal tariff?  If so, please explain the reason for
applying such additional tariff.  Please also explain if the rate applies to all the agricultural products?
(para. 9, p. 42 of the Secretariat Report)
Please explain when Jamaica is to adopt a six- digit structure (HS96) (para. 10, p. 43)
According to Chart III.3 (p. 49), average tariff rate on vehicles (Chapter 87) is around 10%,
which is lower than the bound rate of 50%.  Does Jamaica impose any other duties and charges besides
tariffs on these products?WT/TPR/M/42
Page 26
On some products listed in Table III.7 (p. 53), the total of "Tariff" rates and "Additional stamp
duty" rates does not correspond to the "Aggregate duty" rates.  Please explain the reason.
According to Table III.7 (p. 53), additional st amp duty rate on 'String beans raw, cooked
preserved (frozen) packed for retail, and not packed  for retail' (ex tariff heading No. 0710.203) is 86%.
However, according to the Schedule of Jamaica, 'other duties and charges' on heading No. 0710.203 is
bound at 80%.  Is this figure of 86 % correct?
IPR (para. 115, p. 79)
It is reported that 'it may be revoked if the design is not used within six months of registration'.
This may not be consistent with Articles 25 and 26 of the TRIPS Agreement, which do not provide the
use of design as a requirement for protection.  Please explain Jamaica's view on this point.
Balance of payments
Please explain concretely the correlation between imports and exports which is reported to be
high (para. 25, p. 12).
It is reported that the real appreciation of the Jamaican dollar was a contributory factor to the
imbalance between export and import performance during the 1990s.  Please explain the present situation.
Does the real appreciation of the Jamaican dollar still contribute to the trade imbalance? (para. 25, p. 12)
It is reported that, in 1997, the capital account surplus recorded a sharp reduction, triggered by a
decline in net private capital flows caused by a shif t in portfofio demand, from domestic towards foreign
currency deposits.  Please explain measures which Jamaica has taken to improve this situation.  Please
also explain the current status of the capital account. (para. 29, p. 14)
Price controls (para. 102, p. 76)
Please explain the detail on the price administration scheme on pimento, coconut and edible oils.
Competition policy
It is reported that Section 29 of the Fair Competition Act allows for situations in which restrictive
business practices may be permitted by prior authorization of the Fair Trading Commission.  Please
explain the criteria for the permission. (para. 106, p. 77).
It is reported that a proposal to establish a Commercial Court is currently under consideration.
(para. 110, p. 78).
- Please explain the current situation of the consideration.
- Please also explain the judicial procedures which have been taken against
anti-competitive actions so far.
It is reported that Jamaica has no legislation forbidding parallel imports.  Please explain the
current policy on parallel imports if any.  Does Jamaica intend to take any action on parallel imports in
the near future? (para. 112, p. 78).WT/TPR/M/42
Page 27
Government procurement
It is reported that the Ministry of Finance and Planning maintains a list of suppliers (List of
Approved Suppliers) of goods and services who have  been pre-qualified and approved para. 55, p. 63).
- Please explain the procedure for making the List (including which Ministry pre-qualifies
and approves the suppliers and makes the List), and the criteria for the pre-qualification
and approval of suppliers.
- Is there no discrimination between foreign and local suppliers to be on the List?
Services
(i) Financial services
It is reported that "fit and proper" criteria are applied when the Bank of Jamaica recommends
banking licences to the Minister of Finance and that the criteria are to ensure that the approved
institutions are stable and sound. (para. 109, p. 117).
- Please explain the detail of the "fit and proper" criteria.
- In paragraph 120, prior entry authorization of foreign banks is reported to be subject to
meeting prudential as well as "fit and proper" criteria.  Does the objective of the "fit and
proper" criteria differ from prudential?
Para. 111, p. 117.
- Please explain why foreign-owned banks are subject to higher minimum subscribed
capital requirements than local banks.
- There seems to be no need to require higher minimum subscribed capital requirements
for foreign-owned banks than for local banks if it is only for prudential reasons.  Please
explain Jamaica's view on this point.
It is reported that domestic insurance companies are required to pay a quarterly fee of 0-25% of
their Gross Written Premium Income or an annual minimum level of J$10,000 (or J$5,000 in some
category), while foreign insurance companies are required to pay quarterly fee of 0.5% of their Gross
Written Premium Income or an annual minimum level of J$12,000 (or J$6,000 in some category). (para.
122, p. 121).
- Please explain the reason for requiring higher payment for foreign insurance companies
than for domestic companies.
- Jamaica has committed to provide national treatment without limitation on mode 3 of
insurance services and the above requirement seems to be inconsistent with the
commitment.  Please explain Jamaica's view on this point.
It is reported that stockbroking activities are restricted to broker-members of the Stock Exchange,
who must be Jamaican nationals. (para. 126, p. 122).
- Please explain the reason for requiring Jamaican nationality.
- Does Jamaica have any plan to review such requirement which is a limitation on market
access?WT/TPR/M/42
Page 28
(ii) Communications Services
- Please explain the current situation of the review of the monopoly for voice telephone
services, etc.  When is an improved commitment on private voice telephone services and
other services expected to be submitted?  Is the monopoly of Cable and Wireless Jamaica
to be eliminated before 2013? (paras 138 and 139, p. 125).
- Please explain the details on plans to undertake a partial privatization of postal services.
In which services will government control remain? (para. 142, p. 126).
(iii) Tourism (para. 103, p. 115)
It is reported that the tourism industry has a number of incentive schemes.  Are these schemes
consistent with Jamaica's commitment on tourism services, notably on national treatment?
(iv) Transportation (para. 133, p. 124)
It is reported that one of the aims of maritime transport policy is to provide incentives.  Please
explain the detail of such incentives.
Are these incentives consistent with Jamai ca's commitment on maritime transport services,
notably on national treatment?
QUESTIONS BY THE UNITED STATES
Levies and Charges
The report indicates that in addition to tariffs, other charges are applied to imports, including
Additional Stamp Duties on Customs Warrants Inward, a Special Consumption Tax and the General
Consumption Tax.  While the latter two also apply to domestically produced goods, the Stamp Duties are
levied on the duty-paid value of imports and are designed to protect local production.
Is any consideration being given to unification of  the custom duty and the stamp duty?  Why does
the Government of Jamaica maintain these different systems?
It is not clear from the report when Jamaica intends to implement further import tariff reductions.
"Phase IV" of the CARICOM common external tariff was scheduled to be implemented by
July 1, 1998, when the maximum tariff would be lowered to 20 percent.  Jamaica, however,
seems to be applying a mixture of Phase II and III, a nd according to the report, a decision
regarding the date of implementation has not be made.  We would appreciate clarification.
Jamaica refers to a special general consumption tax (GCT).  Could you provide additional details
regarding the GCT rate and a list of products to which this tax applies?
Subsidies
The report indicates that export subsidies are not allowed, in principle, with the exception of
subsidies on certain agricultural products.  Does Jamaica currently subsidize any agricultural or food
exports?  If so, which products?WT/TPR/M/42
Page 29
Customs Valuation
The report states that Jamaica sometimes uses references prices, but that the list of reference
prices is not published.
Why doesn't the GOJ publish the list of reference prices?  Publication could improve the
transparency of the customs process.  In explaining its system of reference prices for certain
goods, the document notes that declared values are verified by the Regional Intelligence LiaisonOfficer in Puerto Rico.  Is this a Jamaican govern ment official?  If not, what sort of organization
does this Officer represent?  Can Jamaica explain how reference prices are used in the
importation of meat and other foods?  Are these reference prices being used for anything besides
customs valuation?
Licences
Jamaica reports that an import licensing system applies to some 39 HS tariff headings.  How
many actual tariff lines are affected by this licensing requirement?  This licensing system is administeredby the Trade Board.  Are all goods not included in the 39 HS headings freely imported insofar as
licensing is concerned?
Jamaica reports that a licence application fee is applied, as well as a "further" fee once the licence
is obtained.  These fees are based on the "currency value" of imports.  Does this mean that these are
ad valorem  fees?  What are the rates of these fees?  Is Jamaica aware that under Article VIII.I (a) of the
GATT 1994 such fees and charges should be limited to the approximate cost of services rendered?  The
WTO has determined that it is not valid to base such fees on the value of the goods being imported.  Can
Jamaica explain this apparent discrepancy?
The document notes the requirements which automobile dealers must comply with to be licensed
by the Trade Board.  It also noted that annual inspections are made by the Ministry of Commerce andTechnology, for which a fee of J$60,000 (about US$1,700) must be paid.  Are all automobile dealers
subject to this inspection fee?  What is invo lved in the inspection to make it so expensive?
Jamaica has instituted a permit and licensing system for any undertaking in Jamaica or its
territorial waters.  The licence is subject to a fee.  How much are such fees and on what basis are they
assessed?  Has Jamaica found this permit system to be an effective environmental tool?
Phytosanitary provisions
The report notes that certain sanitary and phytosanitary standards are obsolete and in need of
revision in order to comply with the requirements  of the WTO Agreement on the Application of Sanitary
and Phytosanitary Measures.  We would appreciate an update of this review process.  In the case of the
two acts -- the Plants Quarantine Act of 1993 and th e Agricultural Products Act of 1926 -- that are to be
updated, which standards are to be used in their place?
Services
According to the report, the Jamaican Government has prepared a draft telecommunication bill
which may end the current operator's monopoly on the provision of basic telephony services.  This
monopoly is scheduled to remain in place until 2013.WT/TPR/M/42
Page 30
What are the principal provisions of this legislation and what are its prospects for passage?
Financial Services
We would welcome news that Jamaica is prepared to table its acceptance of the WTO Financial
Services Agreement (the Fifth Protocol).  Jamaica has included commitments for financial services
(banking, securities, insurance) in its schedule of initial commitments, further expanded by an offer in
connection with the recent WTO negotiations on financial services.  While the commitments are quiteexpansive for mode-3 commercial presence (100 percent foreign ownership), Jamaica has declined to
included commitments for mode-1 cross border or mode-2 consumption abroad.  We urge Jamaica to
consider expanded market access and national treatment commitments for this sector.  In practice, do
financial services companies have the ability to provide services through all three modes of supply?
Other Sectors
Jamaica's pro-investment stance and interest in further and diversified economic growth and
infrastructural improvements would be supported by more comprehensive commitments, including in the
areas of distribution services, audio-visual services and courier services.
Licensing of Services
Jamaica has bound market access and national treatment commitments for a fairly comprehensive
list of sectors.  However, a number of the commitments (professional services, other business services,
transportation services, other services) are subject to unspecified licensing requirements included in theSchedule.
How do these licensing requirements affect the ability of service providers to take advantage of
the liberalization bound in Jamaica's Schedule?  Can Jamaica provide more detail on how these
licensing systems work and whether they are operated in accordance with GATS disciplines,
including Article VI (domestic regulation)?
Please provide information on Jamaica's plans for liberalizing and binding the above-listed and
other services sectors not included in Jamaica's Schedule of initial commitments or financial
services or telecommunications commitments.
Movement of Persons
Jamaica's commitment for movement of persons is substantially less than the commitments taken
on by other WTO Members and newly acceding countri es.  Given Jamaica's interest in stimulating
foreign investment, and the need for investors to bring in intra-corporate transferees, and related travel of
services salespersons, we would urge Jamaica to take a closer look at this issue.
Does Jamaica have any plans to relax current restrictions, including requirements for domestic
employment?
Intellectual Property Rights
What is the status of your efforts to bring your trade mark, patent, trade secrets, layout designs,
and copyright legislation into full conformity with the TRIPS Agreement?  We would appreciate
information concerning the status of the legislation.WT/TPR/M/42
Page 31
In addition, it is our understanding that the patent application process is quite lengthy, lasting on
average three years.  Does Jamaica have any plans to reform this process?
What is the status of your efforts to become a signatory to the Paris Convention?
Domestic Support
The report notes that Jamaica's program of reform has led to divestment in state-owned
enterprises and government land.  Does the State continue to own an interest in any agriculturalenterprises?
According to the report, the commodity marke ting boards (CMBs) for cocoa, coffee, bananas,
coconut, and sugar have been deregulated.  We note that the report indicates that the name and status of
these commodity boards have been retained because of the lack of legislation modifying the boards.  We
would appreciate additional information regarding the st atus of any legislation to officially change the
name and status of commodity marketing boards.  Are there additional agricultural state-trading
enterprises with marketing and trading functions still operating?  If so, please provide details regarding
any plans to privatize these enterprises.
The report notes that Jamaica eliminated most price controls and food subsidies in 1991.  Please
provide additional details regarding the elimination of  price controls and subsidies for agricultural and
food products.  Do any price controls still exist?WT/TPR/M/42
Page 32
ANNEX II
RESPONSE TO QUESTIONS
1. ECONOMIC ENVIRONMENT
What mechanisms are in place to reduce the internal debt?
In 1997, the servicing of the domestic debt represented 12.4% of GDP.  The Government of
Jamaica is fully cognizant of the economic impact of th is level of debt servicing and is determined to take
steps to reduce this figure.  The growth in the stock of domestic debt is partly an outcome of the attempts
of both fiscal and monetary policies aimed at tempering inflationary pressures within the economy.  The
Secretariat's report correctly attests to the achievement on this critical economic indicator.
The marked reduction in inflation will impact on the cost of servicing the domestic debt.  This has
allowed the Bank of Jamaica to embark on a progra mme of phased reduction of cash reserve requirement.
This development should result in reduced interest  rates and ultimately lowered servicing costs of the
domestic debt.
The increased prospect for economic growth has im plications for the servicing of public debt.
Now that macroeconomic stability has been attained, as expressed by indicators such as the low levels of
inflation and the stability of the exchange rate, the Government's policy is focused increasingly on growth
enhancing measures.  Economic growth will ease the relative cost of servicing the debt.
What service sectors does Jamaica recognize as having attained comparative advantage?
These include tourism, shipping, information technology and music and entertainment.
How to generate increased degree of diversification of markets and products?
With regards to diversifying Jamaica's exportable goods, a number of initiatives are being
developed and executed.  These include product innovation, niche market promotion, increased
application of technology-based production techniques, improvement in the scientific capability for bothinnovation and product development.
Jamaica's trade policy initiatives have been pitched at diversifying its export markets beyond the
traditional trading partners.  As incoming Chairman of the G-15, Jamaica is bent on expanding and
seizing the trade opportunities this group presents.  Other notable initiatives aimed at diversifying our
export markets include conclusion of the recent CARICOM / Dominican Republic Trade Agreement anddiscussions between CARICOM and the Andean Pact on forging increased trade cooperation.
Price Controls
Please provide details on the price administration schemes on pimento, coconut and edible oils.
Pimento :  The Export Division of the Ministry of Agriculture is responsible for collecting, processing
and marketing pimento.  This Division handles a bout 50% of the pimento exported from Jamaica.
Several other private operators are responsible for purchasing and marketing the additional 50% of
pimento exported.  The price paid by the private exporters to the pimento growers is not controlled by theGovernment.WT/TPR/M/42
Page 33
The Ministry of Agriculture links the price paid to pimento growers to the general demand and
supply factors operating in the international market.  Included in the price is also a provision for
administrative expenses.
Coconut :  The Coconut Industry Board regulates the price paid to the farmers for coconuts that are used
to produce Copra.  The coconuts are delivered to C opra manufacturers for processing and the end product
is then sold to Seprod.  The price paid by the Government for coconuts is not determined by market forcesand really represents a form of subsidy to the growers.  The price agreed between Seprod and the
Government for the sale of Copra is also an admini stered price rather than one determined by market
conditions.
All the edible oils  and soaps produced by Seprod are imported as Seprod could not afford to use
locally produced Copra at the existing prices and be competitive.  Seprod sells oil made from the local
Copra mainly to the bakeries.
Government has a contract with Seprod to purchase Copra from the manufacturers up to 2003 and
the Coconut Industry Board is currently examining more efficient and more market-oriented options for
utilizing coconuts after 2003.
Privatization
What plans are there (and in what time frame) for th e privatization of major government-owned entities?
The Government of Jamaica remains committed to its privatization policy.  In this regard, the
Government has begun the process toward privatization of Jamaica's two international airports.  Pre-
privatization analysis is currently being undertaken for the Norman Manley International Airport and
privatization procedures are likely to begin in 1999.  Privatization of the Sangster International Airport is
expected to be completed by June 1999.
Several other government-owned entities are being considered for divestment.  These include:1. National Water Commission
2. Bath Hotel and Spa
3. Milk River Hotel and Spa
4. Jamaica Railway Cooperation
5. Kingston-Port Royal-Portmore Ferry Service6. Cotton Polyester Textile Company
7. Caribbean Cement Company
8. Vehicle Inspection Services
9. Parking Metres
10. Aqualapla Company (Aquaculture)
These entities are in various stages of the privatization or pre-privatization process.  It is,
therefore, difficult to give exact time frames.
In the case of the Jamaica Public Service Company Limited, there are no immediate plans for
privatization.WT/TPR/M/42
Page 34
Regional Trading Arrangements
CARICOM
Response to comments by the delegation of India and Ambassador Saborío (discussant)
As the reports before the Trade Policy Review B ody indicate, CARICOM, in order to deepen the
economic integration process, agreed to establish a Single Market and Economy.
The objective is to provide for the free movement of goods and services, capital and labour, to
achieve greater harmonization of laws and regulations affecting commerce including Customs laws and
procedures, intellectual property, competition policy, corporate taxation, dumping and subsidization.  In
order to manage the transition from a common market to a Single Market and Economy, CARICOM
decided to create new institutions and to establish new rules for the conduct of economic cooperation by
amending the Treaty through nine Protocols.
The negotiations of four of these, have been complete and two have provisionally entered into
force.  These are Protocols I and II.  The former restructures the institutions of the Community, as well asprocedures for decision making, voting and administration, while the latter has expanded and
strengthened commitments and obligations of member States with regard to the free movement of capital
and skilled labour, the provision of services, and the establishment of enterprises.
Protocol IV, which deals with Trade Policy is still under negotiation and is likely to be completed
in the next few months.  This Protocol will provide for the joint regulation of internal and externalcommerce of CARICOM, the use, where possible, of common negotiating strategies in the development
of trade agreements with third countries and groups of countries, and the participation and joint
representation, as appropriate, in international and regional organizations which negotiate, establish and
apply disciplines governing international and regional trade.  Some of the specific areas which will be
covered by the Protocol are the Common External Tariff, rules of origin, safeguards and customscooperation.
Other Protocols under negotiation are Transport Policy; Disadvantaged Countries, Regions and
Sectors; Dispute Settlement; and Competition Rules.
Jamaica is progressively increasing coordination of its trade policies with CARICOM with duty-
free access for a number of products on a non-r eciprocal basis.  The CARICOM/Colombia Trade
Agreement, however, provides reciprocal treatment for a selected list of products.  In the case of the more
developed countries of CARICOM, the duty-free treatment accorded to Colombian products requires a
derogation from the Common External Tariff and is administered by each member State.  Negotiations
are currently under way with the Dominican Republic on a comprehensive trade agreement, which,
inter alia,  will also provide for reciprocal trade in goods.
Caribbean Basin Initiative (CBI)
To what extent does the inherent complexity of the "strict origin criteria" rule hinder access by Jamaican
exporters to the CBI preferential regime?  What controls are operated by the Jamaican and/or
U.S. authorities and do disputes sometimes arise?
Preferential access into the United States under the Caribbean Basin Initiative II, is governed by
the following origin criteria:WT/TPR/M/42
Page 35
At least thirty five per cent (35%) of the appraised value of the article imported into the United
States must consist of the cost or value of materials produced in one or more beneficiary countries, plus
the direct cost of processing operations performed in one or more beneficiary countries.  Business
overhead, administrative expenses and profits, as well as general business expenses are not considered
direct cost of processing.
The rule is not considered inherently complex.  However, because the raw material input for most
manufactured products are not produced in Jamaica or other beneficiary countries, Jamaican
manufacturers find it difficult to comply with the rule.  It should be pointed out that the products which
use indigenous raw material have no problem in accessing the Scheme.
The controls operated by Jamaica are administered by a Certifying Body.  Exporters are required
to submit product analyses to determine their eligibility.  This entails a cost breakdown of the
manufacturing process and periodic inspection by the certifying body to ensure that manufacturing
processes are in conformity with the analyses submitted.
The controls are operated by the United States in the Query/Verification Process.  The certifying
body can at any time be called upon to submit evidence as to the basis on which certification was granted.
The U.S. Customs has the authority to require a detailed accounting and if necessary, full documentary
evidence that the products meet the criteria for entry.
To what extent does the "donor country element" operate as a disincentive for Jamaican exporters to use
non-U.S. materials in their production?  What are the economic sectors most likely to be affected by such
a mechanism?
The origin criteria applicable under CBI II, are characterized by a fifteen per cent (15%) "donor
country element" in favour of U.S. material.  The rule states that the cost or value of materials produced
in the customs territory of the United States (other than Puerto Rico) may be counted, but only to amaximum of fifteen per cent (15%) of the appraised value of the imported article.
This feature operates as an incentive to Jamaican exporters as in effect, this requires a twenty per
cent (20%) value added in the beneficiary countries.
The economic sectors most likely to be affected by this mechanism are light manufacturing,
chemicals and toiletries.
To what extent does the 807A system operate as a disincentive for Jamaican apparel exporters to further
integrate their production and carry out weaving and/or cutting themselves?
TSUS 807A limits the types of assembly operations which can be performed in Jamaica and other
CBI countries.  Under the programme, fabricated components formed and cut in the United States are sent
to CBI countries to be assembled and returned to the United States.  To be eligible for guaranteed access
under the system, the operations performed in the CBI territories are limited to assembly and washing.
Jamaican apparel exporters have other avenues to further integrate their production such as the
Regular 807, which require United States components of non-U.S. fabric, and CMT operations, whereby
they can perform all the operations, i.e. patterning, cutting and assembling.WT/TPR/M/42
Page 36
Competition Policy
It is reported that Section 29 of the Fair Competit ion Act allows for situations in which restrictive
business practices may be permitted by prior authorization of the Fair Trading Commission.  Please
explain the criteria for the permission (para. 106, p. 77).
Section 29 of the Fair Competition Act gives the Commission the power to authorize agreements
and business practices which would otherwise be prohibited by the Act. Such authorization may begranted on written application, where the Commission finds that the practice or agreement is likely to
promote public benefit.
The following are the Commissions guidelines to the analysis of public benefits and detriments:
- The Fair Competition Act was passed on the principle of promoting and protecting
competition in the conduct of trade and business and in the supply of services in Jamaica
with a view to providing consumers with competitive prices and product choices.
- Detriments from a loss of competition include losses of economic efficiency, incentives
to innovate and incentives to avoid waste.
- Public benefits must be net gains in economic and/or social terms ("efficiency gains").
Transfers of wealth per se  are not net gains.
- The public benefits must be shown to be dependent on the agreement or practice being
permitted to go ahead.
It is reported that a proposal to establish a Commercial Court is currently under consideration (para.
110. p. 78).  Please explain the current situation.
The establishment of the Commercial Court as a division of the Supreme Court is progressing.
The rules governing the Court are now being drafted by the Ministry of National Security and Justice.
Please also explain the judicial procedures which have been taken against anti-competitive actions so far.
Cases relating to competitive action had to be pursued through the normal court system and
resulted in cases taking a very long time to resolve.  The Commercial Court when established should see
commercial cases being brought to trial in a much shorter period of time.  It will also promote the
development of legal expertise in commercial/trade law and introduction of improved state-of-the-art
facilities into legal proceedings.
It is reported that Jamaica has no legislation forbidding parallel imports.  Please explain the current
policy on parallel imports if any.  Does Jamaica intend to take any action on parallel imports in the near
future? (para. 112, p. 78)
The Government of Jamaica has no legislation preventing parallel imports and in keeping with its
policy of progressive trade liberalization, has no immediate plans to review the current situation.
Activities in the "informal sector" (EC)
Employment in the informal sector, using the proxy indicator of "own account" work, was
estimated at 325,100 in 1997, approximately 34% of total employment. Own account employment, as
indicated in our Labour Force Survey, is based on em ployment status and is not disaggregated by sector.
However, based on the survey of micro-enterprises and on other studies, most of the employment in theWT/TPR/M/42
Page 37
informal sector is found to be in the areas of distribution - particularly vending, small-scale manufacturing
such as furniture and apparel, and small-scale farming.
There is no relationship between the unemployment rate and the level of employment in the
informal sector.  The unemployment rate, which is comprised of "seekers" and "non-seekers", includes
only persons who reported that they were not working, but were available for and willing to accept a job;
it therefore does not include persons who are employed.
Balance of Payments
Please explain the correlation between imports and exports which is reported to be high.
The bauxite/alumina and the garment sectors combined account for roughly 70% of Jamaica's
total export earnings.  Both sectors have relatively high import content. The production of alumina, for
example, requires a considerable amount of imported fuel and caustic soda input.  In the case of the
garment sector, a considerable amount of the exports (e.g. the cut-make-and-trim jobs) have very little
local value-added, between 15% and 20% on average.  The remaining 30% of total exports, which iscomprised of the traditional agricultural commodities and agricultural goods, have very low import
requirements.  Total imports by the export sector, however, account for a relatively small proportion of
the overall import bill.  A sizeable portion of raw material and capital goods imports are for the
construction sector, the telecommunications and public utilities companies, and manufacturing and
packaging entities producing for the local market.  Data for the period January 1994-August 1998 reveal alow correlation between total exports and imports.
2. TRADE POLICY MEASURES
Anti-dumping and Countervailing Measures
Is the composition of the Anti-Dumping Advisory Boar d in Jamaica consistent with the requirements of
the WTO Agreement?
The Government has recognized that the existing anti-dumping legislation is not WTO consistent,
and new legislation to remedy this is now before the Houses of Parliament.  It should be noted that no
anti-dumping action has ever been taken by the Gove rnment of Jamaica and the only recommendation for
anti-dumping action ever made by the Anti-Dumping Advisory Board was not acted on because of the
fact that the Government recognized that the legislation was not WTO compatible.
Whereas the existing customs duties, dumping and subsidies act makes specific reference to
private sector representation on the Anti-dumping Advisory Board, the revised act, currently before
Parliament will provide for the establishment of an anti-dumping and subsidies commission and has been
designed to be in compliance with the relevant WTO provision.  The composition of the new commission
will therefore be consistent with the requirements of the WTO Agreement.WT/TPR/M/42
Page 38
Standards
When is Jamaica likely to update its legislation on SPS standards in order to comply with the
requirements of the SPS Agreement?
Jamaica prohibits a few agricultural products which, on the basis of plant quarantine regulations,
have been found to present a threat to animal, plant and human health.
When such legislation is updated what standards do you intend to use?
Jamaica in updating its legislation intends to apply the international standards governing plant,
animal and human health, some of which are already in use.
What is the reason for the import ban on a range of agricultural products?
Jamaica does prohibit imports of a range of agricultural products based on the judgement that
these imports could be harmful to animal and plant and human health and life.
Government Procurement
What steps are being taken or are under considera tion to make government procurement procedures and
practices less selective and more transparent?
The responsible Ministry, Finance and Planning, has prepared a new draft regulation, the
Government Procurement Regulation (GPR), to govern  the procurement process.  The existing Supplies
Regulation is outdated and is scheduled to be repealed as soon as the GPR is legislated.
The GPR facilitates uniformity in the procurement process service-wide, with the objectives of:- fairness, integrity and public confidence in the procurement process,
- transparency and openness in procurement procedures,
- competition among suppliers and contractors, and
- providing for the fair and equitable treatment of suppliers and contractors.
In addition, the Government has initiated a reform of the procurement system.  As a consequence,
it is expected that the system will be strengthened in  order to more effectively and efficiently achieve the
stated objectives.  Once legislated, the GPR will be available to any member of the public, national and
international, at a price.  In addition, the regula tion will be included, along with those of other member
states on the ALCA-FTAA's website.
With regard to the list of Approved Suppliers what are the procedures for making the list and the criteria
for the key qualification and approval of suppliers?
Regarding the list of Approved Suppliers, at present the Government's Contracts Committee
(GCC) compiles and maintains the list.  Periodically the GCC publishes advertisements in the national
newspaper inviting suppliers and contractors to be included in the registers.WT/TPR/M/42
Page 39
In order to be included in the registers, suppliers or contractors must qualify by demonstrating the
following criteria:
- that they possess the necessary professional and technical qualifications, professional and
technical competence, financial resources, equipment and other physical facilities,
managerial capability, reliability, experience, reputation, and the personnel, to perform
the contract;
- that they have legal capacity to enter into the procurement;
- that they are not insolvent, in receivership, bankrupt or being wound up, their affairs are
not being administered by a court or a judicial officer, their business activities have not
been suspended, and they are not the subject of legal proceedings for any of the
foregoing;
- that they have fulfilled their obligations to pay taxes and other national contributions
(e.g. insurance, housing and education) in Jamaica;
- that they have not, and their directors or officers have not, been convicted of any criminal
offence related to their professional conduct or the making of false statements or
misrepresentations as to their qualifications to enter into a procurement contract within a
period of ten (10) years preceding the commencement of the procurement proceedings.
Suppliers and contractors are graded according to their specialization, levels, scope of work and
past performance.  Registers are reviewed and updated at quarterly intervals.
Is there no discrimination between foreign and local suppliers to be on the list?
There is no discrimination between foreign and local suppliers and contractors to be on the
Registers.
Intellectual Property Rights
What is the status of Jamaica's IPR legislation?
Jamaica's intellectual property legislation covering design, patents, copyright and trade mark have
been revised to make them consistent with the TRIPS Agreement and are now before Parliament.  These
pieces of legislation should be enacted before the end of this year.
Are Jamaica's procedures for the registration of design consistent with Articles 25 and 26 of the TRIPS
Agreement?
This question relates to Section 11 (i) of the Designs Act of 1957.  This Act predates the TRIPS
Agreement, and as stated above, this Act has been revised and the new Design Act has been drafted and
should be ready before the end of 1998.
What is the status of your efforts to become a signatory to the Paris Convention?
The matter of our accession to the Paris Convention is still being reviewed by the relevant
authorities with a view to acceding as soon as possible.WT/TPR/M/42
Page 40
Notifications
When will Jamaica submit its data for the Integrated Data Base?
We take note of the suggestion by the European Community and assure the Community that
Jamaica intends to meet its obligations under the decision adopted by the General Council on
16 July 1997.  The data will be submitted shortly.
3. SECTORAL TRADE POLICIES
Agriculture
Is Jamaica an importer of sugar and what are the effects of tariff duties on the domestic prices of raw and
refined sugar?
Jamaica imports raw sugar occasionally to meet the shortfall on the domestic market, only after
the export quota commitments have been satisfied.
The domestic market for raw sugar is about 70,000 tonnes.  This is the market that is supplied
with raw sugar imports when there is a shortfall in total production and after the export quotas have beenapplied.
The domestic market for refined sugar is about 50,000 tonnes and this total requirement is
imported as Jamaica does not produce refined sugar.
All the sugar sold on the domestic market both refined and raw is deregulated that is, there is no
price control on these commodities.
The importation of refined sugar is completely deregulated.  However, the SIA is responsible for
all purchases of raw sugar.  The latter provision is necessary to protect the integrity of Jamaica's export
quotas for raw sugar.
The import duty of 40% (Common External Tariff) on refined sugar has been waived for several
years in Jamaica because domestic requirements cannot be met by CARICOM sources.  There is,however, a variable Stamp Duty in place on the c.i.f. price for imported sugar.
How does the level of protection of agricultural products relate to government reforms in the sector?
Will government reforms in the agricultural sector include a reduction in levels of protection?  What is
the main orientation of agricultural trade policy?
The Government of Jamaica is currently concerned about a number of issues affecting the
agricultural sector and these must be reflected in our mix of trade policy initiatives.  These considerations
are as follows:
Concern for alleviation of poverty, particularly in ru ral areas, but also in the inner cities of urban
areas.  The demographics of both are inter-related.
Concern for rural development and the need to st em the drift of rural population to urban centres
and the attendant problems of unemployment and violence associated with types of urbanization.WT/TPR/M/42
Page 41
The agricultural sector employs 25% of the labour force but accounts for only 8% of GDP.  These
twin statistics can be interpreted as a reflection of the inefficiency of the sector and therefore
deserves highest attention.
Government is concerned about the building of competitiveness in the sector in producing for
both the export and domestic markets.
The need to pursue diversification away from dependence on sugar and bananas and to focus
instead on the sustainable development of non-traditional crops.  This process is long term and
therefore considerable attention must be given in the short term to the improvement of
competitiveness of our traditional agricultural products.
Concern for how we deal with natural disasters that affect us from time to time.  There were
several instances of drought in 1997 and recently we experienced severe flooding associated with
hurricanes.  These events impact adversely on the sector's performance.
The so called "green box" measures covered by the WTO Agreement on Agriculture are
important for ensuring that Government is able to lead the development of this sector, in
partnership with the private sector.
The significant increase in agricultural imports over the past ten years has been not been without
adverse consequences on the domestic agriculture. In fact, Jamaica recognizes its need to evoke
WTO compatible safeguard measures to mitigate against this negative development.
Can the Government of Jamaica provide an estimate of the total amount of support provided under the
preferential interest rebate scheme/programme?
We will respond at a later date.
What expenditure is the Government planning to make to achieve milk self-sufficiency and is price
intervention contemplated?
In 1995 the Government of Jamaica requested assistance from the Commonwealth Secretariat to
address the decline in domestic milk production.
The Commonwealth Secretariat, in response to a request from the Government of Jamaica,
funded the visit of a mission, which carried out a comp rehensive review of the industry, prepared a plan
of action for its reorganization and recommended a policy framework to guide the industry in the mediumterm.  The Commonwealth Secretariat Mission concluded that milk production in Jamaica can be
competitive provided appropriate measures are developed.  Arising from the recommendations of the
Mission and with the Secretariat's assistance, a milk production enhancement programme has been
developed.  It aims to increase milk production and cow productivity, and as a consequence milk self
sufficiency. This programme is estimated to cost about US$22 million and the Dairy Cooperative is
responsible for arranging funding for the Programme from different resources eg. bilateral/multilateral
assistance.  The Government of Jamaica is supportive of the programme generally but has not yet made aspecific commitment of funds.
No price invention is being considered at present.WT/TPR/M/42
Page 42
Does Jamaica provide any subsidies to agricultural exports?
Jamaica does not offer financial subsidies on its agricultural exports.
Other than coconut, cocoa, coffee, bananas and sugar, are there any other remaining state-trading
enterprises in the agricultural sector? What is the status of legislation related to changes in the name and
status of such entities? Are any of these state-trading enterprises engaged in marketing and trading
activities? If so, are there any plans to privatize these enterprises?
Jamaica's programme of divestment in the Agricultural Sector has been extensive.  However,
there are a few instances where the programme is incomplete but progressing. In the sugar industry, for
example, considerable divestment of sugar marketing, lands and factories have been implemented. The
Government still owns the Sugar Industry Authority which is mainly a regulatory body for the Industry.
This institution is also responsible for the importati on of raw sugar when it is required for the domestic
market.
The Government continues to purchase and export about 50% of pimento exports through the
Export Division of the Ministry of Agriculture. Government is also involved in trading in coconuts used
to produce copra through the Coconut Industry Board. This arrangement could be reviewed in a few years
time.
JAMCO, a government-owned company, is the body marketing Jamaican bananas in the United
Kingdom.
We are not aware of any initiative to change the name and status of the Commodity Boards
through Legislation.
Has agricultural production recovered from the decline of 1997 and what were the products most
affected?
There was a significant decrease in agricultural production in 1997.  A severe drought - the worst
in seventy (70) years - was the main factor responsible for this decrease in production.  The crops that
suffered most were the domestic crops which include fruit, vegetables, root crops, condiments and
cereals.  Some recovery in this sub-sector is expected in 1999 as rainfall in 1998 has improved.
In order to assist this recovery process, the Government initiated a Domestic Food Crop Project
in 1998 which aims to increase production and productivity of selected crops and to focus on geographicareas where competitiveness can be maximized.  The project is estimated to cost about US$1.4 million,
which will be used to assist in training, adaptive research, marketing and on farm irrigation equipment.
Services
Telecommunications
What are the principle provisions of the  draft Telecommunications Bill and what are its prospects for
adoption?
A modern telecommunications policy was tabled in Parliament on 27 October 1998.  This policy,
while honouring the monopoly licences granted to the existing service provider, will:
- allow competition in wireless and value-added services, while continuing to honour the
monopoly licences granted to the existing service provider;WT/TPR/M/42
Page 43
- provide for the efficient management of the spectrum, and the administering of the
numbering system, in the national good;
- redefine universal service;
- strengthen the role of the independent regulator;  and
- ensure fair and non-discriminatory interconnection with the incumbent
When is an improved commitment on private voice telephone services and other services expected to be
submitted?  Is the monopoly of C& W Ja maica to be eliminated before 2013?
The current licences of Cable and Wireless (Jamaica Ltd.) will be the subject of negotiation as of
12 November 1998 as the negotiating team of the Government will begin to engage C & W in dialogue at
that time.  The aim is to review the terms of th ose licences to bring them in line with Government's
policy.
What are the plans to undertake a partial privatization of postal services?  In which services will
government control remain?
Plans to commercialize postal services are being actively pursued in order to determine the best
methods and to identify the best project proposals for this venture.  A number of proposals have already
been submitted for consideration, these include a fe w from foreign companies.  The Government of
Jamaica would wish to maintain full responsibility for the delivery of mail but will consider contracting
out some services in this regard.
Financial Services
What are the "fit and proper" criteria applied when  the Bank of Jamaica recommends Banking Licences
to the Minister of Finance?
The "fit and proper" criteria is applied to determine the credibility, integrity and competence of
directors, major shareholders and senior management, and hence their suitability to be entrusted withownership or managerial positions in a Central Bank supervised institution.
Does the objective of the "fit and proper" criteria differ from prudential?
Fulfilment of prudential requirements is based on satisfactory assessment of:
- business plans along with feasibility studies which should include clear proposals on
financial plans and management as well as the intended operational structure;
- financial strength of individual and corporate shareholders through an analysis of
Statements of Affairs re individuals and Financial Statements which would include
balance sheets, profit and loss accounts, and auditors reports for the applicant company,
holding companies, and affiliated entities (where appropriate).WT/TPR/M/42
Page 44
Why are foreign-owned banks subjected to higher mini mum subscribed capital requirements than local
banks?
Why are foreign insurance companies required to pay higher quarterly fees (0.5% of Gross Written
Premium Income as opposed to 0.25%, annual minimum level of $12,000 or $6,000 as opposed to
$10,000 or $5,000) than domestic insurance companies?
The higher rate in respect of foreign companies was instituted in order to provide an incentive for
the mobilization of domestic savings for development.
The profits of overseas companies are usually repatriated to their head offices and are therefore
not available for investment in Jamaica to mobilize savings and provide equity locally.  It was, therefore,
considered that a higher rate of quarterly fees would achieve the desired effect of having these foreign
companies contribute to the economic development of the country.
Why is membership of the Stock Exchange limited to Jamaican nationals - are there any plans to review
this requirement?
At present members of the Stock Exchange must be Jamaican resident nationals.  However, this
policy is under review in order to grant similar be nefits to CARICOM nationals.  There are no nationality
restrictions to become a licensed dealer or investment advisor under the Securities Act of 1993.  To
qualify, an applicant must satisfy the requirements set out in the Securities (Licensing and Registration)
Regulations of 1996.
Transport
It is reported that one of the aims of maritime transport policy is to provide incentives. Please explain the
detail of such incentives.  Are these incentives consistent with Jamaica's commitment on maritime
transport services, notably on national treatment?
The Shipping Act, which is slated to come into force on January 1999 primarily focuses on the
regulatory aspects of shipping particularly as they pertain to maritime safety.  The Shipping community
had expressed concerns in relation to the development of the commercial aspects of shipping.  A
Maritime Task Force was formed comprising repres entation of the shipping sector and the Ministry.
However the Shipping Act delayed further development in this regard.  Relative to shipping incentives the
current provisions in the Shipping Incentives Act re lates to government-owned ships rather than vessels
owned by Jamaicans or flying the Jamaican flag.  It is, however, the Ministry's intention to review
existing commercial legislation such as Shipping Incentives Act, Cargo Preference Act, Carriage of
Goods by Sea and the UNCTAD Code of Conduct for Liner Conference and develop a separate piece of
legislation which may include incentives for private companies.
Tourism
It is reported that the tourism industry has a number of incentive schemes.  Are these schemes consistent
with Jamaica's commitment on tourism services, notably on national treatment?
These incentive schemes (para. 103 of TPR/S/42) are consistent with Jamaica's commitment to
the national treatment principle.  All incentives gran ted under the Acts are provided for both foreign and
local investors alike.  This has been the status of our incentive programmes since their inception.WT/TPR/M/42
Page 45
Tariffs and additional duties
This area of Jamaica's Trade Policy has quite naturally generated a great deal of interest, as well
as an obvious need for clarification.
It is reported that an additional rate of 40% applies to agricultural products.  Does this mean that an
agricultural rate of 40% is applied in addition to normal tariff?  If so, please explain the reason for
applying such additional tariff.  Please also explain if the rate applies to all the agricultural products.
The wording of the Secretariat's report as it relates to agricultural products in para. 9 may have
created some confusion, it is suggested that the word "additional" should be deleted.
Jamaica wishes to clarify what has been stated by reporting that items which have been
designated "Agriculture" by CARICOM attract a CET rate of 40%.
However, if an item has been designated "Agricultural Input" it attracts a rate of 0%.  An example
of such a product would be "seeds for sowing".  If an item has been treated as a competing intermediate
input, e.g. Aloe Vera extract, it attracts a rate of 20% and this rate is scheduled to go down to 15% inJanuary 1999.  If an item has been designated Agro-Industry, e.g. Luncheon Meat it currently attracts a
rate of 25%.  This rate is scheduled to be reduced to 20% in January 1999.  Finally, items such as tobacco
products which have been placed on List C (thus a llowing member States of CARICOM to treat such
items as revenue earners) currently attract a rate of 30%.  There are no plans to reduce the CET on these
items in January 1999.
Please explain when Jamaica is to adopt the HS96 six-digit structure.
Jamaica will adopt the HS96 six-digit structure in January 1999.
According to Chart III.3 the average tariff rate on vehicles is around 10%, which is lower than the bound
rate of 50%.  Does Jamaica impose any other duties and charges besides tariff on these products?
The bound rates of customs duties on industrial products of 50% is a maximum or ceiling rate.
Jamaica is therefore free to impose lower rates of customs duty.
Jamaica applies a General Consumption Tariff (GCT) on motor vehicles.  The rates range from
8.08% to 176.82% depending on the type of vehicle and the importer.
The rate of CET applied to motor cars and similar type vehicles was increased from 30% to 40%
in June 1999 as part of the 1998-99 budget exercise.  This measure was intended to earn additionalrevenue.
The new rates will shortly be supplied to the WTO.
On some products listed in Table III.7 the total of "tariff rates" and "additional stamp duty rates" does
not correspond to the "aggregate duty" rates.  Please explain the reason.
The rates of Additional Stamp Duty and CET will not add up to the Aggregate Duty unless
the rate of CET is 0.  The Additional Stamp Duty is applied to the c.i.f. (or value for duty) plus the CET.
For example, if an item attracts a 40% rate of CET and an Aggregate Duty of 86%, the Additional StampWT/TPR/M/42
Page 46
Duty of 32.857% (as is demonstrated in Table III.8) w ould be applied to a base of 140%.  The aggregate
tax would therefore add up to 86%.
According to Table III.7 the Additional Stamp Duty rate on string beans, raw, cooked, preserved, packed
for retail and not packed for retail (ex tariff heading No. 0710.203) is 86%.  However, according to the
schedule of Jamaica "other duties and charges" on tariff heading no. 0710.203 is bound at 80%.  Is this
figure of 86% correct?
The rate of aggregate duty on string beans, raw, cooked, preserved, etc. shown on page 54 as 86%
is correct.  Jamaica has bound its agricultural products at 100% and other duties and charges on items,
which would include string beans, at 80%, there are therefore no inconsistencies.
We note that while 55.4% of tariff lines are duty free, 21.4% are subject to a tariff rate of 20 to 25%.  We
would like to know if Jamaica has any plan to further reduce and as far as possible, eliminate the tariffs.
There are no plans at this time to eliminate all tariffs, however, as was already indicated, in
January 1999, Jamaica is scheduled to introduce Phase IV of the revised CET.  This will result in themajority of tariff lines falling in the range of 0%-20%.
Apart from tariffs, Jamaica impo ses other levies and charges including Additional Stamp Duties on
Customs Warrants Inward on imports.  The Additional Stamp Duties in some cases translate into effective
protection rates of as high as 90%.  In this regard, we are interested to know whether Jamaica has any
plan to simplify the system and to reduce or eliminate such levies and charges.
Jamaica has no immediate plans to reduce the existing levies and charges.  We are, however, in
the process of examining our existing taxation regime in order to effect simplification and higher
voluntary compliance.
Is any consideration being given to unification of the Customs Duty and Stamp Duty?  Why does the
Government of Jamaica maintain these different systems?
There are no plans to unify the Customs Duty and Stamp Duty.  The Customs Duty regime is
determined at the CARICOM level and is applied ac ross the region.  On the other hand, the Additional
Stamp Duty regime is determined at the national level to provide production to local protection.
It is not clear from the report when Jamaica intends to implement further import tariff reductions.
"Phase IV" of the CARICOM common ex ternal tariff was scheduled to be implemented by 1 July 1998,
when the maximum tariff would be lowered to 20%.
Jamaica will move to Phase IV of the Common External Tariff on 1 January 1999 when the
HS96 classification is being introduced.  The exercise is estimated to result in a revenue loss of
J$500 million for the calendar year 1999.
Jamaica refers to a Special General Consumption Tax (GCT).  Could you provide additional details
regarding the GCT rate and a list of products to which this tax applies?
The GCT is applied to all items except for those which are specifically exempted or zero rated.
Examples of these two categories of goods and activities are shown in Table III.9 on pages 56 and 57 of
the Secretariat report.WT/TPR/M/42
Page 47
The rate of GCT applicable to items which are ta xable is 15%.  Exceptions to this rate are some
building materials, e.g. Portland cement, premix concrete, cement blocks and steel re-enforcing bars, to
which a rate of 12.5% is applied.
Why doesn't the GOJ publish the list of reference prices?  Publication could improve the transparency of
the customs process.  In explaining its system of reference prices for certain goods, the document notes
that declared values are verified by the Regional Intelligence Liaison officer in Puerto Rico.  Is this aJamaican Government official?  If not, what sort  of organization does this officer represent?  Can
Jamaica explain how reference prices are used in the importation of meat and other foods?  Are these
reference prices being used for anything besides customs valuation?
Although it is accepted that the publication of reference prices would create greater transparency,
Jamaica faces two major difficulties at this time:
- because of the high incidence of false invoicing (from one of our major trading partners)
it is felt that publication of reference prices would further facilitate fraudulent declarationof values;
- the process of computerization has not yet been completed in the Valuation Branch of the
Customs Department;
- the Regional Liaison Officer in Puerto Rico is a member of the Jamaican Customs
Enforcement Team;
- reference prices are received on a weekly basis on meats, tallow, lard, etc. from
Urner-Barry Publications, an American compan y.  In addition, similar data are supplied
by the U.S. Department of Agriculture on poultry and poultry parts.  The above
information is utilized to create monthly average prices to form the cost element of the
c.i.f. value for imports of the relevant products.
These reference prices are used only for valuation purposes.
One of the main features of the Jamaican tariff is that both the average and maximum applied rates of
customs duty are significantly higher than the ceiling bindings of the Uruguay Round.  The gap between
the two will further accentuate with the implementation of Phases III and IV of the CARICOM schedule of
tariff reductions.  Is Jamaica considering the possibility of rebinding its (agricultural andnon-agricultural) customs duties at lower levels?
The average and maximum applied rates of duty are significantly lower, rather than higher, than
the ceiling bindings of the Uruguay Round.  Jamaica is not however contemplating rebinding of customs
duties at lower levels at this time.
Statement:  Jamaica may wish to simplify its tax system and improve its fiscal administration.
Response:  Jamaica is currently undertaking a major Tax Reform Project in collaboration with the World
Bank.  This project is intended to widen the tax base and to improve voluntary compliance.
Significant progress has already been made with regards to the restructuring of the tax
departments and the introduction of a Tax-payer Registration Number.  This number will facilitate the
identification of taxable activities of persons, which are not now being subjected to tax.
__________