RESTRICTEDWORLD  TRADE
ORGANIZATIONWT/TPR/S/49
7 October 1998
(98-3864)
Trade Policy Review Body
TRADE POLICY REVIEW
TRINIDAD AND TOBAGO
Report by the Secretariat
This report, prepared for the  Trade Policy Review of Trinidad and Tobago, has
been drawn up by the WTO Secretariat on its own responsibility.  The
Secretariat has, as required by the Agreement establishing the Trade Policy
Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the
World Trade Organization), sought clarification from the Government of
Trinidad and Tobago on its trade policies and practices.
Document WT/TPR/G/49 contains the policy statement submitted by the
Government of Trinidad and Tobago
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Trinidad and Tobago.Trinidad and Tobago WT/TPR/S/49
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CONTENTS
Page
SUMMARY OBSE RVATIONS ........................................................................................................... .............xi
(1) ECONOMIC ENVIRONMENT ........................................................................................................ ..xi
(2) TRADE POLICY REGIME AND OBJECTIVES............................................................................. xii
(3) TRADE POLICY BY INSTRUMENT ............................................................................................. xiii
(i) Border measures............................................................................................................. ..... xiii
(ii) Measures affecting exports, production and trade................................................................xiv
(4) MEASURES BY  SECTOR ..................................................................................................xv
(i) Agricul ture...............................................................................................................xv
(ii) Manufact uring.........................................................................................................xvi
(iii) Mineral ex traction...................................................................................................xvi
(iv) Serv ices..................................................................................................................x vii
I. THE ECONOMIC ENVIRONMENT...................................................................................................1
(1) M AJOR FEATURES OF THE ECONOMY .....................................................................................................1
(2) R ECENT ECONOMIC PERFORMANCE .......................................................................................................3
(i) GDP and employment.......................................................................................................... ...3
(ii) Prices..................................................................................................................... ..................6
(iii) Monetary  policy........................................................................................................... ...........6
(iv) Exchange rate policy....................................................................................................... ........8
(v) Public finances ............................................................................................................. ...........9
(3) E XTERNAL PERFORMANCE ...................................................................................................................11
(i) Balance of payments ......................................................................................................... ....11
(ii) Evolution, composition and direction of trade ......................................................................11
(4) E CONOMIC OUTLOOK ...........................................................................................................................15
II. TRADE AND INVESTMENT POLICY RE GIME: FRAMEWORK ANDOBJECTIVES ...............16
(1) I NSTITUTIONAL STRUCTURE OF POLICY FORMULATION .......................................................................16
(i) Form of Government.......................................................................................................... ...16
(ii) Policy-making and administration ........................................................................................17(iii) Advisory and review bodies................................................................................................ ..18
(iv) Trade laws and regulations................................................................................................. ...19
(2) T
RADE POLICY OBJECTIVES .................................................................................................................19
(i) General policy objectives................................................................................................... ...19
(ii) Sectoral policy objectives ................................................................................................. ....21
(3) T RADE AGREEMENTS AND ARRANGEMENTS ........................................................................................22
(i) Multilateral tr ade agreements............................................................................................... .22
(ii) Regional trade agreements .................................................................................................. ..22
(4) I NVESTMENT REGIME ...........................................................................................................................29
(5) T RADE CONSULTATIONS AND DISPUTES ..............................................................................................30
III. TRADE POLICIES AND PRACTICES BY MEASURE...................................................................31WT/TPR/S/49 Trade Policies Review
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(1) O VERVIEW ............................................................................................................................... ............31
(2) M EASURES AFFECTING IMPORTS .........................................................................................................32
(i) Customs regulations......................................................................................................... .....32
(ii) Rules of origin............................................................................................................ ...........32
(iii) Tariffs................................................................................................................... .................34
(iv) Other duties and taxes ..................................................................................................... ......43
(v) Customs Valuation........................................................................................................... .....45
(vi) Preshipmen t Inspec tion..................................................................................................... ....45
(vii) Import prohibitions and licensing ......................................................................................... 45
(viii) State trading ............................................................................................................ ..............47
(ix) Government procurement..................................................................................................... .49
(x) Anti-dumping and countervailing duties...............................................................................49(xi) Safeguards................................................................................................................. ............51
(xii) Standards and technical regulations ......................................................................................5 1
(3) M
EASURES AFFECTING EXPORTS .........................................................................................................52
(i) Export procedures ........................................................................................................... ......52
(ii) Export taxes ............................................................................................................... ...........52
(iii) Export licensi ng .......................................................................................................... ..........52
(iv) Export subsidies and tax and duty concessions.....................................................................53(v) Export financing and credit insurance...................................................................................54(vi) Export promotion ........................................................................................................... .......55
(vii) Free-trade zones .......................................................................................................... ..........55
(4) M
EASURES AFFECTING PRODUCTION AND TRADE ...............................................................................56
(i) Adjustment and regional assistance ......................................................................................56(ii) Investment incentives...................................................................................................... ......56
(iii) Trade-related inve stment measures.......................................................................................59
(iv) Assistance to small enterprises............................................................................................ ..59
(v) Interest rate subsidie s and guarantee facilitie s ......................................................................60
(vi) Price controls ............................................................................................................. ...........61
(vii) Competitio n policy........................................................................................................ ........62
(viii) Trade-related intell ectual property rights..............................................................................6 3
(ix) Environmental policies..................................................................................................... .....67
IV. TRADE POLICIES BY SECTOR .................................................................................................... ..69
(1) O
VERVIEW ............................................................................................................................... ............69
(2) A GRICULTURE AND FOOD PRODUCTS AND FISHING ..............................................................................69
(i) Market access............................................................................................................... .........72
(ii) Sanitary and phytosanitary regulations .................................................................................72(iii) Domestic support .......................................................................................................... ........74
(iv) Export assistance.......................................................................................................... .........75
(v) Crop production and livestock ..............................................................................................7 5
(vi) Fisheries .................................................................................................................. ..............79
(3) M
INING AND QUARRYING ....................................................................................................................79
(i) Hydrocarbons................................................................................................................ ........79
(ii) Oil ........................................................................................................................ .................82
(iii) Natura l gas ............................................................................................................... .............83
(iv) Other minerals and quarrying............................................................................................... .83
(v) Electricity................................................................................................................. .............84Trinidad and Tobago WT/TPR/S/49
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(4) M ANUFACTURING ............................................................................................................................... .84
(i) Market access............................................................................................................... .........84
(ii) Incentive s schemes......................................................................................................... .......85
(iii) Petroleum-related manufacturing..........................................................................................8 8
(iv) Non-petroleum manufacturing.................................................................................91
(5) S ERVICES ............................................................................................................................... 92
(i) Overview.................................................................................................................... ...........92
(ii) Financia l services......................................................................................................... .........92
(iii) Telecommunications ........................................................................................................ .....98
(iv) Maritime transport......................................................................................................... ........99
(v) Civil av iation.............................................................................................................. .........101
(vi) Tourism.................................................................................................................... ...........102
REFERENCES ..................................................................................................................... ...........................103
APPENDIX TABLES ................................................................................................................ .....................105WT/TPR/S/49 Trade Policies Review
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CHARTS
Page
I. THE ECONOMIC ENVIRONMENT
I.1 GDP growth rates, by sector, 1992-97....................................................................................5
I.2 Deposit and lendi ng rates, 1981-97 ........................................................................................7
I.3 Selected indicators of ex ternal performance, 1992-97............................................................9
I.4 Product composition of me rchandise trad e, 1992-1996........................................................13
I.5 Merchandise trade by main or igin and destination, 1992 and 1996 .....................................14
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 Distribution of MFN tariff rates, 1998..................................................................................35
III.2 Tariffs on agricultu ral products , 1998 ..................................................................................36
III.3 Tariffs on manufac tured products, 1998...............................................................................37
IV. TRADE POLICIES BY SECTOR
IV.1 Average tariffs by IS IC classifica tion, 1998.........................................................................70
IV.2 Agriculture GDP by sector, 1992 and 1996..........................................................................71
IV.3 Manufacturing GDP by activity, 1992 and 1996 ..................................................................85
IV.4 Utilization of natural gas, 1997........................................................................................... ..89
IV.5 Commercial bank interest rate s in Trinidad and Tobago, 1992-96.......................................96Trinidad and Tobago WT/TPR/S/49
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TABLES
Page
I. THE ECONOMIC ENVIRONMENT
I.1 Major features of the Trinidad  and Tobago economy, 1996 and 1997...................................1
I.2 Economic performance, 1992-97............................................................................................4
I.3 Balance-of-payments, 1992-97 .............................................................................................12
II. TRADE AND INVESTMENT POLICY REGIME:  FRAMEWORK AND OBJECTIVES
II.1 Government agencies involved in the formulation or administration of trade
or trade-related policies a nd area of re sponsibil ity ...............................................................18
II.2 Notifications by Trinidad  and Tobago to the WTO..............................................................20
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 CARICOM Rules of Origin..................................................................................................3 3
III.2 Agricultural products bound abov e the 100% ceilin g binding..............................................38
III.3 Main features of Trinidad a nd Tobago's tariff schedule, 1997 .............................................40
III.4 Products to be accorded duty reductions in the markets of CARICOM
medium-development countries (MDCs) participating in the agreement on imports
originating in Colombia  from1 January 1999 .......................................................................42
III.5 Import surcha rges ......................................................................................................... ........44
III.6 Excise duties levied on impor ted and locally produced goods .............................................46
III.7 Imports requ iring lic ences................................................................................................ .....48
III.8 Exports requ iring a licence ............................................................................................... ....53
III.9 Direct economic impact of free-zone activit ies, 1993-96 .....................................................56
III.10 Tax concessions under th e Fiscal Incentives Act..................................................................57
III.11 Effects of price regu lation on pharm aceuticals.....................................................................61
III.12 Trinidad and Tobago's membership in  international agreements on intellectual
property rights................................................................................................................ .......63
III.13 Intellectual property rights legi slation in Trinid ad and Tobago............................................63
III.14 Filing and registration of inte llectual/industry property rights .............................................65
IV. TRADE POLICIES BY SECTORIV.1 Main state enterprises in  the agricultur al sector....................................................................71
IV.2 Trade and tariff data for agricultural pr oducts, 1998............................................................73
IV.3 Price support programme:  guaranteed pr ices, 1997.............................................................74
IV.4 Price support programm e:  subsidy payments ......................................................................74
IV.5 Sugar production and exports ............................................................................................... 75
IV.6 Guaranteed prices, Seemungal formula pr ices and price support payments, 1992-96 .........76
IV.7 Production and exports of selected  agricultural comm odities, 1993-97 ...............................77
IV.8 Crude oil and natura l gas production 1993-97......................................................................80
IV.9 Contribution of the energy s ector to the economy, 1970-97.................................................80
IV.10 Petroleum taxation in Trinidad and Tobago .........................................................................82
IV.11 Trade and tariff data fo r industrial products, 1998 ...............................................................86
IV.12 Oil refinery output and exports, 1993-97..............................................................................89WT/TPR/S/49 Trade Policies Review
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IV.13 Petroleum-related product ion and exports, 1993-97.............................................................90
IV.14 Production and exports of se lected manufacturing, 1993-97................................................91
IV.15 The financial system in Trinidad and Tobago, 1996 ............................................................93
IV.16 Types of licences and activities covere d by the Financial In stitutions Act ..........................94
IV.17 Commercial bank perfo rmance indicato rs, 1993-96.............................................................95
IV.18 Telecommunications value added, 1993-97..........................................................................98Trinidad and Tobago WT/TPR/S/49
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APPENDIX TABLES
Page
I. THE ECONOMIC ENVIRONMENT
AI.1 Exports by groups of products, 1991-96.............................................................................107
AI.2 Imports of groups of products, 1991-96..............................................................................108
AI.3 Exports by destinations, 1991-96........................................................................................109
AI.4 Imports by origin, 1991-96 ................................................................................................. 110
III. TRADE POLICIES AND PRACTICES BY MEASURE
AIII.1 Items on CARICOM List A (exceptions to CET), 1997.....................................................111
AIII.2 Items on CARICO M List, C, 1997 .....................................................................................114
AIII.3 Conditional duty exemptions for ap proved industries, (Third Schedule of
the Customs Act) ............................................................................................................... .120Trinidad and Tobago WT/TPR/S/49
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SUMMARY OBSERVATIONS
1. Since the mid 1980s, Trinidad and
Tobago has engaged in a process of
liberalization and deregulation, which has led
to the elimination of a number of restrictionsto trade and to a reduction in the average level
of tariff protection. Few non-price border
restrictions to trade remain, and the
amendment of domestic legislation to
incorporate Trinidad and Tobago'scommitments under the different WTO
agreements has been virtually completed. No
direct export subsidies are granted; however,
a complex system of investment incentives
remains in place.  Regional tradeliberalization undertaken in the Caribbean
Community and Common Market (CARICOM)
has gone hand-in-hand with commitments
under the multilateral trading system.
Trinidad and Tobago has been in the forefront
of compliance with CARICOM's Common
External Tariff (CET) reduction commitmentsfor industrial goods. Tariffs on agricultural
goods remain above average, however, and
some products are subject to high import
surcharges.
(1) ECONOMIC ENVIRONMENT
2. Trinidad and Tobago's economy relies
heavily on production and export of oil and
natural gas. Proven oil reserves are estimated
at 12 years' supply at the current level of
production, while proven natural gas reserveshave been estimated as sufficient for 55 years
of output. Related industrial activities include
oil refining, gas processing and production of
ammonia, urea, methanol, iron and steel.
3. The economy grew rapidly between
1973 and 1982, triggered by high oil prices,
leading to a substantial increase in investment
and consumption. Falling oil prices thereafter
led to contracting output, declining per capita
income, high unemployment, rising current
account deficits and loss of foreign exchange
reserves. In response, Trinidad and Tobagointroduced in 1988 a programme of structural
reform and liberalization, aimed at restoring
external balance, reducing the public sectordeficit, and improving financial
intermediation. This reform process was
strengthened in the 1990s, when price controls
were virtually dismantled, import duties were
reduced under CARICOM provisions and the
role of the private sector in economic activityenhanced.  However, there remains a large
participation of the State in the oil/natural gas
sector; overall, government consumption and
investment represent between one-fourth and
one-third of GDP.
4. Annual economic growth accelerated
to over 3% a year between 1994 and 1997, as
trade and investment liberalization took hold.
Tariffs were cut as a result of the
implementation, starting in 1995, of the four-phased reduction programme of CARICOM's
CET, which has lowered the maximum tariff
on industrial goods from 35 to 20%; capital
controls were removed; the fixed exchange
rate régime was replaced by a managed float;
and a programme of privatization and
liquidation of public enterprises was put inplace. GDP growth reached 3.2% in 1997,
fuelled by an investment and consumer
spending boom.  Initial forecasts point to an
acceleration of growth in 1998, reflecting the
effects of massive investment in the oil/naturalgas sector. These forecasts may, however,
need to be revised downward, to take into
account the negative effect of the recent
decline in oil prices. Although below its peak,
unemployment remains high, at 13.5% at theend of 1997.
5. As a result of improvements in tax
collection, proceeds from privatization, and
reductions in government subsidies and
transfers, Trinidad and Tobago has posted abudget surplus since 1995; the surplus
reached 1.8 % of GDP in 1997. Lower oil
prices may, however, have a negative impact
on public finances in 1998 and 1999.
6. External transactions in goods and
services represent over 100% of GDP, with
exports of fuels, the main earner of foreignexchange, accounting for over 20%.  Low
export diversification and strong dependence
on the oil/natural gas sector make TrinidadWT/TPR/S/49 Trade Policies Review
Page xii
and Tobago vulnerable to external shocks.
The strong decline in oil prices occurring in
1998, while imports continue to increase, is
likely to have a negative impact on the current
account.  Moreover, Trinidad and Tobago's
heavy reliance on a single market, theUnited States, for exports may add to this
vulnerability, should the U.S. economy slow
down.
7. Until 1997, Trinidad and Tobago
generally posted a trade surplus. Recently,however, imports have grown much faster than
exports, fuelled by rapid increases in
consumer and capital goods, as the economy
has expanded and the local currency has
appreciated in real terms.  Between 1993 and1997, imports more than doubled, while
exports increased by around 50%, and in 1997
a trade deficit of US$610 million was
registered.  In 1998, a trade deficit, albeit
smaller than in 1997, is again forecast. The
current account, in surplus for most of the
1990s, recorded a deficit of US$708 million(12.1% of GDP) in 1997.  The capital account,
fed by direct investment flows mainly to the
oil/natural gas sector, has registered a surplus
since 1996, peaking at US$619 million in
1997, leading to a substantial accumulation ofnet foreign exchange reserves, which stood at
the equivalent of over four months of imports
at end-1997.
(2) TRADE POLICY REGIME AND
OBJECTIVES
8. One of the Government's main policy
concerns is to diversify the economy away
from its dependence on the petroleum sector,
by developing  non-oil manufacturing activities
as well as services, such as transhipment andtrading. Other concerns include increasing the
level of foreign and domestic investment,
generating permanent employment
opportunities, and promoting food security.
The Government also aims to improve the
regulatory, legal and fiscal framework for
growth in the energy sector; to maximize localcrude oil production; to increase refining
capacity; and to develop downstream natural
gas-based industries.9. Trinidad and Tobago, a GATT
contracting party since October 1962, became
a WTO Member on 1 March 1995.  MFN
treatment is accorded to all its trading
partners. As a result of the Uruguay Round,
most industrial tariffs are bound at a ceilingrate of 50%; some products are bound at 70%.
There is a substantial gap between bound
rates and applied tariffs, which peak at 30%.
All agricultural lines are bound, mostly at
100%. Other duties and charges are bound at15%. Trinidad and Tobago has revised and
amended several pieces of domestic legislation
to comply with its obligations under the WTO.
Thus, anti-dumping legislation and regulations
have been amended to conform to the WTOAnti-dumping Agreement; new Patent and
Copyright Acts have been adopted, and
legislation regarding trademarks and
industrial designs amended to conform to the
TRIPS Agreement.  Legislation with respect to
trade secrets and unfair competition has also
been put in place.
10. Under the GATS, Trinidad and
Tobago made specific commitments on
tourism, business (including professional),
educational, health-related, recreational,
research and development, recreational,cultural and sporting, transport and financial
services. Trinidad and Tobago's Schedule
includes horizontal commitments on
commercial presence and the presence of
natural persons. Trinidad and Tobago alsoparticipated and presented offers in the
subsequent WTO negotiations on
telecommunications and financial services.
11. To date, Trinidad and Tobago has not
been involved directly, as either plaintiff ordefendant, under the GATT or WTO dispute
settlement mechanisms.
12. Trinidad and Tobago, a founding
member of CARICOM, adopted CARICOM's
CET in 1991, implementing the four-phase
schedule of CET rate reductions between 1995
and 1 July 1998. Deeper integration amongCARICOM countries is expected to result from
reforms aimed at consolidating the CARICOM
Single Market and Economy (CSME).  TwoTrinidad and Tobago WT/TPR/S/49
Page xiii
protocols amending the CARICOM Treaty
signed in 1997, are expected to lead to free
movement of goods, services and capital,
while further steps are being taken to
liberalize movement of persons.  Schedule I of
the CARICOM Treaty allows a few nationalexceptions to the duty-free entry of goods from
other CARICOM member states; for Trinidad
and Tobago these are milk and cream, tyre
repair materials, and rubber tyres. However,
Trinidad and Tobago has chosen not to usethis exception, and is in the process of
eliminating Schedule I.
13. CARICOM has preferential trade
agreements with Colombia and Venezuela.
Under the Agreement with Colombia, Trinidadand Tobago, as a CARICOM medium-
development country, has bound duty-free
access bilaterally as of 1 June 1998 on a
number of products, most of which are already
imported duty free. Actual concessions have
been granted on a small number of products,
including skipjack and bonito, and knives andcutting blades for kitchen appliances and lawn
mowers. Phased, bound duty reductions will
be extended from 1 January 1999 to another
group of products, including precious stones,
some kinds of coated electrodes and rods, anda group of non-competing inputs and capital
goods. Unilateral preferential market access
to Venezuela is granted under the
CARICOM/Venezuela Agreement on Trade
and Investment.
14. The Foreign Investment Act of 1990 is
expected to be replaced by a new Investment
Promotion Act, now in draft, which seeks to
diversify export-related foreign investment.
Currently, more than half of foreigninvestment is in the energy sector and related
downstream activities; the United States is the
largest foreign investor, mainly in the
petroleum sector. There are no restricted
sectors for foreign investment; however,
approval is required for acquisition of
commercial and residential land exceeding acertain area, or where a licence is needed (e.g.
for drilling, mining or establishment of a bank
by any investor, domestic or foreign; or for
acquisition of more than 30% of a publiclyheld local company by a foreign investor).
Trinidad and Tobago has bilateral investment
agreements with Canada, France, the
United Kingdom and the United States;
agreements with Argentina, Hungary, Italy,
the Netherlands and Venezuela are undernegotiation.  Investment issues are also
covered in CARICOM's agreements with
Colombia and Venezuela. In addition to the
treaty with other CARICOM members, double
taxation treaties have been signed withCanada, Denmark, France, Germany, Italy,
Norway, Sweden, Switzerland, United
Kingdom, United States and Venezuela.
(3) TRADE POLICY BY INSTRUMENT
(i) Border measures
15. Trinidad and Tobago adopted
CARICOM's CET for all goods, except a group
of mainly agricultural products (List A) and
industrial goods (List C) in 1991. Between
1995 and 1998, maximum import duties for
industrial products were lowered from 35% to
20% in four phases. Maximum applied ratesfor agricultural goods have remained at 40%
during the whole implementation period.  As a
consequence of these reductions, Trinidad and
Tobago currently has an unweighted average
MFN tariff of 9.1% (slightly higher if advalorem equivalents of specific duties are
included).  Nominal protection is higher for
agricultural products, with an average rate of
19.1%, while industrial imports face an
average tariff of 7%.  The tariff structure offershigher protection to final consumption goods
and agricultural products than to inputs and
capital goods, which are either duty-free or
subject to a 2.5 % tariff.  Final goods that
compete with domestic or CARICOMproduction face the highest rates. Exceptions to
the CET, including some motor vehicles,
electrical appliances, and jewellery, are
charged rates of up to 30%.
16. Quantitative restrictions have largely
been dismantled since 1990. Import
surcharges are currently applied on a numberof agricultural products. These were originally
expected to be eliminated by December 1994,WT/TPR/S/49 Trade Policies Review
Page xiv
but this elimination was postponed, although
certain surcharges were gradually reduced or
phased out.  Under a schedule established in
1995, surcharges on bovine meat and milk
were to be eliminated by 1998; and those on
vegetables and fruit are to be eliminated by1999. Import surcharges on certain other
products will remain after that date; some will
be subject to reductions by 2004, but some will
remain.  For example, import surcharges of
60% on sugar, 75% on icing sugar, and 86%on some poultry cuts are expected to remain in
place beyond 2004, considerably exceeding
the 15% level bound during the Uruguay
Round and included in Trinidad and Tobago's
schedule of concessions.
17. According to the authorities, Trinidad
and Tobago is de facto applying the WTO
Agreement on Customs Valuation, although,
under the Agreement, Trinidad and Tobago, as
a developing country, has until end-1999 to
bring its valuation system into conformity with
the Agreement.
18. The Trinidad and Tobago Bureau of
Standards (TTBS), under the Ministry of Trade
and Industry is the enquiry point under the
WTO Agreement on Technical Barriers to
Trade.  Standards are compulsory where theyaffect the health and safety of consumers or
where they can prevent fraud and deception.
The TTBS has also the right to test against
standards for quality and grading, and is
authorised to accept foreign certificates.Environmental standards, using ISO 14000
guidelines, were adopted in 1997, and are the
domain of the Environmental Management
Authority.
19. Trinidad and Tobago is not a party to
the plurilateral Agreement on Government
Procurement.  Government procurement is not
included in the scope of CARICOM, although
an action plan to create a central regional
information-coordinating agency has been
launched.  Procurement for governmental
agencies is regulated by a Central TendersBoard.  Tenders are either selective or
competitive, and are open to foreign suppliers.
However, a preferential margin of 10% isaccorded to local suppliers of goods and
services, and, in some cases, if tenders go to
foreigners, a local agent may be required.
20. According to the authorities, anti-
dumping legislation has been brought into
conformity with the relevant WTO Agreement.The Anti-Dumping and Countervailing Duties
Act (No.11 of 1992), notified to the WTO in
March 1995, was substantially amended in
1995; however, the amendment has not yet
been notified.  To date, the only anti-dumpingaction taken by Trinidad and Tobago has been
an investigation on imports of cheddar cheese
from New Zealand, initiated in
September 1996. In this case, a margin of
dumping of 13.93% was calculated; however,no duty was imposed, since the New Zealand
Dairy Board undertook to increase its price of
cheddar cheese exported to Trinidad and
Tobago by the amount of the calculated
margin of dumping.
21. Licences are still needed for the
importation of some products, namely thoseincluded in the Import Negative List,
originally used to manage a system of
quantitative restrictions to protect infant
industries, and now used mainly for licensing
purposes. Currently, the List includeslivestock, meat, fish, sugar, oils and fats,
motor vehicles, cigarette papers, small ships
and boats, and pesticides; it does not apply to
CARICOM imports, except of oils and fats.
(ii) Measures affecting exports,
production and trade
22. Trinidad and Tobago applies no
export taxes, but a system of export licensing
for a number of products, mainly for security
and health purposes but also to control the re-export of capital goods imported under
preferential conditions, is in effect.  There are
no export quotas, except those determined
under bilateral arrangements, nor specific
export performance requirements.
23. Trinidad and Tobago has notified the
WTO that it maintains no export subsidies.However, a number of incentives are applied,Trinidad and Tobago WT/TPR/S/49
Page xv
including tax concessions and duty-free access
for imports of inputs and capital goods.  Some
are geared to promoting exports, such as
export allowances (in the form of tax credits)
under the Corporation Tax Act and the
Finance Act; others are designed to promotethe development of specific industries or
sectors, such as the customs duty concessions
for imports of capital goods for a wide range
of approved manufactured activities. The
Government plans to eliminate exportallowances by the year 2000, although
Trinidad and Tobago, as a developing
country, is required to comply fully with the
disciplines of the WTO Agreement on
Subsidies and Countervailing Measures onlyin 2003. Duty concessions under these
schemes have, in some cases, already been
wiped out by the elimination of tariffs on non-
competing inputs and capital goods.
24. The establishment and administration
of Free Zones is regulated by the Trinidad and
Tobago Free Zones Company, which reviewsapplications taking into account foreign
exchange earning capacity and employment
generation potential. No sectoral limitation is
applied. Companies granted approved status
are allowed to supply domestically a maximumof 20% of goods produced, subject to the
payment of import duties. Since 1997,
certificates of origin have been required for
goods manufactured in the Free Zones. There
are currently 24 companies operating underthe free-zone régime, with exports totalling
US$38 million in 1996.
25. Although most price controls have
been eliminated, and only the prices of sugar,
pharmaceuticals, and school books remaindirectly regulated, a number of goods and
services are subject to administered prices.
These include certain agricultural products
(i.e. coffee, milk, cocoa, etc.), for which
guaranteed prices are paid to producers; the
ex-refinery prices of certain fuels; and utility
fares.
26.  Trinidad and Tobago has updated its
domestic legislation regarding intellectual
property rights to bring it in line with theTRIPS Agreement.  The registration of patents,
trademarks and industrial designs is
administered by the Intellectual Property
Registrar-General, within the Ministry of
Legal Affairs.
(4) MEASURES BY SECTOR
(i) Agriculture
27. The contribution of agriculture and
food processing, beverages and tobacco to
GDP, is just above 5%, but the sector employs
some 14% of the labour force.  Agriculturalexports are dominated by sugar.  The main
exports of processed products are beverages
and prepared cereals. Trinidad and Tobago is
a net importer of agricultural products; the
main imported goods are cereals, dairyproducts, oil seeds and vegetables.
28. In the Uruguay Round, Trinidad and
Tobago bound its tariffs on all agricultural
products at ceiling rates of 100%, with the
exception of seven items bound at higher
levels; these include poultry, cabbage, lettuce
and coffee. Applied tariffs on agriculturalproducts vary between 0 and 40%; in 1998,
Trinidad and Tobago's simple average MFN
tariff on agricultural products was 19.1%.
The highest tariffs are applied to edible fruit
and nuts, fish products, edible vegetables,animal and vegetable fat and oil, and meat
and edible meat offal.
29. Quantity-based measures, previously
applied under the Negative List, were
converted to equivalent tariffs in accordancewith the Uruguay Round Agreement on
Agriculture.  Some agricultural products are
subject to import surcharges; in 1998,
surcharges are applied to various parts of
poultry (100%), sugar and icing sugar(60-75%), vegetables (15%) and fruit (5%).
Surcharges on fruit and vegetables will be
removed by 1999, and those on poultry parts
will be reduced in 2004; surcharges on sugar
and icing sugar are not subject to reduction.
Import duties on alcoholic beverages are set at
specific rates, ranging from TT$4.75 per litrefor beer to TT$40.00 per litre for cordials andWT/TPR/S/49 Trade Policies Review
Page xvi
liqueurs.  Alcoholic beverages that are locally
and regionally produced face excise duties.
30. Sugar is the main agricultural crop.
Exports depend primarily on the quota
arrangements with the European Union and
the United States, which offer guaranteedprices above world levels.  Trinidad and
Tobago has been allocated an export quota of
47,556 tons of raw sugar by the
European Union under the Sugar Protocol to
the Lomé Convention, and an additional10,000 tonnes under the Special Preferential
Sugar Arrangement.  The United States
allocated Trinidad and Tobago a quota of
14,201 tonnes of raw sugar for fiscal year
1997, of which 13,576 tonnes were exported.Refined sugar is exported to other CARICOM
countries, but is also imported when domestic
production is insufficient to meet export
quotas and domestic demand.  Some
29,000 tonnes of raw sugar and 9,105 tonnes
of refined sugar were imported in 1997.  As
noted, imports of raw sugar are subject to acustoms duty of 40%, and an additional
charge of 60%.  Imports of refined sugar face
a 15% import tariff.
31. Agricultural incentives include
subsidies for soil conservation, equipment andmachinery, agricultural vehicles and wheel
tractors, as well as price support for
sugarcane, coffee, cocoa, milk, oranges,
grapefruit, paddy, copra and sorrel. Payments
granted for price support reachedTT$35.97 million in 1997, while input
subsidies totalled TT$0.4million; together
these payments account for some 1.8% of
agricultural GDP.
(ii) Manufacturing
32. The manufacturing sector is heavily
dependent on oil refining and petrochemicals;
petroleum-related manufacturing accounts for
two-thirds of total manufacturing GDP. The
1998 average MFN tariff on imports of
industrial products (HS Chapters 25-97,
covering both manufacturing and mining) was7.0%, with a peak of 30% and a minimum rate
of zero. The highest tariffs are applied on armsand ammunition, clocks and watches, works of
art, clothing and apparel articles, carpets,
furniture, toys, footwear, soap and leather
goods. A number of incentive schemes are
available for manufacturers; thus, customs
duty concessions are granted to imports ofmachinery, equipment and materials for a
wide range of approved manufacturing
activities. Relief from corporation tax and
customs duty is granted to approved
enterprises for a period of up to 10 years.
33. Petroleum-related manufacturing
includes a refinery, 13 petrochemical plants, a
natural gas liquid recovery plant and
electricity power plants. Refining activities
have fallen considerably from their peak in the1960s, but the decline has been reversed in the
mid 1990s.  On the other hand, petrochemical
output has been rising considerably; currently
Trinidad and Tobago is the world's second
largest producer of ammonia, and third
largest producer of urea. Non-petroleum
manufacturing activities are concentrated incement, iron and steel.
(iii) Mineral extraction
34. The extractive sector contributed
14.4% to GDP in 1996, while employing under
4% of the labour force; the sector alsogenerates most foreign investment inflows.
Hydrocarbons account for almost the whole of
the sector's output.   Oil production has
declined from its peak in the 1970s;
conversely, natural gas production has beenincreasing since 1978. However, the sector
still accounted for 22% of government revenue
and 73% of foreign exchange earnings in
1997.
35. The tax régime in the petroleum
industry is based on a three-tier system
consisting of two profit-based corporation
taxes (the Petroleum Profits Tax, set at 50% of
taxable profits, and an Unemployment Levy,
set at 5% of taxable profits), three production-
based taxes (a Royalty, a Petroleum
Production Levy, a Petroleum Impost) and anincome-based tax, (the Supplemental Profits
Petroleum Tax. Profits accruing fromTrinidad and Tobago WT/TPR/S/49
Page xvii
exploration, production and refining activities
are subject to the Petroleum Profits Tax and
taxed at 50%, while profits accruing from
petroleum marketing and distribution, for
which the state-owned National Petroleum
Marketing Company of Trinidad and Tobagoand the National Gas Company have the
monopoly, are taxed, since 1997, at a rate of
35%, since they are subject to the Corporate
Profits Tax. A system of incentives and tax
allowances are used to encourage investmentin the energy sector, including import duty and
VAT exemptions, and deduction of capital
expenditures incurred on workovers, heavy oil
projects and on a development dry hole for the
computation of the Petroleum Profits Tax.
(iv) Services
36. The services sector accounts for over
60% of GDP and around 75% of total
employment. Financial services are
particularly important, accounting for 11.5%
of GDP.  Activity in services has been largely
liberalized, and market access is fairly open inmost sub-sectors; national treatment is
granted to foreign suppliers in most areas.
The regulatory frameworks for financial
services, transport, and telecommunications
have been strengthened. Intelecommunications, partial privatization had
led to a temporary de facto monopoly in the
provision of basic telephony services by
Telecommunication Services of Trinidad and
Tobago (TSTT); this monopoly is expected tobe dismantled by 2009. Value-added services
must use the network of TSTT.
37. Under the General Agreement on
Trade in Services (GATS), Trinidad and
Tobago scheduled horizontal commitmentsregarding commercial presence and the
movement of natural persons for all sectors
included in its Schedule.  With respect to
commercial presence, the acquisition of over
30% of the equity of publicly traded
companies is subject to approval. Specific
commitments were scheduled in businessservices (including professional services,
computer and related services, research anddevelopment services, real estate and other
business services); educational services;
financial services; health related and social
services; tourism and travel-related services;
recreation, cultural and sporting services; and
transport services. Trinidad and TobagoTrinidad and Tobago presented a Schedule of
Specific Commitments in the Negotiations on
Telecommunications, binding full competition
in value-added services, using TSTT's network,
full competition on satellite-based mobileservices and fixed satellite services for public
use. Trinidad and Tobago also submitted an
additional offer in the 1997 Negotiations on
Financial Services, making commitments only
in reinsurance.
 Conclusions
38. The economy of Trinidad and Tobago
has experienced considerable liberalization
and deregulation since the mid 1980s, and
particularly since. Strong investment in the
oil/natural gas sector has fuelled growth since
the mid 1990s, at the same time leading to asubstantial increase in imports, which added to
high investment income outflows, has resulted
in a current account deficit.  The recent
strength of the Trinidad and Tobago dollar,
which has resulted from the stringentmonetary policy conducted by the Central
Bank, may aggravate the current account
deficit. Despite the current weakness of oil
prices, Trinidad and Tobago's economy has
been partly shielded from negative effects bylarge direct investment inflows. However, the
economy remains vulnerable to external
shocks due to its excessive dependence on the
production and export of fuels, and a
prolonged situation of lower oil prices is likelyto take its toll on growth. Hence, to ensure
long-run economic stability Trinidad and
Tobago needs to reinforce its current policy of
diversifying away from the oil sector. This
effort will be helped by open access to markets
for its non-fuel exports.