Jamaica WT/TPR/S/242 
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IV. TRADE POLICIES BY SECTOR  
(1) INTRODUCTION  
1. Since its previous Review in 2005, in parallel with its regional trade liberalization efforts, 
Jamaica has continued to use trade policies and in centive schemes to promote specific sectors of the 
economy, including tourism, agriculture, mining, an d manufacturing.  However, the effectiveness of 
these incentives is open to question, as inflows of FDI for export production outside mining and tourism are disappointing, and the stagnant pe rformance of merchandise exports could indicate 
underlying problems in the export sectors. 
2. The extensive set of incentives for investment has made the tax system increasingly complex 
and distortive.  Nominal income and company tax rates in Jamaica are broadly similar to the average 
of other Caribbean countries.  However, accordi ng to the Inter-American Development Bank, the 
dense system of tax incentives distorts the structure of  taxation with the result that the private sector in 
Jamaica is either relatively highly ta xed or not taxed at all.  Corporate income tax is fixed at a flat 
33.3% but, among the largest taxpayers, the telecomm unications industry, the hotels/tourism industry, 
and the construction industry have a collected ra te of 2%, 5%, and 9%, respectively, due to the 
number of incentives, deductions, and credits.
1 
3. The Government is also involved in commerc ial activities in agriculture, mining, utilities, 
banking, and transport through a number of publicly  owned companies that operate on a commercial 
basis.  During the review period, the Government  has taken steps to restructure some of these 
enterprises, including through divestment and liquida tion.  Although the deficit of these public entities 
has been reduced in recent y ears, it remains high at nearly 3% of GDP in FY 2009/10.  The 
divestment of non-core assets has focused on the bigg er loss-makers, i.e. Air Jamaica and the Sugar 
Company of Jamaica, although significant losses have been recorded by the Airports Authority of 
Jamaica, Clarendon Alumina Partners, Petrojam Ethanol, Wallenford Coffee Company, and the 
Jamaica Urban Transport Corporation. 
4. The services sector employs an annual average of  around 750,000 persons or approximately 
65% of the employed labour force, while the goo ds producing sector employs an annual average of 
408,000 persons or about 35% of the labour force (Table  IV.1).  An analysis of labour productivity by 
industry for 2005-09 shows significant variations  according to sector.  The highest levels of 
productivity were in:  finance and insurance ser vices with an average output per worker of 
J$3 million; mining (J$2.7 million);  utilities (J$2.4 million);  and real estate and business services 
(J$1 million).  The average output per worker over the period was J$442,000, which reflects an 
overall decline in labour productivity of 0.8% between 2005 and 2009. 
Table IV.1 
Employment and productivity, by sector, 2002 and 2009 
 2002 
('000) 2009 
('000) Average labour productivitya 
(2005-09) (2003 J$'000) 
Goods producing sectors    
Agriculture, forestry, and fishing 213,000 227,400 122 
Mining 4,700 5,500 2,705 
Manufacturing 72,350 77,700 496 
Construction and installation 92,350 96,000 393 
Table IV.1 (cont'd)
                                                      
1 Panadeiros and Bendfield (2010), pp. 37 and 38. WT/TPR/S/242 Trade Policy Review 
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 2002 
('000) 2009 
('000) Average labour productivitya 
(2005-09) (2003 J$'000) 
Services producing sectors    
Electricity, gas, and water 7,000 8,100 2,387 
Wholesale, retail, hotels, and re staurants services 219,350 214,700 432 
Transport, storage, and communication 78,400 76,500 754 
Finance 22,300 25,600 2,972 
Real estate/renting and busin ess services 50,200 48,100 1,063 
Community/social/personal services 290,000 263,200 .. 
Other 3,200 3,800 .. 
Total employed labour force 1,036,800 1,125,500 442 
.. Not available. 
a Output per worker, i.e. real value adde d output divided by employed labour force. 
Note: Productivity data for community/social/persona l services and other services not available. 
Source:  STATIN (various issues), Labour Force Survey 2002-09 ;  and Planning Institute of Jamaica (2009), Labour 
Market and Productivity Sector Plan 2009-2030 .  Viewed at:  http://vision2 030.gov.jm/SectorPlans/tabid/75/ 
Default.aspx;  and productivity data from the Jamaica Produc tivity Centre, cited in Planning Institute of Jamaica 
(2010), Economic and Social Survey Jamaica 2009 , p. 21.14. 
5. Cognizant of the challenges posed by the high co st of energy, the Jamaican authorities have 
designed a National Energy Policy (2009-30), which is  in keeping with Vision 2030 Jamaica.  The 
goals and strategies underpinning the National Energy  Policy (Strategic Framework) cover:  security 
of energy supply through diversification of fuels;  modernizing the country's energy infrastructure;  
development of renewable energy sources, such as solar and hydro;  energy conservation and 
efficiency;  development of a comprehensive governance/regulatory framework;  and improving 
eco-efficiency in industries.  The National Energy  Policy attempts to ensure that the country 
minimizes the effects of volatile and rising crude o il prices, takes advantage of renewable resources, 
and promotes conservation and efficiency in the use of energy resources amongst all sectors of the 
society.   
(2) AGRICULTURE  
(i) Sector and trade overview 
6. Jamaica remains a net importer of agricultural products, with imports over three times higher 
than exports in 2008.  Agriculture's contribution to the overall economy has declined steadily over 
time, and represented about 5% of GDP during the review period.  Growth has been weakened 
periodically due to natural disasters and external shoc ks.  Serious declines in  growth in 2004, 2005, 
and 2007 were due to the effects of hurricanes Iv an, Dennis, and Emily, and during 2008 agricultural 
GDP shrank by 5.1% due to the effects of Hurricane D ean (Table IV.2).  Nevertheless, the agriculture 
sector remains an important, although declining, contri butor to export earnings.  Sugar, coffee, citrus 
and, until 2008, bananas are the most important crops. 
7. The sector employs about one fifth of the total labour force, and is the largest employer of 
labour in rural Jamaica.  About half of Jamaican s live in rural areas and approximately 80% of the 
poorest quintile of the population is rural.  Acco rding to the latest figures published by the 
authorities2, average annual labour productivity in agri culture between 2000 and 2004 was -3.5%, the 
worst performance of all economic sectors for that pe riod.  The agriculture sector is characterized by 
the small size of farms with 75% of ho ldings being less than one hectare. 
                                                      
2 Planning Institute of Jamaica (2009c), p. 24. Jamaica WT/TPR/S/242 
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Table IV.2 
Agriculture sector, 2004-09 
(Per cent) 
 2004 2005 2006 2007 2008 2009 
Share of GDP 5.2 4.8 5.4 5.0 4.8 5.6 
Growth rate -11.2 -6.8 16.2 -6.0 -5.1 12.1 
Share of total exports 22.2 17.3 16.7 15.4 14.6 25.9 
Share of employed labour force 18.7 18.2 18.0 18.3 18.6 20.2 
Source:  Planning Institute of Jamaica (2009), Final Draft Agricultural Sector Plan , September.  Viewed at:  
 http://www.vision2030.gov.jm/Sector Plans/tabid/75/Defa ult.aspx;  and Comtrade database. 
8. Agriculture is composed of four subsectors:  domestic crops;  livestock;  food processing, 
beverages and tobacco;  and traditional export produ cts.  The main traditional export crops, including 
sugar cane, bananas, coffee, citrus, pimento, and cocoa, contribute significantly to foreign exchange 
earnings and provide significant employment in rural areas (Table IV.3). 
Table IV.3 
Export volume of traditional crops, 2004-08  
(Tonnes) 
 2004 2005 2006 2007 2008 
Sugar 159,908 112,928 140,445 153,053 136,070 
Bananas 27,657 11,560 32,428 17,391 40 
Coffee 1,721 864 1,448 1,183 1,133 
Citrus 3,874 2,375 2,115 3,840 2,914 
Pimento 297 419 255 453 502 
Cocoa 670 200 204 471 275 
Total 194,127 128,346 176,895 178,398 142,942 
Source:  Planning Institute of Jamaica (2009), Final Draft Agricultural Sector Plan , p. 6 September.  Viewed at:  
 http://www.vision2030.gov.jm/Sector Plans/tabid/75/Default.aspx.  
(a) Sugar 
9. Sugar cane is the largest and most important crop in Jamaica and the second largest employer 
of labour with around 35,000 persons.  Over the years,  the industry has been affected by declining 
sugar and cane prices, low productiv ity, and huge losses at the Sugar Company of Jamaica, as well as 
high local production costs of US$0.20-0.23/lb, which are among the highest in the ACP countries. 
10. Until its expiry in 2009, the Lomé/Cotonou Sugar Protocol guaranteed a market for Jamaican 
and other ACP sugar exports to Europe at a set  price;  Jamaica earned on average US$75 million 
annually in foreign earnings from the export of suga r and its derivatives to the EU.  However, it 
appears that Jamaica stands to lose €24 million per year in foreign exchange earnings by 2010 as the 
EU reduces the price at which it buys sugar fro m Jamaica and other ACP countries.  The Sugar 
Protocol will be replaced by a non-reciprocal duty and quota-free preferential trade system on 
1 October 2015.  During the transition period, th e EPA regime applies, continuing some of the 
Protocol's benefits.  Guaranteed prices will be  reduced but maintained until September 2012, and 
limits on imports will apply until October 2015.  Th e measures envisaged under the Jamaica Country 
Strategy for the Adaptation of the Sugar Industry 2006-15 aim to achieve an effective transition to a sustainable private-sector-led sugar cane industry, pa rtly through divestment of all public-sector sugar 
estates and strengthening the economic diversif ication and environmental sustainability of 
sugar-dependent areas. WT/TPR/S/242 Trade Policy Review 
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11. The Sugar Industry Authority is the sole importer and exporter of raw suga r.  It also has the 
power to determine individual factory quotas as and when the necessity arises.  It is involved in the arbitration of all disputes regarding revenue sh aring, cane quality, and meeting export quotas;  
registration and licensing of cane growers;  gathering, collating, analysing, and disseminating industry 
and world sugar data through its Information and Pl anning Department;  and the sale of Jamaican raw 
sugar and molasses, which is contracted out, thr ough its agent, Jamaica Cane Products Sales Ltd. 
(b) Bananas 
12. ACP banana suppliers, including Jamaica, tr aditionally enjoyed high margins of tariff 
preferences under a system of quota-restricted access to the EU market.  EU responses to the 
long-running banana dispute in the WTO have see n the abandonment of quota-based management 
systems, and the progressive erosion of ACP margins of tariff preference.  In December 2009, an agreement was reached which concluded the dispute.
3 
13. The agreement consists of:  an agreed schedule of tariff reductions;  agreement on how to deal 
with tropical products and products subject to pref erence erosion in the wider WTO negotiations;  and 
a financial package of €190 million of assistan ce to ACP banana exporters (the Banana 
Accompanying Measures programme).  In the face of  an increase in the frequency of natural disasters 
(five storms in four years), the Jamaica Producers Group, which accounts for over 80% of total exports, decided to suspend exports to Europe, citi ng the high cost of resuscitation as the reason.  
There have been no exports of bana nas to Europe since August 2008.  As of July 2010, the internal 
EU processes towards finalizing the financial package on bananas had not been completed. 
14. A draft banana/plantain policy was developed in 2009 to increase production and productivity 
in the banana/plantain industry and local consumpti on of bananas and plantains.  The policy aims to 
develop the industry, and covers a ll aspects of banana and plantain pr oduction, regulation, marketing, 
processing, and consumption, as well as the role and responsibilities of the Government, producers, 
and other stakeholders. 
15. The Banana Board has the authority to export bananas and to grant permits to 
agencies/persons to export bananas.  Its other main  objectives are:  to keep  government informed on 
the status of the industry, and advi se when action is necessary;  to promote the interests and efficiency 
of the banana industry, to assist in its developmen t, and to institute, conduct, finance, assist, and 
superintend research activities,  experiments, and operations. 
(c) Coffee and cocoa 
16. The coffee industry is regulated by the Coffee Industry Board, a statutory body established 
under the 1948 Coffee Industry Regulation Act to encourage the development of the industry.
4  The 
Board has become the main exporter of commercial quantities of Jamaican coffee, including Jamaica's 
sought after, and costly, Blue Mountain coffee gr own at altitudes of between 1,500 and 4,000 feet 
mainly by small growers.  At the start of the review period, the Board successfully secured 
registration of its trademarks for the Jamaica Blue Mountain and Jamaica High Mountain Supreme 
                                                      
3 Geneva Agreement on Trade in Bananas in  WTO document WT/L/784, 15 December 2009. 
4 In 2004, the Coffee Industry Board was separated into the commercial and regulatory divisions.  The 
regulatory division continues to operate as the Coffee Industry Board while the commercial division now operates as Wallenford Coffee Company Lim ited, which is to be divested.  The Board's vision is for the industry 
to become profitable and environmentally sustainable through, inter alia , the monitoring and licensing of all 
stakeholders, certification of all Jamaican coffee for export, and monitoring of coffee designated for the local market. Jamaica WT/TPR/S/242 
 Page 63 
 
 
brands in major overseas markets;  it is currently reviewing its trade mark in major markets such as 
China, Japan, the United States, Canada, and Eu rope with a view to protecting the name. 
17. The Cocoa Industry Board is responsible for the ma rketing of Jamaica's cocoa internationally.  
The cocoa beans are exported mainly to Europe , the United States, and Japan.  Between 1996 and 
2006, exports declined by 86%, falling from 1,407 t onnes to 204 tonnes, due to problems including 
hurricanes, a fall in production, and a decline in wo rld prices, which affected the local price to 
farmers.  This led to a reduction in maintenance a nd rehabilitation of cocoa farms and to low yields in 
the main producing areas. 
(ii) Institutional and policy framework 
18. The Ministry of Agriculture and Fisheries (MOAF) is responsible for guiding the long-term 
sustainable development of the Jamaican agricu lture sector.  It implemented the Agricultural 
Development Strategy between 2005 and 2008 to improve the competitiveness and efficiency of the 
sector on the basis of modern technology and manage ment and increase its contribution to the national 
economy.  The Agricultural Sector Plan, finali zed in 2009, seeks to reposition the sector for 
sustainable growth and development.5  The plan recognizes the importance of agriculture as a 
contributor to long-term rural de velopment and national food security.  It is being complemented by 
initiatives to improve production and productivity through the use of new technologies and the 
restructuring of the Ministry and affiliated agencies to improve delivery of extension, marketing, and 
business facilitation services to the sector. 
19. In recognition of the importance of food safety systems, the Ministry drafted a National Food 
Safety Policy to advance the national food safety and security systems based on national and 
international standards.  A draft Plant Health Polic y was also developed to establish a coordinated, 
sustainable, and internationally compliant plant h ealth system that enhances Jamaica's plant health 
status.  According to the authorities, the allocation of  funds to the agriculture sector as a share of the 
total government budget, averaged 1.1% per annum between 2003/04 and 2007/08, compared with an 
average of 11% for education, 6.6% fo r national security, and 4.7% for health. 
20. The Ministry is responsible for a number of ag encies and statutory boards, including the Rural 
Agricultural Development Authority and the Agricu ltural Development Corporation.  The commodity 
boards include the Banana Board, Cocoa Industry Board, Coconut Industry Board, Coffee Industry 
board, Dairy Development Board, Sugar Industry Aut hority, and the Citrus Growers' Association.  
The limited liability companies include:  National Ru ms of Jamaica, Sugar Company of Jamaica, and 
the Wallenford Coffee Company. 
(iii) Trade policy 
21. A significant characteristic of the Jamaican agriculture sector during the 1980s was its high 
level of protection through import licences, reference prices, stamp duties, and quantitative restrictions.  During the 1990s and early 2000s, a series of structural adjustment programmes 
introduced substantial liberalization, and most protectionist measures were either removed or 
converted to a simple ad valorem  tariff. 
(a) Border protection 
22. Tariff rates range from 0% to 100% for agricu ltural products (WTO definition) and from 0% 
to 50% for non-agricultural products.  On average, tariff protection for agricultural products remains 
                                                     
 
5 Planning Institute of Jamaica (2009a). WT/TPR/S/242 Trade Policy Review 
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substantially higher than for non-agricultural prod ucts, at 19% and 7.3%, respectively.  Product 
groups with relatively high average tariffs include  animals and animal products, fish and fishery 
products, diary products, fruits and vegetables, and beverages and tobacco.  Stamp duties are 
generally applied on agricultural products. 
23. Other duties and charges, which usually take th e form of additional stamp duties, were bound 
at 15%, except for 55 products bound at 80% and bindings of 200% on 3 sugar products other than 
raw sugar.  When additional stamp duties are take n into account, average border protection rises from 
19% to 30.4% for agricultural products (WTO defin ition).  The highest stamp duties appear to be:  
90% (5 lines) for certain vegetables (onions, beans, ground nuts);  86% (18 lines) for edible 
vegetables;  80% (12 lines) for meat and edible ve getables;  77% (2 lines) for meat and 70% (17 lines) 
for cereals, products of the milling industry, grains , and residues from the food industry.  The main 
requirements for importing agricultural produce are:  importers must obtain pe rmits and all shipments 
must be inspected by the Plant Quarantine and Produce Inspection Unit of the Ministry. 
(b) Export and domestic support 
24. Jamaica notified the WTO that in 1998 it did not use export subsidies;  according to the 
authorities, this also true for the period 1999–09, as there has been no notification in that respect.  It 
has notified domestic support measures (green box) a pplied during the review period (Table IV.4).  
Jamaica provides a number of agricultural support services to develop the sector and enhance its 
competitiveness, including research and development relating to livestock, and extension and advisory 
services.  The Government also provides plan t quarantine and veterinary services and the 
development of technology services (e.g. improved t echnology training).  According to the notified 
data, these measures amounted to US$10.5 million during fiscal year 2004/05, US$10.8 million in 
2005/06, and US$18.5 million in 2006/07. 
Table IV.4 
Domestic support:  measures exempt from the reduction commitment "Green Box", 2004-07 
(Financial year) 
Value during the reporting period 
(US$ million) Measure type Name and description of measure 
2004/05 2005/06 2006/07 
Government services 
programmes     
General services Research and development re lating to:  feed research and evaluation of 
livestock;  research and evaluation of breeding system for dairy and meat 
animals;  and research and evaluation of husbandry system 2.5 1.35 8.0 
 Extension and advisory services:  de livered primarily to rural farmers to 
train and develop extension personne l;  assist farmers in organizing 
cooperative marketing ventures and disseminating marketing information 
to them;  provide linkage between re search organizations and farmers;  
and implementing agency for select ed farming hillside agriculture 6 7.25 8.0 
 Plant quarantine:  issues impor t and export permits and conducts 
inspection of plants and agricultura l produce to ensure that only the 
highest quality produce is imported into  and exported from Jamaica.  To 
ensure that no harmful exotic plan t pests are introduced and become 
established in the island 1.0 1.0 1.2 
 Veterinary services:  the Veterina ry Services Division oversees animal 
health, status, and welfare.  The Di vision operates a Diagnostic Laboratory 
service for the protection of the livestock  industry;  it certifies the health of 
animals;  is involved in the import/ex port inspection of live animals, meats 
and meat products;  and offers artific ial insemination services for cattle, 
pigs, and goats 1.0 1.2 1.3 
Source: WTO document G/AG/N/JAM/7, 30 June 2009. Jamaica WT/TPR/S/242 
 Page 65 
 
 
25. Incentives under the Export Industry Encouragement Act (EIEA) are not granted for 
unprocessed agricultural products but are applicable  to agri-industrial products.  To encourage 
agricultural production, the Income Tax Act, 1982, gr ants income tax relief to  any person engaged in 
an agricultural activity prescribed by the Minister  of Finance and declared "approved farmer".  
Through the Approved Farmer Status policy, farm ers growing almost all products, and companies 
involved in hatching eggs and fish farming are ex empt from income tax and duties for five to ten 
years on a renewable basis;  a duty concession rate of  20% is applied on imports of certain categories 
of vehicles.  The Ministry of Agriculture administ ers the incentive in conjunction with the Ministry of 
Finance and the Taxpayer Administration Services Department. 
(c) International competitiveness 
26. The loss of preferential access resulted in the serious decline of some traditional export 
products between 2004 and 2008, mostly associated w ith bananas and coffee.  On the other hand, 
according to the Jamaican authoriti es, the new EPA agreement preserved most of the access available 
under the Cotonou agreement.  Negotiations on a Canada-CARICOM agreement are on-going and 
creating opportunities that could have a direct impact  on agriculture and agri-business.  A significant 
improvement in the level of competitiveness is needed in order to reverse the declining trends in the 
balance of trade that has characteri zed the agricultural sector for most of the review period.  Jamaica's 
trade policy aims to foster competitiveness and maxi mize Jamaica's advantages  through initiatives to,  
inter alia :  improve the market intelligence infrastruct ure;  strengthen the certification programme;  
upgrade the trade facilitation infrastructures;  and improve the storage and distribution networks. 
(3) MINING AND QUARRYING  
(i) Industry overview 
27. The bauxite and alumina industry dominates the mining and quarrying sector, representing 
around 97% of the total value.6  Bauxite, the ore from which alumina and aluminium is derived, is 
Jamaica's most important metallic mineral.  The mi nerals industry in Jamaica essentially consists of 
bauxite mining and refining of bauxite into alumin a.  Total production of bauxite was 14.6 million 
tonnes in 2008.  Whereas in 1974, 47% of total ba uxite production consisted of alumina, in 2008 the 
share was 70%, indicating a clear progression up the value chain.  Exports of bauxite and alumina 
were valued at US$1.4 billion in 2008, represen ting 50.4% of earnings from exports of goods.  
According to the authorities, total alumina capac ity increased steadily from 3,850 kilo tonnes7 in 2002 
to 4,550 kilo tonnes in 2008.  Between 2004 and 2008, average capacity utilization at the aluminium 
refineries ranged from 87% in 2007 to 96% in 2004.  According to the long-term sector plan, mining 
also has the highest labour productivity in the Jamaican economy due, inter alia , to its capital 
intensity and advanced technology.8 
28. Jamaica is still a leading producer of bauxite, although its share of world output fell from 18% 
in 1975 to 8% of the 180 million tonnes of bauxite produced worldwide in 2005.  Jamaica's share of 
global alumina production has also declined, falling from 7.3% of total worldwide production in 2001 
to 5% in 2008 with a further 1% decline in the first quarter of 2009 due to cutbacks in production.  
According to the authorities, total bauxite production for 2009 amounted to 7,817 kilo tonnes, a decline of 46% compared with 2008.  This happe ned because some of Jamaica's alumina plants, 
                                                     
 
6 The sector comprises metallic minerals (including bauxite and gold), non-metallic minerals (including 
clay, dolomite, gypsum, limestone, marble, sand, and gravel), and semi-precious minerals. 
7 One kilo tonne is equivalent to 1,000 tonnes. 
8 Planning Institute of Jamaica (2009e), p. 10.  The plan was drawn up by the Mining and Quarrying 
Task Force in September 2009. WT/TPR/S/242 Trade Policy Review 
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which suffer from relatively high energy cost s (a serious challenge to Jamaica's global 
competitiveness), began reducing production and eventual ly closed as the global crisis worsened in 
2009. 
29. Around one third of the approximately 14 million tonnes of bauxite mined in Jamaica each 
year is shipped unprocessed to the Un ited States.  The rest is process ed in four alumina refineries:  
Windalco, Jamalco, Alpart, and Noranda Bauxite Limited, the only company that ships the raw 
bauxite ore (Table IV.5).  It is a capital-intens ive industry, and directly employed only 3,020 persons 
at end-February 2009, down from nearly 7,000 in 1975, as a result of rationalization and modernization.  Due to the global economic downturn, which resulted in the closure of Alpart and 
both Windalco plants, plus an initial cutback in produc tion by St Ann Bauxite Partners (which became 
Noranda Bauxite Ltd in 2009), by the end of 2009 the sector directly employed only 1,259 persons. 
Table IV.5 
Bauxite and alumina industry structure, 2010 
Company Operations Ownership Capacity Situation in mid-2010 
Alumina Partners of 
Jamaica (Alpart) Mining operations in Manchester 
and St. Elizabeth;  refining alumina in Nain (St. Elizabeth);  
and shipping alumina from 
Port Kaiser UC Rusal:  65%;   
Hydro Aluminium:  35% 1.7 million tonnes
a Closed 
Jamalco Mining bauxite in Manchester;  
refining alumina at Halse Hall (Clarenton);  and shipping 
alumina at Rocky Point Port 
(Clarenton) Alcoa:  55%;   
Government of Jamaica:  45%
c 1.5 million tonnesb GOJ seeking to divest shares 
Noranda Bauxite 
Ltd.d The only company in Jamaica 
that exports raw bauxite ore, 
primarily to the Gramercy refinery in Louisiana.  It does so 
from Port Rhoades in Discovery 
Bay Century Aluminium 
Company and Apollo:  
49%;   Government of 
Jamaica:  51% 4.7 million tonnes Plant producing at capacity 
West Indies Alumina 
Company 
(WINDALCO) Mining and refinery operations in 
Manchester, and St. Catherine 
ownership UC Rusal:  93%;   
Government of 
Jamaica:  7% 1.3 million tonnese Kirkvine plant remains 
closed;  Ewarton plant 
re-opened in July 2010.  GOJ seeking to divest its interests in WINDALCO joint venture 
a To be expanded to 2 million tonnes per year. 
b Being expanded to a maximum of 2.8 million tonnes per year. 
c Clarendon Alumina Production (CAP) manages the Government's 45% interest in Jamalco. 
d Formerly St.  Ann Bauxite Jama ica Bauxite Partners (SAJBP). 
e Kirkvine Works:  675,000 tonnes;  and Ewarton Works:  625,000 tonnes. 
Source:  Jamaica Bauxite Institute;  and WTO Secretariat. 
30. Jamaica's main competitors for the production of  metal grade alumina are China, Australia, 
the United States, and Brazil;  competition for bauxit e is mainly from Guinea, Australia, and Brazil.  
Jamaica benefits from shallow deposits of relativel y high-grade ore, which can be strip-mined at 
relatively low cost, and enjoys a transport cost adva ntage in terms of proximity to the important North 
American market.  Canada is Jamaica's leading market for metal grade alumina, accounting for 26% 
of total shipments in 2009 (Table IV.6). 
31. Despite these advantages, Jama ica's competitiveness is adversely affected by the relatively 
high cost structure in the energy-intensive alumin a refining stage.  Data provided in the Mining and 
Quarrying Sector Plan show that the energy cost in Jamaica's bauxite and alumina industry increased 
by 229% in the 2004-08 period.9  In 2008, fuel and energy costs represented 48% of the total 
                                                      
9 Planning Institute of Jamaica (2009e), p. 10. Jamaica WT/TPR/S/242 
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operating cost of production, highlig hting that reducing the cost of energy is essential for the future 
competitiveness of the industry. 
Table IV.6 
Alumina shipments, by destination, selected years 
(Tonnes and % share) 
 2000 2004 2008 2009 
Total (tonnes) 3,642,538 4,024,461 4,034,558 1,875,452 
 (%) 
North America 39 33 30 32 
United States 23 1 11 6 
Canada 16 32 19 26 
Europe 53 46 68 63 
Netherlands 20 14 15 7 
Norway 16 6 6 7 
France 6 5 15 7 
United Kingdom 7 4 6 8 
Other 4 17 26 34 
Other 8 21 2 5 
China 2 20 0 4 
Source: WTO Secretariat calculations, ba sed on data provided by the Ministry of Mining and Energy. 
32. During 2004 to 2008, mining and quarrying repr esented on average around 4% of Jamaica's 
GDP.  It is one of the largest single contributors of  foreign exchange and the largest single contributor 
to government revenue.  Mining's contribution to total export earnings declined from 65.8% in 2004 
to 36.6% in 2009, and accounted for 56.6% of export  earnings on average.  Through the quarry tax 
and royalties and the bauxite levy, the industry cont ributed an annual average of 2.5% of total tax 
revenue during the review period. 
33. However, in 2009 the Jamaican bauxite industry collapsed and three of the four alumina 
factories closing down.  The closures were in res ponse to the global recession and its negative impact 
on the price and demand for aluminium, and the dec line in crude bauxite production was in response 
to lower international demand for alumina.  Real value added in the mining and quarrying industry 
declined by 50% in 2009, and the industry's contribution to overall GDP declined to 2% from 3.8% in 2008.  Preliminary export earnings  totalled US$455 million, down from US$1,349 million in 2008, 
reflecting a 66% decline in the value of alumina and crude bauxite exports. 
34. The closure of three of the country's four alumina plants resulted in the loss of over 
2,000 direct, fulltime, and relativel y high-paying jobs, plus a furthe r 5,000 indirect jobs associated 
with the bauxite and alumina sector.  Government  revenues and the country's foreign exchange 
earnings have also suffered as a result of the fallout.  To facilitate the sector's revival, the Government 
agreed to introduce a new fiscal regime for the sector .  This will change the treatment of the bauxite 
levy, and provide other facilitating arrangements to  help companies to reopen and upgrade their 
plants. 
35. Industrial minerals are used in their natural a nd processed state in the construction, chemical, 
manufacturing, and other industries;  examples in clude limestone, gypsum, sand and gravel, volcanic 
materials, semi-precious minerals, and shale, wh ich are commercially exploited in Jamaica.  The 
industrial minerals industry has the potential to significantly increase its contribution to Jamaica's 
foreign exchange earnings through the export of c onstruction aggregates and a range of value-added 
mineral-based products.  In 2009 , Jamaica earned US$1.4 million from exports of 98,539 tonnes of WT/TPR/S/242 Trade Policy Review 
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limestone aggregates, value-added products, gyps um, sand, and gravel to Barbados, Colombia, 
Trinidad and Tobago, the United States, and Venezuela. 
(ii) Policy and institutional framework 
36. The main laws governing the minerals industry are the Mining Act, the Quarries Control Act 
and related Regulations, the Minera ls (Vesting) Act, and incentive legislation for the bauxite and 
alumina industries.  Under the Bauxite and Al umina Industries Encouragement Act, a business 
engaged in mining activities automatically qualifi es for import duty concessions on capital equipment, 
lubricating oils, grease, blasting materials, and chem icals and other materials (except petrol) necessary 
for the winning, treating, and tran sportation of bauxite.  Within the mining sector, oil refineries also 
benefit from tax incentives.  The Petroleum Refine ry Encouragement Act provides these firms with 
relief from customs duties and general consumption ta x on imported articles used in the construction, 
manufacture, and operation of the refineries. 
37. A National Minerals Policy is being prepared to guide the sustainable development of the 
minerals industry.  This process began in 2003 wi th the formation of the National Minerals Policy 
Development Committee with representation from the public and private sectors.  A draft policy was 
submitted for Cabinet's considera tion in June 2007.  A second draft was submitted in 2009 but was 
withdrawn to facilitate its alignment with the Mi ning and Quarrying Sector Plan of Vision 2030, 
which is currently under way and should be comp leted by the end of 2010.  The draft National 
Minerals Policy was used to guide the development of the Mining and Quarrying Sector Plan.  Both 
outline strategies aimed at developing the entire minerals industry, and place particular focus on the 
industrial minerals sector, which the government fo resees as first complementing, but eventually 
replacing the mature bauxite and alumina sector. 
38. The industrial minerals industry has traditi onally been limited to small-scale quarrying 
activities primarily providing raw materials for "low -end" uses in construction.  For the foreseeable 
future, the overwhelming bulk of output is projec ted to be used for "low-end" applications.  
According to the authorities, it is unlikely that th e industry will replace the bauxite and alumina sector 
in terms of earnings, but its contribution may be significant, especially in creating employment.  The 
Government's has tried to facilitate development of the industrial minerals industry, by making 
available bulk ports facilities, including underutilized  ports under the control of the bauxite and 
alumina sector. 
39. The Ministry of Energy and Mining has overall policy responsibility for developing the 
mining and quarrying.  The Ministry's Mines an d Geology Division supervises all prospecting, 
mining, and quarrying operations on the island.  Th e Minerals Policy and Development Division is 
responsible for policy developmen t and industry modernization. 
40. The Government has various agencies to manage its interest in the industry.  The main one, 
the Jamaica Bauxite Institute, began operating in 1976 to advise on, monitor and implement policies 
on all aspects of the industry, as well as to conduct technical and economic research.  The Jamaica 
Bauxite Mining Company (JBM) was set up to hold the assets acquired from partnerships or joint 
ventures, and the Bauxite and Alumina Trading Company was established to carry out trading 
activities on behalf of JBM.  Clarendon Alumin a Production (CAP) Limited was set up in 1985 to 
hold and manage the Government's 50% share of  the Jamalco operation with Alcoa.  Since 
April 2007, CAP's share of the joint venture h as been adjusted to 45%.  The Government has 
committed to divest its interest in the sector, and the assets targeted for divest ment include the shares Jamaica WT/TPR/S/242 
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of Clarendon Alumina Production10 and in UC Rusal's WINDALCO operations, which are held and 
managed by JBM. 
(4) MANUFACTURING  
(i) Sector overview 
41. Manufacturing's share of total GDP declined from 9.6% in 2004 to 8.3% in 2009, with the 
food, beverages and tobacco subsectors accounting fo r over half the share.   According to the 
authorities, real GDP declined by 7.6% during th e same period.  Manufacturing's share of total 
employment averaged 6.5%.  According to 2007 data, the main subsectors in manufacturing sector 
are:  food (35%), alcoholic beverages and tob acco products (14%), chemicals (10%), non-metallic 
mineral products (8%), metals (7%), and furniture a nd wood products (4%).  Real value added for the 
manufacturing sector was estimated to have declined by 5% during 2009.  Manufacturers were assisted in surviving the impact of the global cris is on the industry through a stimulus package, which 
included removal of customs user fees payable on cap ital goods and raw materials;  adjustment in the 
government procurement policy in favour of local  manufacturers, and reduction in the time allowed 
for depreciation of the cost of capital equipment. 
42. Compared with a number of developed and developing countries, growth of labour 
productivity has been very slow (Chapter I).  Data  from the Jamaica productivity centre indicate that 
labour productivity in manufacturing has reflected the overall decline in labour productivity in the 
Jamaican economy.  Based on the relationship be tween real value-added GDP and the employed 
labour force in manufacturing, unit labour pr oductivity fell by 18% between 1972 and 2007.
11  T o  
improve national productivity, the  Government is focusing on improving the education and skills 
level of the work force;  adoption of modern pr oduction, technology, and management practices;  
retooling and equipment upgrading;  and increased a pplication of research and development in the 
manufacturing process. 
43. Exports of processed foods, rum, and mineral fu els increased significantly, during the review 
period, while exports in most other categories declin ed (Table IV.7).  Data provided by the authorities 
for 2009 indicate a steep reduction in the value of ma nufactured exports relative to 2008, of the order 
of 40%.  This was attributable in large measure to the global economic and financial crisis and the 
resultant downturn, which affected the demand for goods and services. 
Table IV.7 
Manufacturing sector exports, 2004 and 2008 
(% share) 
 2004 2008 Average growth rate 2002-06a 
Traditional 30 12 3.4 
Sugar 22 8 1.5 
Raw 7 3 11.2 
Non-traditional 70 88 37.1 
Processed foods 11 10 25.5 
Mineral fuels 7 35 89.6 
Ethanol 0 32 n.a. 
Beverage and tobacco 14 4 -5.3 
Table IV.7 (cont'd)
                                                      
10 Following on its commitment to divest its interest in the sector, the Government entered into an 
agreement with a Chinese firm (Hongfan),  in March 2010, for the sale of CAP. 
11 Planning Institute of Jamaica (2009e), p. 13.   WT/TPR/S/242 Trade Policy Review 
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 2004 2008 Average growth rate 2002-06a 
Manufactured goods 3 0.3 -23.4 
Chemicals 17 4 -9.7 
Others 48 14  
a Compound annual growth rate. 
n.a. Not applicable. 
Source:  Planning Institute of Jamaica (2009), Manufacturing Sector Plan 2009-30 , p. 8, December.  Viewed at:  
http://www.vision2030.gov.jm/Sector Plans/tabid/75/Default.aspx;   and WTO Secretariat. 
(ii) Policy framework 
44. The main policy framework for the manufacturi ng sector is the National Industrial Policy of 
1996, complemented by the comprehensive long te rm Vision 2030 National Development Plan, which 
seeks to place Jamaica in a position to achieve develope d country status by 2030.  A Sector Plan for 
Manufacturing, one of the strategic plans that fo rm the foundation for Vision 2030, seeks to improve 
the performance and competitiveness of the sector, the business environment and the economic and 
market opportunities for manufacturing, and the environmental sustainability of the sector. 
45. The manufacturing sector benefits from a number of incentives, including the Export Industry 
Encouragement Act, the Jamaica Export Free Zone Ac t, the Industrial Incentive Factory Construction 
Act.12  The Export Industry Encouragement Act, one of the principal incentive programmes available 
to manufacturers, encourages investment and the growth of manufacturing export industries.  It 
provides full income tax relief in relation to expor t production for hard currency markets outside of 
CARICOM, and duty-free imports of raw materi als and capital goods for use in the production 
process.  Partial exporters are provided income tax re lief proportional to the levels of exports.  Income 
tax, import duty, and GCT benefits are allowed by statute for ten years.13  However, pursuant to the 
WTO General Council Decision of July 2007, this incentive, which has been  ruled as a prohibited 
export incentive, will not continue  beyond 2015.  Audits of oper ations for both full and partial 
exporters are carried out by the Customs Depa rtment, and penalties under the Customs Act are 
applicable for false or misleading information. 
46. Other incentive schemes to en courage investments include the Modernization of Industry 
Programme (provides for a waiver of GCT chargeab le on the acquisition of machinery and equipment 
directly related to eligible manufacturing and/or  quarrying operation);  Customs User Fee Waiver 
(waiver of the Customs User Fee on capital equipment and raw material for the first three years of 
operation of the entity);  and Acce lerated Depreciation on Capital Pr ogramme (manufacturers are able 
to write off the cost of capital equipment over a period of one year instead of two years). 
47. The Ministry of Industry, Investment and Commerce assumes responsibility for guiding the 
development of the manufacturing sector.  Other agencies involved in the sector include:  the Bureau of Standards, the Companies Office, Customs, the Fair Trading Commission, the Anti-Dumping and 
Subsidies Commission, JAMPRO, the Trade Board, a nd the Jamaica Intellectual Property Office.  The 
main industry association is the Jamaica Manufac turers' Association, with over 250 member 
companies in a range of subsectors. 
                                                     
 
12 In accordance with the terms of an IMF/World Bank Agreement with the Government of Jamaica, no 
concessions have been granted under the 1956 Industrial Incentives Act (enacted to en courage the growth of the 
local manufacturing sector), since November 1986.  The Jamaica Expor t Free Zone Act is discussed in 
Chapter III. 
13 Manufacturers are exempt from payment of GCT on manufactured products being exported. Jamaica WT/TPR/S/242 
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48. The manufacturing sector has been particularly affected by the global recession as well as by 
trade liberalization at the global and regional leve ls, which have increased the competition faced by 
the sector, both in export market s and in the domestic market.  The main challenges for Jamaican 
manufacturing related to trade and competitiveness fo r the manufacturing include high energy costs, 
high costs of capital, costs of transport and procedures for import and export, and the cost of 
compliance with product and process standards. 
(5) SERVICES SECTOR  
(i) Overview 
49. The services sector accounted for over three quarters of GDP in 2009 and employed around 
two thirds of the labour force.  The size of its main service industry, tourism, makes Jamaica an 
important exporter of services.  There is  currently little government involvement in 
telecommunications and financial services, and market access is relatively open in those sectors. 
50. Under the General Agreement on Trade in Services (GATS), Jamaica participated in the 
extended negotiations on basic telecommunications a nd financial services, and presented offers in 
both negotiations.  Insurance, where foreign ow nership was limited, was liberalized in the 
WTO Negotiations on Financial Services, but Jamaica has not yet ratified the Fifth Protocol to the 
GATS.  In its conditional 2005 offer on services14, Jamaica maintains no market access restrictions 
with respect to commercial presence, as total forei gn ownership is allowed in all sectors, with the 
exception of the preference for joint ventures in certain professional services and real estate services;  certain telecoms services (e.g. mobile and cellular se rvices) are subject to a discretionary government 
licence.  In the CARIFORUM-EC EPA, the libera lization target for the bigger Caribbean states, 
including Jamaica, was 75% of service sectors.  A ccording to the authorities, Jamaica has improved 
on its GATS commitments and added new commitments in several sectors, including:  a range of professional and business services;  telecoms;  construction;  educational services;  environmental services;  financial services;  health services;  tourism;  maritime transport;  and air and road transport services. 
51. The recent imposition of GCT on imported services moves responsibility for GCT from the 
supplier of services to the recipient.  While the GCT Act imposes GCT on the importation of both goods and services, the Act historically lacked an  effective mechanism to assess and collect GCT on 
services provided by non-resident service providers .  A legislative mechanism introduced in 2003 to 
remedy this was not enforced at the time due to a number of legal and administrative issues, and, as of 
September 2010, is not yet operationa l.  According to the authorities, the rationale for the imported 
service regime is to create a level playing field,  which would have a positive impact on Jamaican 
business as they would remain competitive. 
(ii) Financial services 
52. A financial crisis in 1996-97, which cost around 40% of GDP, helped to shape Jamaica's 
financial system.  The banking and insurance sector s moved towards consolida tion and, in 2001, the 
Financial Services Commission (FSC) began operations, while the Bank of Jamaica retained supervision of deposit-taking ins titutions.  Collaboration between the two regulatory authorities is 
facilitated through the Financial Regulatory Council , which is mandated to develop policies and 
strategies to facilitate coordination and informa tion-sharing between the various supervisory and 
related agencies operating in the Jamaican financial sector. 
                                                     
 
14 WTO document TN/S/O/JAM, 8 June 2005. WT/TPR/S/242 Trade Policy Review 
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(a) Sector overview 
53. Financial services contributed on average betw een 11% and 12% to GDP during the review 
period and provided employment for 74,000 in 2009 (up from 58,000 in 2005).  Total assets rose from 
around 164% of GDP  in 2004 to 174% in 2009.  All segments of an advanced financial system are 
present and closely interconnected via a small numbe r of dominant conglomerates (Table IV.8);  
several have foreign parent companies or overseas activities.  A major development in recent years 
has been the growth of the security dealers sector, facilitated in part by industry deregulation and 2002 
legislation to separate banking from non-banking activ ities, resulting in the large transfer of funds 
under management from merchant banks to securities d ealers, regulated by the FSC, and an attendant 
increase in dealers' assets. 
Table IV.8 
Financial system structure, 2004 and 2009 
(J$ million) 
 2004 2009 
Commercial banks   
Number of institutions 6 7 
Total assets 350,463 583,100 
Percent share to total financ ial sector assets 34.0 32.9 
Merchant banks   
Number of institutions 4 2 
Total assets 49,943 31,955 
Percent share to total financ ial sector assets 4.8 1.8 
Building societies   
Number of institutions 4 4 
Total assets 80,401 159,384 
Percent share to total financ ial sector assets 7.8 9.0 
Credit unions   
Number of institutions 50 47 
Total assets 28,548 56,517 
Percent share to total financ ial sector assets 2.8 3.2 
Financial houses and trust companies   
Number of institutions 1 1 
Total assets 1,180 1,531 
Percent share to total financ ial sector assets 0.1 0.1 
Life insurance companies   
Number of institutions 7 5 
Total assets 68,199 153,897 
Percent share to total financ ial sector assets 6.6 8.7 
Non-life insurance companies   
Number of institutions 13 12 
Total assets 40,360 44,668 
Percent share to total financ ial sector assets 3.9 2.5 
Unit trust funds   
Number of institutions 10 4 
Total assets 13,686 702 
Percent share to total financ ial sector assets 1.3 0.0 
Securities firms   
Number of institutions 30 29 
Total assets 300,667 512,506 
Percent share to total financ ial sector assets 29.1 28.9 
Table IV.8 (cont'd)Jamaica WT/TPR/S/242 
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 2004 2009 
Pension funds   
Number of institutions .. 31 
Total assets 98,533 228,640 
Percent share to total financ ial sector assets 9.5 12.9 
Total assets 1,031,980 1,772,900 
Percent of GDP 166.4 174.1 
.. Not available. 
Source:  Information provided by the Jamaican authorities. 
54. The financial sector is relatively stable and we ll-capitalized and has been highly profitable in 
the context of high interest rates on government se curities.  As of December 2009, the solvency 
indicator was adequate as reflected by the capital adequacy ratios of both the banking system and the non-deposit-taking sector.  The CAR was 17.9% up from 15.2% in 2008 (Table IV.9).  The quarterly 
return on assets has remained largely unchanged si nce 2006.  However, there are signs that the 
Jamaican financial sector has suffered from the eff ects of the international financial crisis.  The 
non-performing loan ratio (NPLs over total loans)  for commercial banks increased from 2.9% in 2008 
to 4.1% in (September) 2009, to 5.3% in (March) 20 10.  Over the same period, the ratio of provisions 
for loan losses over NPLs declined from 88.2% to 70.1%. 
Table IV.9 
Financial sector indicators, 2006-10a 
(Per cent) 
 2006 2007 2008 2009b 2010c 
Balance sheet growth (year on year)  
Capital base 13.2 11.7 13.3 11.5 11.6 
NPL 6.0 14.2 57.6 60.4 73.2 
Liquidity      
Loans/deposits 56.2 63.5 75.4 74.3 71.0 
Assets quality      
Provision for loan losses/NPLs 101.2 103.4 88.2 78.6 70.1 
NPLs to total loans 2.6 2.3 2.9 4.1 5.3 
Capital adequacy      
Capita base/total assets 9.4 9.2 9.6 10.1 10.3 
Capital adequacy ratio (CAR) 17.1 16.0 15.2 17.9 18.7 
Profitabilityd      
Pre-tax profit margin 21.8 24.5 21.7 15.5 17.9 
Return on average assets 0.7 0.8 0.8 0.5 0.6 
Interest rate spreade      
Average weighted loan rate 17.6 17.1 16.8 16.2 .. 
Average weighted deposit rate 5.0 4.9 5.2 4.6 .. 
Overall spread 12.6 12.2 11.6 11.6 .. 
.. Not available. 
a Commercial banks, building so cieties, and merchant banks. 
b September. 
c March. 
d Figures are for the calendar quarters. e Commercial bank interest rate spread, December. 
Source:  Bank of Jamaica. 
55. The main systemic risk is the dependency of  the domestic financial system on government 
debt, which accounts for nearly 80% of liquid assets.  In recent years, ponzi schemes were a threat to WT/TPR/S/242 Trade Policy Review 
Page 74 
 
 
the integrity of financial markets in Jamaica.  Some of these schemes were not domiciled in Jamaica 
but solicited funds from residents, while others we re based in Jamaica and solicited investments from 
overseas and/or had affiliates in other countries.  The FSC, as the regulator of the securities market, 
implemented a range of measures to halt the prolif eration of these schemes.  These measures included 
cease and desist orders, referrals for criminal pro secution, and an intensive national public awareness 
and education campaign.  The Government also enunc iated a clear policy position that there would be 
no government-supported bailout when these schemes collapsed.  The recent collapse of some of 
these schemes has reduced their attractiveness to th e public, and did not appear to significantly 
threaten financial sector stability.  During 2010  work has significantly advanced on developing 
legislative amendments to strengthen the capacity  of financial regulators of deposit-taking and 
non-deposit-taking institutions to combat the esta blishment and proliferation of ponzi schemes.  A 
public consultation paper is expected to  be published before the end of 2010. 
56. Although the Bank of Jamaica has introduced aspec ts of conglomerate supervision (e.g. fit 
and proper assessments of principals of the parent  company of licensed entities and requirement for 
the submission of annual audited financial statem ents of all members of the conglomerate group of 
which the licensee is a part), the Bank has identified a need to widen its supe rvisory scope consistent 
with international standards.  Further to legisla tive amendments in 2002, the Bank has been involved 
in monitoring the reorganization/restructuring of fi nancial groups that contain a deposit-taking entity.  
Under Jamaica's current borrowing programme with  the IMF, the authorities will pursue further 
reforms that will build on the consolidated s upervision framework established by legislative 
amendments in 2002.  This will include powers to designate an existing entity as a financial holding 
company and prescribe the roles a nd responsibilities of these entities. 
57. According to the authorities, the Caribbean Fi nancial Action Task Force (FATF) evaluated 
Jamaica's anti-money-laundering and combating of terrorism financing (AML/CFT) framework 
during 2005.  The results showed that the framewo rk satisfied 23 out of the 40 recommendations of 
the FATF on money laundering and 5 of the 8 speci al recommendations on terrorism financing.  
Several of areas of deficiency have been addressed with the passage of, inter alia , the Terrorism 
Prevention Act (2005);  the Proceeds of Crimes Re gulations (2007);  the Fi nancial Investigations 
Division Act (2010) as well as the Terrorism Prevention Regulations (2010). 
58. Jamaica underwent an IMF/World Bank Financ ial Sector Assessment Programme during 
2005.  With specific regard to the Basel Core Pr inciples review, the report indicated an overall 
improvement in ratings as against the 2002 assess ment conducted by the IMF.  In the 2005 
assessment, Jamaica was adjudged "compliant" or "largely compliant" with 90% of the core 
principles, up from 80% in 2002.  The Bank of Jamaica's goal is to achieve fullest possible compliance with the Basel Core Principles by end 2009, which will be a critical component in the 
roadmap for transition to Basel II.  According to information on its website, the BoJ has scheduled 
adoption of Basel II under a four-phased approach leading to full implementation by 2012.
15 
59. With respect to the securities sector, the 2005 FSAP noted that substantial progress had been 
made in strengthening oversight of the securities market and aligning the supervisory framework with 
international best practices.  The Securities Act,  with its various ame ndments and regulations, 
provided a comprehensive scheme of regulation that  facilitated effective s upervision of Jamaica's 
securities markets.  It was also not ed that the FSC's approach of combining prudential requirements 
                                                      
15 The first phase involves implementation of precond itions for Basel II, includi ng full compliance with 
the Basel Core Principles and fullest possible implementation of consolidated supervision;  the second phase 
will focus on implementation of Pillar II (supervisory revi ew principles);  the third phase, implementation of 
Pillar III (market discipline requirements);  and th e final phase full adoption of Pillar I (quantitative 
assessments). Jamaica WT/TPR/S/242 
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and conduct of business rules that emphasize disclosur e and governance structures, together with the 
general improvements in accounting a nd valuation standards, have help ed to strengthen the industry.  
However, some areas required further work, in cluding strengthening of prudential standards, 
rationalizing the regulatory framework for collec tive investments schemes (CIS) and improving the 
regulatory framework for consolidated and conglome rate supervision.  Subs tantial progress has been 
made in developing proposals for prudential an d CIS reforms during 2010, and proposals for 
strengthening consolidated supervision are expected to be developed before the end of FY 2010/11. 
60. Regarding the insurance sector, the 2005 FSAP noted that:  supervision has strengthened 
markedly in recent years and the regulatory and supervisory framework is  closely aligned with 
international best practices;  supervision focuses on ensuring that companies have appropriately 
developed risk management systems and incentives to report their operations in a transparent manner;  
and prudential requirements a ppropriately seek to ensure sufficient capital coverage. 
61. The legislative framework was enhanced duri ng the review period (Box IV.1).  These laws 
establish the key principles and supervisory power s, including:  licensing and pre-qualification 
criteria;  minimum capital requirements;  exposure li mits;  cash and liquidity reserves requirements;  
non-performing loan classification and provisioning crite ria;  routine prudential reporting and regular 
on-site examinations.  The authorities have also continued to strengthen the financial regulatory 
framework during the review period in order to ma intain stability and adapt to new developments. 
Box IV.1:  Legislative framework and recent development s 
Overview of legislative framework 
Principal legislation:  Bank of Jamaica Act, Banking Act,  Financial Institutions Act, and Building Societies Act 
Subsidiary legislation:  Banking (Establishment of Branches) Regulations, Banking (Amalgamation and Transfers) 
Regulations, Banking (Capital Adequacy) Regulations, Banki ng (Licence Fees) Regulations, Financial Institutions 
(Establishment of Branches) Regulations, Financial In stitutions (Amalgamation and Transfers) Regulations, 
Financial Institutions (Capital Adequacy) Regulations, Financial Institutions (Licence Fees) Regulations, Bank of 
Jamaica (Building Societies) Regulations, and Building Societies (Licences) Regulations 
Summary of legislative developments, 2005-10 
2010 
Jamaica continued to be involved in negotiations aimed at finalizing the Draft CARICOM Financial Services 
Agreement (CFSA).  These negotiations are at an advanced stage.  The CFSA is designed to give substantive 
effect to Chapter Three of the Revised Treaty of Chaguaramas – which deals with, inter alia , establishment, 
services, and capital.  In the creation of the region's single market and economy, the CFSA is expected to play a critical role by assisting the establishment of harmonized legal provisions to govern the financial services industry 
in the Community. 
2008 The Credit Bill was tabled in Parliament in July 2008 (and passed in August 2010) The Financial Investigation Division Bill was tabled in Parliament on 12 November 2008 2007 The Proceeds of Crime Act was passed in Parliament in March and entered into effect during May 2007 The Anti-Money Laundering/Counter-Financing of Terrorism Guidance Notes were revised, incorporating gaps 
identified during the Caribbean Financial Action Task Force 2005 Anti-Money Laundering Country Review, and issued to the industry in March 2007 
Box IV.1 (cont'd) 
 WT/TPR/S/242 Trade Policy Review 
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2006 
In March 2006, four regulations were passed in Parliament, allowing the Financial Services Commission to begin 
active supervision of the pensions industry 
In August 2006, the sale, issue, and distribution of "stored valued cards" were designated as "banking business" The Anti-Money Laundering/Counter-Financing of Terrorism Guidance Notes were amended (and to be gazetted 
in 2010) 
2005 
The Pensions (Superannuation Fund and Retirement Schemes) Act was made effective in March 2005 The Companies Act 2004 became effective in February 2005 The Financial Services Commission (Overseas Regulatory Authority) (Disclosure) Regulations 2005 became 
effective on 6 May 2005 
The Anti-Money Laundering/Counter-Financing Terrori sm came into effect on 3 February 2005 
Source:  Planning Institute of Jamaica;  and Bank of Jamaica. 
(b) Banking 
62. Three kinds of deposit-taking institution (DTI) are supervised by the BoJ under a common 
regulatory framework.16  The most important are seven commercial banks17, two of which account for 
about 70% of the assets, and five have foreign pa rents.  Commercial banks continue to command the 
largest share of the market, accounting for 75% of system assets (Table IV.10).  The other DTIs are 
merchant banks (FIA licensees) and building societies.   In practice, the BoJ acts independently but in 
principle it gives the Minister of Finance the final say on a number of important operational issues, 
including the granting or revocation of licences and re medial actions.  In addition to the 14 institutions 
supervised by the Bank of Jamaica there were 45 cred it unions in operation at the end of 2009.  Credit 
Unions have been designated by the Minister of Fi nance as "specified financial institutions" under the 
supervisory regime of the Bank of Jamaica, whic h enables the bank to obtain information on their 
operations. 
Table IV.10 
Number and market share (assets) of li censed deposit-taking entities, 2007-09 
(Year end) 
 2007 2008 2009 
 Number J$ billion % Number J$ billion % Number J$ billion % 
Commercial banks 6 504.2 74.8 7 559.2 76.5 7 583.1 75.2 
Building societies 4 122.9 18.2 4 138.4 18.9 4 159.4 20.5 
FIA licenseesa 4 47.2 7.0 3 33.3 4.5 3 33.4 4.3 
Total 14 674.3 100.0 14 730.9 100.0 14 775.9 100.0 
a Merchant banks licensed under the Financial Institutions Act. 
Source: Bank of Jamaica (2010), Annual Report 2009 , p. 67. 
63. Commercial banks are regulated by the Ba nking Act 1992 and the Banking (Amendment) 
Acts 1997, 2002 and 2004.  Licensing requirement s are the same for foreign-owned and domestic 
                                                      
16 The BoJ also supervises  the so-called money services businesse s:  cambios, bureaux de change, and 
remittance companies. 
17 Bank of Nova Scotia Jamaica, First Caribbe an International (Jamaica), Citibank, National 
Commercial bank Jamaica, First Global bank, RBTT Bank Jamaica, and Pan Caribbean Bank. Jamaica WT/TPR/S/242 
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banks.  Foreign banks may establish either branches or subsidiaries.  However, foreign banks that 
establish branches must also satisfy a global minimum capital requirement.  The same capital-fixed-asset and credit-limit exposures appl y to foreign and domestic-owned banks.  No 
distinction is made between domestic  and foreign banks with respect to the services they can provide.  
Merchant banks and finance houses are licensed u nder the Financial Institutions Act and building 
societies under the Building Societies Act. 
64. The International Financial Companies Act was p assed in 1971 with the intention of offering 
reduced rates of income tax for prescribed operations by non-residents.  A company incorporated in or 
outside of Jamaica qualifies as an international fina nce company (IFC) if at least 95% of the issued 
share capital and voting power is held by non-reside nts.  Similar relief is offered on dividends and 
loan income paid to a non-resident arising from th ese activities.  While this law is still on the books, it 
has been kept in abeyance and the tax authorities do not grant approvals under this law.  However, the 
authorities have indicated that Jamaica is set to est ablish an International Fi nancial Services Centre 
(IFSC) that will offer targeted, sophisticated servi ces to encourage the growth of professional and 
financial services in Jamaica to support th e needs of international companies. 
(c) Non-deposit-taking institutions 
65. This sector is supervised by the Financia l Services Commission and covers insurance 
companies (17 at end-2009), securities dealers (48), and several unit trusts, private pension funds, and 
mutual funds.  Although securities dealers dominate the non-bank sector with assets of approximately 
50% of GDP in 2004 and 47% in 2009,  Jamaica also has a well-established insurance sector.  The life 
and non-life sectors are concentrated;  three largest  companies account for about 82% and 48% of 
their respective sector assets and final contro l of the life sector rests mainly abroad. 
66. The insurance industry is regulated by the In surance Act 2001, Insurance Regulations 2001, 
the Insurance (Actuaries) (Lif e Insurance Companies) Regula tions 2001, and the Insurance 
(Actuaries) (General Insurance Companies) Regulat ions 2002, which cover registration and licensing, 
corporate governance, internal controls, and solvency requirements.   Jamaica is a member of the 
International Association of Insurance Supervis ors (IAIS), and the Cari bbean Association of 
Insurance regulators, which set guidelines for best practices in the insurance industry. 
67. The Securities industry is governed by The Secu rities Act, enacted in 1993 and last amended 
in 2001.  The attendant regulations include the Securities (Licensing and Registration) Regulations, 
the Securities (Conduct of Business) Regulations, the Securities (Disclosure of Interest) Regulations, 
the Securities (Mutual Funds) Regulations, the Secu rities (Take-overs and Mergers) Regulations, and 
the Securities (Central Securities Depository) Regula tions.  Certain activities in the securities market 
are also governed by the Unit Trusts Act, enacted in  1971 and last amended in  2001.  Regulations for 
unit trusts are contained in the Unit Trusts (Nominees) Regulations, 2009, the Unit Trusts 
(Registration of Schemes) (Amendment) Regulations , 2009, the Unit Trusts (Amendment of Schedule 
to Principal Act) Regulations, 2009, the Un it Trusts (Books and Documents) (Amendment) 
Regulations, 2009, the Unit Trusts (R egistration of Schemes) Regula tions and the Unit Trusts (Books 
and Document) Regulations.  Jamaica is designa ted as a Signatory B member of International 
Organization of Securities Commissions (IOSCO) and the Caribbean Group of Securities Regulators (CGSR). 
68. The Pensions Industry is regulated by The Pensions (Superannuation Funds and Retirement 
Schemes) Act, the Pensions (Superannuation Funds  and Retirement Schemes) (Specified Pension 
Funds and Specified Pensions Scheme) Regulati ons, 2005, the Pensions (Superannuation Funds and 
Retirement Schemes) (Registration, Licensing and Reporting) Regulati ons, 2006, the Pensions WT/TPR/S/242 Trade Policy Review 
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(Superannuation Funds and Retirement Schemes) (G overnance) Regulations, 2006, and the Pensions 
(Superannuation Funds and Retirement Schemes) (Investment) Regulations, 2006.  Jamaica is a 
member of the International Organisation of Pensions Supervisors (IOPS) and the Caribbean 
Association of Pension Supervisors (CAPS). 
(d) GATS commitments 
69. Jamaica made commitments on financial services in both the Uruguay Round and the 
extended negotiations that led to the Fifth Protoc ol.  In its GATS Schedule of Specific Commitments 
with respect to banking and othe r financial services, Jamaica listed as unbound the acceptance of all 
types of deposits and other repayable funds from the public, as well as lending of all types for all 
modes of supply, with the exception of commercia l presence.  There are no market access or national 
treatment restrictions for the provision of banking services through commercial presence, except that foreign banks are subject to higher capital require ments than local banks.  In its 2005 Doha Round 
conditional offer, Jamaica has made  no offers in the banking sector. 
70. Jamaica's UR commitments in both life and non-life insurance were enhanced in the 
negotiations on financial services, although Jamaica has not yet ratified the GATS Fifth Protocol.
18  In 
its 2005 conditional offer, Jamaica' s proposed financial services commi tments are limited to life and 
non-life insurance services.  Regarding commercial presence, the policy that insurance entities should 
be at least 51% Jamaican has been reviewed  to allow fully foreign-owned establishments. 
(iii) Telecommunications 
71. The level of competition in the communications  sector has increased si gnificantly since the 
liberalization of the telecommunications and broadcas t media regimes, and has led to a large increase 
in the number of providers, a decrease in  the cost of international telephone calls19, and a strong 
increase in Jamaica's teledensity.  The combined contribution of communications, and storage and 
transport (data for the two subsectors are reported t ogether in Jamaica's GDP statistics) has remained 
more or les constant during th e review period at around 12%, with growth in these sectors 
significantly outperforming overall GDP growth.  Comb ined employment in 2008 was slightly under 
80,000. 
(a) Market overview 
72. Telecommunications is among the sectors in which liberalization has advanced the fastest in 
recent years.  Expansion and investment in th e telecommunications industry has been among the 
highest in the Jamaican economy, particularly since 1999 when the monopoly on telephone services 
by Cable and Wireless Jamaica Limited (C&W) was lifted.  Jamaica has three main mobile providers;  
Cable and Wireless Jamaica Limited (LIME), Digicel Jamaica Limited (trading as Digicel), and Oceanic Digital Jamaica Limited (trading as Claro) .  Each mobile provider has established its own 
network, which interconnects the other mobile ne tworks as well as with the fixed-line networks, 
operated by LIME, Digicel, and Colum bus Communications (trading as Flow). 
73. Inclusion of new mobile operators in  2000 increased mobile penetration from 
14.2 per 100 persons (in December 2000) to 107.8 in 2009, partly reflecting the prevalence of more 
than one cell phone per person because of high cro ss-network connection charges.  The global trend 
of increasing mobile penetration coupled with decreas ing fixed-line penetration has also been evident 
                                                     
 
18 WTO document S/FIN/M/44, 21 April 2004. 
19 According to the Office of Utilities Regulation, international calling rates (in J$/minute) have fallen 
from around J$27 in 2000 to J$10 in 2010 for fixed and about J$15 for mobile. Jamaica WT/TPR/S/242 
 Page 79 
 
 
in Jamaica.  The number of fixed lines fell from over 342,000 in 2006 to 302,337 in 2009 
(Table IV.11).  Mobile penetration has surpassed fixed line penetration primarily due to innovative 
pricing strategies (prepaid subscriptions), lowe r deployment costs for mobile networks, and 
competition in the provision of mobile services. 
Table IV.11 
Telephone subscribers, by category, 2005-09 
 2005 2006 2007 2008 2009 
Fixed lines 319,000  342,692  369,656  316,591 302,336 
Residential ..  243,940  272,329  225,784 214,652 
Business ..  98,752  97,327  90,807 84,684 
Mobile lines  1,981,464  2,274,650  2,684,331  2,723,323 2,909,915 
Pre-paid ..  2,214,289  2,606,106  2,639,077 2,812,997 
Post-paid ..  60,361  78,225  84,246 96,918 
Total telephone subscribers  2,300,464  2,617,342  3,053,987  3,039,914 3,212,251 
Teledensity  86.5  97.8  113.8  113.0 119.0 
Internet ..  73,572  96,203  104,219 112,469 
Narrowband ..  6,325  3,435  3,080 148 
Broadband  3,400  68,243  92,768  97,732 112,299 
.. Not available. 
Source:  Planning Institute of Jamaica (2010), Economic and Social Survey of Jamaica 2009 , p 16.7. 
74. Since the liberalization of the telecommunications regime, there has been an impressive 
increase in the number of telecommunications lic ences granted in Jamaica, from two in 2000 to 
441 by 2008 (Table IV.12) and 446 by 2009.  The number of internet service provider (ISP) licences granted in Jamaica increased from 45 in 2001 to 82 by 2008.  The Government estimates the number 
of internet subscribers at around 112,000.  Howeve r, broadband penetration remains relatively low at 
4.2 subscribers per 100 inhabitants in 2009
20, with potentially adverse consequences on Jamaica's 
competitiveness.  The Government awarded spec trum licences to Digicel and C&W to offer 
broadband services in the 3.5 GHz band. 
Table IV.12 
Number of telecom li cences granted, 2002-08  
 2002 2003 2004 2005 2006 2007 2008 Total 
Internet service provider (ISP) 12 3 14 2 4 1 1 82 
ISP for subscriber television operators 
(STVO) 0 0 0 0 0 0 0 7 
International voice service provider 
(IVSP) 10 6 5 1 0 0 0 53 
Domestic carrier (DC) 8 8 7 2 3 2 1 42 
Domestic voice service provider (DVSP) 8 13 6 2 0 3 1 50 
Data service provider (DSP) 2 5 1 2 2 0 0 34 
Free-trade zone carrier (FTZC) 2 1 0 0 1 0 0 11 
Free-trade zone service provide (FTZSP) 1 0 0 0 0 0 0 8 
International (voice/data) transit (IC) 0 48 20 5 3 2 1 79 
International (voice/data) service 
provider (INTL.SP) 0 41 21 7 3 2 1 75 
Total 43 125 74 21 16 10 5 441 
Source:  Planning Institute of Jamaica (2010), Economic and Social Survey of Jamaica 2009 , p 16.7. 
                                                      
20 Does not include mob ile internet users. WT/TPR/S/242 Trade Policy Review 
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75. Jamaica's advanced telecommunications infrastructure includes a 100% digital 
telecommunications network, submarine fibre-optic  transmission ring around the island, international 
submarine cable links through the Cayman-Jamaica fibre system, the recently installed Columbus 
Communications' Fibralink system to the Dominican Republic and the spur to the Florida-Colombia 
cable.  Recent developments include the award of  a licence for submarine facilities to link Cuba and 
Jamaica and connect with the proposed Cuba-Venezuela cable system. 
(b) Regulatory framework 
76. The office with portfolio responsibility for the communications sector, currently the Office of 
the Prime Minister, has responsibility for providing the overall policy framework to guide the 
development of the sector.  Prior to 2009, the mi nistries responsible for the communications sector 
were the Ministry of Industry, Technology, Energy, and Commerce, then the Ministry of Energy, Mining and Telecommunications, and then the Mi nistry of Mining, and Telecommunications.  The 
office recently led the development of the revised  draft Telecommunications Policy 2007 to provide 
an updated policy framework for the sector.  Subs equently, the Government introduced the draft 
Information and Communication Technology Policy in  2009, which is aligned with the ICT Sector 
Plan of Vision 2030, and provides the framework for the drafting of a proposed ICT Act.  
77. The policy has declared as its mandate the establishment of an island-wide modern 
telecommunications network, universal service for all Jamaicans, and wide deployment of broadband 
services.  The Policy Principles include the recognition of telecommunications as a development instrument, establishment of universal service a nd access, respect for technology neutrality, and 
fostering competition.  The Fair Trading Commissi on (FTC) is responsible for ensuring equitable 
competition among players in the sector.   
78. The ICT sector is governed by several laws, including the:  Telecommunications Act (2000);  
Post Office Act (1941);  Radio and Telegraph Control Act (1973); Broadcasting and Radio 
Re-Diffusion Act (1944);  Electronic Transactions  Act (2006);  Fair Competition Act (1993);  
Consumer Protection Act (2005);  and Office of Utilities Regulations Act (1995).  The Agencies 
involved in the regulation of the sector include: 
− the Office of Utilities Regulation (OUR):  the OUR, inter alia , receives and processes 
applications for a licence to provide telecommunications services;   
− the Spectrum Management Authority:  the Aut hority's main functions are to: license and/or 
authorize users of the spectrum; collect the rele vant fees for use of the spectrum; preserve the 
spectrum rights of all legitimate users; ensure  the maintenance of frequency bands that are 
free from interference and unauthorized use.  The SMA manages the radio frequency 
spectrum in accordance with the rules and regulations of the International 
Telecommunications Union;   
− the Broadcasting Commission (BCJ):  the Commission's role is to monitor and regulate the 
electronic media, broadcast radio and television, as well as subscriber television industries.  It is a statutory body established by the Broad casting and Radio Re-Diffusion Amendment Act 
of 1986;   
− the Fair Trading Commission (FTC):  the Co mmission's role is to monitor and regulate 
competition matters in conjunc tion with the OUR;  and  Jamaica WT/TPR/S/242 
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− the Consumer Affairs Commission:  the Commission's role is to, inter alia , protect the rights 
of consumers, in conjunction with the OUR. 
(c) IT-enhanced services 
79. The robustness of the country's telecommunicati ons infrastructure has enabled and facilitated 
the growth of a vibrant information technology en abled services (ITES) subsector, which has been 
identified as a strategic industry for support and deve lopment.  The ITES subsector consists of contact 
centres, business process outsourcing (BPO), and in formation technology (IT).  Contact centres 
dominate Jamaica's ITES.  The country's ITES mark et is moving to deliver higher-value services 
including finance and accounting (F&A), HR out sourcing (HRO), legal process outsourcing (LPO), 
research and development (R&D), and software development and testing. 
80. According to the authorities, Jamaica leads the English-speaking Caribbean in the outsourcing 
market with nearly 10,000 full time employees in  the 28 local and multinational companies (MNCs) 
offering offshore services.  The heart of the ITES in dustry is in the Montego-Bay Freezone but there 
are also centres in Kingston and Portmore – the English-speaking Caribbean's largest middle-income 
dormitory city (400,000 residents).  Technology pa rks are being developed to house the ITES industry 
in northern and central parts of the island.  The Government is working to develop a strong ITES 
industry and is strengthening the policy framework  through the revision and streamlining of the 
incentives targeting the industry.  Under the Jamai ca Export Free Zones Act, incentives (tax relief on 
profits for an indefinite period and exempti on from customs duty on imported capital goods and raw 
materials) are offered to enterprises in export free zones, carrying out information services such as 
data processing, software development, telemarketing and medical transcription. 
(d) GATS 
81. Jamaica did not table commitments on telecomm unications in the Uruguay Round.  However, 
it accepted commitments on telecommunications in th e Fourth Protocol of the GATS containing the 
results of the extended negotiations on telecomm unications.  The Schedule contains limitations on 
market access (commercial presence and cross-borde r supply), which reserve voice telephone services 
for a single supplier until September 2013.  Si nce the conclusion of the negotiations on 
telecommunications services, Jamaica has moved to liberalize several of the services listed in its 
schedule. 
(iv) Tourism 
82. Tourism is a significant contributor to the ec onomy and government ta x revenue and is the 
main source of foreign exchange earnings.  Averag e annual GDP growth for the hotels and restaurants 
sector between 2004 and 2008 was 4.5%.  In 2009 , although the tourism industry was negatively 
affected by the global economic crisis, the hotels and restaurants subsector grew by an estimated 1.4% 
and contributed 5.8% to overall GDP.  The hotels a nd restaurants subsector employed an average of 
79,000 persons in 2009 compared with  slightly over 80,000 in 2008.  The decline reflected the closure 
of some hotels and tourist entities due to the impact of the global downturn, which affected international travel. 
83. Since independence, the tourism sector has shown robust growth.  Visitor arrivals to Jamaica 
increased over tenfold, from around 272,000 in 1962 to nearly 2.9 million in 2008 (Table IV.13), 
roughly divided between 60% stopover arrivals a nd 40% cruise passengers.  The United States 
represents about 65% of Jamaica's stopover visito rs, Canada 13%, and the United Kingdom 11%.  The 
average length of stay of foreign national stopovers  during 1999-08 was 9.9 nights per visitor.  Gross WT/TPR/S/242 Trade Policy Review 
Page 82 
 
 
estimated expenditure by tourists reached almost US$2 billion in 2008 although this was estimated to 
have declined by 2% in 2009 (to US$1,939 million). 
Table IV.13 
Performance of the tourism sector, 1962, 1982, and 2008 
 1962 1982 2008 Annual growtha 
Total visitor arrivals 271,692 670,202 2,860,544 5.25% 
Tourism receipts (US$ milli on) 34.7 337.8 1,975.5 9.18% 
Number of visitor accommodati on rooms 3,736 10, 327 29,794 4.62% 
a Compound annual growth rate from 1962 to 2008. 
Source:   Jamaica Tourist Board. 
(a) Policy framework 
84. The Ministry of Tourism is responsible for t ourism development within the framework of a 
number of statutes, including:  Jamaica Tourist Board Act, Tourism Enhancement Fund Act, Hotel 
Incentives Act, and the Resort Co ttages (Incentives) Act.  The agen cies under the Ministry include:  
the Jamaica Tourist Board, which markets and promotes Jamaican tourism;  Jamaica Vacations, which 
manages airlift capacity;  the Tourism Product Deve lopment Company, which is responsible for the 
development and quality of the tourism product;  a nd the Tourism Enhancement Fund, tasked with 
providing funding for development projects in the tourism sector. 
85. The Government promotes the development of tourism by encouraging investments in the 
sector, supporting product development with physical infrastructure (e.g. airports, cruise ports, and 
highways) and services (e.g. security, labour fo rce training), and destination marketing. 
86. Investment in tourism has been promoted ma inly through generous tax incentive schemes 
(Table IV.14).  The Hotels (Incentives) Act provi des income tax relief and import duty concessions 
for up to ten years for approved hotel enterprises21, and 15 years for convention-type hotels with not 
less than 350 bedrooms and conference facilities.22  Both types of investment qualify for an 
abrogation of import duties for the same period as their tax holidays, and the industry provides for fast-track processing of applications for work perm its for foreigners wanting to work in Jamaica's 
tourism sector.  During 2009, ten hotels represen ting 724 new rooms benefited under the HIA, with 
capital investment of J$19.3 billion. 
Table IV.14 
Incentives/programmes to the tourism industry, 2008-09 
Concessions granted 
Incentives/programmes Period Benefits 2008 2009 
Hotel Incentives Act 10-15 years Relief from income tax, customs duty, and GCT 9 10 
Resort Cottages Incentives Act 7 years Relief from income tax, customs duty, and GCT 4 4 
Attraction Incentives Max. 5 years Relief from customs duty and GCT 9 9 
Ground transportation Ongoing Relief from customs duty and GCT 532a 422a 
Work permits Ongoing Assistance with  fast tracking applications of 
foreign nationals   
a Duty concessions granted to car re ntal entities to import motor vehicles. 
Source:  Planning Institute of Jamaica (2010), Economic and Social Survey of Jamaica 2009 , p. 17.2, based on Ministry of 
Tourism data. 
                                                      
21 Approved hotel enterprises must have ten or more bedrooms with facilities for meals and 
accommodation for transient guests, including tourists. 
22 To be increased to 500 rooms. Jamaica WT/TPR/S/242 
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87. The Resort Cottages (Incentives) Act provides r ecognized resort cottages with income tax 
relief for up to seven years and import duty concessions on imported building materials and 
furnishings.  Benefits under the 2003 Attractions Incentives Program include import of specific items 
free of GCT and customs duty for five years, and a five-year exemption from corporate taxes for 
investors, both are at the Finance Minister's discretion.  In 2009, four properties benefited from the 
RCIA, representing 43 new rooms with proj ected capital investment of J$162 million. 
88. The Tourism Ground Transportation Sub-Industry Incentive Policy, established a number of 
incentive regimes for, inter alia , car rental operators, tour companies offering package tours, and 
independent operators.  During 2009,  a total of 422 duty concessions were granted to car rental 
entities to import motor vehicles.  In response to th e economic recession, the Government put in place 
a stimulus package for car rental operators (inc luding customs duty reductions) with effect from 
September 2009 and ending 31 March 2010. 
89. The tourism fee (Tourism Enhancement Fund23) contributed about 1.5% of all tax revenue in 
2005.  Foreign exchange earnings reached nearly  US$2 billion in 2008, ro ughly equivalent to 80%  of 
all goods exports, including bauxite and alumina.  Since 1962, foreign exchange earnings from 
tourism have been increasing at an average annual rate of 9%.  According to Jamaica Tourist Board 
statistics, employment in the tourism industry is estimated at around 35,000 persons.  Foreign direct 
investment in the tourism industry averaged US$144 million annually over 2003-07, representing 19% of total foreign investment inflows over the period. 
90. In an effort to diversify the tourism industr y, the Government has enacted legislation to 
support the establishment of casino gaming facilities with in integrated resort development schemes.  
The investment criteria include a minimum level of overall investment (US$1.5 billion) and a cap (20%) on the size of the casino investment as a proportion of the total investment for the resort development.  Members of the Casino Gaming Co mmission were appointed in  July 2010 and will 
lead in the development of the regulations to accompany the Act. 
91. Goods and services supplied by the tourism sector are taxed at a reduced GCT rate;  this was 
increased to 10% as of 1 April 2010 (previously 8.25% ).  According to the authorities, the increase 
will translate into higher costs for the industry.  The tourism sector did not easily accept the increase 
but recognized that the Government needed the revenue to help stabilize the economy. 
92. The main policy documents guiding the industry are the Master Plan for Sustainable Tourism 
Development and the Tourism Sector Plan of Vision 2030 Jamaica.  The Master Plan aims to return 
the industry by 2010 to the rapid growth rates ach ieved during the 1980s.  It envisages annual growth 
of 4% in visitor accommodation over the ten-year  period from 2003 to 2012 (Table IV.15).  A recent 
review of the Tourism Master Plan showed that the industry exceeded its targets for room stock by 
9.3%, but that stop-over and cruise-passenger arriva ls, visitor expenditures, and employment were 
below expectations. 
                                                     
 
23 The TEF was established in 2005 to provide financing for the development of tourist attractions.  It is 
funded through a fee of US$10 charged to incoming airline passengers and US$2 charged to cruise passengers.  In March 2009, TEF resources were around J$4.2 billion. WT/TPR/S/242 Trade Policy Review 
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Table IV.15 
Tourism Master Plan targets, 2000-10 and actual 
 
Baseline 2000 Plan growth rate 
(% p.a.) Target 2010 Actual 2009 
Stop-over arrivals ('000) 1,323 5.5 2,200 1,831 
Cruise passengers ('000) 908 10.0 2,200 922 
Visitor expenditure (US$ million) 1,333 8.4 2,935 1,938 
Room stock 23,640 4.0 35,000 38,248 
Employment 75,000 5.7 130,000 79,000 
GDP contribution (%) 8 .. 15 .. 
Net forex contribution (U S$ million) 800 8.2 1,800 918a 
.. Not available. 
a According to the authorities, no accurate fi gure is available for net foreign exchange contribution.  This estimate is based on an 
 import coefficient of 526 estimated in 1998.  A new study is being commissioned to measure the current import coefficient. 
Source: Information provided by the Jamaican authorities. 
(b) Trade policy 
93. Jamaica's Initial Conditional Offer on Services24 in the Doha Round GATS negotiations, 
made in 2005, places no limitations on market access, except for registration and licensing requirements, for cross-border supply, consum ption abroad, and commercial presence, for the 
activities of hotels, restaurants, travel agencies, and tour operators.  There are no national treatment 
limitations.  The movement of natural persons remains unbound. 
94. However, tourism negotiations in the WTO have  not made significant progress.  According to 
the CRNM (Caribbean Regional Negotiating Machinery) Secretariat, the EPA negotiations represented an opportunity to reap benefits not achieved in the WTO in  terms of creating useful rules 
for the sector and to strengthen the capacity of  CARIFORUM operators to increase tourism exports 
and competitiveness.
25  In the EPA negotiations, Jamaica added marina services, spa services and 
rental and leasing of yachts. 
(v) Transport 
95. The Ministry of Transport and Works was re-est ablished in 2007.  Th e Ministry prepared a 
national transport policy to provide a framework fo r the future development of the sector and the 
creation of an efficient transport system for p assengers and freight by air, sea, road, and rail.26  It was 
tabled as a White Paper on 30 May 2007. 
(a) Air transport 
96. Jamaica did not make any specific commitment under the GATS with respect to air transport 
and has not made any commitments in the Doha Round.   Jamaica's policy towards liberalization in air 
transport services is to grant market access throu gh bilateral agreements.  Jamaica has bilateral 
aviation agreements with 21 countries, including an  open-skies agreement with the United States.  
The agreement with the United States was signed in  October 2008 although it w as initiated in 2002 on 
the understanding that it would be applied provisionally  (the agreement conceded  to Jamaica the right 
to serve any point without restriction).  Air Jamaica increased the number of points served from 
4 gateway points across the United States in 1979 to 11 by 2002. 
                                                      
24 WTO document TN/S/O/JAM, 8 June 2005. 
25 Caribbean Regional Negotiating Machinery (2008). 
26 Ministry of Transport and Works (2007). Jamaica WT/TPR/S/242 
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97. Jamaica is an island state and a tourist destina tion, thus highlighting the role and significance 
of air transport on the nation's economy.  In Ma rch 2010, the Government of Jamaica adopted an 
open-skies policy, calling for Jamaica to pursue more liberalized air services agreements with as many 
states as possible.27  Key features of an open-skies regime include:  an open route schedule including 
behind, intermediate, and beyond points with full 3rd, 4th, and 5th freedom traffic rights, and 
7th freedom for all cargo operations;  operational fl exibility;  designation based on the Principal Place 
of Business and CARICOM Designation;  no limits on the number of airlines that can be designated;  liberal code-sharing arrangements between airlines of both parties and market-based tariff regimes. 
98. Partly because of this agreement, Air Jamaica h as a significant role in the aviation sector with 
over 45% market share (1.7 million annual passengers ), but the national carrier has been unprofitable 
for many years, accumulating a $1.54 billion defic it during its 42-year history.  In 2009, the 
company's total operating revenue was US$257 million compared to with US$439 million in 2007.  The decline reflected lower revenue in both the passenger and cargo categories.  On 1 May 2010 
Caribbean Airlines, the state-owned carrier of Tr inidad and Tobago, assumed control of Air Jamaica 
and took over Air Jamaica's 7 routes and 1,000 employees.  During a transition period, which is 
expected to take between 6 and 12 months, the company is called Caribbean Airlines Air Jamaica 
Transition Ltd.  Air Jamaica will keep its equipm ent and offices at airports in Jamaica, and the 
Government will retain a 16% share in Caribbean Airlines, which will fly Air Jamaica's 140 weekly 
flights between Montego Bay and Kingston to Fo rt Lauderdale, New York, and Philadelphia. 
99. The Ministry of Transport and Works has ove rall responsibility for air transport policy 
formulation and implementation.  The Jamaica Civil Aviation Authority (JCAA), a statutory 
organization within the Ministry regulates the industry and oversees all air navigation activities, 
including economic aspects, and matters relating to sa fety in civil aviation in Jamaica.  Air transport 
services are regulated by, inter alia , the Civil Aviation Act 1966, as amended in 1994, 1995, and 
2004;  the Civil Aviation (Air Transport Licensing) Re gulations 1966;  and the Airports Authority Act 
1974, as amended in 1997.  The Airports (Economi c Regulation) Act 2002, establishes the framework 
for the economic regulation of Jamaica's airports.  The Act grants the JCAA the legal authority to 
regulate scheduled airports, presently Sangster Intern ational and Norman Manley International, which 
handled over 5 million passengers in 2008.  The JC AA has the authority to regulate certain airport 
charges and deal with public interest issues including anti-competitive behaviour. 
(b) Maritime transport 
100. According to the authorities, Jamaica has a well-developed maritime infrastructure with 
14 seaports, including 3 cruise-ship facilities
28, and accommodated 3,586 vessels in 2008, handling 
30.3 million tonnes of cargo (a third was tranship ment cargo), and 1.09 million passengers.  In 2009, 
Jamaica accommodated 3,397 vessels, and abou t 25 million tonnes of cargo was handled with 
transhipment cargo accounting for about 10.5 milli on tonnes.  The port of Kingston accounted for 
over two thirds of the vessel calls and over half of  tonnage handled.  There are 45 Jamaican flagged 
vessels totalling 200,000 gross tonnes trading worldwid e.  There are plans to privatize the Kingston 
Container Terminal. 
                                                      
27 With a view to facilitating air service negotiations between states and improving the efficiency of 
negotiating processes, talks were held with 14 countries at the ICAO Air Services Negotiation Conference 
(ICAN) held in Montego Bay in July 2010.  The countries were:  South Africa, Burkina Faso, Ghana, Senegal, 
Nigeria, Liberia, Ethiopia, Uganda, Switzerland, Iceland,  India, United Arab Emirat es, Bahrain, and Kuwait.  
Several memoranda of understanding as well as agreed minutes were signed between Jamaica and other states. 
28 The Falmouth Cruise Ship Terminal is scheduled  to accommodate its first two cruise ships in 
November 2010, carrying an estimated 3,000 passengers.  The terminal is slated to become fully operational by 
March 2011. WT/TPR/S/242 Trade Policy Review 
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101. The Maritime Authority of Jamaica, a stat utory body established under the Shipping Act, 
1998, regulates matters relating to merchant shipping.  The Authority is responsible for registration of 
ships and regulating seafarers certification;  regula ting the safety of shipping as regards construction 
and navigation;  inspecting ships for the purposes of maritime safety and prevention of marine 
pollution;  and administering policy for the development of shipping in general.29  It also administers 
an international Ship Registry.  The Port Authorit y of Jamaica (PAJ) has regulatory responsibility for 
the operation of all ports.  It is also mandated to  provide and operate, and to maintain and improve 
port facilities and other services. 
102. Maritime transport activities are governed by the Shipping Act 1998, the Port Authority Act 
1972, and the Harbours Act 1874.  Jamaica is a member  of the UN Convention on a Code of Conduct 
for Liner Conferences.  Jamaica has ratified a num ber of International Maritime Organization (IMO) 
conventions as well as the United Nations Convention on the Law of the Sea.  Jamaica has exempted 
cargo reservation from MFN treatment in its Doha R ound conditional offer, limiting it to signatories 
of the Convention for an indefinite period.  Jamaica made a specific commitment on freight transportation. 
103. Foreign ships may participate in local trade pr ovided they meet the conditions set out in the 
Shipping (Local Trade) Regulations, 2003.  Under th e Shipping Act, to be recognized as Jamaican, a 
ship must be registered or licensed.  Jamai can nationals and businesses, foreign companies and 
partnerships, and persons deemed  to belong to Jamaica pursuant to the Immigration Restriction 
(Commonwealth Citizens) Act are qualified to own a Jamaican ship;  foreign nationals require a 
resolution from the House of Representatives. 
104. Under the Shipping Incentives Act (1979), owners of Jamaican ships may benefit from fiscal 
incentives.  Jamaican ships engaging in foreign trad e may be declared "exempted ships";  the entities 
that own or operate an exempted ship (approved sh ipping entities) may be exempted from income tax 
in respect of gains derived from ownership or oper ation of the ship for ten years, renewable.  
Approved shipping entities are also exempt from tran sfer tax, stamp duties, and customs duties and 
GCT on imports to be used for the operation of an exempted ship and on articles imported for the 
construction, repairing, etc. of a ship. 
105. The Container Security Initiative (CSI) devel oped by the United States Customs is aimed at 
protecting the global trading system and the trade lo ans between counterpart na tions, and to target all 
containers that pose a potential threat.  The Cabinet authorized the Port Authority of Jamaica (PAJ) to 
make an application to the United States Custom s and Border Protection for membership of the 
Container Security Initiative.  The CSI Declarati on of Principles among the U.S. Customs and Border 
Protection, the U.S. Department of Energy, the Mi nistry of Housing, Transport, Water and Works, 
and the Ministry of Finance was signed on 20 June 2006 in Washington D.C.  Jamaica has benefited through the CSI programme, as it is a requirement  for its membership in the National Nuclear 
Security Administration (NNSA) Megaports Initiative. 
                                                     
 
29 Ministry of Housing, Transport, Water, and Works (2007), p. 30. Jamaica WT/TPR/S/242 
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