RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/151 
17 August 2005  
 
(05-3549) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
TRINIDAD AND TOBAGO 
 
Report by the Secretariat 
 
  
 
This report, prepared for the second Tr ade Policy Review of Trinidad and 
Tobago, has been drawn up by the WTO Secretariat on its own responsibility.  
The Secretariat has, as required by th e Agreement establishing the Trade Policy 
Review Mechanism (Annex 3 of the Ma rrakesh Agreement Establishing the 
World Trade Organization), sought clarif ication from Trinidad and Tobago on its 
trade policies and practices. 
 
Any technical questions arising from this  report may be addressed to Mr. Angelo 
Silvy (tel. 022 739 5249), and Mr. Raymundo Valdés (tel. 022 739 5346). 
 
Document WT/TPR/G/151 contains the policy statement submitted by 
Trinidad and Tobago. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Trinidad and Tobago. Trinidad and Tobago WT/TPR/S/151 
 Page iii 
 
 
CONTENTS 
 Page 
SUMMARY OBSERVATIONS vii 
 (1) I NTRODUCTION  vii 
 (2) E CONOMIC ENVIRONMENT  vii 
 (3) T RADE AND INVESTMENT POLICY FRAMEWORK  vii 
 (4) M ARKET ACCESS IN GOODS  viii 
 (5) O THER MEASURES AFFECTING TRADE  ix 
 (6) S ECTORAL POLICIES  ix 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC DEVELOPMENTS  1 
 (i) Economic structure 1  (ii) Production and employment 3 
 (iii) Monetary and exchange rate policy 4 
 (iv) Fiscal policy 7  (v) Balance of payments 9 
 (3) T
RADE AND INVESTMENT FLOWS  11 
 (i) Developments in merchandise trade 11 
 (ii) Trade in services 12 
 (iii) Foreign direct investment 12 
 (4) O UTLOOK  13 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 14 
 (1) O VERVIEW  14 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  14 
 (i) General constitutional and legal framework 14 
 (ii) Trade and investment policy objectives 15  (iii) Trade policy formulation and implementation 16 
 (3) F
OREIGN INVESTMENT REGIME  17 
 (4) I NTERNATIONAL RELATIONS  19 
 (i) World Trade Organization 19 
 (ii) CARICOM and re lated agreements 20 
 (iii) Non-reciprocal arrangements 23  (iv) Other agreements and negotiations 25 
 (5) T
RADE -RELATED TECHNICAL ASSISTANCE  25 
III. TRADE POLICIES AND PRACTICES BY MEASURE 27 
 (1) O VERVIEW  27 
 (2) M EASURES AFFECTING IMPORTS  28 
 (i) Customs procedures 28 
 (ii) Rules of origin 29 
 (iii) Customs valuation 30  (iv) Tariffs 31 
 (v) Other duties and taxes 41 WT/TPR/S/151 Trade Policy Review 
Page iv 
 
 
 Page 
 (vi) Import prohibitions and licensing 42 
 (vii) Quantitative restrictions 45 
 (viii) Anti-dumping and countervailing duties 45  (ix) Safeguards 48 
 (x) Standards and technical regulations 49 
  (xi) Sanitary and phytosanitary measures 51 
 (3) M
EASURES AFFECTING EXPORTS  53 
 (i) Export procedures 53 
 (ii) Export taxes 54  (iii) Export licensing 54 
 (iv) Export tax and duty concessions, including free zones 55 
 (v) Export financing and credit insurance 57  (vi) Export promotion 59 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  59 
 (i) Legal framework for businesses including taxation 59  (ii) Competition policy and price controls 60 
 (iii) Incentives and other government assistance 62 
 (iv) State-trading and other state-owned enterprises 65 
 (v) Government procurement 67 
 (vi) Trade-related intellectual property rights 70 
IV. TRADE POLICIES BY SECTOR 75 
 (1) O
VERVIEW  75 
 (2) A GRICULTURE  76 
 (i) Features and market developments 76 
 (ii) Policy objectives and administration 77 
 (iii) Policy instruments 78 
 (3) H YDROCARBONS  83 
 (i) Features 83 
 (ii) Policy objectives 86  (iii) Legal framework and incentives 86 
 (4) O
THER MANUFACTURING  89 
 (i) Features 89  (ii) Policy considerations 90 
 (5) E
LECTRICITY  90 
 (6) S ERVICES  92 
 (i) Overview 92 
 (ii) Financial services 93 
 (iii) Telecommunications 102 
 (iv) Maritime transport and ports 105 
 (v) Civil aviation and airports 106  (vi) Tourism 108 
REFERENCES   111 
APPENDIX TABLES  113 
 Trinidad and Tobago WT/TPR/S/151 
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 Page 
CHARTS 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Frequency distribution of MFN tariff rates, 2004      34 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Sectoral composition of GDP, at current market prices, 1999-04 2 
I.2 Basic economic indicators, 1999-04 3 I.3 Main monetary indicators, 1999-04 6 
I.4 Financial accounts of the Central Government, 1998-04 8 
I.5 Balance of payments, 1999-04 10 I . 6  T r a d e  i n  s e r v i c e s ,  1 9 9 9 - 0 3          1 2  
I.7 FDI stock, 1980-03         12 
 
III. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 I I I . 1  C A R I C O M  r u l e s  o f  o r i g i n          3 0  
III.2 Tariff structure, 2004         32 
III.3 Summary analysis of Trinidad and Tobago's MFN tariff, 2004     32 III.4 Specific duties, 2004         34 
III.5 Import surcharges, 1999-05        35 
III.6 Items for which the applied MFN tariff (2004) exceeds the final bound rate   37 III.7 Excise duties, 2004         42 
III.8 Import licensing requirements, 2004       43 
III.9 Anti-dumping investigations initiated 1998 to May 2005     47 III.10 Exports requiring a licence        54 
III.11 Direct economic impact of free-zone activities, 1999-04     57 
III.12 Trinidad and Tobago's membership in intern ational agreements on intellectual property rights 70 
 
IV. TRADE POLICIES BY SECTOR 
 IV.1 Price support programme:  gu aranteed prices, 2005      79 
IV.2 Price and input support, 1999-04        79 
IV.3 Domestic support to agriculture, 1999-03       80 
IV.4 Incentives to the agriculture sector        81 
IV.5 Agricultural Development Bank approvals and disbursements, 1998-04    82 IV.6 Crude oil and natural gas production, 1999-04      84 
IV.7 Petroleum taxation in Trinidad and Tobago       88 
IV.8 Production and exports of steel products and cement, 1999-03     89 IV.9 Summary of electricity rates, January, 2005       92 
IV.10 The financial system in Trinidad and Tobago, 2004      94 
IV.11 Commercial bank performance indicators, 1999-03 97 IV.12 Selected indicators of st ock market activity, 1998-03 100 WT/TPR/S/151 Trade Policy Review 
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 Page 
 
APPENDIX TABLES  
 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports and re-exports by group of products, 1998-03 115 AI.2 Merchandise imports by group of products, 1998-03 116 
AI.3 Merchandise exports and re-exports by trading partner, 1998-03 117 
AI.4 Merchandise imports by trading partner, 1998-03 118  
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 AII.1 Summary of Trinidad and Tobago's notifications to the WTO, 1998 to February 2005 119 
 
IV. TRADE POLICIES BY SECTOR  
AIV.1 Summary of Trinidad and Tobago's specific commitments in individual service sectors 121 
 
 
 
 
  
 Trinidad and Tobago WT/TPR/S/151 
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SUMMARY OBSERVATIONS 
 (1) I
NTRODUCTION  
1. Since Trinidad and Tobago's last 
Review, in 1998, trade has played a crucial 
role in supporting rapid economic growth.  Structural and circumstantial factors underpin this, notably Trinidad and Tobago's rich natural endowments, its attractiveness as an 
investment destination, and favourable 
developments in world ma rkets.  At the same 
time, changes in trade policy have been measured.  Thus, although the use of import surcharges has been reduced, the average applied MFN tariff remains at 9.1%.  Non-
tariff trade barriers appear low but non-
automatic licensing is still applied and the use of anti-dumping measures has increased.  Investment incentives and official support to extra-CARICOM exports continue to be key 
policy instruments, although net benefits to the 
economy as a whole are yet to be empirically assessed. 
2. The hydrocarbons sector continues to 
be the mainstay of the economy, and Trinidad and Tobago is an important supplier of energy 
and petrochemical products to the world 
market.  In contrast, the support given to agriculture has not halted its decline while raising domestic prices.  In services, reforms have had the greatest impact on financial 
services and telecommunications but are being  
extended to other activities.  Further reform and implementation efforts in areas such as telecommunications, port administration, and financial services are crucial for Trinidad and 
Tobago to achieve its ambitious objectives of 
becoming a knowledge-based economy and a regional economic hub.  Progress in recent years bodes well for Trinidad and Tobago's ability to further impr ove resource allocation 
and diversify its production base, thus 
ensuring the sustainability of economic 
growth. 
(2) E
CONOMIC ENVIRONMENT  
3. During the period under review, 
Trinidad and Tobago's economy has undergone strong growth, largely on account 
of developments in the hydrocarbons sector.  Over the 1999-04 period, real GDP expanded at an annual average rate of 7.7%, and per 
capita income increased to over US$8,800 in 
2004.  As a result of the fast growth, the unemployment rate has fallen, although at 8.3% in 2004 it remains relatively high.  Labour productivity has risen at a rapid pace, 
above real wage growth, partly reflecting the 
strong growth in capital intensive industries. 
4. The overall fiscal situation has 
improved, and current expenditure has been kept under control;  the Central Government has been posting current account surpluses 
since FY 1999/00.  An important development 
was the creation in 2000 of a stabilization fund where the Government must deposit any additional revenues from a base petroleum price of US$25 a barrel, to act as a cushion 
against any unexpected drop in petroleum 
prices and strengthen the public sector savings effort. 
5. Growth in domestic prices has been 
contained although inflationary pressures have built up since early 2004, particularly 
triggered by higher food prices.  The 
appreciation of the real effective exchange rate during the period under review may have helped to constrain inflation, but may have also tended to erode external competitiveness.  
Fed by developments in the energy sector, 
total merchandise trade expanded rapidly, with merchandise exports growing at an annual average rate of 18.3% over 1999-03, while imports grew at an average of 5.5% a 
year.  Trinidad and Tobago is an attractive 
investment destination, with the foreign direct investment stock almost matching GDP. 
(3) T
RADE AND INVESTMENT POLICY 
FRAMEWORK  
6. Trinidad and Tobago's main policy 
objectives are to position itself as a regional 
economic hub and to achieve full integration into the Latin American economy while perfecting the Caribbean Community and Common Market (CARICOM).  To attain these WT/TPR/S/151 Trade Policy Review 
Page viii 
 
 
goals Trinidad and Tobago is seeking, among 
other things, to lower the cost of doing business in the country, to promote investment in human capital, and to improve overall 
economic efficiency. 
7. Trinidad and Tobago has not been a 
complainant in any WTO dispute;  it has been involved as a respondent in a single case at the consultation stage.  Trinidad and Tobago 
made commitments in the extended GATS 
negotiations on telecommunications, and has ratified the Fourth Protocol, but did not participate in the extended negotiations on financial services.  In the context of the Doha Development Agenda, Trinidad and Tobago 
has supported efforts to promote special and 
differential treatment for developing countries, the principle of "less than full reciprocity" in the formulation of the modalities for tariff reduction, and the need to ensure that the 
negotiations on trade in services facilitate the 
increasing participation of developing countries.  It has also maintained an active programme of notifications to the WTO. 
8. Trinidad and Tobago is a member of 
CARICOM and implements the Revised Treaty 
of Chaguaramas, which forms the legal basis 
for the establishment of the CARICOM Single Market and Economy.  The Single Market is expected to be implemented by participating CARICOM members by 31 December 2005.  
Through its participation in CARICOM, 
Trinidad and Tobago has concluded preferential trade agreements with Venezuela, Colombia, the Dominican Republic, Cuba, and Costa Rica, the latter three since 1998.  
Trinidad and Tobago's exports also benefit 
from preferential market access under non-reciprocal preferential trade agreements offered by a number of developed countries. 
9. Trinidad and Tobago's investment 
regime is generally open to foreign investors 
although only CARICOM citizens and 
companies are guaranteed national treatment.  In addition, Trinidad and Tobago has signed a series of bilateral investment treaties offering national treatment to fo reign investors.  On the 
other hand, approval is required for the acquisition by foreigners of commercial and 
residential land over a certain limit, and foreign investors wishing to own more than 30% of the share capital of a local public 
company must obtain a licence. 
(4) M
ARKET ACCESS IN GOODS  
10. As in 1998, the average applied MFN 
tariff was 9.1% in 2004 (excluding specific duties);  including tariff surcharges the 
average increases to 9.2%.  Tariff protection 
for agricultural products (17.1% or 17.9% including surcharges) is significantly higher than for non-agricultural products (7.6%).  An important step during the period under review has been the elimination or reduction of most 
import surcharges.  However, at mid 2005 
remaining surcharges on poultry (40% and 86%) and sugar (60% and 75%), exceed Trinidad and Tobago's bound rate for other duties and charges (15%).  Except for a small 
number of tariff lines, customs duties are all 
ad valorem.  All imports from other CARICOM members enter Trinidad and Tobago duty free if they meet rules of origin criteria. 
11. Trinidad and Tobago has bound its 
entire tariff in the WTO.  This increases the 
predictability of the trade regime, although the gap between applied and bound rates is wide.  The bound rate for almost all agricultural goods is 100%, while most industrial products 
have been bound at 50%, with certain 
exceptions at 70%.  For 44 tariff lines bound prior to the Uruguay Round, MFN duties in 2004 were higher than bound rates. 
12. A number of products are subject to 
automatic or non-automatic import licensing 
requirements, mainly for sanitary, health or safety reasons.  For some goods, non-automatic licensing is applied to MFN imports 
while automatic licensing applies to imports from CARICOM countries.  Standards may be 
declared voluntary or compulsory (technical 
regulations) by the Trinidad and Tobago Bureau of Standards after recommendations by technical committees.  Because of resource constraints, compliance with technical Trinidad and Tobago WT/TPR/S/151 
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regulations is monitored for only some 
products. 
13. Trinidad and Tobago has made more 
active use of anti-dumping measures during 
the period under review.  Since the inception 
of the WTO and as at May 2005, the Anti-Dumping Authority had initiated 11 AD investigations and had made nine final determinations.  There are five AD orders in 
force.  Trinidad and Tobago has not made use 
of other contingency measures during the period under review.  There is no safeguard legislation but the authorities are in the process of drafting such legislation. 
(5) O
THER MEASURES AFFECTING 
TRADE  
14. A limited number of products require 
export licences, including goods benefiting from domestic support measures.  A tax credit granted to export firms was eliminated in 
2000.  However, other forms of support to 
extra-CARICOM exports remain, including assistance to enter new markets and for industries producing exclusively for export to countries outside the CARICOM region.  A free-trade zone regime is in place to attract 
export-oriented investment. 
15. Trinidad and Tobago applies a range 
of incentives to promote investment, including duty concessions, tax exemptions and holidays, loss write-offs, and training support.  In 
certain cases, the length of tax holidays 
depends on the degree of local value added.  Sector-specific investment incentives are also available.  Given the importance attached to export and investment incentives, it would be 
useful to establish empirically whether their 
benefits, notably their capacity to generate exports and investment opportunities, outweigh their costs, both fiscal and in terms of distortions due to incentives.  Trinidad and Tobago has notified the WTO that it maintains 
no subsidies within the meaning of Articles 1 
and 2 of the Agreement on Subsidies and Countervailing Measures, and that it maintains no laws and regulations inconsistent with the TRIMs Agreement. 16. Trinidad and Tobago has no 
comprehensive legislation on competition policy, but certain business practices are prohibited and competition policy issues are 
covered as part of sectoral legislation.  A few 
goods and services remain subject to mark-up limits.  State-owned enterprises continue to represent a large share of the economy;  through them, the State is involved in a wide 
range of activities, including petroleum and 
natural gas, chemicals, electricity, and telecommunications. 
17. Trinidad and Tobago is not a party to 
the Plurilateral Agreement on Government Procurement.  Competitive tenders are 
increasingly becoming the norm;  they are 
open to potential suppliers without reference to nationality.  In certain cases, if tenders go to foreigners a local agent may be required.  No preferential margin is granted to local 
suppliers but consideration is being given to 
the development of a policy to encourage participation of small businesses.  Other reforms of the government procurement system, are also under consideration. 
18. Domestic laws on intellectual property 
rights have continued to be updated during the 
period under review in order to bring existing legislation into conformity with the TRIPS Agreement and other international engagements. 
(6) S
ECTORAL POLICIES  
19. Since 1998 the structure of the 
economy has shifted towards the sectors where Trinidad and Tobago enjoys comparative advantage.  As a result, and despite trade 
policies and incentives schemes having been 
used to promote other activities, Trinidad and Tobago has increased its reliance on the hydrocarbons sector (petroleum, natural gas, and petrochemicals).  The sector generates directly over one third of GDP and two thirds 
of merchandise exports, having benefited in 
recent years from higher prices and production.  Large international companies dominate the sector but there is also strong WT/TPR/S/151 Trade Policy Review 
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state participation.  Most of Trinidad and 
Tobago's energy production is exported. 
20. Although the contribution of 
agriculture to GDP has fallen, the 
Government plays an active role in supporting 
the sector, which is considered vital for diversification, and income and employment growth.  With the exception of the sugar industry and a few other products, agricultural 
production is largely geared towards the 
domestic market.  Agricultural policy has become more open, as witnessed by the reduction in the scope and rates of the import surcharges, the partial reform of the sugar industry, and the divestment in state-owned 
enterprises.  However,  incentive schemes still 
include guaranteed prices for certain commodities, subsidies for the acquisition of equipment, and preferential credit.  Domestic support accounted for between 12% and 15% 
of agricultural GDP during the 1999-03 
period. 
21. Manufacturing activity is closely 
linked to the hydrocarbons sector, and partly due to its natural resources and geographical situation, Trinidad and Tobago has become an 
important producer of petrochemical products.  
Most non-petroleum manufacturing consists of iron and steel and cement, wood products, paper, printing, and publishing.  A number of incentive schemes are available for 
manufacturers, including tariff concessions for 
imports of machinery, equipment, and materials for approved activities;  corporate tax relief to approved enterprises;  and accelerated depreciation allowances. 
22. The main activities in the services 
sector are financial services, distribution, transportation, telecommunications, and government services.  Trinidad and Tobago is seeking to make service activities more competitive by reforming and modernizing the 
regulatory environment.   Recent liberalization 
and reform efforts have had the greatest impact on financial services and 
telecommunications, while in other subsectors 
the Government is in the process of reviewing the legislation.  Reform in the financial services sector has included enhanced prudential regulations and  steps to consolidate 
supervision but the Government has identified 
the need for further reforms, including:  updating the legislative framework;  implementing international standards for information disclosure and reporting, throughout the financial system;  and 
improving corporate governance and 
reporting standards. 
23. In telecommunications, new 
legislation was introduced in 2001 to transform the industry from a virtual 
monopoly to a competitive environment.  The 
required legislation was completely promulgated in June 2004, with liberalization scheduled as from July 2005.  In maritime transport, the Government is seeking to restructure the Port Authority and 
commercialize operations to increase 
efficiency and reduce costs. 
24. In the Uruguay Round, Trinidad and 
Tobago made sector-specific commitments with respect to eight of the twelve sectors 
identified in the classification prepared by the 
WTO Secretariat.  Trinidad and Tobago participated and undertook commitments in the WTO extended negotiations on telecommunications, but did not make 
commitments in the extended negotiations on 
Financial Services.  As a result, the only financial services area in which it has made GATS commitments is reinsurance.  Trinidad and Tobago submitted an initial 
services offer in the negotiations on services 
under the Doha Development Agenda in June 
2005.