Are Jamaicans wizing up to the Tyranny of the Roti-Eaters??

[Don1]

nope... juss being di said Bittah self..LOL!

[ReggaeMike]

Truth is always nuanced and every circumstance possible cannot be covered in a few lines. You raise 1 issue of patties to refute my point...your explanation re the individual patty issue may or may not be valid...I don't know the specifics.

What I do know is that Jamaican manufacturers have been complaining for decades about lack of ready access to the TT market due to non-tariff barriers...ask Doreen Frankson ex-JMA president.

Well here read for yourself:

http://www.jamaicaobserver.com/news/...tufton_7556781

There is also TDowl's thread noting that Jamaican Patties are really American Patties since even the bloody beef comes from the US and we all know Jamaica doesn't produce the flour to make the crust. So in some instances, if one looks beyond the complaints of persons like Doreen Frankson, it will be noted that Jamaica is it's own worst enemy when it comes to trade. How we can we reasonably expect customs officials around the world to have confidence in our "Jamaican" patties for instance when over 50% of abattoirs are unsupervised and some (possibly most) of the meat itself doesn't even come from Jamaica? In any other free-trade area those would be grounds for not just holding up shipments but an outright ban. Imagine the reverse situation: Guyana is selling "Guyanese" rice to Jamaica under the Caricom rules, but a significant portion of the rice didn't originate in Guyana but in Venezuela and some of the rice might come from farms in Venezuela and Guyana which haven't been registered or certified with any health authorities and only God knows what might be coming in with said rice. I'm almost certain there would be uproar in Jamaica if our customs department didn't at least thoroughly inspect the shipment before letting it through.

For proof you merely have to look at the price the TT producers sell energy to businesses... it's a fraction of Jamaica's.

National treatment does not mean the final price will be the same...the price to Jamaica under a favorable interpretation of the trade treaty would be the domestic TT charge plus freight....which is probably much less than 10% by value.

Oh come on Don1. That's the kind of populist "logic" one would expect from maybe Ben. Of course the price in T&T will be a fraction of the price in Jamaica. Firstly a lot goes in oil production and distribution:

- T&T's producers are also the local distributors so there are no middle-men in the supply chain.

- Any fuel produced in T&T only has to travel a fraction of the distance that it would to Jamaica (hundreds of miles as opposed to thousands).

- The fuel to Jamaica or elsewhere has to loaded onto cargo ships (and no company is going to do that for free).

- The ships need fuel to go between Jamaica and T&T (again, none will get it for free).

- The ships' crews also need to be paid.

- The fuel needs to be offloaded in Jamaica (again at a cost since one has to offload it with equipment unless one is willing to accept substantial losses in the product by simply dumping the oil at port)

- The fuel then needs to be transported (via transporters who are sometimes middle-men) to the distributors in Jamaica (who are not the same as the producers/distributors in Jamaica)

- The fuel then needs to be stored, possibly refined and then re-distributed by Jamaica's distributors (again, all of this comes at a cost).

- The retailers then need to make a profit.

- The government needs to make money off of it by imposing taxes (and the tax itself will be more than merely 10% of the product).

- Gangsters will want a cut and will charge outrageous extortion fees that have to get passed on to the consumer if the distributors and retailers want to stay in business

- Some retailers have to make up for some of the gas that goes "missing" when tankers divert from their stipulated course to illegally sell some of the gas to illegal gas stations (there were stories on this in both dailies just a few years ago).


So right away the idea that the cost of fuel will only be TT's price + 10% can't hold up (and freight is NOT cheap anyway). After all it was only recently that the Jamaican government imposed a J$8.75 per litre increase on the petrol tax. The increase alone accounts for 9% of the current retail price of even the most expensive fuel ($98 a litre) on the island. Note that prior to that tax adjustment the tax on the original price of fuel (before distribution and retail sale i.e. J$40+ per litre in 2009) was about 16% of the value. It is now about 36%. Add in the fact that players along the supply chain (freighters, distributors, retailers, etc) will also have to pay the additional tax when they use fuel and that whenever possible they will attempt to pass the price on to the consumers not involved in the supply chain and it shouldn't be too hard to see how prices in T&T will always be a fraction of what they are in Jamaica.

To take another example, the price of bananas in Jamaica is always a fraction of the price of bananas in the UK. However, bananas are covered under the EU-ACP accords of the past which granted privileged (i.e duty-free) access to European markets by bananas produced in ACP countries (so bananas have the same access to European markets as Trini products have to the Jamaican markets). But as Jamaica Producers (producers AND distributors of bananas in Jamaica) is merely a supplier of bananas to further distributors in the UK, the cost naturally goes up. Freight and consumption taxes will only increase the price of bananas. However, Jamaica Producers will rubbish any claims that they are "subsidizing" the Jamaica market for bananas.

First...I am not saying that favorable trade terms with TT will solve our productivity problems...I already outlined the long term fixes in response to Assasin.

But if favourable trade terms will not solve our productivity problems then what would be the point of stimulating an economic war in order to get them? Why waste all that time and energy on something that won't be geared towards the real problem? Is there any doubt that the politicians would continue in the "fine" tradition of focusing on that issue whilst ignoring the really major issues as they continue to grow?

1. Trade with TT is NOT a minor issue... the positive balance in TT's favour is above US$400M... a US$4B outflow over a decade

Yet, the balance with the US is easily more than double that, but somehow nobody seems to advocate attempting to blackmail the US into more favourable trade terms. In fact the media and various talking heads are all oddly silent on the US$900+ M trade deficit with the US. Meanwhile, T&T enjoys a trade surplus with the US that is 9 times that of T&T's trade surplus with Jamaica. In that light the trade with T&T is a minor issue, especially given that trade with the US accounts for something like 40% of Jamaica's total trade, but with T&T it struggles to reach 20%. So everybody is focused on the 20% whilst the 40% continues along merrily and will probably grow.

Plus if favourable trade terms with Trinidad are not a long term solution then how can trade with Trinidad not be a relatively minor issue? The long term problems are the major problems, not the short term ones.

2. The TT surplus with the US is almost entirely based on LNG exports of which they are the LARGEST supplier to the US market

So? Jamaica is currently exempt from the taxes that Brazil faces on it's ethanol. Yet no attempt has been made to transform Jamaica into a major ethanol producer and re-distributor to take advantage of that as well as the US aim to diversify their fuel base. In fact I can quite clearly remember a columnist in one of the daily newspapers writing that an ethanol plant in Jamaica would be too expensive and not worth the money!

3. It is legit to make TT trade an issue because it's a country we can use leverage on as we're in the same trade block...the other countries we have zero leverage over.

Except as a pointed out, Jamaica has no leverage over any country even with those in the same trade block. T&T's surplus with the US is 9 times that of the surplus with Jamaica. Do you really think T&T is going to miss Jamaica if Jamaica threatens to stop buying T&T products? They know that we will probably end up buying more expensive products from elsewhere (and hence cut off our noses to spite our faces), whilst they would have the surplus with the US to fall back on whilst they find new markets (which they eventually will). So how is that leverage?

4. I already stated the solution to productivity is broad reform which I have advocated here since creation...but the TT issue is something than we should address if we're smart...there's zero downside

There's plenty downside, including the fact that blackmail doesn't engender goodwill. We threaten them today and eventually if we increase productivity we find that a market that we should have in the bag (not least due to the Jamaicans living in T&T) wants nothing to do with us. That's not smart. China or Singapore would never do anything like that because they know that soft power works better than flexing your hard power/muscles.

[Don1]

[QUOTE]

Well here read for yourself:

http://www.jamaicaobserver.com/news/...tufton_7556781

There is also TDowl's thread noting that Jamaican Patties are really American Patties since even the bloody beef comes from the US and we all know Jamaica doesn't produce the flour to make the crust. So in some instances, if one looks beyond the complaints of persons like Doreen Frankson, it will be noted that Jamaica is it's own worst enemy when it comes to trade. How we can we reasonably expect customs officials around the world to have confidence in our "Jamaican" patties for instance when over 50% of abattoirs are unsupervised and some (possibly most) of the meat itself doesn't even come from Jamaica? In any other free-trade area those would be grounds for not just holding up shipments but an outright ban. Imagine the reverse situation: Guyana is selling "Guyanese" rice to Jamaica under the Caricom rules, but a significant portion of the rice didn't originate in Guyana but in Venezuela and some of the rice might come from farms in Venezuela and Guyana which haven't been registered or certified with any health authorities and only God knows what might be coming in with said rice. I'm almost certain there would be uproar in Jamaica if our customs department didn't at least thoroughly inspect the shipment before letting it thro

Again you're stressing this minor patty issue. Why? It may or may not be a case of unfair trade... I don't know

Oh come on Don1. That's the kind of populist "logic" one would expect from maybe Ben. Of course the price in T&T will be a fraction of the price in Jamaica. Firstly a lot goes in oil production and distribution:

- T&T's producers are also the local distributors so there are no middle-men in the supply chain.

- Any fuel produced in T&T only has to travel a fraction of the distance that it would to Jamaica (hundreds of miles as opposed to thousands).

- The fuel to Jamaica or elsewhere has to loaded onto cargo ships (and no company is going to do that for free).

- The ships need fuel to go between Jamaica and T&T (again, none will get it for free).

- The ships' crews also need to be paid.

- The fuel needs to be offloaded in Jamaica (again at a cost since one has to offload it with equipment unless one is willing to accept substantial losses in the product by simply dumping the oil at port)

- The fuel then needs to be transported (via transporters who are sometimes middle-men) to the distributors in Jamaica (who are not the same as the producers/distributors in Jamaica)

- The fuel then needs to be stored, possibly refined and then re-distributed by Jamaica's distributors (again, all of this comes at a cost).

- The retailers then need to make a profit.

- The government needs to make money off of it by imposing taxes (and the tax itself will be more than merely 10% of the product).

- Gangsters will want a cut and will charge outrageous extortion fees that have to get passed on to the consumer if the distributors and retailers want to stay in business

- Some retailers have to make up for some of the gas that goes "missing" when tankers divert from their stipulated course to illegally sell some of the gas to illegal gas stations (there were stories on this in both dailies just a few years ago).


So right away the idea that the cost of fuel will only be TT's price + 10% can't hold up (and freight is NOT cheap anyway). After all it was only recently that the Jamaican government imposed a J$8.75 per litre increase on the petrol tax. The increase alone accounts for 9% of the current retail price of even the most expensive fuel ($98 a litre) on the island. Note that prior to that tax adjustment the tax on the original price of fuel (before distribution and retail sale i.e. J$40+ per litre in 2009) was about 16% of the value. It is now about 36%. Add in the fact that players along the supply chain (freighters, distributors, retailers, etc) will also have to pay the additional tax when they use fuel and that whenever possible they will attempt to pass the price on to the consumers not involved in the supply chain and it shouldn't be too hard to see how prices in T&T will always be a fraction of what they are in Jamaica.

To take another example, the price of bananas in Jamaica is always a fraction of the price of bananas in the UK. However, bananas are covered under the EU-ACP accords of the past which granted privileged (i.e duty-free) access to European markets by bananas produced in ACP countries (so bananas have the same access to European markets as Trini products have to the Jamaican markets). But as Jamaica Producers (producers AND distributors of bananas in Jamaica) is merely a supplier of bananas to further distributors in the UK, the cost naturally goes up. Freight and consumption taxes will only increase the price of bananas. However, Jamaica Producers will rubbish any claims that they are "subsidizing" the Jamaica market for bananas.

The landed price of the product in Jamaica should be the TT product price plus transport costs... whatever those transport costs are.... that is national treatment imho... whatever additional costs are added on this end are our concern....as long as the net pricing for energy is more favourable

This is not populist logic... but an advantageous interpretation of a treaty signed by both parties.. that's what we should insist on imho

But if favourable trade terms will not solve our productivity problems then what would be the point of stimulating an economic war in order to get them? Why waste all that time and energy on something that won't be geared towards the real problem? Is there any doubt that the politicians would continue in the "fine" tradition of focusing on that issue whilst ignoring the really major issues as they continue to grow.

The point is.. using leverage one has to improve one's position. Nations do that every day... so should Jamaica when it can.

The fact that this does not "solve" a long term, intractable problem of low productivity is immaterial...that's not the issue it's addressing...it's addressing a bi-lateral trade imbalance through aggressive policy.

Yet, the balance with the US is easily more than double that, but somehow nobody seems to advocate attempting to blackmail the US into more favourable trade terms. In fact the media and various talking heads are all oddly silent on the US$900+ M trade deficit with the US. Meanwhile, T&T enjoys a trade surplus with the US that is 9 times that of T&T's trade surplus with Jamaica. In that light the trade with T&T is a minor issue, especially given that trade with the US accounts for something like 40% of Jamaica's total trade, but with T&T it struggles to reach 20%. So everybody is focused on the 20% whilst the 40% continues along merrily and will probably grow.

Jamaica can perhaps pressure TT... NOT the US...that's realpolitik.
The fact that JA cannot pressure the US does not mean we should not pressure those we can

So? Jamaica is currently exempt from the taxes that Brazil faces on it's ethanol. Yet no attempt has been made to transform Jamaica into a major ethanol producer and re-distributor to take advantage of that as well as the US aim to diversify their fuel base. In fact I can quite clearly remember a columnist in one of the daily newspapers writing that an ethanol plant in Jamaica would be too expensive and not worth the money!

Columnists are not necessarily wise on all issues

Except as a pointed out, Jamaica has no leverage over any country even with those in the same trade block. T&T's surplus with the US is 9 times that of the surplus with Jamaica. Do you really think T&T is going to miss Jamaica if Jamaica threatens to stop buying T&T products? They know that we will probably end up buying more expensive products from elsewhere (and hence cut off our noses to spite our faces), whilst they would have the surplus with the US to fall back on whilst they find new markets (which they eventually will). So how is that leverage?

Absolutely TT would miss that easy JA market...are you kidding? We're the biggest market for their manufacturers... what they export to the US is hydrocarbons... not manufactured goods...they cannot compete well enuff in the US with that because they don't have the tariff advantage over others

It's a fallacy that a substitute to TT goods in JA would be more expensive.... unless these goods are Jamaican. The common external tariff creates a semi-protected market for Caribbean manufacturers in our common market...largely to the benefit of TT.

If Jamaica exited that treaty it would attract the world's most efficient manufacturers... which TT cannot compete with on price absent external tariff protection.... so prices would tend to be lower ...not higher`

There's plenty downside, including the fact that blackmail doesn't engender goodwill. We threaten them today and eventually if we increase productivity we find that a market that we should have in the bag (not least due to the Jamaicans living in T&T) wants nothing to do with us. That's not smart. China or Singapore would never do anything like that because they know that soft power works better than flexing your hard power/muscles.

LOL! "Soft Power"... like wha "moral suasion"?? Come on... this is business...hard nosed and looking out for national interests... not "friends"

Apart from some hurt feelings and lost jobs in TT...JA has zero to fear in such a move... there is NOTHING that TT currently supplies that cannot be had at better pricing elsewhere...all being equal with tariffs

Besides...The type of niche marketing that's recommended as best for Jamaica works best with our vast diaspora...a market many times larger than TT...

TT people already have an ingrained cultural bias against JA and will not buy our products in huge volumes...very insular set when it comes to the island mentality

I had earlier made the point that before we exit Caricom we should be speaking with the US on "most favored nation status" on a bi-lateral basis... where we give them market access through favourable tariffs...and they return the favour so we can develop industry aimed at niche markets there... the US is doing these bi-lateral pacts with S Korea, Panama and many other countries..... the US will be eager to counter China's growing influence in JA and may be flexible on terms..

If we do the calculus and there are tangible benefits over and above Caricom (very easy calculus!) JA should consider signing up as others have done...

[ReggaeMike]

Part 1:

Again you're stressing this minor patty issue. Why? It may or may not be a case of unfair trade... I don't know

Firstly it wasn't minor at the time as it occupied front page news for a while and it had Samuda all in a huff.

Secondly, I thought you said trade with trinidad was not a minor issue? So how can patties being traded to trinidad (one of the few products we actually sell abroad incidentally) be considered minor now?

The landed price of the product in Jamaica should be the TT product price plus transport costs... whatever those transport costs are.... that is national treatment imho... whatever additional costs are added on this end are our concern....as long as the net pricing for energy is more favourable

This is not populist logic... but an advantageous interpretation of a treaty signed by both parties.. that's what we should insist on imho

And I'm demonstrating that is what happens. I was pointing out that what you are calling a subsidy is really just the difference in price due to transportation costs and other ancillary costs that have to do with distribution once it reaches the island (plus taxes). Remember you pointed out that the "proof" for this "subsidy" claim was the difference in the price between T&T and Jamaica and that the price costs a fraction in T&T of what it costs in Jamaica (that is what you said isn't it?). However, that is not proof of a subsidy. A subsidy would be like the EU's CAP (Common Agricultural Policy) payouts to farmers so that they let the land remain fallow. Or various US government assistance programmes to farmers and their exports.

Incidentally the price of fuel in T&T will always be a fraction of what it is in Jamaica and that fractional price argument is also not proof of a subsidy. Even if the price in Jamaica was the market price + 10% it means the price in trinidad would be 100/110 and hence a fraction of the price in Jamaica. The only way it would never be a price is if government Trinidad and/or Jamaica directly subsidized the price of transport and distribution (and if Jamaica's government made fuel tax exempt) so that the price at the end of the chain in Jamaica would be the same as the price at the start of export chain in Trinidad. I suspect that is what most folks are really calling for when they raise this phantom subsidy issue, but it's an unrealistic expectation.

A more realistic expectation would be to demand that our own government stop stealing from us. They instituted a gas tax increase of about J$9 a litre but have repeatedly stated that only 20-35% of the revenue from that tax increase is supposed to go into repaying the Chinese loan (despite said tax increase being instituted because they wanted to repay the loan). If only 20-35% of that extra $9 is being used then motorists should demand that the tax be lowered to J$3.15 so that 100% would go into repaying the loan (the stated purpose) and we could then have instantly a cut of 6% in the cost of fuel. Then demand that the moment the loan is repaid the rest of the tax is repealed. Agitating for alternative fuels (which is what would really put pressure on Trinidad since the majority of Trinidad's exports are fuel) would also dramatically lower the cost of fuel.

The point is.. using leverage one has to improve one's position. Nations do that every day... so should Jamaica when it can.

The fact that this does not "solve" a long term, intractable problem of low productivity is immaterial...that's not the issue it's addressing...it's addressing a bi-lateral trade imbalance through aggressive policy.

Real leverage comes from having a strong position. There is very little point in using "aggressive policy" to "gain" a trade position which Jamaica cannot exploit. If the leveraging you are talking about isn't meant to solve the long-term problem of low productivity then at best it will only have temporary (very temporary) benefits with regards to the trade balance at the expense of really solving the real problems so that the long-term trade imbalances (and they have been long-term and are intimately related to low productivity) will be solved. It would be like trying to cure a fever with an ice-pack that melts when you should be addressing the underlying cause of the fever. No doctor I know would ever recommend focusing on the fever when they should be curing the cause. For them, such focus would be as you said immaterial and that is exactly what such aggressive policy would be.

Jamaica can perhaps pressure TT... NOT the US...that's realpolitik.
The fact that JA cannot pressure the US does not mean we should not pressure those we can

How? If Jamaica's trade surplus (not just total exports) with T&T is worth only 1/9th of the trade with the US, how is Jamaica going to pressure T&T? Sure lots of Trinidad's trade with the US is made up of petrol and it's derivatives, but then so is Trinidad's trade with Jamaica. Oil is something for which there is no shortage of customers, so if what we are talking about is Jamaica threatening to cut off trade in the minority commodities (i.e. non-petrol products) with Trinidad then at best we might be talking about 20% of the trade with Trinidad (for which Jamaica accounts for under 10% of Trinidad's exports) then at best we might be talking about leverage covering 2% of Trinidad's trade. If we are talking about Jamaica threatening not to buy T&T's fuel products then that's an unrealistic proposition since it isn't like we are going to get cheaper fuel from anywhere else (Venezuela's PetroCaribe seems cheaper in the short term but in 25 years Jamaica is going to be wonder which freight trains just ran over it) and T&T will simply have more oil to sell to other countries. That's not going to pressure anybody.

Had we been talking about a country like Grenada maybe, where apparently over 70% of their exports (mainly nutmegs and other spices) went to Jamaica and Air Jamaica was their designated national carrier and only regional airline that connected them to New York, then yes we would certainly be talking about leverage.

Columnists are not necessarily wise on all issues

Agreed, but note that the columnists tend to reflect the thinking of the government and wider public. I certainly have not seen or heard of any plans to transform Jamaica into an alternative fuel hub and producer.

Absolutely TT would miss that easy JA market...are you kidding? We're the biggest market for their manufacturers... what they export to the US is hydrocarbons... not manufactured goods...they cannot compete well enuff in the US with that because they don't have the tariff advantage over others

If Jamaica counts for less than 10% of T&T's exports and about 35% of T&T's exports to Caricom and if a significant portion of said trade is fuel related then how would they really miss us? At best we are talking about 2% of their total trade being in terms of manufactures with us and 7% of their exports to Caricom being in terms of manufactures to us. We don't seem to miss substantially larger percentages of money that disappears after it is collected as tax. After all the increase in the gas tax was only supposed to result in 20--35% of the collected revenue going into the repayment of the Chinese loan for the road maintenance project even though the gas tax increase was instituted solely for the purposes of repaying that loan.

It's a fallacy that a substitute to TT goods in JA would be more expensive.... unless these goods are Jamaican. The common external tariff creates a semi-protected market for Caribbean manufacturers in our common market...largely to the benefit of TT.

And our tax-loving governments would simply put on a similar tax on substitute goods? If the government institutes a tax to repay a loan but only uses less than 40% of the revenue from that tax to actually repay the loan then such a government is very likely to institute taxes similar to the CET on various goods.

LOL! "Soft Power"... like wha "moral suasion"?? Come on... this is business...hard nosed and looking out for national interests... not "friends"

So I suppose Singapore, China and Korea got rich through blackmail and aggressive trade policy right?

Alright, I'll bite. Give me examples of countries which have managed to get rich and been able to exploit any benefits derived through such aggressive policy over the long-term whilst having low productivity.

Apart from some hurt feelings and lost jobs in TT...JA has zero to fear in such a move... there is NOTHING that TT currently supplies that cannot be had at better pricing elsewhere...all being equal with tariffs

The better pricing elsewhere could well be the result of actual subsidies such as occurs in Europe and the United States (home of some of the world's most efficient manufacturers) or through countries which play fast and loose with standards (China and it's toxic milk). So we might get better prices but at the expense of our health (don't drink the milk or let the children play with their toys) or by pandering to countries which actually use the very (supposedly unfair) subsidies we were supposedly trying to get Trinidad to lift. None of that makes any sense if the real issue is Trinidad's subsidies as opposed to some parochial and provincial bias.

[ReggaeMike]

Part 2

Besides...The type of niche marketing that's recommended as best for Jamaica works best with our vast diaspora...a market many times larger than TT...

That's how countries become poor. As opposed to looking at the world as it's market place and attempting to go after many markets, Jamaica would focus on the "vast" diaspora (some of which are diaspora in name only and wouldn't eat an ackee or yam if you paid them) to the detriment of multiple markets such as the US, EU, Caricom, Africa, South America and Asia (all of which contain Jamaican diaspora populations). Given also that the diaspora market is very dispersed (even within places such as New York) such a strategy has failure written all over it because goods and services would very rarely be geared towards the majority of the population within a given area (save for a few neighbourhoods in a few cities in North America and England). That leaves no room for "growth" which is a vital component of any hard-nosed business strategy.

TT people already have an ingrained cultural bias against JA and will not buy our products in huge volumes...very insular set when it comes to the island mentality

But we don't help ourselves. The French used to have a very ingrained cultural bias against the Germans (or "Boche" as they were derogatorily called by the French) and the two even fought three wars, yet now Germany and France are strong trading partners. How did that happen? Well the Germans helped to shed the image that the French had of them, through hard work, high productivity, positive news from Germany and proper marketing. Jamaica on the other hand kind of expects that we simply show up and sell stuff and that people will buy it all while they have read stories of illegal abattoirs, American beef, low-quality cement, shoddy workmanship for public works and private construction, formalin-soaked fish, murder and corruption galore. Locals don't even want to buy some of our own products to rhatid and yet we expect that people overseas will flock to it (and I well recall being in a supermarket and having a fellow patron encouraging me to buy a foreign product over it's local competitor because the foreign product was "better man, it better!"). If Jamaica sold competitive goods (which would be had through better productivity) and had high productivity and vastly reduced crime then cultural perceptions of us as lazy, weed-smoking thieves and murderers (and this is a perception that is had not just by the Trinis, but by Americans, Peruvians (as one poor traveller can attest), Brits, Canadians, etc) would fade and eventually disappear.

[ReggaeMike]

I had earlier made the point that before we exit Caricom we should be speaking with the US on "most favored nation status" on a bi-lateral basis... where we give them market access through favourable tariffs...and they return the favour so we can develop industry aimed at niche markets there... the US is doing these bi-lateral pacts with S Korea, Panama and many other countries..... the US will be eager to counter China's growing influence in JA and may be flexible on terms..

Not realistic I'd say. Those two countries you mentioned have very, very different relationships with the US than Jamaica does. Panama was essentially created by the US and has a much deeper and longer history of connection with the US (McCain for instance was born in the Canal Zone, the only comparable person with regards to Jamaica would be Colin Powell who wasn't even born in Jamaica but just had parents born in Jamaica). Panama also has higher productivity than Jamaica and is still essential to US security because of the Canal. Jamaica isn't. The US knows China isn't going to set up military bases in Jamaica or turn Jamaica into a little China. The US also knows that China's growing influence in Jamaica has limits - most Jamaicans would never choose a Chinese visa over an American visa and if given a choice they would readily choose to study in the US over China. The language barrier also makes it unlikely that Chinese influence would grow to such an extent that Washington would be worried.

South Korea has had super-close relations with the US since the Korean War and the fact that South Korean sent the second highest contingent of soldiers to assist the US in South Vietnam only reinforced that. South Korea also makes things that the US wants (electronics, etc) and is far more vital in US relations and contingencies with regards to China than Jamaica will ever be.

Ultimately though the idea is unrealistic and in fact anachronistic becuase:

1. the US stopped using the term "most favoured nation" in 1998 as by then just about everybody had it. They now use the term "permanent normal trade relations" or "NTR".

2. As a result of WTO rules, this status is accorded to all other WTO members by the US (with a few exceptions which I will list). All Caricom states (save the Bahamas) are already in the WTO (since 1995-1996) and accorded this status.

3. The only countries denied NTR status are Cuba and North Korea (by law). The following countries have temporary NTR status due to presidential waivers: Belarus, Turkmenistan, Azerbaijan, Kazakhstan, Moldova, Russia, Tajikistan, Ukraine (though Ukraine might have got it recently because they joined the WTO) and Uzbekistan.

[ReggaeMike]

Part 4

If we do the calculus and there are tangible benefits over and above Caricom (very easy calculus!) JA should consider signing up as others have done...

Sadly, this is what has gotten Jamaica nowhere. We think of everything as zero-sum. So it's "this" can be better than "that", rather than "this" and "that" can be better than "this" or "that" alone.

Jamaica has already signed up to the "most favoured nation" status and it hasn't gotten us anywhere because we have low productivity and too much corruption and poor standard (though good standard guides and rules). The fact that Jamaica is one of the many countries with NTR with the US and that this hasn't generated the benefits that you think we should have gotten from the late 1990s demonstrates that getting "favourable trade terms" in the absence of the ability to exploit them leads only to more of the same: stagnation or decline.

[Assasin]

Mi tiad fi tell him

but him nah listen, him ears tuff.

[quote=ReggaeMike;266951]Part 2



That's how countries become poor. As opposed to looking at the world as it's market place and attempting to go after many markets, Jamaica would focus on the "vast" diaspora (some of which are diaspora in name only and wouldn't eat an ackee or yam if you paid them) to the detriment of multiple markets such as the US, EU, Caricom, Africa, South America and Asia (all of which contain Jamaican diaspora populations). Given also that the diaspora market is very dispersed (even within places such as New York) such a strategy has failure written all over it because goods and services would very rarely be geared towards the majority of the population within a given area (save for a few neighbourhoods in a few cities in North America and England). That leaves no room for "growth" which is a vital component of any hard-nosed business strategy.

[Don1]

Firstly it wasn't minor at the time as it occupied front page news for a while and it had Samuda all in a huff.

Secondly, I thought you said trade with trinidad was not a minor issue? So how can patties being traded to trinidad (one of the few products we actually sell abroad incidentally) be considered minor now?

It may have been a media sensation...but the patty trade is minor...very minor in the national scheme of things

And I'm demonstrating that is what happens. I was pointing out that what you are calling a subsidy is really just the difference in price due to transportation costs and other ancillary costs that have to do with distribution once it reaches the island (plus taxes). Remember you pointed out that the "proof" for this "subsidy" claim was the difference in the price between T&T and Jamaica and that the price costs a fraction in T&T of what it costs in Jamaica (that is what you said isn't it?). However, that is not proof of a subsidy. A subsidy would be like the EU's CAP (Common Agricultural Policy) payouts to farmers so that they let the land remain fallow. Or various US government assistance programmes to farmers and their exports.

Incidentally the price of fuel in T&T will always be a fraction of what it is in Jamaica and that fractional price argument is also not proof of a subsidy. Even if the price in Jamaica was the market price + 10% it means the price in trinidad would be 100/110 and hence a fraction of the price in Jamaica. The only way it would never be a price is if government Trinidad and/or Jamaica directly subsidized the price of transport and distribution (and if Jamaica's government made fuel tax exempt) so that the price at the end of the chain in Jamaica would be the same as the price at the start of export chain in Trinidad. I suspect that is what most folks are really calling for when they raise this phantom subsidy issue, but it's an unrealistic expectation.

whatever the fraction may be...again...the beneficial interpretation of national treatment demands that the energy price in Jamaica should reflect the TT domestic price plus freight.

We can agree to disagree on the specifics...no worries

A more realistic expectation would be to demand that our own government stop stealing from us. They instituted a gas tax increase of about J$9 a litre but have repeatedly stated that only 20-35% of the revenue from that tax increase is supposed to go into repaying the Chinese loan (despite said tax increase being instituted because they wanted to repay the loan). If only 20-35% of that extra $9 is being used then motorists should demand that the tax be lowered to J$3.15 so that 100% would go into repaying the loan (the stated purpose) and we could then have instantly a cut of 6% in the cost of fuel. Then demand that the moment the loan is repaid the rest of the tax is repealed. Agitating for alternative fuels (which is what would really put pressure on Trinidad since the majority of Trinidad's exports are fuel) would also dramatically lower the cost of fuel.

Reasonable...but another issue entirely

Real leverage comes from having a strong position. There is very little point in using "aggressive policy" to "gain" a trade position which Jamaica cannot exploit. If the leveraging you are talking about isn't meant to solve the long-term problem of low productivity then at best it will only have temporary (very temporary) benefits with regards to the trade balance at the expense of really solving the real problems so that the long-term trade imbalances (and they have been long-term and are intimately related to low productivity) will be solved. It would be like trying to cure a fever with an ice-pack that melts when you should be addressing the underlying cause of the fever. No doctor I know would ever recommend focusing on the fever when they should be curing the cause. For them, such focus would be as you said immaterial and that is exactly what such aggressive policy would be.

One goes into battle with the army one has... not the army you wish you had. whatever your leverage... use it to best advantage.

Leverage cannot solve long term, structural deficiencies... only long term, visionary policy can as I said earlier...so let's not conflate the short and long term perspectives.... it leads us off track.

Also this is not a mutually exclusive situation.. we can both address short term trade issues and long term development policy simultaneously.

How? If Jamaica's trade surplus (not just total exports) with T&T is worth only 1/9th of the trade with the US, how is Jamaica going to pressure T&T? Sure lots of Trinidad's trade with the US is made up of petrol and it's derivatives, but then so is Trinidad's trade with Jamaica. Oil is something for which there is no shortage of customers, so if what we are talking about is Jamaica threatening to cut off trade in the minority commodities (i.e. non-petrol products) with Trinidad then at best we might be talking about 20% of the trade with Trinidad (for which Jamaica accounts for under 10% of Trinidad's exports) then at best we might be talking about leverage covering 2% of Trinidad's trade. If we are talking about Jamaica threatening not to buy T&T's fuel products then that's an unrealistic proposition since it isn't like we are going to get cheaper fuel from anywhere else (Venezuela's PetroCaribe seems cheaper in the short term but in 25 years Jamaica is going to be wonder which freight trains just ran over it) and T&T will simply have more oil to sell to other countries. That's not going to pressure anybody.

Had we been talking about a country like Grenada maybe, where apparently over 70% of their exports (mainly nutmegs and other spices) went to Jamaica and Air Jamaica was their designated national carrier and only regional airline that connected them to New York, then yes we would certainly be talking about leverage.

If you think Trinidad would be unconcerned or unaffected by the loss of its export market in Jamaica...I have a very flat bridge for sale to you.

Agreed, but note that the columnists tend to reflect the thinking of the government and wider public. I certainly have not seen or heard of any plans to transform Jamaica into an alternative fuel hub and producer.

columnists come and columnists go...

If Jamaica counts for less than 10% of T&T's exports and about 35% of T&T's exports to Caricom and if a significant portion of said trade is fuel related then how would they really miss us? At best we are talking about 2% of their total trade being in terms of manufactures with us and 7% of their exports to Caricom being in terms of manufactures to us. We don't seem to miss substantially larger percentages of money that disappears after it is collected as tax. After all the increase in the gas tax was only supposed to result in 20--35% of the collected revenue going into the repayment of the Chinese loan for the road maintenance project even though the gas tax increase was instituted solely for the purposes of repaying that loan.

Let's agree to disagree on whether TT would "miss" our market

And our tax-loving governments would simply put on a similar tax on substitute goods? If the government institutes a tax to repay a loan but only uses less than 40% of the revenue from that tax to actually repay the loan then such a government is very likely to institute taxes similar to the CET on various goods.

True but an entirely separate problem

So I suppose Singapore, China and Korea got rich through blackmail and aggressive trade policy right?

Alright, I'll bite. Give me examples of countries which have managed to get rich and been able to exploit any benefits derived through such aggressive policy over the long-term whilst having low productivity.

Trade policy is a carrot and stick construct... nations like like China/US/S. Korea use all the tools in their toolbox for any advantage

The better pricing elsewhere could well be the result of actual subsidies such as occurs in Europe and the United States (home of some of the world's most efficient manufacturers) or through countries which play fast and loose with standards (China and it's toxic milk). So we might get better prices but at the expense of our health (don't drink the milk or let the children play with their toys) or by pandering to countries which actually use the very (supposedly unfair) subsidies we were supposedly trying to get Trinidad to lift. None of that makes any sense if the real issue is Trinidad's subsidies as opposed to some parochial and provincial bias.

So the only place to get safe, inexpensive products is Trinidad??

God help us if dem flop

[Don1]

[QUOTE=ReggaeMike;266951]Part 2

That's how countries become poor. As opposed to looking at the world as it's market place and attempting to go after many markets, Jamaica would focus on the "vast" diaspora (some of which are diaspora in name only and wouldn't eat an ackee or yam if you paid them) to the detriment of multiple markets such as the US, EU, Caricom, Africa, South America and Asia (all of which contain Jamaican diaspora populations). Given also that the diaspora market is very dispersed (even within places such as New York) such a strategy has failure written all over it because goods and services would very rarely be geared towards the majority of the population within a given area (save for a few neighbourhoods in a few cities in North America and England). That leaves no room for "growth" which is a vital component of any hard-nosed business strategy.

This is not good analysis at all RMike..

Yes...Jamaica should seek markets wherever we have a competitive advantage...the diaspora is definitely a marketplace where we should focus on... not exclusively but it should be a huge part of the mix..... then leverage that to try to mainstream our brands

Grace Kennedy, our largest and most successful conglomerate is the best example of this strategy.... they have executed this well in the last 10 years.. Do you know what their slogan is?

But we don't help ourselves. The French used to have a very ingrained cultural bias against the Germans (or "Boche" as they were derogatorily called by the French) and the two even fought three wars, yet now Germany and France are strong trading partners. How did that happen? Well the Germans helped to shed the image that the French had of them, through hard work, high productivity, positive news from Germany and proper marketing. Jamaica on the other hand kind of expects that we simply show up and sell stuff and that people will buy it all while they have read stories of illegal abattoirs, American beef, low-quality cement, shoddy workmanship for public works and private construction, formalin-soaked fish, murder and corruption galore. Locals don't even want to buy some of our own products to rhatid and yet we expect that people overseas will flock to it (and I well recall being in a supermarket and having a fellow patron encouraging me to buy a foreign product over it's local competitor because the foreign product was "better man, it better!"). If Jamaica sold competitive goods (which would be had through better productivity) and had high productivity and vastly reduced crime then cultural perceptions of us as lazy, weed-smoking thieves and murderers (and this is a perception that is had not just by the Trinis, but by Americans, Peruvians (as one poor traveller can attest), Brits, Canadians, etc) would fade and eventually disappear.

That would be a blessed day if we get there.. ie selling competitive goods...

Structural reform of the entire society is the key... reduce the power of politicians and the corrupt "Brown Man Time" class system through a social contract with all sectors & massively upgrade education & community development

[Don1]

Sadly, this is what has gotten Jamaica nowhere. We think of everything as zero-sum. So it's "this" can be better than "that", rather than "this" and "that" can be better than "this" or "that" alone.

Jamaica has already signed up to the "most favoured nation" status and it hasn't gotten us anywhere because we have low productivity and too much corruption and poor standard (though good standard guides and rules). The fact that Jamaica is one of the many countries with NTR with the US and that this hasn't generated the benefits that you think we should have gotten from the late 1990s demonstrates that getting "favourable trade terms" in the absence of the ability to exploit them leads only to more of the same: stagnation or decline.

What will continue to get us nowhere is looking to Caricom...a tiny, poor market where we are the largest consumer... a losing strategy.

We need to negotiate a bi-lateral agreement with the US for this new dispensation...playing the growing Chinese strategic interest in Jamaica off the US and try to get some benefits.

Caricom will take us nowhere

[Willi]

Gospel truth.

[Peter R]

ReggaeMike,

The Trinidad subsidy IS A FACT! the cost of energy in T&T is NOT based on distance of transportation to market. The subsidy has been discussed in the T&T parliament as a potential source of revenue, i.e. by removing it the govt. will have that money to spend elsewhere. The government that removes it would probably lose the next election.

[Peter R]

Here you go:

http://guardian.co.tt/news/general/2...on-gas-subsidy

[Don1]

1. Whatever the terminology one wishes to use, MFN (agree the term is dated...but I used it loosely..my bad) or whatever...the fact is that the United States is currently engaged in a program of bi-lateral trade agreements with countries throughout the world... the latest being South Korea just this week. Jamaica would be foolish to continue ignoring this option and hew to this romantic but failed (for us) notion of Caricom... where our chances for significant growth & development are nil.

2. It's naive to believe that the US is unconcerned about China's aggressive moves in its sphere of influence. They are.

3. Jamaica has a strategic location in the region, potentially controlling sea lane access to the Panama Canal on the Atlantic side. Kingston has a big container port which China is interested in controlling.... they already control ports bracketing the Atlantic & Pacific points of the Canal Zone through Hutchison Whampoa... all these things are of concern to the US...especially in war planning.
As we know, peace time is mere preparation for war.... for strategic planners that is

4. It is a fact that S Korea has far more strategic significance to the US than Jamaica does...but that fact is irrelevant to Jamaica pursuing its interests in a bi-lateral agreement

5. Jamaica needs to wake up to the reality that this Caricom thing is NOT operating to our benefit... and is structurally impossible to do so at this point.... ALL the other nations except Guyana are ahead of us...but offer no avenue for our development because they are small...ie the worst of all worlds.
We should de-couple ourselves from that regional/small-minded thinking and find a better way by opening our eyes fully... a bi-lateral arrangement with the US is one such way imho


Respek