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<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>Once more into the breach</SPAN>
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Anthony Gomes
Wednesday, March 14, 2007
</TD></TR></TBODY></TABLE>
<P class=StoryText align=justify>The acting editor of the Trinidad Guardian Anthony Wilson, in his response to the Gleaner editorial of February 25, referred to the LNG supply and pricing disagreement between Jamaica and Trinidad and Tobago (T&T) as "the looming trade war". An extreme reference indeed, but not entirely unexpected, though definitely undesirable.<TABLE cellSpacing=0 cellPadding=5 width=75 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>Anthony Gomes </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>Over the past four years there have been mixed and sometimes scrambled signals emanating from the T&T government officials over the price and supply of LNG to Jamaica.<P class=StoryText align=justify>An early example was PM Patrick Manning's statement after conversing with Mr PJ Patterson during a visit to Antigua in May 2003, concerning the selling price of LNG to Jamaica: "Our position was that the Caribbean Single Market and Economy (CSME) did not properly form part of the LNG negotiations and would have to be taken up elsewhere at another level.<P class=StoryText align=justify>Therefore, we have agreed that the LNG negotiations will proceed on a purely commercial basis". This was an early indication of a cop-out being considered, as Mr Manning's statement followed a previous pronouncement that his government would sell LNG to Jamaica at "world market" prices. T&T's obligations under the CSME again appeared to have been overlooked.<P class=StoryText align=justify>Jamaica's position on the LNG pricing issue is based on the fundamental principle of "national treatment". This is described in the Preamble to the Revised Treaty of Chaguaramas thus: "Resolved to establish conditions which would facilitate access by their nationals to the collective resources of the region on a non-discriminatory basis".<P class=StoryText align=justify>This principle of "national treatment" underpins the existence and operation of the CSME that creates a single market and a single economy, which means the virtual existence of a unitary state without, as yet, any political integration. The single economy is scheduled to come into force in 2008.<P class=StoryText align=justify>The 2004 agreement between Jamaica and T&T for the supply of 1.1 million tonnes of LNG per annum over 20 years, was expected to be priced at Trinidad's domestic price for natural gas, plus the cost of liquefaction and transportation, in accord with the spirit of the CSME.<P class=StoryText align=justify>However, the Guardian's acting editor has introduced another argument involving a subsidy to Alcoa's production through the application of T&T's domestic price plus add-ons to Jamaica. As Alcoa is reported to be financing the initial expansion of the refinery in Jamaica, jointly owned 50 per cent /50 per cent with the government of Jamaica, the Guardian projects an increase in Alcoa's ownership from 50 per cent to 80 per cent of the equity. This projected change in ownership is unclear and seems highly speculative.<P class=StoryText align=justify>In 2003 the reported cost of electricity in Jamaica was about US$0.18 per kilowatt hour (kWh) while in T&T it was US$0.04 kWh approximately. T&T's trade surplus with Jamaica exceeds US$500 million and is due mainly to the very competitive energy price enjoyed by their domestic enterprises. In Jamaica's case, the application of T&T's domestic price for natural gas seeks to remedy the imbalance by bringing Jamaican manufacturers closer to their Trinidadian counterparts as far as energy prices are conc
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Anthony Gomes
Wednesday, March 14, 2007
</TD></TR></TBODY></TABLE>
<P class=StoryText align=justify>The acting editor of the Trinidad Guardian Anthony Wilson, in his response to the Gleaner editorial of February 25, referred to the LNG supply and pricing disagreement between Jamaica and Trinidad and Tobago (T&T) as "the looming trade war". An extreme reference indeed, but not entirely unexpected, though definitely undesirable.<TABLE cellSpacing=0 cellPadding=5 width=75 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>Anthony Gomes </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>Over the past four years there have been mixed and sometimes scrambled signals emanating from the T&T government officials over the price and supply of LNG to Jamaica.<P class=StoryText align=justify>An early example was PM Patrick Manning's statement after conversing with Mr PJ Patterson during a visit to Antigua in May 2003, concerning the selling price of LNG to Jamaica: "Our position was that the Caribbean Single Market and Economy (CSME) did not properly form part of the LNG negotiations and would have to be taken up elsewhere at another level.<P class=StoryText align=justify>Therefore, we have agreed that the LNG negotiations will proceed on a purely commercial basis". This was an early indication of a cop-out being considered, as Mr Manning's statement followed a previous pronouncement that his government would sell LNG to Jamaica at "world market" prices. T&T's obligations under the CSME again appeared to have been overlooked.<P class=StoryText align=justify>Jamaica's position on the LNG pricing issue is based on the fundamental principle of "national treatment". This is described in the Preamble to the Revised Treaty of Chaguaramas thus: "Resolved to establish conditions which would facilitate access by their nationals to the collective resources of the region on a non-discriminatory basis".<P class=StoryText align=justify>This principle of "national treatment" underpins the existence and operation of the CSME that creates a single market and a single economy, which means the virtual existence of a unitary state without, as yet, any political integration. The single economy is scheduled to come into force in 2008.<P class=StoryText align=justify>The 2004 agreement between Jamaica and T&T for the supply of 1.1 million tonnes of LNG per annum over 20 years, was expected to be priced at Trinidad's domestic price for natural gas, plus the cost of liquefaction and transportation, in accord with the spirit of the CSME.<P class=StoryText align=justify>However, the Guardian's acting editor has introduced another argument involving a subsidy to Alcoa's production through the application of T&T's domestic price plus add-ons to Jamaica. As Alcoa is reported to be financing the initial expansion of the refinery in Jamaica, jointly owned 50 per cent /50 per cent with the government of Jamaica, the Guardian projects an increase in Alcoa's ownership from 50 per cent to 80 per cent of the equity. This projected change in ownership is unclear and seems highly speculative.<P class=StoryText align=justify>In 2003 the reported cost of electricity in Jamaica was about US$0.18 per kilowatt hour (kWh) while in T&T it was US$0.04 kWh approximately. T&T's trade surplus with Jamaica exceeds US$500 million and is due mainly to the very competitive energy price enjoyed by their domestic enterprises. In Jamaica's case, the application of T&T's domestic price for natural gas seeks to remedy the imbalance by bringing Jamaican manufacturers closer to their Trinidadian counterparts as far as energy prices are conc
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