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<SPAN style="COLOR: red">Trinidad Guardian
Thursday 15th March, 2007
Editorial
</SPAN>
ON MONDAY, Jamaica Prime Minister Portia Simpson Miller and Venezuela President Hugo Chavez signed a memorandum of understanding covering the supply of liquefied natural gas (LNG) to Jamaica from Venezuela.
This MOU has some significance for the local business community which has looked on in shock and awe at the bellicose rumblings coming from Jamaica on this thorny issue of LNG.
Jamaica’s private sector is upset at what it perceives to be T&T’s failure to live up to its undertaking to provide cargoes of LNG to Jamaica.
Last week, the Jamaica Manufacturers Association (JMA) said it had reached the end of its tether with respect to trade relations with T&T. Referring to T&T’s private sector, the JMA said it had never witnessed a “more insular and selfish group” which seemed to be only interested in “plundering our country to increase their wealth and the current US$500 million trade surplus which they enjoy with our economy.”
The JMA also advocated that T&T “must be brought to book and held accountable” and threatened the Jamaican Government that if it did not do so “the JMA will be forced to act on behalf of its constituents.”
Not to be outdone, the Jamaica Chamber of Commerce issued a news release stating that T&T’s perceived failure to supply Jamaica could threaten the future of the Caricom Single Market and Economy and disrupt Jamaica’s future development.
“The perception of a large segment of the Jamaican business sector is that it has always been difficult to trade with Trinidad, because non-tariff barriers are used to block the entry of Jamaican goods and services into Trinidad, even while there is the expectation that Trinidad will have free access to the Jamaican market,” the Chamber said.
Thankfully, the local private sector and its leaders have responded in a mature and measured fashion to the intemperate language coming out of Kingston.
Is the anti-integrationist rhetoric from Jamaica’s private sector justified? Absolutely not.
The first difficulty for our northern neighbours lies in an appreciation of the difference between an MOU and other kinds of agreements.
By its very definition, an MOU is an expression of intent and not a promise to supply.
By its very definition, therefore, an MOU cannot be breached because in signing an MOU one undertakes to use one’s best efforts to deliver a product or service. Such an expression of intent is subject, always, to the undertaking of feasibility studies and negotiation of the final terms.
So the common-sense understanding of the MOUs between T&T and Jamaica (one in 2004 and one last year) is that T&T expressed an intention to supply 160 million cubic feet of LNG to Jamaica by 2009.
The MOUs that T&T and Jamaica signed are likely to be quite similar to the one signed by Jamaica and Venezuela on Monday. This means that Venezuela would have expressed an intention to supply LNG to Jamaica by 2009, just as T&T had done.
It would be interesting for the Jamaican private sector to note that President Chavez signed the MOU without having in place any identifiable LNG facilities whatsoever. While President Chavez may purchase LNG shipments on Jamaica’s behalf, it would be difficult for Venezuela to supply LNG over the long term without the requisite liquefaction units.
It is also worth mentioning that it took Atlantic LNG four years from the signing of the sales contracts (not the MOU) to the delivery of the first LNG shipment—and that was considered to be warp speed in the LNG industry at the time.
Also relevant is the fact that Venezuela has been trying since the early 1970s (more than 30 years) to get an LNG facility off the ground and that the closest the South American country has come is the framework agreement signed by Shell and Mitsubishi five years ago. Little has been heard of that project, involving two bl
Thursday 15th March, 2007
Editorial
</SPAN>
ON MONDAY, Jamaica Prime Minister Portia Simpson Miller and Venezuela President Hugo Chavez signed a memorandum of understanding covering the supply of liquefied natural gas (LNG) to Jamaica from Venezuela.
This MOU has some significance for the local business community which has looked on in shock and awe at the bellicose rumblings coming from Jamaica on this thorny issue of LNG.
Jamaica’s private sector is upset at what it perceives to be T&T’s failure to live up to its undertaking to provide cargoes of LNG to Jamaica.
Last week, the Jamaica Manufacturers Association (JMA) said it had reached the end of its tether with respect to trade relations with T&T. Referring to T&T’s private sector, the JMA said it had never witnessed a “more insular and selfish group” which seemed to be only interested in “plundering our country to increase their wealth and the current US$500 million trade surplus which they enjoy with our economy.”
The JMA also advocated that T&T “must be brought to book and held accountable” and threatened the Jamaican Government that if it did not do so “the JMA will be forced to act on behalf of its constituents.”
Not to be outdone, the Jamaica Chamber of Commerce issued a news release stating that T&T’s perceived failure to supply Jamaica could threaten the future of the Caricom Single Market and Economy and disrupt Jamaica’s future development.
“The perception of a large segment of the Jamaican business sector is that it has always been difficult to trade with Trinidad, because non-tariff barriers are used to block the entry of Jamaican goods and services into Trinidad, even while there is the expectation that Trinidad will have free access to the Jamaican market,” the Chamber said.
Thankfully, the local private sector and its leaders have responded in a mature and measured fashion to the intemperate language coming out of Kingston.
Is the anti-integrationist rhetoric from Jamaica’s private sector justified? Absolutely not.
The first difficulty for our northern neighbours lies in an appreciation of the difference between an MOU and other kinds of agreements.
By its very definition, an MOU is an expression of intent and not a promise to supply.
By its very definition, therefore, an MOU cannot be breached because in signing an MOU one undertakes to use one’s best efforts to deliver a product or service. Such an expression of intent is subject, always, to the undertaking of feasibility studies and negotiation of the final terms.
So the common-sense understanding of the MOUs between T&T and Jamaica (one in 2004 and one last year) is that T&T expressed an intention to supply 160 million cubic feet of LNG to Jamaica by 2009.
The MOUs that T&T and Jamaica signed are likely to be quite similar to the one signed by Jamaica and Venezuela on Monday. This means that Venezuela would have expressed an intention to supply LNG to Jamaica by 2009, just as T&T had done.
It would be interesting for the Jamaican private sector to note that President Chavez signed the MOU without having in place any identifiable LNG facilities whatsoever. While President Chavez may purchase LNG shipments on Jamaica’s behalf, it would be difficult for Venezuela to supply LNG over the long term without the requisite liquefaction units.
It is also worth mentioning that it took Atlantic LNG four years from the signing of the sales contracts (not the MOU) to the delivery of the first LNG shipment—and that was considered to be warp speed in the LNG industry at the time.
Also relevant is the fact that Venezuela has been trying since the early 1970s (more than 30 years) to get an LNG facility off the ground and that the closest the South American country has come is the framework agreement signed by Shell and Mitsubishi five years ago. Little has been heard of that project, involving two bl
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