Call made for removal of CET on food, fuel

Caribbean countries are being urged to remove the Common External Tariff (CET) on fuel and food imports, to cushion the effects of the rising oil price, which has affected the cost of a range of products and services in the past month.

The proposal was made at the opening of the 35th Special Meeting of the Council for Trade and Economic Development (COTED), at the Caribbean Community (Caricom) Secretariat on Thursday. The COTED, currently addressing energy, will examine a draft regional policy on energy.

Chairman of COTED, Joann Massiah, Minister of State in the Antigua and Barbuda Legal Affairs Ministry, underscored the link between fuel price increase and that of food and other commodities on the world market. As such, she stated that any response by regional governments must be crafted in such a way that it takes all of these issues into consideration.

Massiah said that the meeting is significant in that it comes at a time when there are “tremendous global uncertainties”, and she challenged her colleagues to ensure that the meeting ends certain key issues being addressed.

These are: the consideration of additional national and regional initiatives aimed at providing relief to the most vulnerable, and the convening of an urgent meeting of the regular COTED to consider issues surrounding recent price increases in fuel and raw materials. “Both actions should run parallel to each other, and should be led by the appropriate community organs, given the fragile state of regional economies.” She believes that it is also imperative that COTED convenes a joint meeting of regional trade and agriculture ministers to discuss the challenges as well as prepare an action plan.

She also encouraged that a strategy of engagement with international donors, particularly the European Union, be developed; while noting that the region needs to be updated on the status of a 2008 €1.8 million grant to help countries adapt to emerging global crises.

Caricom Secretary General (ag) Ambassador Lolita Applewhaite, at the opening of the ministerial session, said a Caricom energy policy is “instrumental”, since it will take into consideration the interests of all member states, bringing them equal benefits. According to her, current global developments demand action by regional authorities.

The acting secretary general pointed to the negative impacts that rising oil prices have on regional economies, despite efforts to move in the direction of renewable energy. She revealed that, with every 10 per cent increase in the price for oil on the world market, there is a negative impact of 1.5 to 2.5 per cent of the gross domestic product (GDP) of a Caribbean country. This means that every time the price for oil increases by US$4.30, the GDP is reduced across the Caribbean.

She pointed to efforts being made at the national level of several countries to ensure energy security, with Guyana looking to hydropower, as is the case in many other member states; Jamaica expanding wind, hydropower and bio-fuels, and Barbados with its solar energy.

At a broader level, the Caricom Secretariat has implemented a ‘greening’ initiative that seeks to improve efficiency through behavioural change and energy efficiency retrofits, as well as renewable energy generation.

Germany, the Inter-American Development Bank and the United Nations Development Programme are among the financiers of the secretariat’s and ultimately the region’s energy push. “We will be challenged to see how we could leverage the energy sector advantages, both fossil and renewable, through such approaches as cross-border integration of energy systems; encouraging participation in downstream energy sector industries, and implementation of regional strategies to support capacity development in the sector,” Applewhaite recommended.

Meanwhile, Acting President of Guyana, Samuel Hinds, who holds responsibility for energy, in his remarks, pointed to the efforts undertaken by regional governments, making specific reference to Guyana. “Guyana is rapidly advancing its own energy programme through the Amaila Falls hydropower project, which is set to transform Guyana’s electricity sector with almost 100 per cent hydroelectricity,” Hinds noted.

He also commended the Caricom Secretariat for its work in energy sector development, which has seen a new “programmatic” approach. “The establishment of an energy unit underscores the importance of energy as a key ingredient in economic development,” the acting president added.

The Draft Caricom Energy Policy was developed by a task force comprising representatives of Barbados, Grenada, Guyana, Jamaica, Suriname and Trinidad and Tobago. It is intended to address issues such as security of energy supplies, energy pricing policy, and the impact on relative competitiveness on the Caricom Single Market and Economy, and purchasing and transportation arrangements.

The 35th Special Meeting of the Council for Trade and Economic Development opened on Tuesday, March 22nd with an official meeting, also held at the Caricom Secretariat.