Caribbean/Guyana: Caribbean Court test case

Caribbean/Guyana: Caribbean Court test case
14 December 2009

A trade row over Guyana’s cement imports is finally settled with a tough stance taken by the court.

The Caribbean Court of Justice (CCJ) has recently settled a case that had threatened to undermine the legitimacy of the new entity and underscored the capacity deficiencies that face the Caribbean region as it moves to implement the Caricom Single Market and Economy (CSME). Relief came when Guyana finally agreed to reinstate Caricom’s Common External Tariff (CET) on cement in October 2009, following months of court proceedings and political manoeuvring.

Despite this settlement, Guyana continues to insist that Trinidad Cement Limited (TCL)– one of the largest cement companies in the English-speaking Caribbean – is unable to meet regional demand. Trinidad-based TCL and its Guyana-based subsidiary, TCL Guyana Incorporated, filed suits against the government of Guyana with the CCJ, arguing that the government was in violation of the Revised Treaty of Chaguaramas when it unilaterally lifted the CET on extra-regional cement imports in October 2006.

The CET is applied by all Caricom member states to products imported from non-member countries and can only be altered or suspended under certain circumstances. That decision cannot be made unilaterally by an individual country and can only be given by the Council of Trade and Economic Development (COTED) or the secretary-general of Caricom. Guyana, in effect, authorised its own waiver in 2006 and renewed that waiver annually.

Following the suspension of the CET in 2006, Guyana imported cement from Venezuela, Colombia, and the Dominican Republic. TCL Guyana argued that this policy resulted in company revenue losses of more than US$2m. In August the CCJ ruled that Guyana was in breach of the Treaty and gave it 28 days to implement the CET. The September 17th deadline passed, prompting CCL to file contempt of court proceedings against the government. The CCJ subsequently dismissed an application from Guyana for more time to implement the CET and it was forced to acquiesce. The government of Guyana continues to insist that regional cement supplies are insufficient to meet the needs of Guyana’s construction sector.

Source: Business Latin America
Published under Cement News