- Regional paint producers want increased tariffs on imported products
Dr Clarence Henry, Antigua and Barbuda’s Ambassador to the Caribbean Community (CARICOM), has reiterated his call for a “independent and comprehensive” analysis of claims made by regional paint manufacturers calling for tariff increases on paint imports from the United States.
On Tuesday, Henry met with local manufacturers to discuss the matter, and he stated that the analysis must be conducted independently of the businesses.
Local manufacturers insist that when the government applied Article 164 of the Revised Treaty of Chaguaramas, they were still able to survive despite going through difficult times.
They urged the Antiguan authorities to be vigilant against the formation of monopolies, which they allege would come from the regional paint makers’ appeal for support.
In a letter to Trade Minister E.P. Chet Greene dated September 26, 2023, Henry stated that the “so-called study cannot be taken at face value because it was not conducted by an independent consultant.”
According to the seasoned trade official, the document “cannot be relied on as one that provides a transparent and fair comprehensive analysis” because it was not coordinated by the CARICOM Regional Organisation for Standards and Quality (CROSQ).
The CARICOM Paint Manufacturers indicated in a letter to Greene dated September 20, 2023, and signed by Marguerite Desir, that they were seeking the Gaston Browne administration’s cooperation “for remedial measures via an alteration of the Common External Tariff (CET) on paints.”
The CET is a single tariff rate agreed upon by all CARICOM members on imports of a product from outside CARICOM, and informed sources told the Caribbean Media Corporation (CMC) that when the CARICOM Private Sector Organisation (CPSO) presented the study to the Council for Trade and Economic Development (COTED), almost all member states of the Organisation of Eastern Caribbean States (OECS) did not support the request.
The regional manufacturers stated in their letter that they commissioned the study and that “its conduct has been coordinated by the CARICOM Private Sector Organisation (CPSO), at the invitation of the CARICOM/Regional Paint Manufacturers.”
The regional paint manufacturers claim that the CARICOM paint market has suffered significant incursions due to “substantial under-pricing of paints” from the United States.
“Over the past several years, individual regional paint producers have raised this issue with their national governments on numerous occasions.” While a few governments have attempted to address the issue, the actions have been ineffective, given the need for a ‘whole of community’ response through the Council for Trade and Economic Development (COTED) (i.e. a CET alteration, rather than an individual country response through a CET suspension).”
They stated that OECS members and the paint industry in less developed countries (LDC) benefit from Article 164 “and has shown tremendous promise as a successful Community enterprise.”
“US incursions have hampered OECS producers’ success by significantly eroding price competitiveness and market share in both LDC and MDC markets.” Under-pricing, if not addressed, will completely negate the intended benefit of Chapter Seven and Article 164 of the Revised Treaty of Chaguaramas (RTC),” which controls the regional integration movement.
“Previously, the Paint Manufacturing Industry was unable to complete the complex analytical work required to justify the approach to the COTED.” The formation of the CPSO and the Caribbean Manufacturers Association (CMA) permitted the unification of all Regional Paint Manufacturers around a single issue that has severely impacted their market share, investment, intra-regional commerce in paints, and jobs.
“An opportunity to present the Study, will highlight the egregious extent of under-pricing to an extent that now threatens innovation, industry expansion, and for some manufacturer’s, even their business continuity as producers,” the companies in the region stated.
During the conference on Tuesday, local manufacturers reiterated their call for higher duties on paints imported into the region from North America, saying that consumers could suffer in the future.
They contended that the findings implied that a few paint companies in the region dominated the market.
The study, according to Henry, is “self-serving favouring regional manufacturers,” and they are aware “that the threshold to prove their case would be difficult to pursue a country by country approach and would also call into question the implications of setting the tariff at 50% for extra-regional paints.”
He said that the study failed to demonstrate that the region’s paint producers were harmed, adding that “there was no evidence to show loss in profits, inability to compete, or any sort of loss in the market.”
Henry went on to say that “there must be national stakeholder consultation by the Cabinet to determine whether to support remedying action.”
He also wants the CROSQ to be engaged and included in the independent assessment, citing “a lack of information to show where CROSQ and its paint standards intersected with this body of work.”
Henry also wants the CARICOM Competition Commission (CCC), which is situated in Suriname, to be “integrally involved in the investigation of unfair competition claims.”
