CUSTOMS (AMENDMENT) BILL 2013 – Bill No. 2/2013
Minister of Foreign Affairs [Mrs. Rodrigues-Birkett]: Mdm. Deputy Speaker, I rise to speak in support of the Customs (Amendment) Bill before us. This Bill will bring us into compliance with a number of our obligations, regional and international. To say that there is no obligation on the part of Guyana as it relates to this particular tax and its application is not the truth. Let me read from the revised Treaty of Chaguaramas which came into force in December, 2005. Bear in mind the environmental tax was included in the Customs Act of 1995. That revised Treaty was passed in this National Assembly through Act No. 8 of 2006. This is what Article 90 says which deals with internal taxes and other fiscal charges. I quote:
“Save as otherwise provided in this Treaty, member states shall not, (a) apply directly or indirectly to imported goods of community origin any fiscal charges in excess of those applied directly or indirectly to like domestic goods or otherwise apply such charges so as to protect like domestic goods.”
There is an obligation on the part of Guyana to not discriminate. It is not true to say we do not have an obligation to CARICOM.
The Hon. Minister Edghill outlined clearly what is the problem we are trying to fix. Basically, we are bringing this amendment Bill to make this tax non-discriminatory. Mr. Greenidge spoke about the name of the tax and I am sure that we can argue. This tax was there, like I said, since 1995. However, I am sure there are ways we can look at how we expend the resources obtained from this tax. This has been the subject of all of the Council of Trade and Economic Development (COTED) meetings that I have attended in the last five years or so. In 2005 what the CARICOM Secretariat did was to look at this very tax that was being implemented in nine member states. They found that six member states, including Guyana, were applying the tax on a discriminatory basis. Since that study in 2005 member states sought to address the matter. At the Heads of Government meeting in July, 2012 in St. Lucia this matter became so urgent, so important, that it was elevated from the COTED to the Community Council to the Heads of Governments because two countries were still not compliant – that is Guyana and St. Lucia. Both countries at that meeting committed to addressing this issue. In October, 2012 St. Lucia addressed the matter and so that leaves Guyana. If this amendment is successful today, one has to be optimistic, then all of our countries in CARICOM will be compliant as it relates to this particular matter of environmental tax.
As we continue to promote Guyana as a destination for investment and a country that adheres to regional an international obligations it is my humble submission that we cannot delay the passage of this very important amendment. Indeed, Mdm. Speaker, you would recall when I came to this House with the amendment to the Caribbean Community Free Entry of Skilled Nationals Act in July 2011 I had informed this August House that CARICOM did an appraisal of all our member states as it relates to our obligations on the single market. Guyana led CARICOM in terms of meting our obligations; we were deemed substantially compliant. There were a few issues and on top of that list was addressing the environmental tax. If we are able to address this matter today we would certainly be in the 90% of adhering to our obligations under the CARICOM Single Market.
Apart from our regional obligations under the revised Treaty of Chaguaramas, you would recall that we signed the economic partnership agreement in 2008. I came to this National Assembly in May, 2012 and the House unanimously approved the ratification of the economic partnership agreement. Under Article 27, dealing with national treatment on internal taxation and regulation, this is what is stated in the epoch, and I quote:
“Originating imports shall not be subject either directly or indirectly to internal taxes or other internal charges of any kind in excess of those applied directly or indirectly to internal taxes or other internal charges of any kind, in excess of those applied directly or indirectly to like domestic products. Moreover, the parties and the signatories Cariforum states shall not otherwise apply internal taxes or other internal charges so as to afford protection to like domestic products.”
Even though I recognise that the importation of beverages from Europe is not significant, just around 2% or so, the passage of this legislation, will nevertheless bring us into compliance with our obligations under the Economic Partnership Agreement (EPA), as far as it relates to how we apply the taxes. It is my view that it is only a matter of time, as imports increase from Europe that this would also become an issue.
The Hon. Member Bishop Edghill, spoke about our obligations under the World Trade Organisation (WTO). Let me say that when we appeared before the WTO for the Trade Policy Review in 2009, member states of the WTO raised this issue of the Environmental Tax and asked that we address it and bring it in line so that it would be non-discriminatory. At that time we committed to review the tax as well. So in other words, we are looking at our regional obligations under the revised Treaty of Chaguaramas; we are looking at our obligations under the EPA; we are looking at our obligations to the WTO as well.
Let me say, for what it is worth, that the bulk of the beverage imports in 2011 came from Trinidad, about 55% or so, Suriname came second with 22.5% and the United States of America with 9%. I should also note that in 2009, importation from Caricom member states accounted for about 89%, but that was reduced in 2011 to about 83%. We have seen some new exporter countries, if I could say that, added to the list over the last two years. We now have beverages coming in from Turkey, Panama, Mexico, Vietnam, Denmark, Poland, the United Arab Emirates (UAE) and Singapore. In the last two years, we have seen these new exporting countries added to our list and so I can only imagine that as our country develops, so does our liquid appetite as well.
It would be disingenuous on my part, if I pretend to be unaware of the concerns of our local manufacturers and producers on this matter. I am aware of their concerns, specifically, as it relates to the “unfair” competition from other member states, where cost of production is much lower than Guyana because there is an abundance of a specific input needed in the production process. This matter I am sure would have been elucidated and debated in all of the member states that had the same concerns as we have in Guyana, with respect to competition.
There is a view that even after transportation costs and other costs are factored in that these beverages can still be so cheaper than what we produce here locally. We are also well aware of the many voices across the Caribbean Sea, speaking about the issue of Caribbean Airlines vs. Liat when it comes to some of the subsidies being given to the former. The issue of cement is one that is a very fluid issue in Caricom as well.
These are all valid issues, voiced by our local manufacturers and indeed, other entrepreneurs in other member states as well. There is one thing; we cannot address those issues by being non-compliant with our obligations, as we too are exporters. We are part of regional and international bodies and we abide by those regulations included in those international bodies. We therefore have to find legal mechanisms to assist our local producers here to, as far as possible, cushion these effects. Our Government is open to discussing how we can do that and it is for this reason that we are proposing that, instead of the $10 that we apply right now through the imports, that we apply $5 instead.
It is a fact that in our country, we have to continue to implement every measure that can improve our productivity and our competitiveness, hence the importance of the Amaila Hydro, which hopefully would give us reliable electricity and consequently reduce the cost of production. Aid for Trade for example is very important, since this world is an unequal one and trade must not only be free but it must also be fair. So assistance to countries like ours in developing the necessary infrastructure remains a very important topic.
In 2013, the truth is, we cannot pick and choose in terms of the obligations we would adhere to and those we would not adhere to or else the very objective that we are trying to achieve in seeking a level playing field, utopian as that might sound, will be undermined.
With the advent of the CCJ, the wriggle room so to speak, has become much smaller, if existent at all in some cases. Member states are being taken to court: Guyana along with the Caricom Secretariat was taken to the CCJ on the issue of cement and now on the Environmental Tax; Suriname was taken to the CCJ on the application or non-application of the Common External Tariff (CET) on flour from extra-regional sources; Barbados has been taken to the CCJ with respect to the alleged maltreatment of a national of that country. So this is where we are today in 2013. We therefore have to adhere to our obligations as far as possible, in keeping with our reputation too, as a trusted partner in the regional and international community. We are seen as a county ripe for investment, with sound macro-economic fundamentals, as evidence in our consistent growth. This amendment today is just another step in the right direction as we promote our country as a destination for foreign investment and joint ventures, while at the same time strengthening our relations with Caricom neighbours.
As I close, let me say this, at the last court held there was a discussion even amongst member states whether member states or the community can take Guyana to court on this matter. So it is a very serious issue and I would really like if we can approve this amendment today. Some of the concerns that Mr. Greenidge voiced, I am sure we can find a way. We did have engagements with the private sector. Indeed, the individual who was slated to look at doing some work for them, as you know Mr. Greenidge is now part of the Government of Grenada so we are doubtful that anything can come out of that in the near future.
I was told earlier that APNU had indicated that they will oppose this Bill and I hear now we speak about a deferral. I believe that we can pass this amendment and we can find ways of putting some of the measures in place with our private sector here to cushion the effects.
I ask for you support. I thank you. [Applause]