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Concerns over rum subsidies

By Carla Bridglal

Rum was on the agenda for Caricom leaders as they used yesterday’s visit by United States Vice-President Joe Biden to Trinidad and Tobago to highlight concerns about the impact of US rum subsidies to Puerto Rico and the US Virgin Islands.

“The most contentious issue is rum subsidies to Puerto Rico and the US Virgin Islands. We don’t expect (Biden) to make a decision today but we expect to let him know the whole position and the full ramifications of continuing those subsidies and that it will clearly affect rum production,” Trade Minister Vasant Bharath said yesterday.

The US has     been running a “Rum Cover-Over Programme” since 1917, which consists of a tax levied on sales of spirits in the US market. 

Most of this revenue is transferred to the US Virgin Islands and Puerto Rico—US dependencies—to aid these territories’ economic development. 

These islands, however, use much of these funds to encourage their local rum industries, at the expense of other Caribbean rum-producing countries. 

Caricom has since considered taking the matter to the World Trade Organisation. 

Bharath was speaking at a discussion on the Logistics Performance Index report on Trinidad and Tobago at the Arthur Lok Jack Graduate School of Business, Mt Hope. 

Other items on the agenda, he said, were Caricom-US trade agreements, including the Caribbean Basin Initiative (CBI), and the accession of St Kitts to these agreements, as they had previously been excluded. 

The CBI is a unilateral programme initiated by the US in 1983 that offers countries in Latin America and the Caribbean several tariff and trade benefits.

“The CBI has given us a significant amount of access to the US for a number of products, and a number of our manufacturers have been able to access the US as a result. The agreement has been extended until 2020,” Bharath said. 

Trinidad and Tobago ranked 68th out of 155 countries in the LPI, a competitiveness survey commissioned by the World Bank. 

 

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