Yesterday, William Mahfood, the president of the Private Sector Organisation of Jamaica (PSOJ) expressed surprise at the volume of imports from Trinidad and Tobago, as Jamaica Customs figures showed tariff-free imports of packaged drinks, including the popular Fruta Brand, amounting to nearly $3.7 billion.
“What it says to me is that there’s probably still an opportunity for moremanufacturing in Jamaica. Surprisingly I’d have thought imports in ready-made packaged drinks would have been reduced with the increased capacity that companies like LASCO, Pepsi and Serge Island and WYSYNCO have been putting in place,” said Mahfood. “I’d have thought it would have been on the decrease. There’s still a lot of room for local manufacturers.”
The concern has led to local manufacturers who supply similar products brainstorming about creative strategies in order to remain competitive.
Mahfood said that while there’s scope for improvement for making the businessenvironment more conducive to local manufacturers, there has been of late a lot more investment in the packaged drinks industry in Jamaica compared with 15 years ago. He commented that Jamaica’s programme with the InternationalMonetary Fund (IMF) had seen a lot of substitution replacing other imported goods.
Recently, when he unveiled his plant’s expansion a few weeks ago, LASCO head Lascelles Chin, one of the country’s largest manufacturers spoke stridently about the imbalance in the situation in which local manufacturers were facing significant imports of packaged drinks from regional neighbours.
Responding to the concerns, Director of the Industry Division in the Industry Ministry, Beverley Rose-Forbes told the Jamaica Observer that the Government was committed to taking legitimate steps within the Caricom framework to make the business climate more conducive to the local manufacturing sector.
Rose-Forbes said that in the wake of trade liberalisation and globalisation, the manufacturing sector has had to cope with a changing environment, characterised by the erosion of trade preferences and the emergence of low-cost producers. She said the surge in imports has triggered fierce competition not only from regional, but also third-country products.
Rose-Forbes says the Government was collaborating with private sector trade associations and a range of public institutions, including JAMPRO, the Bureau of Standards, and the Ministry of Foreign Affairs and Foreign Trade to build on the competitiveness and supply capabilities of the local manufacturing sector.
She noted that strategies geared toward the modernisation and expansion of the manufacturing sector in the areas of standards-development, accreditation, technology-acquisition and innovation are being accelerated.
Complementing the focus of industry modernisation, are the export development initiatives built around a programme to raise the export-readiness of local enterprises, Rose-Forbes said.
She added that the second phase of the National Export Strategy would be rolled out in this fiscal year.
But Rose-Forbes acknowledged that as Jamaica is a member of the Caricom Single Market, products from other member states, once they satisfy the rules-of-origin criteria, are entitled to duty-free entry in Jamaica, noting that corresponding treatment is also accorded to export of goods from Jamaica into other member states.
According to Rose-Forbes the Government stands to intervene if fair treatment is not being meted out to local manufacturers who seek to access the regional market in the expanding packaged drinks industry.
“Though an open economy, we will not resile from our obligation to provide legislative protection to domestic industries through trade remedy legislation. We will also be vigilant in pursing action under dispute settlement mechanisms where we perceive unfair trade and discrimination to be occurring,” she said.
“We have done it before with a range of products (eg lubricating oil, meat products etc) and are not afraid, once the evidence is available to pursue similar action. An active partnership with our private sector is in force. The trade associations have always called on, and sought the ministry’s intervention where the rules are being flouted,” she said.