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OECS Working With WTO On Tariffs And Tax

by Leroy Baker, Tax-News.com, New York

16 May 2011

Following recent consultations in Dominica between the Organization of Eastern Caribbean States's (OECS) World Trade Organization (WTO) members, the OECS has said that securing flexibility in negotiations on tariff liberalization will enable its governments to avoid cuts to border taxes.

The statements come as the OECS concluded a meeting of trade officials, where the current state of the WTO Doha Round talks provided the main agenda focus. Topics discussed included market access for agricultural and industrial goods, trade facilitation, fisheries subsidies, intellectual property rights, and services, all matters which have proved controversial and frustrating to Doha negotiators.

The WTO's director general Pascal Lamy has taken to the stage frequently since the publication of a collection of draft Doha texts on April 21, warning of dangers of failure for less economically developed countries, and imploring member states to push forward with a viable conclusion, rather than concentrate on the furtherance of narrow interests.

In spite of this, the OECS Technical Mission in Geneva in fact reported significant progress for the OECS in most areas of the WTO negotiations. The head of the Mission, Ricardo James, noted that a number of achievements had been made, of particular interest to the OECS Countries, for they will affect their tariff levying capacity.

James explained, "In the area of tariff liberalization for example, a special concession has been granted to Small Vulnerable Economies (SVEs), such as the OECS member states, that will significantly modulate the depth of tariff cuts. In this regard SVE modalities provide significant flexibilities to the OECS member states in deciding which lines to cut and by how much. The net effect is that member states would not need to make cuts in to applied tariffs which are the Common External Tariff (CET). So we have a lot of flexibilities and for those modalities we want to preserve them.”

In turn, James believes the retention of current border tax rates will prove beneficial for OECS economies. He stressed, “A significant proportion of government revenue at various levels comes from border taxes including import duties. Therefore not having to make cuts in our CET rates as a result of this round will mean that government revenues are being preserved for the time being ... In addition our tariff structure has been informed by the need in a number of areas to provide a certain level of comfort and protection to domestic productive sectors whether in agriculture or manufacturing. Therefore not having to make tariff cuts in certain sensitive areas where we have production and export interests is another key objective for the OECS member states moving forward.”

Nonetheless, the OECS recognizes that more needs to be done. In particular, Intellectual Property Rights, Dispute Settlement and the Harmonized Liberalization of Services sectors within the context of the establishment of the OECS Economic Union were highlighted as areas in which negotiators need to press on.

James said, “In the services negotiations, we are talking about the identification of sectors that countries are going to further liberalize and the various modes of supply along which these services will be provided. Each country will have to place an offer on the table regarding the additional services sectors they would want to liberalize and by how much. Once the modalities for tariff liberalization on agriculture and industrial goods are agreed then schedules will be set indicating what tariff lines are to be cut and by how much. In consequence much technical work needs to be done at the national and regional level to identify which sectors and which modes of supply the OECS member states are willing to liberalize”.

TAGS: tax | Montserrat | Saint Lucia | Saint Vincent and the Grenadines | tariffs | World Trade Organisation (WTO) | trade treaty | Grenada | Virgin Islands | agreements | trade disputes | Anguilla | Antigua and Barbuda | Dominica | Saint Kitts and Nevis | trade | British Virgin Islands

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