A “cover-over” tax on Caribbean rum exports entering the United States is continuing to present “a significant challenge” to this important regional industry, according to Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss, who is vowing to keep fighting for its removal.
Addressing the annual West Indies Rum and Spirits Producers’ Association’s (WIRSPA) technical seminar and rum tasting event here last night, Inniss expressed disappointment that US President Barack Obama, whose election as the first black American leader was widely celebrated in the Caribbean, has not been of any help to the region in seeking resolution to this and other issues of concern.
“I make this point and I really cannot apologize for it,” Inniss said. “I don’t know that the current occupant of the White House has been of any tremendous benefit to us in the region, certainly when it comes to matters like these. I am very hurt because I have seen many entities in the region challenged by decisions made in the White House in the last couple of years that have me very concerned.”
“I think it is wrong,” said Inniss of the discriminatory “cover over” tax which supports Puerto Rican and US Virgin Islands rum producers. “I think what the United States of America has done goes against the fundamental tenet of fair trade. It has done and can do considerable damage to the economies of the region,” he added.
Since its introduction and subsequent extension in 2012, the “cover-over” tax has made it difficult for regional rum to compete in the US market against similar US-made products. The tax is levied at the rate of US$13.25 per gallon on all rum imported into the US. The proceeds are then handed over to Puerto Rico and the USVI on the basis of their rum production.
Inniss lauded regional rum and spirits producers for focusing on niche markets, branding and pitching their products way above what competitors are doing. “That is something that the Government of Barbados and regional governments, I am sure, will continue to support,” he said, “but it doesn’t belie the fact that what the US did and continues to support under President Obama, of all people, is fundamentally wrong.”
Inniss encouraged regional producers not to be daunted by the challenges since, as he put it, “the road ahead looks a lot smoother than it has been in the last few years” because of their efforts to find new markets and develop niche products. He called on operators of restaurants, bars and hotels to always ensure that local rums were the first choice of drink for locals and tourists.
Addressing the event, chairman of WIRSPA Dr Frank Ward said the association had been “attempting in myriad different ways” to address the challenges. Making it clear that “the road ahead is not going to be easy”, he said he was confident that growth and expansion of the industry were still possible.
“I see a bright future for the industry but one which needs a great deal of work and a great deal of application and commitment from all,” he said.