Fresh concerns have emerged following Tuesday’s ruling by the Caribbean Court of Justice (CCJ) that handed local cement producer – Rock Hard Cement Limited – its final victory in the longstanding tariff war with Trinidad Cement Limited (TCL) and local subsidiary Arawak Cement Company Limited.
The CCJ ruled that Rock Hard Cement should be classified as ‘Other hydraulic cement’ and attract an import levy of 0- 5%, instead of ‘Building cement (grey)’ as argued by TCL and be charged 15%.
But Executive Chairman of Rock Hard Mark Maloney seems to have another “beef” with the CEMEX Group of Companies, which includes TCL and Arawak Cement in St Lucy.
Maloney is now claiming that while the court ruling was a significant triumph in his company’s quest to stop “the monopolistic behavior” of the CEMEX Group in the region, it has resorted to other means to try to have the 0 – 5% tariff increased.
“They have tried everything possible to stop us from competing with them; and this [court] action was brought by them. So for us to win in a case that was brought against us, is testimony to the fact that we have done all of the right things. What concerns us now, is their lobbying governments through COTED [CARICOM Organization for Trade and Economic Development] to do a study on the impact of lower duties on cement imported to try and have the duties increased to protect them,” the Barbadian business leader told Barbados TODAY.
Of note is that the CCJ itself had suggested the study be done by COTED.
In delivering the judgment, the regional tribunal, sitting in its Original Jurisdiction, said that recent developments in the cement industry made it appropriate for a study to be done by COTED to assess whether the tariff rate for imported ‘Other hydraulic cement’ ought to be increased to give additional protection to regional cement manufacturers.
The CCJ explained that such a study could determine whether regional manufacturers might obtain an appropriate level of protection if the levy was raised on ‘Other hydraulic cement.’
The court also indicated that such a study would be entirely in keeping with the CARICOM Treaty obligation on COTED to keep the tariff under review.
But Maloney has expressed some concerns about how the study was likely to be conducted.
“We hope that such studies will include all stakeholders and that all consultations will take place as mandated by the court and that the cost impact on consumers, not just on the protection of manufacturers, be taken into consideration,” the Rock Hard boss stressed.
Maloney contended that the Revised Treaty of Chaguaramas and the CARICOM Single Market and Economy (CSME) are designed to advance and protect the interests of all Caribbean people and not just one group over the other.
“So just as producers need protection, consumers need protection from excessive costs and unnecessary prohibitive and anti-competitive pricing. I think these and more, are the things any study that is done should consider,” he argued.
Meanwhile, TCL and Arawak also have concerns of their own.
In a newspaper advertisement, the group recorded its disagreement with the CCJ ruling and warned that the judgment against their companies could result in job losses and a leakage of precious foreign exchange out of the region.
“The ruling does not augur well for the safeguarding of our CARICOM industries and products…which could lead to mothballing of remaining factories, giving rise to more imported goods. This will result in further FOREX [foreign exchange] consumption and the protection of jobs outside of the CARICOM region at the expense of local jobs,” the TCL group warned.
The two affiliate companies said that the economies as a whole, with the changing of regional rules, would adversely affect the way foreign investors would take decisions about investing in the CARICOM market.
“The TCL Group/Arawak Cement believes that it is very challenging for local industries to compete and survive against duty-free products coming from larger and low-cost countries; it is a question of scale and competitiveness, and about the kind of country we want for our future generations,” the ad said.
“Essentially, the CCJ’s decision has the potential of inadvertently preserving extra-CARICOM industry and labour, while putting our investments in manufacturing and workforce at considerable risk,” it added.
The TCL Group and Arawak said they are sticking to their guns that the imported [Rock Hard Cement] product has been wrongfully classified and therefore, the applied tariff is incorrect.
The Rock Hard competitors in Barbados and Trinidad accused the CCJ of appearing to be more concerned with the role of COTED in the region, than the fundamental point.
“To say that the issue of tariff setting in not for classification and is a matter of policy for COTED to decide the level of safeguarding, goes against the tenets of the Common External Tariff (CET) system of the Caribbean Community,” the TCL Group contended.
The company said that as a significant contributor to the regional economies, it continues to uphold the values of fair trade and ethical practice.