Competition is heating up among the regional flour mills, threatening the milling industry in Barbados and the wider region, the industry and commerce minister said today, suggesting that Barbados ought to appeal to global trade arbiter for protection against extra-regional suppliers.
Minister Dwight Sutherland told the annual meeting of the Caribbean Millers’ Association (CMA), held at Infinity on the Beach on St Lawrence Gap, that despite its relatively small market, the Caribbean still imports nearly a million metric tons of wheat flour annually from external suppliers.
He said: “The wheat flour industry is highly competitive.
There are sixteen mills in the region and these mills are competing with each other for the regional market.
“We recognize that due to our multilateral obligations under the World Trade Organization (WTO), extra regional imports must be allowed into the regional space.
“As a result, the region is faced with approximately 900,000 metric tonnes of wheat flour that is imported annually.
“This may be considered unsustainable in such a small space.”
He further noted that this issue was compounded by the fact that the nine-nation Organisation of Eastern Caribbean States (OECS) as well as fellow CARICOM states Belize and Haiti triggered Article 164 under the revised Treaty of Chaguaramas, which is designed to promote the development of industries in CARICOM’s Lesser Developed Countries (LDCs).
This means that wheat flour produced in OECS enjoys duty-free access to other CARICOM countries; while wheat flour produced in more developed countries such as at ADM Barbados Mills Ltd, pays a duty of 70 per cent to export to the OECS region.
Sutherland declared: “It is often articulated that continued implementation of this provision is critical to facilitating the operation of the productive sectors in the lesser developed countries and their adjustment to competition in the CARICOM Single Market and Economy.
“However, this provision of Article164 of the revised Treaty of Chaguaramas has and continues to present a challenge to some wheat flour producers of the more developed CARICOM countries including ADM Barbados Mill Ltd who have to compete with duty free imports from member countries,.
“I posit that the time has come for the CMA to explore via World Trade Organisation’s compatible trade law mechanism, the preservation of some policy space to allow the wheat flour industry to develop in the OECS and for the wheat flour manufacturers in the developed members of CARICOM to remain viable.
“CMA must therefore look beyond the region for potential markets.”
The Commerce Minister revealed that Government is supportive of such an initiative and is currently undertaking a study of manufacturing, seeking to rebuild industry.
The Government is also seeking to determine what policies can boost manufacturing’s contribution to GDP not only through product development but also in finding and penetrating export markets, he added. [email protected]
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