ClarkeLavern Clarke, Staff Reporter
Internally, the Dominican Republic's economy is showing much vibrancy, with telecommunications and tourism at the forefront of the vigorous growth experienced since 1997.
Growth, which is running at about 8 per cent annually now, has been significant to the degree that its tourism is now considered one of Jamaica's main competitors, both having similar products and targeting the same markets.
But the more immediate priority of both countries is how they can build on the level of business they conduct with each other.
The Dominican Republic, with a population of some 10 million, is actively seeking alliances as part of its own strategy to boost trade and establish a stronger presence in the international community. Along with the working relationships it is developing in other parts of the hemisphere, it has entered into a formal free trade agreement with the Caribbean's trading bloc and has membership in the Regional Negotiating Machinery, CARICOM's mechanism for fostering its trade agenda in international forums.
Jamaica, whose population figures are at 2.6 million, meantime is going after as many markets as it can sew up prior to the official coming of the Free Trade Area of the Americas.
Trade between both countries is growing, their representatives said Tuesday, and it is expected that the reciprocal CARICOM/Dominican Republic free trade agreement will further boost business.
However, local producers have barely exploited the trade possibilities, officials here have said.
In 2000, Jamaica exported more than it imported from DR, ending up with a positive trade balance of US$2 million on US$9.03 million of exports. However, last year, the figures to September indicated a reversal of that position, with imports at US$6.53 million and exports at US$2.69 million for the nine-month period. The figures were provided by Industry Commerce and Technology Minister, Phillip Paulwell.
Ambassador Arsenio Jime-nez Polanco also told Sunday Business that latest trade figures from the Dominican Republic for last year were estimated at US$8 million of exports to Jamaica, which indicate a slight improvement on the US$7.03 million exported from the DR in 2000. While our exports to them declined, they were selling Jamaica more goods.
Within CARICOM, Trinidad and Tobago is the DR's largest trading partner from which the DR recorded trade of approximately US$50 million in imports last year, said Mr. Polanco. He adds that the DR imports more from Trinidad than it exports to the twin island republic. Jamaica is its second largest trading partner within the regional bloc. But, Mr. Polanco pointed excitedly to the seats he had to pull strings to secure on Air Jamaica flights between the countries recently, and the trade delegations that visit as tangible enough evidence that the trade activity is about to blossom.
Top exports
Jamaica's top exports to the DR are in the categories of inorganic acids, articles of iron and steel, starches and glues, tyres, packings and cable drums of wood, tobacco, insecticides, breads, pastries, biscuits and some others.
But according to Mr. Paulwell, speaking at a workshop on the CARICOM/Dominican Republic Free Trade agreement, said there were only four product groups that had sustained positive performance during 1993-1998 iron and steel, sulphides and alums, packings and cable drums of wood, and tobacco.
The CARICOM/Dominican Republic agreement which came into full force on December 1, 2001, allows for full reciprocity in the treatment of goods that move between the partners to the agreement. Negotiations are to commence on the treatment of services and the movement of labour within the free trade area, as soon as CARICOM has established its own trade in services regime.
On a practical level, the agreement removes all duties on the goods traded, except for 20 categories of products designated with Most Favoured Nation (MFN) status. The tariffs on these products, ranging between 10 and 40 per cent, will be reduced on a phased basis over a period, says director of foreign trade within the Ministry of Foreign Affairs and Foreign Trade, Gail Mathurin.
Additionally, while agricultural products also have duty free status, a seasonality condition applies under a special arrangement where tariffs will apply to 25 product categories during particular periods, as stipulated by a schedule contained within the free trade agreement.
The goods must satisfy rules of origin criteria and meet agreed technical and other standards to be accepted by the partners.
Stagnant and declining
According to Mr. Paulwell, "hyper growth" for Jamaican products entering the DR was experienced only for glues, plastic articles and carton boxes.
"Only some 39 per cent of Jamaica's exports to the Dominican Republic have been dynamic and what this means, according to STATIN, is that our exports are either stagnant or declining," the Minister said.
Local manufacturers, for their part, say they are encouraged by the spirit of co-operation that the new free trade area agreement facilitates, and are enthused about the business possibilities.
A Joint Council comprising trade representatives in the various countries that are signatory to the agreement have managed to settle the issue of consular fees that the Dominican Republic was charging on documents accompanying goods entering the country - that fee is no longer applied.
Now the Council is being asked to deal with what Jamaica sees as a contradiction to free trade, a domestic law on DR's books referred to as 'Law 173'. The law exists to regulate agreements between supplier and distributor, but carries extremely high switching costs.
Jamaica Manufacturers Association President Cla-rence Clarke, says under the law, once an exporter selects a distributor for his products, it becomes an agreement for life notwithstanding the distributor's performance and any attempt to back out of the arrangement comes at a penalty decided by the distributor.
Ms. Mathurin says the Council has taken up the issue and that the Dominican Republic has promised a review of the law.
