Identifier
Created
Classification
Origin
05KINGSTON2397
2005-10-24 15:02:00
UNCLASSIFIED
Embassy Kingston
Cable title:  

RESPONSE TO USTR REQUEST FOR INFORMATION FOR CBERA

Tags:  ECON JM 
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UNCLAS SECTION 01 OF 03 KINGSTON 002397 

SIPDIS

DEPT PASS TO USTR (RUSSELL SMITH),STATE FOR WHA/CAR (WBENT)

E.O. 12958: N/A
TAGS: ECON JM
SUBJECT: RESPONSE TO USTR REQUEST FOR INFORMATION FOR CBERA
REPORT

REF: STATE 188288

The following information is provided in response to reftel.
Responses are keyed to the format in paragraphs six and
seven of reftel.

UNCLAS SECTION 01 OF 03 KINGSTON 002397

SIPDIS

DEPT PASS TO USTR (RUSSELL SMITH),STATE FOR WHA/CAR (WBENT)

E.O. 12958: N/A
TAGS: ECON JM
SUBJECT: RESPONSE TO USTR REQUEST FOR INFORMATION FOR CBERA
REPORT

REF: STATE 188288

The following information is provided in response to reftel.
Responses are keyed to the format in paragraphs six and
seven of reftel.


1. Jamaica is in the process of implementing all of its WTO
obligations, but the GOJ does not plan to implement any of
those obligations ahead of schedule. Patent Law must be
updated to be in compliance under the Trade Related Aspects
of Intellectual Property Rights (TRIPS) Agreement, but this
has fallen from the legislative agenda due to a recent
emphasis on toughening criminal law. As a member of
CARICOM, Jamaica will continue to participate in
negotiations toward the establishment of the Free Trade Area
of the Americas (FTAA). Jamaica, however, has always argued
that smaller and more vulnerable economies should receive
special protection.


2. Jamaica is a member of the World Intellectual Property
Organization (WIPO) and is a signatory of the Bern
Convention. Jamaica and the United States have an
Intellectual Property Rights Agreement and a Bilateral
Investment Treaty, both of which provide assurances to
protect intellectual property. Nonetheless, Jamaica remains
on the Special 301 "Watch List," primarily because current
patent law is not TRIPS-compliant. In 2004, GOJ passed the
Geographical Indications (GI) Act, which protects products
that originate from certain localities, where quality or
reputation arises from geographical origin.


3. Jamaica has an estimated labor force of approximately
1.2 million, with an estimated 20 percent engaged in the
country's strong trade union movement. While both political
parties arose out of the trade union movement, it appears
that labor is considerably weaker now than has traditionally
been the case, due to a sluggish economy, as well as the
private sector strategy of hiring contract workers, which is
not prohibited under current labor regulations.
Nevertheless, worker rights in Jamaica are defined and
protected under the Labor Relations and Industrial Disputes
Act (LRIDA). Workers enjoy full rights of association, as
well as the right to organize and bargain collectively. An
independent Industrial Disputes Tribunal (IDT) hears
collective bargaining cases. Strikes do occur: of 129
disputes reported to the Ministry of Labor in 2004, 16
resulted in stoppages, an overall decline from previous
years. The Jamaican Constitution does not specifically

prohibit forced or bonded labor by either adults or
children, but there are no reported incidents. The Child
Care and Protection Act of 2004 states that "no person shall
employ a child under the age of thirteen" in any form of
work, and employment of children aged thirteen to fifteen is
restricted in both type of employment and hours of work
permitted. The government sets the minimum wage in
consultation with the National Minimum Wage Advisory
Commission. Currently, the minimum wage is set at USD 40
for a 40-hour work week (it is USD 1.5 per hour for security
guards),but most employers pay workers above this amount.
Employers must, under the Labor Act, compensate workers at
overtime rates - time-and-a-half - for work over 40 hours
per week or eight hours per day, and double time for public
holidays. The Ministry of Labor's Industrial Safety
Division sets and enforces industrial health and safety
standards. Industrial accident rates remain low.


4. The Child Care and Protection Act is the key mechanism
used in eliminating the worst forms of child labor. Passed
in March 2004, CCPA sets the framework to proscribe all
forms of child abuse. It is too early to say whether the
enforcement mechanisms of CCPA are adequate, as the system
has yet to be tested. The formal institutional mechanism
for investigation into allegations is the Child Development
Agency, which operates under the auspices of the Ministry of
Health. Additionally, GOJ cooperates with NGOs such as
`Children First' to prevent child labor. Historically,
authorities have been well-meaning but constrained by poor
enforcement mechanisms, and it seems that this continues to
be the case. Nonetheless, a positive indication of GOJ
efforts was the ratification of ILO Convention 182, in 2003.
It was this that paved the way for the passage of CCPA, in
order to bring Jamaica into compliance.


5. Jamaica is a major transit point for South American
cocaine, as well as being the largest Caribbean producer and
exporter of marijuana. Jamaica is included in the 2005
Presidential Determination listing it as a major illicit
drug-producing or drug-transit countries. Jamaica continues
to cooperate with the United States on our shared counter-
narcotics and law enforcement goals. However, GOJ must
continue these efforts and take additional steps to
intensify and focus its law enforcement efforts and enhance
international cooperation in order to dismantle drug
trafficking organizations and disrupt drug trafficking
throughout Jamaica.


6. Jamaica is a signatory to the OECD Anti-Bribery
Convention and completed ratification of the Inter-American
Convention Against Corruption in March 2001. The Corruption
Prevention Act became operational in 2003. Under this Act,
public servants can be imprisoned for up to 10 years and
fined up to JMD 10 million (USD 160,000) if convicted of
engaging in acts of bribery. Jamaican individuals and
companies are also criminally liable if they bribe foreign
public officials, facing the same penalties as public
servants. The Act also contains provision for the
extradition of Jamaican citizens for crimes of corruption.
On October 26, 2005, the Jamaican Constabulary Force (JCF)
will unveil a new strategy to combat corruption within the
police force. Transparency International's Corruption
Perception Index for Jamaica in 2005 was 3.6, indicating the
need to continue to take this problem very seriously.


7. Government procurement is generally done through open
tenders, direct advertising, or by invitation to registered
suppliers. U.S. firms are eligible to bid. The range of
manufactured goods produced locally is relatively small, so
there are few instances of foreign goods competing with
domestic manufacturers. Companies interested in supplying
office supplies to the government must register with the
Financial Management Division of the Ministry of Finance.
Companies interested in supplying other equipment or
materials contact the relevant agency directly.


8. There are no known cases of property expropriated from
U.S. citizens. Property rights are protected under Section
18 of the Jamaican Constitution. Expropriation of land by
the government may take place under the Land Acquisition
Act, which provides for compensation on the basis of market
value. Expropriation may take place before compensation is
paid, but on this case interest for the period between the
expropriation and the compensation settlement must be paid.
According to this law, the purpose of any expropriation must
be transparent and compensation must be adequate. If
informal negotiation for compensation fails, the investor
has recourse to the courts. Jamaica's legal system is based
on English common law principles and the rules in relation
to the enforceability of contracts are therefore based on
the English common law. The Jamaican judicial system
recognizes and upholds the sanctity of contracts. Jamaica
has signed bilateral agreements for the reciprocal promotion
and protection of investments with a number of countries,
including the United States.


9. If not resolved in the local courts, arbitration of
investment disputes between Jamaican and nonresident
investors may be referred to the International Center for
the Settlement of Investment Disputes (ICSID),of which
Jamaica is a member. Awards from ICSID are enforceable by
the Jamaican courts. Jamaica enforces property and
contractual rights through four statutes, under which the
judgments of foreign courts are accepted and enforced in all
cases where there is a reciprocal enforcement of judgment
treaty with the relevant foreign nation. In the past 2
years, there have been no known cases involving U.S. firms
in arbitration.


10. Embassy is not aware of any developed country being
afforded preferential treatment.


11. Government-owned entities do not broadcast copyrighted
material belonging to U.S. copyright-holders without their
express consent. The Copyright Act of 1993, as amended,
complies with the TRIPS Agreement and adheres to the
principles of the Bern Convention, and covers works ranging
from books and music to computer programs. Amendments in
June 1999 make explicit the provision of copyright
protection on compilations of works such as databases and
make it an offense for a person to manufacture or trade in
decoders of encrypted transmissions. It also gives persons
having rights in encrypted transmissions or in broadcasting
or cable program services a right of action against persons
who infringe their rights. In one example of GOJ's
commitment to these issues, in 2004 Polcouns attended a
public destruction, hosted by the Minister for Commerce,
Science and Technology, of pirated CDs and DVDs.


12. Jamaica is a signatory to both a Mutual Legal
Assistance Treaty and an Extradition Treaty regarding U.S.
citizens, Jamaicans, and third-country nationals.


13. The Jamaican economy recorded its sixth consecutive year of
growth during 2004, with real GDP increasing by 1.2 percent. This
result represents a slowing in the growth momentum due to the
impact of Hurricane Ivan, as output for the first six months of the
year expanded by 2.7 percent. The total cost of the damages caused
by the hurricane was estimated at just under USD 600 million, with
63 percent representing damage to assets. The impact of the
hurricane and rising oil prices combined to affect other areas of
macroeconomic performance during the year. In particular,
inflation for 2004 was 13.7 percent, the second consecutive year of
double-digit inflation. Inflationary impulses stemmed from supply
shocks, reflecting the shortage of locally-produced food following
the hurricane, increased oil and grain prices, and higher utilities
costs. The higher commodity prices combined with the increased
importation of goods for reconstruction fuelled deterioration in
the balance of payments. However, the net international reserves
jumped by USD 700 million to USD 1.9 billion on the back of higher
foreign direct investment in the mining, tourism and
telecommunications sectors. Central Government's operations also
generated a reduced fiscal deficit of USD 480 million, USD 80
million below the result for last year. Despite the moderation in
the fiscal deficit, debt and debt servicing continues to take a
heavy toll on the economy.


14. By being a signatory to the WTO Agreement, Jamaica has in
principle agreed to provide equitable and reasonable access to
goods from the U.S. and other members of the WTO. In fact, the
United States is Jamaica's primary trading partner. Based on
preliminary data for 2004, merchandise imports to Jamaica from the
U.S. amounted to USD 1.7 billion or 44 percent of total imports,
compared with USD 1.6 billion or 44.4 percent in 2003.


15. There are currently no performance requirements imposed as a
condition for investing in Jamaica. However, investments that
attract hard currency and expand employment opportunities are
favorably considered. There is no requirement that investors
purchase from local sources or export a certain percentage of
output. However, "Free Zone" type incentives require companies to
export at least 85 percent of their output.


16. Since the late 1980s, Jamaica has been a major proponent of
regional economic integration. Most CARICOM countries look to
Jamaica for leadership and the country was among the first to
reduce duties on goods from CARICOM countries and has been
spearheading efforts to get the CARICOM Single Market and Economy
and the Caribbean Court of Justice on track. Since the late 1980s,
Jamaica has engaged in significant trade with CARICOM members.
Jamaica currently runs large trade deficits with Trinidad and
Tobago and Barbados.


17. Although economic performance continues to be moderately
positive, the rate of expansion has been insufficient to raise per
capita income. The sluggish economic performance is largely due
to structural bottlenecks like the country's archaic labor laws, a
weak educational system, and inefficiencies in customs. Economic
performance also remains vulnerable to shocks in general and
natural disasters in particular as was evident during 2004 when
the country was on track to post economic growth of over three
percent until Hurricane Ivan blew the targets off track.
Notwithstanding, the GOJ has been making some of the structural
adjustments necessary to improve economic growth. In this regard,
the GOJ established a Ministry of Development in 2002 to address
some of the red tape facing both local and foreign investors. The
GOJ has also transferred USD 80 million from the National Housing
Trust to transform the educational system. To date there has been
some tangible output, as the country has seen an influx of FDI
particularly in the tourism, mining and telecommunications
sectors. The GOJ has also initiated a port expansion project as
well as an ambitious Highway Project that is now two-thirds
completed along the North Coast. These developments combined with
the divestment and modernization of the two international airports
is expected to boost economic expansion.


18. The Trade Board is the agency responsible for administering
the CBERA/CBTPA programs in Jamaica. The agency has been and
remains willing to promote the program. Trade Board officials
are, however, concerned about the underutilization of the program
and attribute this to a lack of competitiveness of a number of
firms.


19. Embassy Kingston Econoff, John Morgan, is the primary point
of contact for CBERA/CBTPA issues and for this report. Contact
information: Tel. (876) 935-6028, Fax: (876) 935-6029, e-mail:
morganjs@state.gov.

TIGHE