JAMAICAN-TRINIDADIAN-TRADE: FIRE SALES, FAILED DEALS AND DETAINED PATTIES

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UNCLAS KINGSTON 000508

SIPDIS

SENSITIVE

DEPT PASS EC CARICOM COLLECTIVE FOR INFO

STATE FOR WHA/CAR (DHOFFMANN) (VDEPIRRO) (WSMITH)

WHA/EPSC (MROONEY) (FCORNEILLE)

EEB/ESC/IEC/EPC (MMcMANUS)

INR/RES (RWARNER)

SANTO DOMINGO FOR FCS AND FAS

TREASURY FOR ERIN NEPHEW

USTDA FOR NATHAN YOUNG AND PATRICIA ARRIAGADA

OPIC FOR ALISON GERMAK

E.O. 12958: N/A

TAGS: ECON ETRD ENRG PREL PGOV EFIN EMIN TRSY OPIC XL JM

SUBJECT: JAMAICAN-TRINIDADIAN-TRADE: FIRE SALES, FAILED DEALS

AND DETAINED PATTIES

REF: A) KINGSTON 471

B) KINGSTON 427

C) 07 KINGSTON 1659

1. (U) SUMMARY: Trade relations between the Government of

Jamaica (GOJ) and the Government of Trinidad and Tobago (GOTT)

heated up again in May after Trinidad detained a container of

Jamaican meat patties for several weeks before releasing them

on June 1. An ensuing media debate subsequently broke out

over the so-called "dominance of Trinidad" in the Jamaican

market, and Karl Samuda, Minister of Industry, Investment, and

Commerce, put Trinidad "on watch" for their "unfair" trade

practices. End Summary.

2. (U) After several weeks of negotiations, GOTT released a

container of Jamaican beef patties that had been detained

pending certification of compliance with the GOTT?s sanitary

and phyto-sanitary standards. A frustrated Samuda said,

"uite frankly, I tell you here and now, Trinidad is on

watch,"and speculated as to what Jamaican product Trinidad

would detain next.

Minister Frustrated Over Production Drain

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3. (U) Samuda pointed out that trade tensions between Trinidad

and Jamaica have existed for close to two decades. During

Jamaica' economic crisis in the 1990s, commonly referred to

as FINSAC, many Trinidadians bought up inexpensive Jamaican

assets and turned quick profits after the downturn. (Reftel

A). Trinidad's per capita GDP is more than triple that of

Jamaica's (USD 5,500 versus USD 17,000),and Trinidad now owns

several large firms in Jamaica, including the Caribbean Cement

Company, Guardian Life Insurance, the Jamaica Biscuit Company,

and RBTT bank.

Energy Also A Source Of Tensions

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4. (SBU) Former Minister of Industry and Commerce Claude

r />
Clarke has accused Trinidad of using its liquid natural gas

(LNG) reserves to subsidize energy costs, thereby gaining an

unfair advantage over Jamaica. Clarke laments that many

products previously made in Jamaica, such as chocolate and

biscuits, are now manufactured in Trinidad. (NOTE: Clarke

once owned High Gate chocolate company, which failed during

the FINSAC period due to competition from Trinidadian

chocolate companies) END NOTE.

5. (U) In 2004, the GOTT and GOJ signed a memorandum of

understanding for the supply of 1.1 million tons of LNG per

year over a 20 year span, but the deal broke down and left

Jamaica embittered and struggling to find other lower cost

energy options. Jamaica continues to explore LNG development

and hopes to include such plans as part of a new energy policy

to be released in July (Reftel B). More recently, during a

Parliamentary meeting on June 24, Trinidad's Prime Minister

Patrick Manning told lawmakers that supplying LNG to Jamaica

was a "national priority." Manning said falling world demand

for LNG has freed up supplies that could become available to

Jamaica. In addition, he said technological improvements in

the area of re-gasification of LNG make supplying Jamaica more

feasible. Manning explained that the new technology allows

floating terminals to be used and reduces the need to

construct costly re-gasification terminals which would have

been needed in Jamaica if it were to buy LNG from Trinidad.

CSME and CARICOM

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6. (U) Samuda's comments come just ahead of the Caribbean

Community (CARICOM) Summit in Guyana, scheduled for July 2-5

and suggest that the likelihood of a Caribbean Single Market

Economy (CSME),originally planned to be in operation by the

end of 2008, is receding (SEPTEL). "The level of frustration

that has been relayed to me and to my office in respect of

these attempts to export to Trinidad cannot be described in

any other language than frustrating, and it serves as a major

impediment to the concept of free trade within Caricom," said

Samuda.

COMMENT:

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7. (SBU) Samuda most likely welcomes this trade dispute as a

distraction from Jamaica?s economic woes, and appreciates the

increased positive media attention for his Ministry. He had

an early win immediately upon taking over the Ministry by

successfully cracking down on the illicit scrap metal trade

(Reftel C). However, over the past year-and-a-half Samuda has

not had many notable victories in promoting trade or

attracting new foreign direct investment. Even recognizing the

challenges he has faced amid the global economic downturn, his

successes have been few. END COMMENT.

MOSS

JAMAICAN-TRINIDADIAN-TRADE: FIRE SALES, FAILED DEALS AND DETAINED PATTIES

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