II.TRADE and INVESTMENT POLICY REGIME: FRAMEWORK and Objectives

Trinidad and TobagoWT/TPR/S/49
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II.TRADE AND INVESTMENT POLICY REGIME: FRAMEWORK AND oBJECTIVES

(1)Institutional Structure of Policy Formulation

(i)Form of Government

1. Trinidad became Britain's first crown colony in 1802 and Tobago came under British rule in1877; in 1888, the two were joined administratively. Under self rule since 1956, Trinidad and Tobago won independence in 1962 and became a Republic, within the British Commonwealth, under a new Constitution on 1 August 1976. The Constitution provides for a President and a bicameral Parliament, comprising a Senate and a House of Representatives.
2. Executive authority is vested in the President, the Head of State who, generally, is to act in accordance with the advice of Cabinet.[1] The head of Government is the Prime Minister, who is the leader of the majority party in the House of Representatives and presides over the Cabinet which is collectively responsible to Parliament. The Prime Minister is appointed by the President, who can revoke his appointment following a vote of non-confidence. Ministers are appointed by the President, on advice from the Prime Minister, from among members of the House and the Senators. The President, acting in accordance with the Prime Minister, may dissolve or prorogue Parliament.
3. Presidential and parliamentary elections take place every five years. The Constitution requires Parliament to be dissolved every five years. The House consists of 36 members elected by universal adult suffrage. The Senate consists of 31 members appointed by the President: 16 on the advice of the Prime Minister, six on the advice of the leader of the opposition and nine at the President's own discretion from among outstanding persons from economic, social or community organizations. The President is elected by an Electoral College, voting by secret ballot, of members of the Senate and the House of Representatives. Ten Senators, the Speaker of the House and twelve other members of the House, constitute a quorum of the Electoral College.
4. Tobago has its own House of Assembly to which powers over local affairs have been delegated by Parliament.
5. In the hierarchy of domestic legislation, the Constitution is the supreme law. International treaties have no legal effect unless they have been incorporated into domestic law. According to the authorities, the Marrakesh Agreement did not become part of domestic law in its entirety, but parts of it are being ratified in laws that Trinidad and Tobago has passed. Private individuals may not invoke WTO provisions directly before national courts, but only provisions in domestic legislation, patterned after WTO provisions. Parliament enacts laws based on bills passed by the House and the Senate and assented to by the President. According to practice, the President acts on advice of the Attorney General regarding the legislation to be assented. A bill, other than a money bill (dealing with tax and financial matters, public grants and loans, etc.) may be introduced in either the House or the Senate. Money bills may not be introduced in the Senate. In order to be passed, laws require a simple majority in both Houses of Parliament, except legislation that seeks to alter the entrenched provisions of the Constitution, which requires a two-thirds majority in each House or in some cases, a three-fourths majority in the House of Representatives and a two-thirds majority in the Senate.
6. The legislative process begins with the introduction of proposals involving legislation by Ministers. If the Cabinet agrees, it issues drafting instructions to the Chief Parliamentary Counsel. A draft bill is prepared on the basis of those instructions and in consultation with the Ministry concerned. It is then reviewed by the Legislation Review Committee of the Attorney General's Ministry to ascertain whether it is in a suitable form for presentation to Parliament. Once the bill is introduced in Parliament it undergoes two readings. As soon as the bill has gone through all its stages in both Houses, it must be submitted to the President for his assent. A bill does not become law until the President has assented thereto, and does not have effect until it is proclaimed by the President.
7. The judicial system, whose independence is guaranteed by the Constitution, is similar to that of the United Kingdom, with a High Court and Appeal Court. Final appeal is to the Judicial Committee of the Privy Council, a group of judges from Commonwealth countries, which sits in London.

(ii)Policy-making and administration

1. The Ministry of Trade and Industry is in charge of trade policy matters, including negotiating trade agreements and approving import licensing applications (Table II.1). The Ministry also approves activities accorded incentives, including duty concessions, which are subject to legislative approval. However, under the Fiscal Incentives Act, the President may, by order, declare a product an approved product or an enterprise an approved enterprise. The Ministry is currently being reorganized and will create an International/Hemispheric and Regional Trade Unit which will be responsible for trade policy formulation, implementation and review, participation in multilateral fora such as the WTO, negotiations of bilateral and regional agreements, and CARICOM issues.
2. The Tourism and Industrial Development Company of Trinidad and Tobago, Ltd. (TIDCO), established in 1995 in the portfolio of the Minister of Trade and Industry, has a number of trade-related responsibilities. The Division of Trade and Industry is, interalia, involved in trade negotiations, the analysis of trade agreements, and the promotion of export activities of local manufacturers. Its Certification Department is the certifying body for various regional trade agreements facilitating concessions to exporters. The Government Policy and Special Projects Division is responsible for promoting the implementation of relevant government policy through legal, regulatory, informational and institutional reforms.
3. The Government or the private sector may propose changes to the tariff structure but the Cabinet is the final arbiter for introducing such changes. According to the Customs Act, Parliament may impose import and export duties. The Department of Customs and Excise, within the Ministry of Finance, handles such matters as duty collection, the imposition of surcharges, duty concessions and export rebates; it also issues certificates of origin for exports under various preference schemes, including the Generalized System of Preference, and the Caribbean Basin Initiative.
4. The registration of patents, trademarks and industrial design is administered by the Intellectual Property Registry of the Registrar General who reports to the Attorney General within the Ministry of Legal Affairs.
5. The Cabinet Sub-Committee, headed by the Minister of Energy and Energy Industries, comprises also the Ministers of Finance, Planning and Development, Trade, Industry and Consumer Affairs, Foreign Affairs and Public Utilities to take decisions in respect of the energy industry. A Fiscal Incentives Committee has recently been set up, as mandated by the Energy Sub-Committee, to evaluate the costs of the incentives and analyse the extent to which concessions are necessary.
6. In December 1997, the Cabinet agreed to the establishment under the responsibility of the Ministry of Trade and Industry of a Technical Coordinating Committee (TCC) and supporting subcommittees on access, competition policy, intellectual property rights, etc. The function of the TCC is to ensure that Trinidad and Tobago's position in the various negotiations is informed by government policies. The responsibility of the specialist sub-committees is to provide advice to the TCC on functional subject areas.

Table II.1

Government agencies involved in the formulation or administration of trade or trade-related policies and area of responsibility

Agencies / Responsibility
Ministry of Finance / Double taxation agreements
Controller of Customs / Changes to the Common External Tariff (CET)
Administration of rules of origin and procedures
Administration of the Common External Tariff
Ministry of Agriculture / Plant and animal quarantine
Sanitary and phytosanitary measures
Ministry of Trade and Industry / Formulation of trade policies
Negotiation of free-trade agreements
Co-ordination of trade in services
Administration of anti-dumping and countervailing duties
Bilateral Investment Treaty
Administration of competition policy
Tourism & Industrial Development Company Limited (TIDCO) / Implementation of trade and investment policy
Administration of certificates of origin
Trinidad and Tobago Bureau of Standards (TTBS) / Implementation and development of standards
Ministry of Legal Affairs / Administration of intellectual property (patents, trademarks, etc.)
Intellectual Property Office / Drafting of legislation and agreements
Office of the Attorney General / Environmental impact assessment
Chief Parliamentary Council / Co-ordination of overall economic policy framework
Ministry of Planning
Ministry of Works / Air services agreements
(Standing Committee on Air Services Agreement)
Office of the Prime Minister / Telecommunications Agreement
Telecommunications Division / Negotiations related to telecommunication services
Ministry of Health / Food and drug certification
Food and Drug Division

Source:Information provided by the authorities of Trinidad and Tobago.

(iii)Advisory and review bodies

1. The Government has appointed a Standing Advisory Committee on Trade and Related Matters. This Committee comprises representatives of the major private sector bodies, the Trinidad and Tobago Manufacturers' Association, Chambers of Commerce, the University of the West Indies and representatives of the labour movement. This Committee meets at least once a month.

(iv)Trade laws and regulations

1. The main legislation affecting trade is encompassed in the Customs Act, dating from 1936, but amended frequently (last in 1996). Merchandise trade is also regulated via the Imports and Exports Control Regulations of 1941 and ordinances issued thereunder. There are also numerous provisions in a variety of laws that relate to trade matters. These laws include the Miscellaneous Taxes Act which is the underlying legislation for the imposition of surcharges or the Animal (Diseases and Importation) Act (1954) incorporating regulations governing the import of animal products. Much of the legislation affecting trade in both goods and services is under review including the Foreign Investment Act of 1990 and the Fiscal Incentives Act of 1985. Other pieces of legislation have also been revamped to conform with international obligations, such as the Standards Act 18 of 1997, or the legislation for antidumping and intellectual property.

(2)Trade Policy Objectives

(i)General policy objectives

1. The emphasis of trade policy, reflected in the shift from import substitution to a more outward orientation in the last ten years, has graduated from extracting maximum value from preferential arrangements to advancing Trinidad and Tobago's own competitiveness under conditions of sustainable growth. A cornerstone of Trinidad and Tobago's current development policy is the encouragement of foreign and domestic investment. Since 1988, when a concerted effort at structural adjustment began, the Government has progressed in the direction of trade liberalization to foster development of the non-oil manufacturing sector driven by export-led growth. The authorities have identified many areas where improvements are still needed: interalia,

-the streamlining of bureaucratic procedures;

-the removal of temporary import surcharges on agricultural products;

-a competition policy to regulate restrictive business practices in the domestic market;

-the development of international standards on imported goods; and

-the adoption of international environmental standards.

1. In the Uruguay Round negotiations, Trinidad and Tobago bound all of its tariffs (ChapterIII(iii)(b)), and made specific commitments under the General Agreement on Trade in Services (GATS) in a number of subsectors including business services, insurance, telecommunications, transport and tourism. Since joining the WTO, Trinidad and Tobago has fulfilled a number of its notification obligations (Table II.2).
2. The Government has a regional and bilateral approach to negotiating free-trade agreements. As a member of CARICOM, Trinidad and Tobago will be seeking trade agreements with the Dominican Republic, the Andean Pact, the Central American Common Market, and MERCOSUR. Bilaterally, Trinidad intends to pursue a free-trade agreement with Mexico.[2] In 1994, Trinidad and Tobago formally declared its desire to accede to the North American Free Trade Agreement (NAFTA), signing a bilateral agreement with the United States on the protection of intellectual property rights to further its cause but it considers accession by CARICOM as a group the preferred option.

Table II.2

Notifications by Trinidad and Tobago to the WTO

Legal basis, instrument or provision / Periodicity / WTO documents / Subject
General Agreement on Trade in Goods1994
Art. XXVIII:5 / Triennial / G/MA/42
10.01.97 / Reservation of right to modify schedule for a 3year period commencing 1.1.97
Agreement on Agriculture
Art. 10 and 18.2 / Annual / G/AG/N/TTO/1
31.01.96 / No export subsidies
Art. 18.2 / Annual / GT/AG/N/TTO/2
27.07.98 / Domestic support measures
Agreement on the Application of Sanitary and Phytosanitary Measures
Art. 7, Annex B / Ad hoc / G/SPS/N/TTO/1
10.10.95 / Regime for mealybug infested fruit and vegetables
Agreement on Textiles and Clothing
Art. 6.1 / Once / G/TMB//N/117
14.08.95 / Retention of right to use safeguard measures
Agreement on Technical Barriers toTrade
Art. 2.10 / Ad hoc / G/TBT/NOTIF.97.675
13.10.97;
G/TBT/NOTIF.97.676
13.10.97 / Notification of technical regulations
Art. 10.6 / Ad hoc / G/TBT/Notif.98.161
25.03.98
Annex 3C / Once / G/TBT/CS//N/37
29.04.96 / Acceptance of Code of Good Practice on voluntary standards
Agreement on Trade-related Investment Measures
Art. 5.1 / Once / G/TRIMS/N/1/TTO/1
15.04.96 / No laws or regulations inconsistent with the Agreement
Agreement on Implementation of Art.VI of the GATT 1994 (Antidumping)
Art. 16.4 / Ad hoc / G/ADP/N/2/ADD.1/Rev.1
28.08.95 / Anti-dumping actions (taken within the preceding six months)
Art. 18.5 / Once / G/ADP/N/1/TTO/1
06.04.95;
G/ADP/N/1/TTO/1/Corr.1
31.10.95 / Anti-dumping laws and regulations (and changes thereto, including changes in the administration of such laws)
Agreement on Rules of Origin
Art. 5.1 / Once / G/RO/N/7
12.02.96 / Does not maintain any non-preferential rules
Annex II(4) / Once / G/RO/N/7
12.02.96 / Preferential rules
(Treaty of Chaguaramas)
Agreement on Import Licensing Procedures
Art. 7.3 / Annual, by
30 September / G/LIC/N/3/TTO/1
16.02.96 / Replies to questionnaires on import licensing procedures
Table II.2 (cont'd)
Agreement on Subsidies and Countervailing Measures
Art. 32.6 / Once / G/SCM/N/1/TTO/1
22.11.95;
G/SCM/N/7/Add.1
08.12.95 / Notification of laws and regulations
Art. 25.1 / Annual / G/SCM/N/3/TTO
09.01.96 / Trinidad & Tobago provides no subsidies
Art. 25.11 / Ad hoc / G/SCM/N/4/Add.1/Rev.2
22.11.95;
G/SCM/N/12/Add.1
18.04.96 / Countervailing duty actions (taken within the preceding six months)
Agreement on Safeguards
Art. 12.6 / Once / G/SG/N/1/TTO/1
04.10.95 / No safeguard legislation in force

Source: WTO Central Registry of Notifications.

(ii)Sectoral policy objectives

1. For the last few decades, the Government has had a policy of diversifying the economy away from its dependence on the petroleum sector. At present, industrial-development policy aims to expand the range of business activity in the non-oil business sector, increase levels of foreign and domestic investment, generate permanent employment opportunities and attain food security objectives.[3] Industrial policy focuses essentially on the development of the non-oil business sector, the non-financial services sector and the small business sector.
2. In agriculture, goals include the evaluation of commodities with agro-processing potential, improving access to farm credit, continuing trade and price policy reforms and the provision of appropriate incentives to export agriculture.
3. A Green Paper on energy policy identified the following overall policy objectives:

-the development of an efficient administrative, regulatory, legal and fiscal framework, to promote sustainable growth and development;

-the maximization of local crude oil production;

-the further development of refining capacity;

-the optimal exploitation of natural gas resources;

-the development of downstream natural gas-based industries;

-security of energy supplies, both for consumption and supplies to the refining industry; and

-state participation in the sector as a promoter and facilitator.[4]

1. Proposed regulatory measures include the establishment of a petrochemical licence and the creation of a more transparent gas pricing structure, critical to petrochemical production and the industries consuming large quantities of fuel.
2. In the provision of public utilities, reform of the regulatory environment focuses on improving performance and pricing services to reflect their economic and environmental costs. In the services sector, Trinidad and Tobago seeks both to capitalize on its location to act as a regional transhipment and trading centre and to transform it into an international financial services centre. Offshore banks would participate in the domestic financial system and the local capital market would be developed to provide a broader range of investment instruments.

(3)Trade Agreements and Arrangements

(i)Multilateral trade agreements

1. Trinidad and Tobago joined the GATT in October 1962 and ratified the WTO Agreements on 30 January 1995, with the Agreement entering into force on 1March1995.[5] Trinidad and Tobago grants at least MFN treatment to all its trading partners.

(ii)Regional trade agreements

(a)CARICOM

1. Trinidad is a founding member of the Caribbean Community and Common Market (CARICOM) established by the Treaty of Chaguaramas (Trinidad) which entered into force on 1August1973. CARICOM currently comprises fifteen member states (BoxII.1).[6] CARICOM was notified to GATT under Article XXIV as an interim agreement for the formation of a customs union and reviewed by a working party that produced a report adopted on 2 March 1977.[7] Since then, no further notifications have been made on the part of CARICOM. [8]
2. Trinidad and Tobago is the second most populous member of CARICOM, after Jamaica. It accounts for the largest share member, of intra-regional exports (over 20% mainly petroleum and its by-products), and is the only member with a consistently positive balance on intra-CARICOM trade. In 1996, CARICOM accounted for nearly one quarter of its exports but less than 4% of its imports.

Box II.1: CARICOM
The Caribbean Community and Common Market (CARICOM), preceded by the Caribbean Free Trade Association (CARIFTA), was established in 1973 under the Treaty of Chaguaramas. Its initial objectives included economic integration and a unified foreign policy. Progress towards integration was slow; for the first eighteen years CARICOM was a preferential trading area and subsequently a free-trade area. In 1991, CARICOM started to operate as a customs union when the Common External Tariff (CET) was implemented. The original objectives were redefined in 1989 and endorsed in 1991 as a "Single Market and Economy" characterized by the free movement of goods, services, labour and capital, and to be achieved by the end of the decade. The CARICOM Treaty was amended in 1997 with the signature of the Protocol Amending the Treaty Establishing the Caribbean Community, ProtocolI. The Protocol restructures the organs and institutions of CARICOM to deepen the process of integration, and sets the foundations for the CARICOM Single Market and Economy (CSME). Protocol I has been ratified by some CARICOM countries, and is currently applied provisionally. Trinidad and Tobago ratified Protocol I on 12 June 1997. Protocol II, referring to the right of establishment, services and capital, was signed in July 1997 but has not yet been ratified.