Caricom rum producers in talks with US officials

Source: Guardian

Monday, January 21, 2013

Caribbean Community (Caricom) rum producing countries are holding high-level talks with the United States on resolving issues surrounding the rum industry in the region, Prime Minister Freundel Stuart announced. A government statement said that Prime Minister Stuart made the announcement as he addressed a ceremony unveiling a commemorative plaque for Mount Gay Distilleries' New Aging Bond earlier this week.

Stuart said the discussions, which are also being attended by officials from the Dominican Republic, were necessary since, within recent time, subsidies had been given to rum producers in the United States Virgin Islands and Puerto Rico, much to the disadvantage of Caribbean rum producers. He said the situation is so serious that Barbados is prepared to take its case to the World Trade Organization (WTO) if a solution is not forthcoming.

"The Government of Barbados has had to take a stand on this issue, and under my instructions, the Ministry of Foreign Affairs and Foreign Trade communicated with the US Government on this issue.

And, of course, very recent discussions have taken place between Caricom countries, the Dominican Republic and the United States Trade Representative with a view to addressing the more pressing concerns of rum producers, not only here in Barbados, but in other parts of the Caribbean, and, of course, in the Dominican Republic," he said.

Stuart said Caricom was not going to "relapse its vigilance" on the issue. "We are not about to relax our persistence on this issue. We do not intend to allow rum producers in the Caribbean to be so severely disadvantaged by this market distortion which has resulted from these overwhelming, if I may use that word, subsidies being extended to producers in the US Virgin Islands and Puerto Rico."

Last month, the Caricom Council for Trade and Economic Development (Coted) said the region continues to have "serious concerns" regarding the competitiveness of Caribbean rum in the United States. "In addition to being the largest agriculture-based export industry in Caricom, the rum industry is a substantial employer and a major contributor to foreign exchange earnings and government revenues," Coted said.

Caricom Secretary General Irwin LaRocque said the rum issue, involving Diageo, the global rum producer, continues to "threaten Caribbean rum into the US market, and the leaders agreed that strong and urgent political intervention was needed to address that issue.

"There is a concern with regards to some subsidy that is being provided for Diageo, the multilateral and one of the largest rum producers which is currently located in St Croix in the US Virgin Islands," said LaRocque.

 "Last August, the UK-based Diageo reportedly warned that should Caricom mount a complaint to the WTO over the alleged subsidies it would "re-evaluate" its Caribbean interests.