The Guyana government will continue to waive the 15% Common External Tariff (CET) on extra-regional cement even though Cabinet Secretary Dr. Roger Luncheon acknowledged that the government did not follow “standard procedures” by applying to the Caricom Secretariat for approval.
Dr. Luncheon told Stabroek News in an interview after his weekly post-Cabinet briefing at the Office of the President on Friday that the, “CET is not being applied now,” explaining that the government continues to waive the CET on extra-regional cement. The Cabinet Secretary did not reveal the duration of the current waiver when asked about the timeframe.
In October, the CET waiver on cement came to an end and following a meeting with cement importers on October 3, Tourism, Industry and Commerce Minister Manniram Prashad then confirmed in an interview with this newspaper on November 1, that the ministry would continue the waiver on cement, despite opposition from Trinidad Cement Ltd (TCL). TCL maintains that it can supply the entire Guyana market from its new bagging facility.
Dr. Luncheon again argued that, “the (TCL) bagging plant mainly bags,” adding that, “the production of cement by TCL is the issue.”
At midyear TCL, the regional cement supplier, opened a US$10M bagging plant at the Guyana National Industrial Co. Inc. (GNIC), which the company says has the capacity to bag 30,000 tonnes of cement per month, while the local market needs some 12,000 tonnes monthly.
The allegation is that the government unilaterally instituted the waiver, noted Luncheon, explaining that Prashad did not provide a formal request to COTED or the Caricom Secretariat, according to standard procedures.
This issue, he said, was raised by TCL at the meeting of the Council for Trade and Economic Development (COTED) held on November 14, at Buddy’s International Hotel, Providence.
In this regard, Guyana’s refusal to follow standard procedure “is still at the level of COTED,” according to Dr. Luncheon; and he also reaffirmed that Guyana’s action was not approved by COTED or Caricom.
At this COTED meeting, Guyana did not request a CET waiver on extra-regional cement and made no proposal. As a result COTED did not take any position on the issue.
“When this thing happened in the first instance there was overwhelming support for intervention,” noted Dr. Luncheon, speaking of the CET waiver. He said further that Guyana might not have been the only country whose economy was affected by concerns about the availability of cement and resorted to a waiver.
TCL, according to the Cabinet Secretary, feels it can take care of the regional demand, but TCL has admitted to importing extra-regional cement. TCL last month admitted bagging a shipment of cement sourced from the Dominican Republic and from TCL shareholder CEMEX, but noted as well that this was not normally done and had explained the circumstances under which this was undertaken.
In 2004, Guyana began waiving the CET on extra-regional cement to ease shortages and to stop prices from climbing. According to Article 32 of the revised Treaty of Chaguaramas, as it relates to the operation of the CET, – “any alteration or suspension of the Common External Tariff on any item shall be decided by the Council by unanimous vote”.
In the city TCL branded cement is currently sold at $1600 Value Added Tax (VAT) inclusive, while the imported Dominican Republic and Venezuelan brands sell for $1300 inclusive of VAT. In locations outside the city the TCL brand is $1900 VAT inclusive.
