At the end of the two day meetings of the Council for Trade and Economic Development (COTED) of CARICOM in Georgetown, Guyana. COTED issued the following statements. “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,” "CARICOM continues to have serious concerns about the threat to the competitiveness of Caribbean rum in the United States market resulting from the massive subsidies provided by the governments of the United States Virgin Islands (USVI) and Puerto Rico to multinational rum producers in those territories." “The nature and scale of these subsidies are such that they threaten to distort rum markets not only in the US but elsewhere,” CARICOM warned, adding that “time is not on the side of the Caribbean rum industry." “Given the likely deleterious effect of these subsidies on the long-term viability of an industry which is of such critical importance to the economic fabric of so many countries in the region, the COTED supports strongly the deep commitment of CARICOM countries to pursuing all avenues available to secure a resolution of this matter that restores the competitive balance in the marketplace.”
CARICOM Secretary General Irwin LaRocque said that 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.
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| Irwin LaRocque |
"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.
"There is an arrangement in the US government that allows for resources to be provided based on the exports of rum from the Virgin Islands, but more than that the resources are being used to provide a direct subsidy for a modern rum factory that is being constructed in St Croix," he added.
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In August, the UK-based Diageo reportedly warned that should CARICOM mounts a complaint to the World Trade Organization (WTO) over the alleged subsidies it would ‘re-evaluate’ its Caribbean interests.
Diageo has denied ‘flooding’ the US market and has defended the US governments 100 year old “cover over” programme, which it said granted the USVI and Puerto Rico much-needed revenues to promote economic stability and fiscal autonomy.
The issue doesn't seem to be getting the attention of the American administration, even though the calls for a dialog with Washington. This is an issue that just doesn't see to be going away soon even if Washington does keep ignoring it. I don't mean to sound trite about this, but we have enough problems with our own rum producing companies here within the boundaries of the United States, and here we are supporting the largest rum producer in the world and a British company at that. There is no subsidy being set to the rum producers here within the United Stat es, but we can afford to send the money to foreign companies. There is surely a problem here that needs our attention.
