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Washington subsidy could unleash Caribbean “rum war”

Santo Domingo.- The Dominican ambassador in Washington and the head of the Caribbean Council cautioned Santo Domingo to take action to revert what they call unfair competition in the U.S. subsidies to the Virgin Islands’ and Puerto Rico’s rum makers.

Anibal de Castro’s statement on 30 January coincides with those by officials from other Caribbean countries, whose rum sector is being affected by what he considers could be a misuse of the “cover over” classification

The so-called “rum refund” are  federal funds allocated to the Virgin Islands and Puerto Rico for decades, and equals nearly all of the revenue from taxes paid by rum in that country, or US$13.50 per gallon.

Official figures show that Puerto Rico was refunded around US$449 million in fiscal year 2012, while Virgin Islands to US$133 million.

De Castro adds that while the funds are intended for areas such as education, health and public infrastructure, for some time now, those territories have used a substantial part thereof the subsidy to develop their rum industries. “It’s an obstacle to compete on equal terms with those countries.”

David Jessop’s warning

Several months ago senior DT Op-Ed contributor and director of the Caribbean Council David Jessop, also warned the Caribbean nations on the unfair competition posed by the subsidies.

“There are a growing number of reasons why the Caribbean should be looking very closely at how best to use the World Trade Organization’s (WTO) dispute resolution procedures to guard against larger more powerful nations discriminating against or damaging its economic interests; particularly in relation to rum,” Jessop said.

Source: DT

Category: DR News |

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Last updated December 9, 2016 at 7:25 PM
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