VZCZCXRO8030
OO RUEHGR
DE RUEHKG #0770/01 2731413
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O 301412Z SEP 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0080
INFO EC CARICOM COLLECTIVE IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE

UNCLAS SECTION 01 OF 07 KINGSTON 000770 
 
SENSITIVE 
SIPDIS 
STATE FOR WHA/CAR (RALVARADO)(VDEPIRRO)(WSMITH) 
WHA/EPSC (MROONEY) (FCORNEILLE) 
EEB/IFD/OMA 
WHA/PPC (JGONZALEZ) 
INR/RES (RWARNER) 
INR/I (SMCCORMICK) 
SANTO DOMINGO FOR FCS AND FAS 
TREASURY FOR ERIN NEPHEW 
EXPORT IMPORT BANK FOR ANNETTE MARESH 
USTR FOR KENT SHIGETOMI 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EFIN EINV ETRD PGOV PREL IADB IBRD IMF TRGY
JM, XL 
SUBJECT: JAMAICA: OPERATION OF THE CARIBBEAN BASIN ECONOMIC RECOVERY 
ACT (2009) 
 
TRADE OBLIGATIONS 
 
----------------- 
 
 
 
¶1. Jamaica is a signatory to the WTO Agreement and has generally 
demonstrated a commitment to undertaking its obligations.  While 
the Golding administration, reeling under the effects of the global 
economic crisis, has championed the need for the country to replace 
particularly agricultural imports, it has maintained that this has 
to be done under the auspices of current trade agreements. 
Agriculture and manufacturing interests have also blamed the 
country's gargantuan trade deficit on its "so called" liberal 
trading arrangements.  The country was committed to the completion 
of the Free Trade Area of the Americas, but its efforts were 
stymied by smaller CARICOM members, who were concerned about the 
impact of such an agreement on their vulnerable economies in the 
absence of special and preferential treatment. 
 
 
 
¶2. The current view coming out of CARICOM is that the stakeholder 
community has reservations about a free trade agreement with the 
U.S. at this time.  However, the Council for Trade and Economic 
Development has cleared Trinidad and Tobago to embark on 
discussions with the U.S. on a product specific agreement.  Jamaica 
appears to be more interested in the revival of the Trade and 
Investment Council (TIC) and a discussion of a draft Trade and 
Investment Framework Agreement (TIFA) submitted by CARICOM.  Chief 
among the concerns for discussion is Jamaica's huge trade deficit 
with the U.S.  Jamaican officials posit that although market access 
might exist, there are serious supply side constraints which 
require external intervention.  However, a member of the former 
Caribbean Regional Negotiating Machinery is of the opinion that 
CARICOM is distracted by upcoming negotiations with Canada.  Even 
more important is the view that CARICOM already has ample market 
access, including the recently signed Economic Partnership 
Agreement with the EU. 
 
 
 
¶3. Jamaica remains the largest recipient of CARICOM goods, which 
increased by 30.4 percent in 2008 to USD 1.7 billion.  With the 
country exporting less than USD 100 million to other CARICOM 
states, this translated into a trade deficit of over USD 1.6 
billion.  This imbalance has placed Jamaica at odds with some of 
its partners in CARICOM, with many in the GOJ increasingly 
skeptical as to whether CARICOM membership has been beneficial to 
Jamaica's economic interests.  Recent developments suggest an 
absence within CARICOM of a shared vision of the future, and a 
region splintering into new interregional relationships, driven by 
differing levels of development among CARICOM states and growing 
signs of protectionism and insularity in response to the global 
economic crisis. 
 
 
 
INTELLECTUAL PROPERTY RIGHTS PROTECTION 
 
--------------------------------------- 
 
 
 
¶4.  In addition to being a member of the World Intellectual 
Property Organization and a signatory of the Bern Convention, 
Jamaica and the U.S. have an Intellectual Property Rights Agreement 
and a Bilateral Investment Treaty, which provide assurances to 
protect intellectual property.  Although Jamaica remains a Special 
301 "Watch List" country because the patent law is not TRIPS 
compliant, work is advanced on a new Patent & Designs Bill, which 
could be tabled this legislative year.  A Geographical Indications 
Act was passed in 2004 and general law provides protection for 
Trade Secrets.  The Copyright Act of 1993, as amended, complies 
with the TRIPS Agreement and adheres to the principles of the Bern 
 
KINGSTON 00000770  002 OF 007 
 
 
Convention, and covers works ranging from books and music to 
computer programs.  The Act needs to be amended to give effect to 
the provisions of the WIPO WCT and WPPT (Internet) Treaties to 
which Jamaica acceded in 2002. 
 
 
 
¶5. The Trademark Act of 1999 is also compliant with the TRIPS 
Agreement and provides the owner of registered trademarks exclusive 
rights for up to ten years, renewable.  It provides for the 
protection of "well-known" marks under the Paris Convention. A 
TRIPS compliant Layout Designs Act has also been in effect since 
June 1999.  The Act provides protection for layout-designs for 
integrated circuits and gives the rights owner the exclusive right 
to reproduce, import, sell or otherwise commercially exploit the 
layout-design. Enforcement of IP rights has improved significantly 
in recent times with the police becoming more active in pursuing 
breaches.  The Jamaica Intellectual Property Office has also been 
working with stakeholder interests to ensure that there is full 
compliance with IP laws. 
 
 
 
WORKER RIGHTS 
 
------------- 
 
 
 
¶6. Jamaica has ratified the following ILO Conventions: 
 
 
 
(I)  Right of Association (Agriculture) Convention 1921 - ratified 
July 8, 1963; Freedom of Association and Protection of the Right to 
Organize Convention, 1948 - ratified December 26, 1962 
 
 
 
(II)  Right to Organize and Collective Bargaining Convention, 1949 
- ratified December 26, 1962 
 
 
 
(III)  Forced Labor Convention (29) - ratified in 1962; Abolition 
of Forced Labor Convention (105) - ratified in 1962 
 
 
 
(IV) Minimum Age for Employment Convention (138) - ratified in 
2003: Children must be at least 15 years of age to engage in any 
form of gainful employment.  However, children should not work at 
nights and should not be taken out of schools for employment 
purposes.  The Worst Forms of Child Labor Convention was ratified 
in 2003. 
 
 
 
¶7.  Worker rights in Jamaica are defined and protected under the 
Labor Relations and Industrial Disputes Act, with the Industrial 
Disputes Tribunal (IDT) hearing collective bargaining cases. 
Workers generally enjoy full rights of association, as well as the 
right to organize and bargain collectively.  However, unionized 
workers have frequently been laid off and then rehired as 
contractors with reduced remuneration.  This issue was the subject 
of litigation for a number of years and in July 2009 the Court of 
Appeals upheld a 2005 decision by the IDT, in favor of a 
representational rights poll for contract workers.  Jamaican labor 
law neither authorizes nor prohibits strikes.  However, workers in 
the "essential services" are prohibited from striking.  The general 
minimum wage is $46 for a 40-hour week, including at least one day 
of rest.  Employees are expected to work for eight hours per day, 
with any additional time remunerated at times and a half or twice 
the regular rate. 
 
KINGSTON 00000770  003 OF 007 
 
 
CHILD LABOR 
 
----------- 
 
 
 
¶8. Jamaica ratified ILO Convention 182 in 2003, and in March 2004 
passed the Child Care and Protection Act (CCPA).  The CCPA 
implements the Government of Jamaica's strategy to eliminate the 
worst forms of child labor, and establishes a framework within 
which all forms of child abuse may be proscribed.  It includes a 
prohibition on employing a child under the age of 13 in any form of 
work, and restricts both the type of employment and hours of work 
permitted for children between the ages of 13 and 15.  The formal 
institutional mechanism for investigation into allegations of the 
mistreatment of children is the Child Development Agency, which 
operates under the auspices of the Ministry of Health. 
 
 
 
¶9. Additionally, Jamaica cooperates with non-governmental 
organizations such as Children First to prevent child labor.  It 
signed a Memorandum of Understanding with ILO-IPEC, and has 
established a National Steering Committee for the Protection of 
Children in conjunction with ILO-IPEC. While Jamaica continues to 
make significant efforts to address child labor issues, it is often 
constrained by poor enforcement mechanisms.  Additionally, the law 
does not specifically prohibit forced or compulsory labor, 
including by children, and there were reports of child prostitution 
and of children trafficked into domestic servitude and forced 
labor. 
 
 
 
COUNTER-NARCOTICS EFFORTS AND EXTRADITION TREATY 
 
--------------------------------------------- --- 
 
 
 
¶10. Jamaica continues to be a major transit point for South 
American cocaine, and remains the largest Caribbean producer and 
exporter of marijuana.  While Jamaica is listed in the 2008 
Presidential Determination as a major illicit drug-producing or 
drug-transit country, it has worked with the U.S. to combat drug 
trafficking and, therefore, has not been identified by the 
President as having failed to comply with the criteria in the FRAA. 
Jamaica is a signatory to both a Mutual Legal Assistance Treaty and 
an Extradition Treaty regarding U.S. citizens, Jamaicans, and 
third-country nationals. 
 
 
 
CORRUPTION 
 
---------- 
 
 
 
¶11. Jamaica has a Corruption Prevention Act which, among other 
things receives and examines the statutory declarations of public 
sector workers and if necessary investigates complaints regarding 
corruption.  To date there has been no enforcement, as the 
Commission lacks the capacity to enforce the filing of 
declarations.  Jamaica is a signatory of the OECD Anti-Bribery 
Convention and has ratified the Inter-American Convention Against 
Corruption.  However, Jamaica is not a signatory to the UN 
Anticorruption Convention.  Jamaica prosecutors continue to take 
part in regional anti-corruption conferences, with one such 
conference developed by the United States Department of Justice. 
The new government has also publicly advocated for the adoption of 
whistle blower legislation and the establishment of a Special 
Prosecutor for Anti-Corruption to improve transparency and reduce 
 
KINGSTON 00000770  004 OF 007 
 
 
public corruption.  A senior police officer and a former Minister 
of Government are currently before the courts on corruption 
matters. 
 
GOVERNMENT PROCUREMENT 
 
---------------------- 
 
 
 
¶12.  The GOJ has comprehensive public procurement procedures, which 
are vigorously enforced by the Contractor General.  Government 
procurement is generally done through open tenders, direct 
advertising, or by invitation to registered suppliers. U.S. firms 
are eligible to bid. The range of manufactured goods produced 
locally is relatively small, so there are few instances of foreign 
goods competing with domestic manufacturers.  Companies interested 
in supplying office supplies to the government must register with 
the Financial Management Division of the Ministry of Finance. 
 
 
 
PROPERTY RIGHTS 
 
--------------- 
 
 
 
¶13.  Property rights are protected under Section 18 of the Jamaican 
Constitution.  Expropriation of land may take place under the Land 
Acquisition Act, which provides for compensation on the basis of 
market value.  Expropriation can take place before compensation is 
paid, but in this case interest for the period between the 
expropriation and the compensation settlement must be paid. 
According to the law, the purpose of any expropriation must be 
transparent and compensation for expropriated property must be 
adequate.  If informal negotiations on compensation fail, the 
investor has recourse to the courts.  Jamaica has signed bilateral 
agreements for the reciprocal promotion and protection of 
investments with a number of countries, including the United 
States.  The Embassy is not aware of any litigation between the 
Jamaican government and any private individual or company based on 
expropriation or on compensation for expropriation. 
 
 
 
ARBITRAL AWARDS 
 
--------------- 
 
 
 
¶14.  Jamaica, a signatory to the International Center for the 
Settlement of Investment Disputes (ICSID) since 1965, accepts 
international arbitration of investment disputes between Jamaicans 
and foreign investors.  Local courts also recognize and enforce 
foreign arbitral awards.  International arbitration is also 
accepted as a means for settling investment disputes between 
private parties.  However, acting in its role as an international 
tribunal, the Caribbean Court of Justice interprets and applies the 
Revised Treaty of Chaguaramas.  There is no formal domestic 
arbitration body in Jamaica, but disputing parties can use 
arbitration proceedings to settle their disputes.  These 
proceedings would be guided by the Arbitration Act which sets out 
the procedures disputing parties would follow once they agree on 
arbitration and is read in conjunction with the Arbitration Clauses 
Protocol Act, which in turn makes reference to how foreign arbitral 
awards will be addressed.  If a foreign investor's country has a 
BIT with Jamaica then the rules of this treaty would apply.  Other 
foreign investors are given national treatment and civil procedures 
would apply.  Disputes between enterprises are handled in the local 
courts, but foreign investors can refer cases to ICSID.  There have 
been cases of trademark infringements in which U.S. firms took 
action and were granted restitution in the local courts. 
 
KINGSTON 00000770  005 OF 007 
 
 
PREFERENTIAL TREATMENT AND COPYRIGHT ISSUES 
 
------------------------------------------- 
 
 
 
¶15.  Jamaica does not provide preferential treatment to the 
products of any developed countries.  However, CARICOM recently 
signed an Economic Partnership Agreement with the European Union to 
establish a WTO compatible trading arrangement.  Jamaica has a very 
strong copyright regime, which adheres to the principles of the 
Bern Convention, and covers works ranging from books and music to 
computer programs.  The government has actively enforced this Act, 
but in recent times the rights holder for HBO in Jamaica has 
complained about broadcast breaches in Jamaica.  However, in 
response, JIPO said it has always sought to collaborate with the 
Motion Picture Association of America on an enforcement and public 
education program.  The office says it remains ready and willing to 
work with US-based interests to ensure full IP compliance in the 
Jamaican market. 
 
 
 
ECONOMIC OVERVIEW 
 
----------------- 
 
 
 
¶16.  Jamaica's already moribund economy has plunged further into 
recession on the back of the global economic crisis.  Real GDP has 
been declining by up to four percent, as the economy reels from the 
fallout in the real sector, and in particular bauxite and 
construction.  Three of the island's four alumina plants have been 
forced to halt production as external demand wanes.  The falling 
external demand has also resulted in a slump in foreign exchange 
earnings, although tourism earnings have remained flat. 
Remittances, the second largest foreign exchange earner, have 
declined by almost 20 percent for the year to date.  The imbalance 
in the country's external position led to a steep depreciation in 
the local currency, prompting the central bank to effect a number 
of demand management measures, led by record high interest rates. 
 
 
 
¶17. These measures have had some success, as the currency 
stabilized and the stock of Net International Reserves (NIR) 
leveled off at USD 1.6 billion.  Inflation also moderated to four 
percent for the first half of 2009.  But these gains have come at a 
significant cost to the fiscal accounts.  The weakening fiscal 
dynamics combined with talk of a debt concession triggered a second 
downgrade in Jamaica's credit rating to CCC+ by Standard & Poor's. 
The fiscal crisis also forced the government into action; in 
addition to speeding up negotiations with the IMF for a USD 1.2 
billion Stand-by Agreement, the GOJ made some changes at the 
technical level in the Ministry of Finance.  The GOJ has also had 
to revise the budget it presented only five months ago.  The first 
supplementary budget tabled in September 2009, increased 
expenditure and by extent the fiscal deficit by almost USD 70 
million on the back of higher than budgeted interest cost.  The 
central bank received USD 303.4 million in special drawing rights 
(SDRs) from the Fund at the end of August 2009, pushing the stock 
of NIR to nearly USD 2 billion.  The GOJ also received a USD 40 
million grant from the European Union for budgetary support. 
 
 
 
MARKET ACCESS AND TRADE DISTORTIONS 
 
----------------------------------- 
 
KINGSTON 00000770  006 OF 007 
 
 
¶18. There have been a few instances where U.S. agricultural 
products have been the subject of increased scrutiny by the local 
Veterinary Division due to what they consider the absence of 
accompanying health certification attesting to the wholesomeness of 
the products.  However, this is not a general problem as over 50 
percent of food consumed by Jamaicans is imported from the U.S. 
Additionally, the U.S. continues to be Jamaica's largest trading 
accounting for almost 40 percent of total trade in 2008.  Imports 
from the U.S. to Jamaica amounted to USD 3.2 billion, while exports 
were a less flattering USD 1.2 billion, translating into a trade 
deficit of USD 2 billion.  There are currently no performance 
requirements imposed as a condition for investing in Jamaica. 
However, investments that expand employment opportunities are 
favorably considered.  There is no requirement that investors 
purchase from local sources or export a certain percentage of 
output.  However, "Free Zone" type incentives require companies to 
export at least 85 percent of their output.  Jamaica's perennially 
dire fiscal situation makes it almost impossible for the government 
to provide export subsidies. 
 
 
 
LOCAL TRADE POLICIES AND THE CBI REGION 
 
--------------------------------------- 
 
 
 
¶19.  Jamaica has always been a major proponent of regional economic 
integration.  Most CARICOM countries look to Jamaica for leadership 
and the country was among the first to reduce duties on goods from 
CARICOM countries and has been spearheading efforts to get the 
CARICOM Single Market and Economy and the Caribbean Court of 
Justice on track. Jamaica currently runs large trade deficits with 
Trinidad and Tobago and Barbados and a number of regional firms, 
including financial institutions and manufacturing entities, have a 
physical presence in the country.  However, there is a feeling 
among Jamaicans that there is no reciprocity, as when they try to 
do business in these markets they are met with resistance. 
 
 
 
PROMOTION OF ECONOMIC DEVELOPMENT 
 
--------------------------------- 
 
 
 
¶20. Jamaica has embarked upon the preparation of a 25-year National 
Development Plan - Vision 2030 Jamaica, which is expected to put 
the country on a path to achieve developed country status by the 
year 2030. With export growth less than impressive, the GOJ and the 
JEA are also collaborating on a National Export Strategy to expand 
exports in the next 2 to 3 years.  Technical support is being 
provided by the Geneva-based International Trade Council (ITC). 
The ITC is providing Jamaica with a template, which will be 
customized to fit the local context.  The aim is to concentrate on 
9 sectors including agro-processing, mining and quarrying, fashion, 
apparel and jewelry.  There is also a view that Jamaica cannot 
compete on volume and as such the country has to concentrate on 
niche markets and value addition through intellectual property and 
diversification.  The JEA is therefore working with JIPO to 
establish geographical indicators (GI) for products like coffee. 
The JEA is also embarking on a Brand Jamaica Initiative, which will 
include registered certification marks to gain indigenous status. 
 
 
 
ADMINISTRATION OF CBERA 
 
----------------------- 
 
 
 
¶21.  The Trade Board is the agency responsible for administering 
 
KINGSTON 00000770  007 OF 007 
 
 
the CBERA/CBTPA programs in Jamaica.  The agency has been and 
remains willing to promote the program.  Trade Board officials are, 
however, concerned about the underutilization of the program and 
attribute this to the general lack of competitiveness of a number 
of firms as well as the demand constraints associated with the 
global economic crisis. 
 
 
 
PARNELL 
Parnell