The Government of Trinidad and Tobago has been brought under investigation by the United States Department of Commerce (USDC) and the United States International Trade Commission (USITC), under allegations of unfairly subsidising the manufacturing process of one of its industries.
Speaking at the Post Cabinet Briefing this afternoon, Acting Attorney General (AG), Stuart Young, said that it came to his attention last week Wednesday that in December of 2014 the government and Methanol Holdings Limited (MHTL) had been subject to countervailing duty and anti-dumping duty investigations on the production and exportation of melamine.
He added that the complaint was filed in the USA by a company called Cornerstone Chemical Company, who are manufacturers of melamine in the United States.
Young indicated that the discovery of these investigations came as a complete surprise to the new government and highlighted that the claim of countervailing was against the government of Trinidad and Tobago, whereas the anti-dumping complaint was against MHTL.
“What is of grave concern to this government is that it appears as though a decision was taken by the past administration not to have proper and adequate legal resources put behind the government’s case to defend the government Trinidad and Tobago,” Young said.
The Acting AG explained that the previous administration had retained the services of US lawyers to defend its case completely. He stated that Trinidad and Tobago did not participate as a local entity by having its own independent attorneys put forward the best case, nor did it utilise any local counsel in the process to inform and work alongside the US firms.
“These are allegations being made about what is going on the ground in Trinidad and Tobago, and it would always assist a proper defence by foreign attorneys to have someone with certain knowledge of the local ground and play, and especially local laws, being part of that team,” the Acting AG said.
Young said that there was a preliminary determination, taken by the USDC and the USITC in February of this year on the matter that negatively affected Trinidad and Tobago. “What it means is that currently we have an increase in the customs and import duty into the United States, of melamine from Trinidad and Tobago of about 172% to 174%”. He added that unknown to the public, personnel from the USDC and the USITC came to Trinidad and Tobago in June to do interviews with the Trinidad and Tobago Electricity Commission (T&TEC), the National Gas Company (NGC), The Board of Inland Revenue and CLICO.
Young said that this is because the case being made against the state is being built around allegations that the bailout programme by the government (for CLICO) and its relationship with MHTL, gave MHTL an unfair advantage. He added that the case is also being made that there are fiscal incentives and the provision of natural gas at cheaper prices than what is available in the US, as well as cheaper electricity rates that have fuelled the allegations of unfair advantages and government interference in the manufacturing process.
The allegations, he says, claims that the Government has unfairly subsidised the manufacturing process and has the potential to negatively affect the manufacturing sector, seeing that manufacturers in Trinidad and Tobago benefit from low gas and energy costs.
“My understanding is that the company in the United States that brought the claim was having problems with their own manufacturing process,” Young said, “but of course our product was going in there cheaper. And they used this procedure to challenge it.”
The administration believes that now that they are aware of the circumstances, they can now put the necessary resources in place to properly defend Trinidad and Tobago, despite being involved at such a late stage. With a negative preliminary finding already issued against the government, the new administration said that they are going to monitor the process going forward, as the final determination is yet to be made.
Should the final decision in favour of foreign interests, Young said that the government will take advice on whether there is a good chance of success with an appeal.
“This government of Trinidad and Tobago will certainly take whatever prudent decisions need to be taken to protect our local industry and to ensure that claims that may appear to be frivolous aren’t upheld, and therefore have a precedent effect on our manufacturing economy”