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Maritime sector to see changes when EPA takes effect

Jamaica Gleaner

Maritime sector to see changes when EPA takes effect

3 June 2008

With the signing of the Economic Partnership Agreement (EPA) scheduled for July this year between CARICOM states, the Dominican Republic and the European Union (EU), several services within the local maritime sector could see changes taking place when the Agreement takes effect.

Calvin Manduna, Trade Policy Analyst at the Ministry of Foreign Affairs and Foreign Trade, gave details of these changes during a recent Lunch and Learn seminar, hosted by the Shipping Association of Jamaica (SAJ) and sponsored by Shipping Services Stevedoring Limited. The seminar was held at the SAJ’s auditorium, Port Bustamante.

Manduna said, under the EPA, Jamaica has committed to opening up its market to firms from the EU offering the following international maritime transport services:

Freight and passenger transports (less cabotage, i.e. transport of goods between two ports or places located in Jamaica);

Rental of vessels with crew, including rental and leasing of yachts;

Maintenance and repair of vessels as well as vessel salvaging and refloating services;

Support services for maritime transport such as home porting, bunkering, short-sea and ship chandlering;

Storage and warehouse services;

Freight and transport agency services.

Foreign participation

According to Manduna, Jamaica’s maritime sector had already been open to foreign participation as the sector had previously pursued foreign investment and had undergone a massive transformation in an effort to raise Jamaica’s attractiveness as a transshipment hub.

"The commitments Jamaica has made under the EPA represent an intention to further provide legal certainty for investors in the sector - that they are guaranteed a certain level of access into the market," Manduna explained.

He continued: "It is hoped that such commitments will stimulate an influx of investment into areas such as distribution, storage, logistics, rental and leasing of yachts in support of tourism ..."

Manduna was, however, quick to point out that while the market will become open to foreign participation, the participation, on its own, will not translate into investment.

"International maritime transport services have become highly competitive in recent years, leave increasingly integrated and technology intensive as major players seek to diversify the range of services they offer," Manduna further explained in an e-mail interview. "Therefore, the threat of greater competition from abroad is ever present for service providers such as shipping agents, freight forwarders and ground transport operators. If anything, it is hoped that the EPA will stimulate local maritime firms towards becoming more competitive and looking outward for greater business opportunities in what is becoming an increasingly shrinking world."

Increased business

He noted that increased trade, as a result of the implementation of the EPA and private sector uptake, is expected to result in increased business for operators in the maritime transport sector. The EPA, Manduna said, contains a number of provisions that are aimed at promoting private sector and enterprise development, strengthening regulatory institutions such as the Maritime Authority, developing human resources such as the Caribbean Maritime Institute and enhancing competitiveness, innovation, technical and other supply capacity through the provision of technical and other cooperation.

"It is up to local stakeholders to develop specific projects for which they can seek assistance under the Agreement from the EU," Manduna said. "The gains and expansion that have taken place so far in Jamaica’s maritime sector have been void any far reaching commitments on market openness. Therefore, one should not read too much into the catalytic effects that liberalisation under the EPA may have."

In addition to opening up its market, Jamaica will make several services at its port available to international maritime transport suppliers on reasonable and nondiscriminatory terms and conditions. These include: pilotage, towing and tug assistance, provisioning, fuelling and watering, garbage collecting and ballast waste disposal, port captain’s services, navigation aids and shore-based operational services essential to ship operations.