CCJ affirms COTED decision to up tariff on hydraulic cement imported into Barbados

-raps CARICOM and Bridgetown for failing to undertake consultations

While affirming a decision of the Council for Trade and Economic Development (COTED) to raise tariffs on “other hydraulic cement” imported into Barbados, the Caribbean Court of Justice (CCJ) on Wednesday declared that both CARICOM and Barbados failed in their respective duties to conduct prior consultation with the affected importer—Rock Hard Cement Limited.

Rock Hard would later take the Barbadian government and CARICOM to court to challenge the increase.

The Court also granted Arawak Cement Company Limited, the only domestic producer of cement in Barbados, leave to intervene in the proceedings.

Almost a year ago, COTED, the organ of CARICOM responsible for altering or suspending the Common External Tariff (CET), approved Barbados’ application to suspend the CET of 5% on “other hydraulic cement” in order to replace it with a tariff of 35%.

The request was on the basis that there was—a critical shortfall in government revenue being experienced in Barbados, a need to support an industry in that country, and that the product was of strategic importance to the economic development of Barbados.

Though requested for a 5-year period, the suspension was only authorized for two years.

Rock Hard which imports into Barbados other hydraulic cement manufactured in Turkey, was not consulted or notified before the application to raise the tariff was made or granted although both

Barbados and COTED knew the impact the decision would likely have on that company.

Rock Hard argued that the decision to raise the tariff should be annulled, since it had a legitimate expectation that Barbados would keep the tariff steady at the rate of 5% because of alleged representations made to it by Barbadian officials in 2015 when the country reduced the tariff from 60%, where it stood in 2015, to the CET rate of 5%.

This was as a result of a derogation sought and obtained from COTED by Barbados in 2001. At Rock Hard’s instance, Barbados unilaterally restored the tariff to the CET rate of 5% expressly to support Rock Hard’s business, as confirmed by the Cabinet Note confirming the reduction.

An August 6th, 2019 ruling of the court classified Rock Hard

Cement as “other hydraulic cement” for which the applicable CET range was to be 0-5%.

Barbados had denied that the communications in question gave rise to a legitimate expectation that it would permanently apply the CET of 5% on other hydraulic cement, or that a suspension of that rate would never be sought, as this would mean that successive Governments of Barbados would also be bound not to ever invoke the right afforded by Article 83 of the Revised Treaty of Chaguaramas (RTC) to seek suspension or alteration of the CET.

Barbados also argued that Rock Hard was aware of its intent to suspend the CET and increase the tariff since July 2018 and that, even if Rock Hard had any legitimate expectation as claimed, Barbados would have been entitled to disappoint it where overriding public interest considerations existed.

Both CARICOM and Arawak Cement Limited agreed with Barbados.

Arawak has submitted that Barbados was not competent to