This litigation is part of the series of actions in the Caribbean Court of Justice that was commenced by Trinidad Cement Limited against the States of Trinidad and Barbados to impose protective tariffs on imports of cement by Rock Hard Cement Limited into the region.
In 2001 Barbados sought and received the approval of the Council for Trade and Economic Development (“COTED”) to apply a tariff rate different from the Common External Tariff (“CET”). The approval was to increase its rate of duty on certain types of cement, included in Tariff Heading 25.23, to 60%, up from the CET of 5%. Barbados described Tariff Heading 25.23 as containing cement fondu, slag cement, super sulphate cement, and similar hydraulic cement. The COTED did not however state an expiry date for the derogation granted.
On the 8th October 2015, Barbados decided that it would no longer apply the rate of 60% on imported cement classified as “other hydraulic cement” and decided to re-apply the CET 5% rate of duty on that cement, consistent with the CET. However, this was not enacted into domestic law although from November 2015 duty on imports of cement attracted the CET rate of 5%.
Trinidad Cement Limited and Arawak Cement Company Limited, both manufacturers and distributors of cement subject to Community treatment, claimed that Barbados had wrongfully lowered the approved 60% derogation rate to a 5% tariff on the importation of extra-regional cement and obtained an order from the CCJ by way of interim measures re-imposing the rate of 60%.
The issue was therefore whether Barbados was obliged to obtain the approval of COTED before it could reimpose the CET. Rock Hard Cement Limited, represented by Allan S. Wood Q.C and Symone Mayhew, contended that there was no requirement for Barbados to obtain the approval of COTED before it could properly reimpose the CET as this would fetter the sovereign right of the State, conferred by the Revised Treaty of Chagaramus, to apply the CET.
The Caribbean Court of Justice held that there was no requirement for Barbados to have received the approval of COTED to revert to the CET. The Court added however that as a matter of good administration it would have been expected and appropriate that Barbados informs COTED of its revised position. The Court’s previous order granting interim measures to enforce the duty rate of 60% was accordingly discharged.