Gov. John deJongh Jr. returned to the territory Friday after holding discussions on the future of the territory’s rum industry with St. Lucia’s prime minister, Dr. Kenny Anthony, Thursday night.
According to a statement released Friday night by Government House, the visit was part of an outreach effort the governor is making to friends and neighbors in the Eastern Caribbean, primarily members of the Organization of Eastern Caribbean States, as rum production is becoming an increasingly contentious economic issue.
Caribbean community countries that have been exporting well-known rums to the United States for decades are preparing to mount a concerted lobbying campaign to persuade Washington to cut back on heavy subsidies given to a British spirits producer in the U.S. Virgin Islands (USVI) because regional production has been placed at a serious disadvantage, the governments said this week.
Last year the 15-member Caribbean Community, known as Caricom, complained to U.S. trade authorities that the tax and other incentives given to Diageo by the U.S. Virgin Islands to build the St. Croix distillery that produces Captain Morgan Rum for the U.S. market gives it an anti-competitive advantage over other Caribbean rum exporting companies.
DeJongh recently wrote to all ministers of Caricom to explain the importance of the rum industry in the U.S. Virgin Islands and the legal basis of long-standing agreements with the federal government.
Anthony and deJongh discussed a number of issues on Thursday, including Caricom’s concerns, as expressed to the federal government, on the protection that has been extended to rum producers in the Virgin Islands, and the impact of the closure of the Hovensa refinery on St. Croix.
Some Caribbean leaders have suggested the possibility of taking their complaint about the rum agreements to the World Trade Organization, an action that would create years of litigation and not benefit any parties, according to deJongh.
“I’m optimistic that they will understand that an action with the World Trade Organization really does none of us any good. It doesn’t help any of our economies,” de Jongh said, adding the U.S.Virgin Islands industry is focused on branded rums, not in bulk trade, the part of the industry that many of the other islands’ producers are looking at.
Anthony and deJongh also spoke of the need to continue developing relations between the two Caribbean islands, especially since St. Croix has a large population of St. Lucian nationals, and of redoubling efforts to seek new opportunities for training, employment and education.
The governor has also reached out to the prime ministers of St. Kitts and Nevis, Dominica, and Antigua and Barbuda, because those countries best “understand our economy and how those rum agreements are desperately needed to support health care, law enforcement, education in our territory, especially in the aftermath of the Great Recession.”
Prime Minister Anthony said he understands the governor’s position, but harbors concerns. Anthony said he might bring up the issue at a heads of states meeting that will take place in Trinidad this July.
“This is important, there should be a middle ground rather than having them go to the WTO in an action where the United States will have to represent us,” deJongh said.
Before traveling to St. Lucia on Thursday, de Jongh attended meetings with officials of the U.S. Environmental Protection Agency and the territory’s bond counsel in New York.