9. The Government of St. Kitts and Nevis is very cautious with respect to entering into a Tax Information Exchange Agreement which will most definitely assure the U.S. Treasury of obtaining tax information when requested, but which does not assure our country of any of the proposed benefits. There will hardly be any real Exchange in terms of tax information. The Government of St. Kitts and Nevis feels that it may be useful for there to be some preliminary discussion on the subject against the background of the internal tax legislation and banking systems of St. Kitts and Nevis, with a view to ascertaining whether a TIEA can be functional without infringing upon local law and constitutionality. 10. The Government of St. Kitts and Nevis intends to continue to reduce the rate of unemployment, accelerate the transfer of technology and know how, improve the infrastructural development, further develop a skilled labour force and raise the standard of living for the general population, thus underscoring appropriate economic development through peace and demonstrative democracy. 11. St. Kitts and Nevis has put an emphasis on agribusiness and the export of its produce to the U.S. Market. Unfortunately, the nation has been hindered in increasing the quantity of its agricultural exports because of inadequate and costly transportation. To reduce the problem St. Kitts and Nevis faces with transportation, a "hub" trans-shipment port designed to expedite agricultural products would be beneficial. It is sometimes difficult to meet the product market standards of the U.S. because of market constraints and bureaucratic red tape. To help overcome the above problems, in-country technical workshops on post-harvesting handling, packaging, and shipping, would be exceedingly beneficial. EMBASSY OF THE REPUBLIC OF TRINIDAD AND TOBAGO 1708 MASSACHUSETTS AVENUE, N.W. WAQUIMISTON, D.C. 20036 24 February, 1986. Honourable J. J. Pickle, Chairman, Sub-Committee on Oversight, Longworth House Office Building, Room 1105, Washington, D.C. Dear Chairman Pickle, I have pleasure in submitting to you, as requested, the response of the Government of Trinidad and Tobago to the questionnaire provided to us on the implementation and progress of the Caribbean Basin Initiative as it relates to Trinidad and Tobago. I trust the members of your Committee will find it helpful in making their own assessment of the CBI. I look forward to attending the hearings of your Committee next week, and am grateful for the opportunity they have provided my Government to express to the United States Congress its appreciation of the value of initiative. Yours sincerely, J'o'nzie Lenny J. O'Neil Lewis Submission by the Government of Trinidad and Tobago 1. Overview of Trade The Trinidad and Tobago economy experienced unprecedented rates of growth during the years 1979 to 1982. This was principally due to rising oil revenues and capital investment undertaken by the Government in industrial and infrastructural development. Trade increased significantly during this period. Trinidad and Tobago's exports rose from US $1,608 million in 1975 to US $4,056.7 million in 1982 while imports increased from US $1,344.9 million to US $3,678.7 million. Oil exports accounted for about 85% of total exports and contributed roughly 40% to government revenues. Since 1982, reflecting the softening of the international petroleum market, Trinidad and Tobago's GDP has declined by approximately 2% per year with a consequent loss of national income, foreign exchange earnings and government revenue. The U.S.A. is, as it has been for the last decade, Trinidad and Tobago's major trading partner in respect of both exports and imports. In 1984 Trinidad and Tobago's exports to the United States were valued at US $1.4 billion. Principal products were petroleum and petroleum products, ammonia, steel wire rod, sugar, alcohols. In 1984, Trinidad and Tobago imported from the United States US $588 million, principally construction equipment, grains and animal feed, heating and cooling equipment, paper, pharmaceuticals and plastic resins. The EEC followed by Caricom were the second and third largest markets for Trinidad and Tobago. Within the Caribbean region, Guyana and Barbados were the major export markets and Jamaica and Barbados the principal sources of imports. Principal Exports Petroleum and petroleum products are the largest source of export revenue amounting to US$ 1,755.8 million or 81.2% of total exports in 1984. Chemicals, manufactured goods, and food and live animals account for the largest proportion of non-oil exports, reaching approximately 93% in 1984 and 95% in 1985. Exports of chemicals increased by 25% in 1984 and by September, 1985 were 16% above the 1984 level. This growth was brought about by the coming on stream of a new urea and methanol plant in 1983. Exports of manufactured goods and articles after growing by 25% in 1984, declined by 20% in 1985. The United States, Trinidad and Tobago's largest trading partner, was for the period January-September, 1985 the market for 65% of exports (US $1,066m) and the source of 36.6% of imports (US $441.9m). Principal Exports to the U.S.A. Trinidad and Tobago's principal domestic exports to the U.S.A. products entitled to duty-free treatment: Other exports markets in descending order of importance are: 3. Government Entities Involved with CBI The Government has as one of its main priorities the encouragement of new investment both foreign and domestic into production for extraregional export markets. This imperative is dictated by both a recognition of the need to diversify and augment foreign exchange earnings, and the realization that it is only through access to larger markets that growth can be rekindled and sustained. Several agencies are devoted to the promotion of industrial development and specifically geared toward the export sector. The Government has set up a new agency, the Export Development Corporation, to provide encouragement, |