TREATY CHALLENGE
Rock Hard Distribution v Trinidad and Tobago and the Caribbean Community
A challenge to a 50% cement tariff that settled whether World Trade Organization law binds the Caribbean Community.
Matter overview
Cement of the kind at issue normally enters CARICOM from outside the region at a common external tariff of 5%. The Council for Trade and Economic Development (COTED) is the Community body that manages that tariff. In 2019, it allowed Trinidad and Tobago to suspend the 5% rate and charge 35% for 2020. In November 2020, Trinidad and Tobago asked to go to 50% for all of 2021. COTED agreed in December, and the higher rate took effect on 1 January 2021 alongside a quota on imports.
Rock Hard Distribution, a regional distributor, and two local importers of Turkish cement said the measure did them serious harm. They asked the Caribbean Court of Justice to annul the COTED decision. The claim came under the Court's original jurisdiction, where businesses can sue states and the Community under the Revised Treaty of Chaguaramas. Trinidad and Tobago and the Community defended the decision. Belize and Trinidad Cement Limited, the local producer, joined the case on their side.
Strategic approach
The claim attacked both how the decision was made and what it allowed. The claimants' grounds fell into three groups.
- A flawed process. COTED, they argued, had acted without accurate and sufficient information from Trinidad and Tobago. The claimants had not been properly consulted, and the agreed procedure had not been followed.
- A decision that went too far. On their case, a 50% rate was out of proportion, served the wrong purpose and worked against the Community's aim of expanding trade with countries outside CARICOM.
- A breach of WTO limits. Trinidad and Tobago's bound rate at the World Trade Organization is 5%; that is the ceiling it has committed to on cement. The claimants said COTED could not lawfully approve a tariff ten times higher.
The claimants won the first round. On 19 February 2021, before the full hearing, the Court ordered interim measures stopping Trinidad and Tobago from charging more than 5% on the cement while the case ran. It found the claimants had a strong enough case on first look and that waiting would cause them serious harm. That order stayed in place until December 2021. At the trial on 28 and 29 June 2021, several witnesses and two experts in WTO law gave evidence and were cross-examined.
The claimants' team comprised Ian Benjamin SC, appearing with Jagdeo Singh, Justin Phelps, Karina Singh and Nalini Jagnarine. Deborah Peake SC appeared for Trinidad and Tobago and Dr Corlita Babb-Schaefer for the Community. Eamon Courtenay SC appeared for Belize and John Jeremie SC for Trinidad Cement Limited.
Result
The Court dismissed the claim in full on 2 March 2022. COTED has a broad discretion over the common external tariff, and the Court will interfere only where a decision is clearly wrong. None of the grounds met that bar. The Court accepted that consultation in Trinidad and Tobago could have been fuller and more transparent and that the procedure had some flaws; neither was enough to set the decision aside.
The WTO question produced the ruling that outlasts the case. The Court held that it could decide whether WTO law forms part of Community law, then held that WTO law does not bind the Community when it sets tariffs. The Community is not itself a WTO member, and nothing in the Revised Treaty limits COTED's tariff powers by reference to WTO rules. COTED is still expected to have regard to a member state's bound rate – as a matter of practice, not a legal limit.
