WASHINGTON, USA -- In a letter last November to United States Trade Representative (USTR), Ambassador Ron Kirk, the US Virgin Islands Representative to Congress, Donna Christensen, has defended the USVI’s use of cover over revenues from attacks from various sources in the region.
“There has been much said in press articles about how the arrangements of the US Virgin Islands and Puerto Rico will decimate the Caribbean rum industry. This is simply not true,” Christensen said in her letter.
The US Congress enacted the cover over to provide revenue to the USVI and Puerto Rico based on their production of rum and the cover over revenue is of vital importance to the USVI economy. Rum production in the USVI also has a long heritage.
“In particular with the loss of 2,000 jobs due to the closing of the Hovensa refinery, the agreements my territory made with rum producers are vital to the USVI economy. In reliance on these contracts, bonds were issued on the financial markets to support the USVI's economy,” Christensen said.
She urged the USTR to defend the sanctity of these contracts and uphold the rule of law.
Christensen pointed out that imports of rum into the US from the Caribbean are up year on year according data from the US International Trade Commission.
“The press articles have made mention of the impact on the Caribbean producers, but as the data show these allegations are false. Moreover, the Caribbean producers enjoy many protections from their own governments in the form of tariffs and taxes that are inconsistent with their WTO obligations,” she added.
She claimed that many of these Caribbean rum producers are owned by multinationals similar to those with which the USVI has partnered.
“Some commentators like to portray this issue as David versus Goliath. I can tell you that the David in this story is the USVI -- fighting to grow its rum industry and keep its economy afloat,” she said.
Christensen said there are very few facts behind the statements made by representatives from the Caribbean Community (CARICOM) and the Dominican Republic. Their producers enjoy duty free access to the US market, as well as direct assistance from the European Union and preferential market access, which Caribbean rum is provided through multiple trade agreements.
“The ITC data show that rum is imported into the US from many countries. Places like Guatemala and Mexico are also competing with the Caribbean. Without the cover over and the ability to provide incentives to producers, the producers in my territory probably would leave for places like Mexico and Guatemala,” she said.
The US Congress has never mandated how the USVI and Puerto Rico spend the revenues generated by the rum cover over. These monies are in lieu of direct appropriation from Congress guaranteeing the territories a predictable stream of revenue. The cover over and the territories' use of it complies with US international obligations, Christensen said.
“As Congresswoman from the US Virgin Islands, I have joined with our Caribbean neighbors over the years to protect our common interests in rum and other areas. I look forward to putting these concerns to rest and continuing to face our common challenges together. I thank you for USTR's support over the past year and I ask for your continued support,” she concluded.
The USVI representative is a paid shill for Diageo and Fortune Brands. Rums from the rest of the Caribbean simply cannot compete when billions of dollars in subsidies, not to mention millions in tax rebates is all free money. It's like being paid to make rum.
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