The Editor, Sir:

John Rapley, in his article titled 'Buy local, kill jobs', which appeared in the February 5, 2009 issue of The Gleaner, made reference to the buy local provision in the Government's stimulus package announced in December last year. He also related that the provisions of the protectionist trade legislation tended to protect existing jobs, but create no new ones.

The Jamaica Manufacturers' Association (JMA) hereby defends the Government's adoption of procurement policy as well the 'Buy Jamaican' initiative, to stimulate its own industries, protect and enhance the employment of its workers.

Huge trade deficit

Since the start of the year many jobs have been lost, factory orders are low, sales have declined and Jamaica continues to struggle with a huge trade deficit. It is therefore essential that there is government support from the manufacturing sector. It is not protectionist when a government implements measures to save jobs and utilises taxpayers' dollars to spend it on Jamaican-made products.

The procurement policy will: create a level playing field with our CARICOM competitors, many of whom do not experience the challenges faced by our local producers such as high security costs due to the high crime rate and an unstable exchange rate; save valuable foreign exchange; and reduce the country's dependency on imports, thereby lessening the trade imbalance. This results in reduced demand for foreign currency, which is critical at this time given the closures in the bauxite sector and the problems being faced by the sugar industry.

Overall benefits

Additionally, when you support Jamaican products, it increases taxable activities within the economy, hence increasing the base of government revenue. The 10 per cent price differential is therefore justified as the overall benefits to the Jamaican economy outweigh any additional cost.

It is also important to point out that only 15 per cent of government procurement has been reserved for small businesses and micro enterprises, which leaves 85 per cent of government procurement open to competition. Fifteen per cent is a tiny fraction of Jamaica's trade with the rest of the world.

It is true that the procurement policy will serve to protect existing jobs, and in 2007 alone, the manufacturing sector employed over 69,000. However, we firmly believe that revitalising the manufacturing base will generate new jobs. For instance, if our printers were awarded schoolbook printing contracts, based on economies of scale, they would have expanded and employed additional workers.

A case in point is the printing sector in Trinidad, which has expanded due to Jamaican contracts being awarded to them.

If America should implement a new 'Buy American' policy due to the current global recession, it would no doubt affect Jamaica, as this is one of our larger export markets. However, it must be noted that countries have for many years implemented domestic sourcing provisions into law, of which the US has had such law in place for 70 years starting with the Buy American Act of 1933. Additionally, Canada and the European Union have similar provisions applicable to their transportation and water-processing sectors.

EXPORT FREELY MYTH

The notion of 'exporting freely' as mentioned by Rapley is merely a myth as there is no true free trade as even trade agreements are coupled with 'provisions' to protect each country involved. Trade has always been distorted by subsidies and other non-tariff barriers.

It is good that as leader of the free world, President Obama has sent a message that it would be a mistake for America to appear as if it was looking out for itself.

This choice is for America to make, but the fact is, more powerful nations have practised domestic preference, and as a small and vulnerable island state it is prudent that, especially in a time of economic recession, we implement policies to boost our local productive sector, particularly our micro and small enterprises.

I am, etc.,

BRIAN PENGELLEY

Deputy President

Jamaica Manufacturers'

Association Ltd