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TITLE:  TRINIDAD/TOBAGO ECONOMIC POLICY AND 
        TRADE PRACTICES
DATE:  FEBRUARY 1994
AUTHOR:  U.S. DEPARTMENT OF STATE

                       TRINIDAD AND TOBAGO

                     Key Economic Indicators
         (Millions of TT dollars unless otherwise noted)


                                   1991      1992     1993 1/
Income, Production,
 and Employment

Real GDP (1985 market prices)     16,530.6  16,267.5  16,106.5
Real GDP Growth (pct.)              2.5      -0.3      -0.9
GDP (current market prices)       21,429.2  22,222.3  24,282.0
GDP (current prices) by sector
  Petroleum products               5,691.6   4,860.2   5,585.5
  Agriculture                        558.2     563.8     584.1
  Electricity and Water              258.4     357.9     463.5
  Manufacturing                    1,992.3   2,057.6   2,100.2
  Construction                     1,851.5   1,915.5   1,857.3
  Transport, Storage and                  
   Communications                  1,980.5   2,007.6   2,123.3
  Financial Services               2,525.8   2,765.7   3,180.6
  Other Services                   1,454.6   1,516.2   5,437.8
  Government                       2,372.6   2,636.4   2,751.3
Real Per Capita GDP (TT$)         13,359.1  12,991.1  12,780.9
Labor Force (000's)               492.4     505.2     497.0
Unemployment Rate (pct.)           18.9      19.6      19.5


Money and Prices

Money Supply (M2)                  9,656.6   9,017.7   9,276.0
Base Interest Rate (pct.)          12.9      15.5      15.5
Retail Inflation (pct.)             3.8       6.5      11.0
Wholesale Inflation (pct.)          0.2       0.8       1.8
Consumer Price Index              232.0     247.0     273.0
Exchange Rate (TT$ per U.S.$) /2  4.25      4.25      5.60


Balance of Payments and Trade
 (millions of US dollars)

Total Exports (FOB) /3             1,985.0   1,867.1   1,400.0
  Exports to U.S.                    965.3     879.0     650.0
Total Imports (CIF)                1,667.0   1,435.6   1,360.0
  Imports from U.S.                  647.9     594.4     475.0
Aid from U.S.                          0         0         0
Aid from Other Countries               0         0         0
External Public Debt (year-end)    2,432.5   2,216.0   1,962.0
Annual Debt Service Paid /4          461.0     612.1     634.0
Gold and Foreign Exchange
  Reserves (net, year-end) /5        -30.4     -67.8      29.3
Trade Balance                        318.0     431.6      40.0
  Balance with U.S.                  317.1     284.6     175.0


Notes:

1/  TT Government estimates, based mostly on third quarter data.
2/  Effective April 13, 1993 the government floated the TT
    dollar.  The TT$/U.S$ rate has subsequently remained
    fairly stable at about TT$5.6 per U.S.$1.00.
3/  1993 Import/export data are based on January-June figures.
4/  Principal and interest.
5/  As of September 30, 1993.



1.  General Policy Framework

    The dual-island parliamentary Republic of Trinidad and
Tobago is endowed with rich deposits of oil and natural gas. 
During the oil boom of the 1970's, Trinidad and Tobago became
one of the most prosperous countries in the Western
Hemisphere.  Oil revenues enabled the nation to invest in
state-owned and state-controlled corporations, which are a
major drain on the nation's resources.  The oil wealth also
fueled a dramatic increase in domestic consumption.  The
collapse of the oil boom in the 1980s, and concurrent decrease
in Trinidadian oil production, caused a severe decline in
Trinidad and Tobago's economy, which is still being felt.

    Since January 1992, the Government of Trinidad and Tobago
has moved decisively to lay the foundations for private-sector
based, export-led growth.  In July 1992 the government
dismantled most remaining non-agricultural trade barriers, and,
effective April 13, 1993, it removed currency controls,
floating the TT dollar.  The government has aggressively
courted foreign investors, attracting over US$1 billion thus
far in 1993.  In the short term, however, before the stimulus
from the new investment is felt, Trinidad and Tobago's
prospects for economic growth remain closely tied to oil prices.

    High debt-service payments have forced the GOTT to pursue a
tight monetary policy.  The resultant high interest rates have
hampered local investment.  Official unemployment figures,
which reflect only those who are actively seeking work, have
dropped below 20 percent, but the number of labor-force
dropouts and, thus, the total number of unemployed persons,
continues to rise as state-owned enterprises and some
private-sector manufacturers retrench workers.

    Trinidad and Tobago is highly import-dependent.  Products
imported cover a broad range of consumer and industrial goods
from its major supplier, the United States, and other developed
countries.  Trinidad and Tobago's exports, however, are
traditionally highly concentrated in oil and downstream
petrochemical products (chiefly anhydrous ammonia, urea and
methanol), and processed iron ore and steel wire rod (both
produced using local natural gas and gas-derived electricity). 
The April 1993 float (and resultant depreciation) of the TT
dollar has made local manufactured and agricultural exports
more competitive.  The removal of import-licensing restrictions
has also forced local manufacturers, traditionally accustomed
to producing only for a protected domestic market, to look
outward and become more efficient.

    The Government of Trinidad and Tobago uses a standard array
of fiscal and monetary policies to influence the economy,
including a 15-percent value-added tax (VAT) and relatively
high corporate and personal income taxes.  Improvements in
revenue collection in 1993 have boosted VAT, income-tax and
customs-duty revenues dramatically.  As a result, the
government expects to end fiscal year 1993 with a slight budget
surplus, despite lower petroleum-tax revenues.  The government
projects a surplus of one percent of GDP in 1994.

    The April 1993 flotation of the TT dollar has made the
conduct of monetary policy in Trinidad and Tobago more
complex.  To ensure a stable exchange rate, the Central Bank
feels it must manage liquidity by keeping aggregate demand
consistent with balances.  Accordingly, the Central Bank, which
traditionally has relied primarily on reserve requirements to
control the money supply, now plans to use more open-market
operations, initially through the Treasury Bill market.  Low
inflation and a stable exchange rate since the float attest to
the success of the government's tight monetary policy.  The
approximately 35-percent depreciation of the TT dollar in April
led to a 15-percent increase in fuel prices in July, boosting
1993 inflation figures to an estimated 11 percent.  In general,
however, the underlying inflation rate has remained low.


2.  Exchange Rate Policies

    Effective April 13, 1993 the Government of Trinidad and
Tobago removed exchange controls and floated the TT dollar,
which had been pegged to the U.S. dollar (the currency of its
major trading partner) at the rate of TT$4.25/US$1.00 since
1988.  Since announcement of the float, the TT dollar has
traded in a relatively narrow band, selling at around
TT$5.60/US$1.00 and buying at TT$5.77/US$1.00.

    Initially the commercial banks administered exchange
controls similar to those formerly imposed by the Central Bank,
but, influenced by competitive forces, those informal controls
are gradually and quietly being lifted.  Foreign currency for
imports of both visible and invisible goods, as well as for
profit remittances and repatriation of capital, is now freely
available.  Only a few reporting requirements have been
retained to deter money laundering and tax evasion.


3.  Structural Policies

    Pricing Policies:  Generally, the free market determines
prices.  The government maintains domestic price controls on a
narrow range of items, such as some basic foodstuffs, fuel,
school books and pharmaceuticals.  In some circumstances, the
controls could act as import barriers if suppliers are unable
to meet the established ceiling prices.  The range of
price-controlled products has been reduced in recent years, and
price controls are expected eventually to be eliminated
entirely.  A "Negative List" prohibits the importation of
certain agricultural products without a license.  Until July
1992, the Negative List also covered a number of manufactured
and processed-food products.  Items formerly on the list are 
now subject to tariff surcharges, which were reduced on January
1, 1993, will be further reduced in 1994 and eliminated in 1995.

    Tax Policies:  In a major effort to curb consumption, the
government instituted a 15-percent value-added tax on January
1, 1990.  Corporate tax rates were raised by 5 percentage
points, to 45 percent, in 1992.  The higher rate, intended to
be temporary, was maintained in the 1993 budget.  The
government's 1993 budget included substantial tax breaks for
construction activity in 1993 and 1994, as well as for
export-oriented venture-capital companies.  The petroleum tax
regime was revised in 1992 to index tax rates to oil prices,
and make Trinidad and Tobago a more competitive location for
investment.  A tax of 0.25 percent was imposed on business
sales on January 1, 1993.

    Regulatory Policies:  All imports of food and drugs must
satisfy prescribed standards.  Imports of meat, live animals,
and plants, a large percentage of which comes from the United
States, are subject to licensing and specific regulations. 
Firearms, ammunition and narcotics are rigidly controlled or
prohibited.


4.  Debt Management Policies

    Its foreign exchange reserves depleted, the government was
compelled to negotiate two IMF standby agreements for a total
of US$350 million between December 1988 and March 1991. 
Official debt was also rescheduled in the Paris Club, and an
agreement concluded for a US$40 million structural-adjustment
loan from the World Bank.  As a result, Trinidad and Tobago's
debt-service payments in 1992, 1993 and 1994 average over
US$600 million per annum.

    While the government has met every IMF target, it has
avoided a return to the IMF for further balance-of-payments
support.  Instead, it has relied on bond issues, proceeds from
the divestiture of state enterprises and the offset effects of
substantial loans from the Inter-American Development Bank
(IDB) to cover its 1992 and 1993 payments.  The government will
continue these policies in 1994.  Trinidad and Tobago should
emerge in 1995 with a manageable debt burden of approximately
US$400 million per annum, and, as of 1996, a debt-service ratio
below 15 percent.

    Total foreign debt now stands at slightly less than US$2
billion, or 42 percent of GDP, down from a high of 59 percent
in 1989.  While austerity measures now in place reduce the
government's capacity to purchase U.S. goods and services,
these same measures are putting Trinidad and Tobago on a
stronger macroeconomic footing, which should enhance prospects
for increased trade with the United States in the years ahead.


5.  Significant Barriers to U.S. Exports

    Import Licenses:  Effective July 1, 1992, most of the
import licensing regime (Negative List) was scrapped and
replaced by tariffs.  Products still requiring import licenses
are certain poultry and meat products, liquid milk, fish, wheat
flour, rice, some vegetables, most fresh fruit, coffee and
cocoa beans, sugar, most cooking oils and fats, left-hand drive
and used vehicles, cigarette paper, and ships and boats under
250 tons.  With advance notice, licenses are easily obtained
for the import of many of these products, particularly beef and
temperate-climate fruits.

    Discriminatory tariffs:  Imports are subject to the Caricom
common external tariff (CET).  The CET range now stands at 5 to
35 percent of CIF value, reduced on January 1, 1993 from the
previous range of 5 to 45 percent.  Further reductions will be
made in yearly stages to 5 to 20 percent by January 1, 1998. 
In addition, Trinidad and Tobago levies a 20-percent stamp tax
on the CIF value of imports and a 15-percent value-added tax
(VAT) on all retail sales.  Most goods that previously
benefitted from Negative List protection are subject to
supplementary surcharges of up to 25 percent.  The top
surcharge will, however, be lowered to 15 percent on January 1,
1994 and to zero on January 1, 1995 when the stamp tax will
also be eliminated.

    Services Barriers:  Most services are subject to the
investment criteria outlined in the investment section below. 
Foreign ownership of service companies is permitted, however. 
Trinidad and Tobago currently has one 100-percent U.S.-owned
bank, several U.S.-owned air-courier services, and one U.S.
majority-owned insurance company.  The government has expressed
interest in attracting another U.S. bank.

    Investment Barriers:  The "Caricom and Foreign Investment
Bill of 1990" extends national treatment to Caricom citizens,
but not to other foreigners.  Unless the government
specifically grants a waiver, the law limits foreign equity
participation in local companies; restricts foreign ownership
of land beyond a limited size; and requires government approval
for investments in certain sectors.  As a rule, the government
strictly controls the number of foreign personnel granted work
permits.  In February 1993, however, the government eliminated
the requirement for work permits for foreign personnel working
in Trinidad and Tobago for less than 30 days.  Further
reductions of investment and employment barriers are expected
as the government seeks to attract more foreign investment.

    Standards:  Standards, labelling, testing and
certification, to the extent that they are required, do not
hinder U.S. exports.  The government is not a party to the GATT
Standards Code.

    Government Procurement Practices:  Government procurement
practices are open and generally fair.  The government and
government-owned companies generally adhere to an open bidding
process for procurement of products and services.  U.S. firms
often win these bids.  The government is not a party to the
GATT Government Procurement Code.

    Customs Procedures:  Customs clearance can consume much
time because of bureaucratic inefficiency and occasional
inflexible interpretation of regulations.  In addition, the
press has reported allegations of widespread corruption in the
Customs Division.  In October 1993 the government engaged three
full-time U.S. Customs Service consultants for two years to 
improve efficiency and revenue collection and to eliminate
opportunities for corruption.


6.  Export Subsidies Policies 

    There is no evidence of subsidized Trinidad and Tobago
exports to the United States.  The government is not a party to
the GATT Subsidies Code.

    Effective January 1, 1993, the government implemented the
five-percent CET on all factors of production.  Most such
products had traditionally been allowed to enter the country
duty free.  Manufacturers that export, however, may reclaim the
duty on the re-export of an imported product or receive
vouchers, equal in value to the tariffs paid, that can be
applied against duties owed on further imports.


7.  Protection of U.S. Intellectual Property

    Trinidad and Tobago devotes few resources to enforcement of
intellectual property rights.  Failure in law to provide for
minimum statutory damages, recovery of legal costs, and
criminal penalties for willful infringement undermines the
deterrent value of existing legislation.  Trinidad and Tobago
is a member of the Universal Copyright Convention; the
Universal Copyright Convention, Revised; and the Convention for
the Protection of Producers of Phonograms Against Unauthorized
Duplication.  Trinidad and Tobago is also a party to the Bern
Convention, Paris Act of 1971, the Paris Convention for the
Protection of Industrial Property, and the Rome Convention for
the Protection of Performers, Producers of Phonograms, and
Broadcasting Organizations.  As a member of the Caribbean Basin
Initiative, the government is committed to prohibiting
unauthorized broadcasts of U.S. programs.

    Patents (product and process):  Patents are protected for a
period of 14 years, but the President may extend protection by
an additional seven years upon application.  The current law is
outdated:  it does not provide for many new technological
advances and has few guidelines on which technologies are
patentable.  A new patent law to address these shortcomings is
being drafted.

    Trademarks:  Trademark law affords protection to registered
trademarks for renewable 14-year periods, but the registration
process is slow, unreliable and requires two-to-four years to
complete.  The current Trademark Act is also slated for review.

    Copyrights:  The Copyright Act of 1985 authorizes the TT
High Court to enforce copyrights of authors from member nations
on the basis of reciprocity.  The Copyright Act covers
literary, musical and artistic works that are fixed in material
form, expressly including computer software and compilations,
and protects them from unauthorized adaptation, reproduction,
publication, performance, broadcast or 
distribution for fifty years from the author's death.  Sound
recordings, audio-visual works and broadcasts are afforded
similar protection by "neighboring rights" for fifty years from
the first performance, publication or broadcast.

    Infringement of patents, counterfeiting of trademarks or
infringement of new technologies is not a discernible problem
in Trinidad and Tobago.  However, video stores in Trinidad and
Tobago are replete with pirated videos, and personal use of
satellite dishes connected to descramblers is a widespread,
though diminishing, practice among the sector of the population
that can afford such equipment.  Despite reported threats by
organizations like the West Indies Film Board of Trade that it
was considering action under Trinidadian law against infringing
video stores, the Embassy is not aware of any action being
taken against recording pirates.  While larger firms are
scrupulous about obtaining their software legally, many smaller
firms are believed to use wholly or partially pirated software.

    Given the popularity of U.S. movies and music, and the
dominance of the United States in the software market, United
States copyright holders are the most heavily affected by the
lack of copyright enforcement in Trinidad and Tobago, although
the market is relatively small.  A large percentage of
households own video cassette players; relatively few, however,
have access to personal computers.


8.  Worker Rights

    a.  The Right of Association

    The right of association is respected in law and in
practice.  An estimated 24 percent of the work force is
organized into 45 labor unions.  The unions are independent of
government or political party control and freely represent
their members' interests.  Union members are free to choose
representatives, publicize their views and determine their own
programs and policies.  Under Trinidadian law, upon expiration
of a conciliation period, workers are permitted to strike, and
employers are permitted to lock workers out.  Strikes and
lockouts are not permitted in essential public services, and
the Minister of Labor may apply for an injunction to halt any
labor action he finds contrary to the national interest.  They
may also file civil suits against the government.  Under
Trinidad and Tobago law, no union may represent more than one
essential public service to avoid strikes of several essential
services at one time.

    b.  The Right to Organize and Bargain Collectively

    The constitutional right of workers to organize and bargain
collectively is well exercised.  Anti-union discrimination is
prohibited by law, and trade union property, as is other
private property, is protected under law.

    c.  Prohibition of Forced or Compulsory Labor

    There is no forced labor in Trinidad and Tobago.  Although
there is no domestic legislation on this, Trinidad and Tobago
is a party to the relevant ILO conventions.

    d.  Minimum Age for Employment of Children

    Legislation prohibits the employment of children under the
age of 12 years, and children aged 12 to 14 years are permitted
to work only in family businesses.  Children may begin
apprenticeships at age 15 and regular employment at age 17. 
Education is compulsory until the age of 12, but in practice,
if parents do not have the funds to buy required books and
uniforms, their children do not attend school.

    e.  Acceptable Conditions of Work

    A minimum wage structure is in place for service-station
employees, domestic assistants, and retail-sales personnel. 
Other sectors are not currently protected by minimum wage laws;
however, most wages are covered under collective bargaining
agreements  The standard work week in Trinidad and Tobago is
forty hours (44 hours for domestic workers); additional hours
are considered overtime and remunerated at a negotiated rate. 
Daily rest periods and paid annual leave form part of most
employment agreements.  The Factories Ordinance Bill (1948)
sets occupational health and safety standards; state inspectors
and trade union representatives monitor conditions in work
places, and workers who refuse to perform work due to hazardous
conditions are protected from retribution under the Industrial
Relations Act (1972).

    f.  Rights in Sectors with U.S. Investment

    Employment conditions in sectors with U.S. investment do
not differ from those in other sectors.



         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (millions of U.S. dollars)

Category                                    Amount

Petroleum                                                 D
Total Manufacturing                                      89
    Food & Kindred Products                     7
    Chemicals and Allied Products               D
    Metals, Primary & Fabricated                0
    Machinery, except Electrical                *
    Electric & Electronic Equipment             0
    Transportation Equipment                    0
    Other Manufacturing                         D
Wholesale Trade                                           0
Banking                                                   D
Finance and Insurance                                    18
Services                                                  1
Other Industries                                          D

TOTAL ALL INDUSTRIES                                    575


(D)-Suppressed to avoid disclosing data of individual companies
(*)-Less than $500,000

Source:  U.S. Department of Commerce, Bureau of Economic
Analysis.
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