Return to: Index of "1994 Country Reports on Economic Practice and Trade Reports" ||
Index of "Economic and Business Issues" || Electronic Research Collections Index || ERC Homepage


                       TRINIDAD AND TOBAGO

                     Key Economic Indicators
        (Millions of U.S. dollars unless otherwise noted)

                                      1992      1993     1994 1/

Income, Production and Employment:

Real GDP (1985 prices) 2/          3,827.6   3,770.2   3,883.3
Real GDP Growth (pct.)                -0.6      -1.5       3.0
GDP (at current prices) 2/         4,846.2   4,161.4   4,745.8
By Sector:
  Agriculture                       132.66    108.37    102.68
  Energy/Water                    1,227.79  1,122.26  1,138.53
  Manufacturing                     484.14    389.65    386.34
  Construction                      450.71    344.58    344.92
  Transport                       1,446.73  1,288.33  1,334.10
  Rents                                N/A       N/A       N/A
  Financial Services                472.38    393.93    408.31
  Other Services                    369.88    310.63    304.39
  Government/Health/Education       620.33    510.45    513.26
  Net Exports of Goods & Services   138.60     39.10    500.00
Real Per Capita GDP                3,189.7   3,141.8   3,236.1
Labor Force (000s)                   505.2     504.6     508.4
Unemployment Rate (pct.)              19.6      19.8      18.0

Money and Prices:  (annual percentage growth)

Money Supply (M2)                     -6.6       5.1      -1.8
Base Interest Rate 3/                15.50     15.50     15.50
Personal Saving Rate                   N/A       N/A       N/A
Retail Inflation                       6.5      10.8       9.0
Wholesale Inflation                    0.8       5.3       3.0
Consumer Price Index                 247.0     273.6     295.3
Exchange Rate (USD/TT)                4.25      5.39      5.83

Balance of Payments and Trade:

Total Exports (FOB) 4/             1,868.9   1,632.8   1,933.9
  Exports to U.S.                    879.0     735.0     874.1
Total Imports (CIF) 4/             1,435.6   1,390.6     996.9
  Imports from U.S.                  594.4     540.9     470.5
Aid from U.S.                         0.60      0.15      0.70
Aid from Other Countries               N/A       N/A       N/A
External Public Debt               2,214.7   2,095.8   2,000.0
Debt Service Payments                612.1     613.5     594.0
Gold and Foreign Exch. Reserves       40.2     207.4     117.6
Trade Balance 4/                     433.3     242.2     512.6
  Balance with U.S.                  284.6     194.1     253.8

N/A-Not available.

1/ 1994 figures are all estimates based on available monthly
data in October 1994.
2/ GDP at factor cost.  Figures reflect the exchange rates 
applicable in each year.  1992 exchange rate: US$1.00/TT$4.25. 
Exchange rate for 1993 is a period average which includes the
post-float devaluation:  US$1.00/TT$5.39.  Exchange rate for
1994 is an average of the period January - September 1994: 
US$1.00/TT$5.83.  Sector indicators:  Financial Services
includes finance, insurance and real estate; Transport includes
transport, storage and communication, and distribution.
3/ Figures are actual, average annual interest rates, not
changes in them.
4/ Merchandise trade.

1.  General Policy Framework

    The dual-island 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 became a 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 1980's and concurrent decrease in Trinidadian oil
production, caused a severe recession from which Trinidad and
Tobago is only now beginning to emerge.  Prospects for
continued economic growth, however, remain closely tied to oil
prices and oil and gas production in the short term as the
government's structural reforms require time to stimulate

    Since January 1992, the Government of Trinidad and Tobago
has moved decisively to lay the foundations for private-sector
based, export-led growth and to reform its state-controlled
economy to a market-controlled one.  On April 13, 1993, the
government removed currency controls, floating the TT dollar. 
In 1992, it undertook a large scale divestment program and has
since divested several previously state-owned companies.  In
addition, the government began dismantling trade barriers in
1991 eliminating the import licensing requirement for most
manufactured goods in July 1992, and for most agricultural
goods in September 1994.

    The Government of Trinidad and Tobago has aggressively
courted foreign investors and on September 26, 1994, signed a
Bilateral Investment Treaty with the United States, which
provides national treatment for U.S. investors.  New U.S.
investment in Trinidad and Tobago increased from US$428 million
in 1993 to about US$660 million in 1994.

    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 and 1994 have boosted VAT,
income-tax and customs duty revenues dramatically. 
Nevertheless, a public sector budget deficit of approximately
US$52 million is projected for 1994 because of
lower-than-projected oil prices resulting in less revenue from
the energy sector.  The 1994 budget based oil revenues on a
price of US$19/barrel, but prices hit a five-year low in 
February and have not sufficiently recovered to
budget-projected levels.

    To protect the exchange rate, which has several times
neared the TT$6.00 - US$1.00 rate, the Central Bank has
attempted to manage liquidity by keeping aggregate demand
consistant with balances.  The Central Bank continues to rely
primarily on reserve requirements to control the money supply,
despite its stated goal of moving to open market operations as
a more market-oriented means of influencing the money supply. 
The Central Bank has raised the reserve requirement for
commercial banks twice in 1994, to a current 20 percent.  The
tight money supply, combined with a weakening of the
inflationary effects of the 1993 float, are keeping inflation
low.  The year-on-year rate of inflation was 7.8 percent from
June 1993 to June 1994 compared with 11.2 percent in the twelve
months preceding June 1993.

2.  Exchange Rate Policy

    On 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 at the rate of TT$4.25 equals
US$1.00 since 1988.  The average rate of exchange for the first
three quarters of 1994 is TT$5.83 equals US$1.00.  Foreign
currency for imports, profit remittances, and repatriation of
capital is 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
sugar, schoolbooks, and pharmaceuticals.  Controls on rice and
counter flour were lifted in September 1994 and remaining
controls are expected eventually to be eliminated entirely. 

    Tax Policies:  In an effort to curb consumption, the
government instituted a 15 percent VAT on January 1, 1990. 
Corporate tax rates were raised by five percentage points to 45
percent in 1992, but a revision in the 1993 budget allows
incremental profits of a company over a given base year to be
taxed at 30 percent.  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 to 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. 
Additional taxes in the 1994 budget hit motorists with a five
percent gasoline tax for road improvements, a new used-car
transfer tax and an increase in the motor-vehicle tax applied
to new purchases.   

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

4.  Debt Management Policies

    From 1988 to 1991, the government negotiated International
Monetary Fund (IMF) standby agreements, rescheduled Paris Club
debt and concluded an agreement for a World Bank
structural-adjustment loan.  From 1992 to 1994 Trinidad and
Tobago's high debt-service payments averaged about US$600
million per annum.  The government has met these payments by
relying on bond issues, proceeds from the divestiture of state
enterprises and the offset effects of substantial loans from
the Inter-American Development Bank.  The country should emerge
in 1995 with a manageable debt burden of approximately US$450
million per annum, and, as of 1996, a debt-service ratio of
15.1 percent down from 27.7 percent in 1994.

    Total foreign debt now stands at approximately US$2
billion, or 42 percent of GDP, down from a high of 59 percent
in 1989.  With the government meeting its debt payments, the
elimination of trade barriers and the economy edging toward
growth, prospects for increased trade with the United States in
the years ahead are excellent. 

5.  Significant Barriers to U.S. Exports

    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.  Only sugar, poultry parts, left-hand drive
vehicles, small boats and firearms remain on the "Negative
List" of products requiring import licenses.  Current import
surcharges and stamp duties required on most manufactured goods
will be reduced to zero on January 1, 1995, although Caricom
Common External Tariff (CET) rates will continue to apply. 
Surcharges on agricultural goods removed from the negative list
in September 1994, will be phased to zero on January 1, 1998.

    Liberalizing agricultural trade will eventually open the
market for more U.S. commodity exports into Trinidad and
Tobago, raising concerns among local farmers that the domestic
agricultural sector will suffer from the cheaper foreign
products making farming unprofitable.  However, the government
firmly expects the introduction of competition to result in a
more efficient agricultural sector.

    The removal of import-licensing requirements has also
forced local manufacturers, traditionally accustomed to
producing only for a protected domestic market, to look outward
and become more efficient.  The government actively encourages
export industries and small business development as a means of
employment generation.  In 1994, government officials
championed the role of the private sector in the generation of
economic growth.  The government now views its role to be more
a facilitator than an engine of growth. 

    Trinidad and Tobago's exports remain 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 float and resultant depreciation of the TT
dollar has made local manufactured and agricultural exports
more competitive and imported goods more costly for local
consumers.  As a result, Trinidad and Tobago's overall trade
balance has improved.  During the first quarter of 1994,
Trinidad and Tobago's merchandise trade surplus was US$256.3
million compared with a US$4.5 million deficit in the first
quarter of 1993 before the currency was floated.  1994's first
quarter surplus was Trinidad and Tobago's fourth consecutive
quarterly surplus.

    Trinidad and Tobago signed the Uruguay Round Agreement on
April 15, 1994 in Marrakech, Morocco.

    Foreign ownership of service companies is permitted. 
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.

    Standards, labelling, testing and certification, to the
extent that they are required, do not hinder U.S. exports.  The
Trinidad and Tobago Bureau of Standards (TTBS) is responsible
for all trade standards except those pertaining to food, drugs
and cosmetic items, which the Chemistry, Food and Drug Division
of the Ministry of Health monitors.  The TTBS uses the ISO 9000
series of standards and is a member of ISONET.  Trinidad and
Tobago is not a party to the GATT Standards Code. 

    Foreign direct investment is actively encouraged by the
government.  Generally speaking there are no de facto
restrictions on investment and the government is actively
removing all disincentives to investment.  On September 26,
1994 the Government of Trinidad and Tobago signed a Bilateral
Investment Treaty with the U.S., granting national treatment to
U.S. investors in Trinidad and Tobago on a reciprocal basis. 
Foreign investment is screened only for eligibility for
government incentives, and assessment of its environmental
impact.  Foreign investors are eligible for tax concessions in
the form of tax holidays and concessions in the manufacturing
and hotel industries.  Both tax and nontax incentives may be
negotiated with the government for investments in the
manufacturing, tourism, and energy sectors.  The repatriation
of capital dividends, interest, and other distributions and
gains on investment may be freely transacted.  

    Government procurement practices are generally open and
fair, and the government and government-owned companies
generally adhere to an open bidding process for procurement of
products and services.  However, some government entities
request prequalification applications from firms, then notify
prequalified companies in a selective tender invitation. 
Trinidad and Tobago is not a member of the GATT Government
Procurement Code.  

    Customs clearance can consume much time because of
bureaucratic inefficiency and administrative procedures can be
burdensome.  Local importers often complain that it takes
several working days to get import documents approved and their
goods released.  In October 1993, the Government of Trinidad
and Tobago engaged three full-time U.S. Customs Service 
consultants for two years to improve efficiency and revenue
collection.  The Trinidad and Tobago Customs Service has
implemented several consultant recommendations. 
Computerization of the Trinidad and Tobago Customs Service
import clearance process is under consideration but no date is
set for implementation.  

6.  Export Subsidies Policies

    There is no evidence of directly subsidized exports to the
United States.  However, the government offers incentives to
manufacturers operating in a Free Zone or Export Processing
Zone (EPZ) to encourage foreign and domestic investors.  Such
manufacturers are exempt from customs duties on capital goods,
spare parts and raw materials imported to construct and equip
their premises.  They are also exempt from all corporation and
withholding taxes on profits from manufacturing and
international trading in products or export services.

    On January 1, 1993, the government implemented the five
percent CET on all factors of production.  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.  Trinidad and Tobago is not a member of the
GATT subsidies code.

7.  Protection of U.S. Intellectual Property

    Few resources are currently devoted to intellectual
property rights, a situation that is expected to change during
the two-year phase-in period for compliance with provisions in
the Intellectual Property Rights (IPR) agreement, signed with
the United States September 26, 1994.  The agreement will, in
most instances, provide IPR protection equivalent to that in
the U.S., and is part of the Trinidad and Tobago government's
drive to attract more U.S. investment to Trinidad and Tobago. 
Failure in law to provide for minimum statutory damages,
recovery of legal costs, and criminal penalities for willful
infringement undermines the deterrent value of existing

    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.

    Current copyright protection is governed by the Copyright
Act of 1985, which complies with the revised Bern and Universal
copyright conventions.  A copyright is valid for a period of
fifty years.  Although the Act provides for protection of
literary, musical and artistic works, computer software, sound
recordings, audio-visual works and broadcasts, it is not 
enforced.  Video rental outlets in Trinidad and Tobago are
replete with pirated videos and operate openly.  

    The existing law on patent protection is the Patents and
Design Act, which establishes a registration system with no
form of examination of patentable subject matter, novelty,
inventive step, or industrial applicability.  Patents are
currently valid for a period of 14 years and may be extended
before expiry for any period not exceeding seven years without
limit.  Infringement of patents is not a discernible problem in
Trinidad and Tobago, but the existing law is outdated.  A new
patent law to provide for new technologies is being drafted.  

    Trademarks can currently be registered for a period of 14
years, and renewed by application before the expiration of the
registration for an unlimited number of 14 year periods.  The
current Trademark Act is also slated for review. 
Counterfeiting of trademarks is not a widespread problem in
Trinidad and Tobago.  

    New Technologies:  Larger firms in Trinidad and Tobago are
scrupulous about obtaining legal computer software while many
smaller firms are believed to use wholly or partially pirated
software.  Licensed cable companies are faced with unlicensed
cable operators and satellite owners who connect neighborhoods
onto private satellites for a fee.  Even licensed cable
companies are not exempt from piracy since they regularly
provide customers with U.S. "premium" cable channels for which
they have not obtained rights.

    Given the popularity of U.S. movies and music, and the
dominance of the United States in the software market, U.S.
copyright holders are the most heavily affected by the lack of
copyright enforcement in Trinidad and Tobago, although the
market is relatively small.  By signing the IPR agreement, the
government has acknowledged IPR infringement is a deterrent to
additional U.S. investment in Trinidad and Tobago and is
committed to improving both legislation and enforcement.   

8.  Worker Rights

    a.  The Right of Association

    The right of association is respected in law and practice. 
Approximately 26 labor unions were active in Trinidad and
Tobago in 1994. The unions are independent of government or
political party control and freely represent their members'
interests.  There are no excessive or arbitrary registration
requirements, nor restrictions on selections of union officers
or advisors.  Union members are free to choose representatives,
publicize their views and determine their own programs and
policies.  All employees except those in "essential services"
have the right to strike.  

    b.  The Right to Organize and Bargain Collectively

    The rights of workers to collective bargaining is
established in the Industrial Relations Act of 1972. 
Anti-union discrimination is prohibited by law.

    c.  Prohibition of Forced or Compulsory Labor

    Forced or compulsory labor is not explicitly prohibited by
law and is not a problem in EPZs since the same labor laws
applied in the country at large are also applied in in EPZs. 
Some prison inmates sentenced to hard labor are involved in
subsistance agriculture and dairy farming and fishing.  

    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.  General employment is
permitted after 14 years.  

    e.  Acceptable Conditions of Work

    A minimum wage structure is in place for gas station
employees, domestic assistants, retail-sales personnel and
hotel workers.  These wage rates are adjusted for cost of
living increases at regular intervals, every few years.  In
1994, the parliament considered legislation which would set a
minimum wage for security guards.  There is no national or
general minimum wage.  The standard work week in Trinidad and
Tobago is forty hours with no cap on overtime.  The Factories
and Ordinance Bill of 1948 sets occupational health and safety
standards in certain industries; state inspectors monitor
conditions in work places and workers who refuse to perform
work because of hazardous conditions are protected from
retribution under the Industrial Relations Act of 1972.

    f.  Rights in Sectors with U.S. Investment

    Employee rights and labor laws 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--1993

                    (Millions of U.S. dollars)
              Category                          Amount          

Petroleum                                             469
Total Manufacturing                                   (1)
  Food & Kindred Products                     7
  Chemicals and Allied Products             (1)
  Metals, Primary & Fabricated                0
  Machinery, except Electrical              (2)
  Electric & Electronic Equipment             0
  Transportation Equipment                    0
  Other Manufacturing                         4
Wholesale Trade                                         0
Banking                                                 5
Finance/Insurance/Real Estate                         (1)
Services                                                1
Other Industries                                        3
TOTAL ALL INDUSTRIES                                  693      

(1) Suppressed to avoid disclosing data of individual companies
(2) Less than $500,000

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


To the top of this page