RESTRICTED GENERAL AGREEMENT ON L/445 TARIFFS AND TRADE 2 1955 Limited Distribution CONTRACTINGPARTIES Original: French Tenth Session

REQUEST BY HAITI FOR EXTENSION OFRELEASE UNDER ARTICLE XVIII1 Notes relating to application of import restrictions on leaf tobacco, cigars and cigarettes be the Republic of Haiti 29

By decision of 27 the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade authorized the Republic of Haiti to maintain in effect for a period of five years compulsory import licences for Haitian importers of least tobacco, cigars and cigarettes. The obligation to produce import licences was considered a restrictive measure, and the CONTRACTING PARTIES granted the authorization under the provisions of Article XVIII, para- graph 12, of the Agreement. In view of the fact that the authorization expires on 27 November 1955 and is to be reviewed at the forthecoming session of the CONTRACTING PARTIES the consequences of the application of that measure on the foreign trade relations of Haiti should be ascertained. The obligation to secure import licences prior to importing leaf tobacco, cigar and cigarettes into Haiti is part of a general mechanism established by the Haitian Government authorities in. 1948 for the purpose of developing domestic production of tobacco and promoting local manufacture of the home-grownvariety. This mechanism ishinged around the Tobacco Régie., a state enterprise exercising a de jure monopoly over the tobacco trade. The objectives of Haiti in establishing a State tobacco monopoly are set forth in document GATT/CP/60 of 21 , and correspond to the specfications of Article XVIII of the Agreement. That Article recognizes that protective measures are justified whenever the establish- ment or development of particular industries or branches of agriculture requires to be promoted, Insofar as the proposed objectives have been achieved. the establishment of a new industry or of a new agricultural activity in a specific country is usually accompanied by a fall in the global quantum of imports into that country of the articles now produced by the new home industry. From the angle of international trade, this reduction cannot be considered of itself and singly as indicating that the measures adopted to achieve the proposed objectives were harmful or restrictive. The two criteria which should serve as a guide in any appraisal

1ef.L/379/Add. 2 for this request. L/445 Page 2

of these measures are the tact that development o! that branch of industrial or agricultural activity is indispensable and that the measures adopted are non-discrininatory. In the case of the Republic of Haiti, tobacco growing was faced with a serious crisis in 1948, the causes being of long standing (ref: document GATT/CP/60 of 21 April 1950) and it proved necessary, for economic and social reasons alike, to promote a resumption of that cultivation, and to increase production and the number of factories engaged in processing tobaçco for the manufacture of cigars and cigarettes. The development of tobacco production and the manufacture or cigarettes since 1948 is reflected by the development of import of leaf tobacco, cigar and cigarettes for the .first four years when the restrictive measure authorized by the CONTRACTINGPARTIES was applied (of. Statistics: Annexes A and B)- The statistics in Axnex B show that while imports of leaf tobacco were not normally affected - account should be taken of the customary Introduction of a percentage of imported tobacco into the domestic manufacture of cigarettes- imports of cigars and cigarettes declined substantially., more particularly beginning with the financial year 1952/531 at a time when the efforts under- taken in 1949-1950 were beginning to yield results. (Data relating to domestic production appear in Annex A). It should be noted that this overall reduction in tobacco imports is more than offset by the increase in the general import trade of Haiti for these same years (of.Statistics, Annex C). The need for prior licensing In the case of imports of leaf tobacco, cigar and cigarettes inherent in the Tobacco Régie system. In Haiti the Régie i a State body which has a de jure exclusive monopoly over the tobacco trade. II practice, however, that organ has been superimpsed over the private home manufacturers of cigarettes and importers of foreign cigarettes, rather than substituted for them. Thus the Régie allows manufacturers to pursue their' activities as in the past, but requires them to use it as an intermediary for the marketing of their production. Likewise the Régie allows private import- ers to carry out imported of tobacco, but undertakes to purchase from them the entire imported stock for resale on the home market. Unless previous licensing were required, importers would be tempted unreasonably to increase their lmports, in view of the fact that any danger o! unsold quantities would thus be shifted to their advantage and to the detriment of the Régie. ln addition, this obligation affords a means of controlling the activities of lmporters and o! counteracting any tenancy to create a tobacco trade circuit outaide of the Régie. It is mainly from that viewpoint that the real character of the import licence required to be secured by Haitian imported of tobacco should be considered. The interested of the CONTRACTINGPARTIES could be deemed to be injured only if, in effect, the granting of import licences involved

The financail year extends from 1 October to 30 September. L/445 Page 3 discrimination with regard to any country. The Tobacco Régie cannot be accused of discriminating since it has always been careful to ensure that no discriminatory measure was taken either against private importers or against the various supplier countries. Licences are issued on the basis of current sales which reflect consumers preferences. In analyzing the statis- tics in Annex A, it may be seen that downward trends during the financial years 1952 - 1953 and 1953 - 1954 affect all the main supplier countries. Increase in Imports from certain countries is the result of economic factors only, or of consumers preference, and not of a preferential or more liberal distribution of licences. The CONTRACTING PARTIES are therefore requested to re-examine the Heitian licensing system for imported of leaf tobacco, cigar and cigarettes in the light of the above considerations. They are asked to recognize that the objectives pursued by the Republic of Haiti through the intermediary of the Tobacco Régie are fully consistent with the principles of Article XVII, para- graph 12, of the Agreement; to recognize likewise that implementation of the measure requiring import licensesto be obtained by importers hag. given rise to no discrimination against any of the contracting partiee which are interest- ed in the tobacco trade, and to authorize the maintenance of the measure, as a means of pursuing the proposed objectives of the Government of the Republic of Haiti. L/445Page

ANNEXA REPUBLICOF HAITI TOBACCO REGIE PRODUCTION No.1.

~ ~ ~ ~ 1 - YEAR CIGARS LEAF TOBACCO

l I i QUANTITY VALUE QUANTITY, VALUE QUANTITY

8520,000 5,623,200,00 113,025 13,015,4 1950-51 1,072,785 7,030,381,00 217,200 29,495,50 7,000 252,50 1951-52 1,412e190 9,320,454,00 448,325 41,242,50 2,264 8,494,40 1952-53 1,274,480 8,411,568,00 730,925 101, 679, 101 1,043,000 3,911,250,00

1953-54 1,564,000 10,322,450,00 826,309 757,419,00 328,000 1,230,000,00

x

1One kilo represented a carton of ten packets containing twenty cigarettes each. L/445 Page 5 ANNEXB STATISTICS OF TOBACCO IMPORTS FROM 1949-50 TO 1953-54 1949 - 50 Quantity Value Tobacco and its manufactured products Kilos Gourds Leaf Tobacco: Canada 1 23 Puerto-Rico 2,383 12,029 United States of America 45,144 347,789 47,528 359,841

Number Cigars: Austria 200 63 Belgium 100 24 Canada 650 335 Cube 51,550 29,511 Curaçao 45 14 Dominican Republic 5,975 2,854 france 5 1 Jamaica 500 154 Netherlands 1,085 343 Puerto-Rico 50 17 United States or America 8,448 4,353 68,608 37,669

Number Cigarettes: Belgium 540 12 Canada 822 76 Cuba 340 6 France 80 2 Jamaica 40 2 Puerto-Rico 1,200 28 United e tes of Aumerica 71,979,458 1,302,509 71,982,480 1,302,635 Quantity Value Kilos Gourds Other: Belgium 3 29 Canada 7 France 5 United States of America 124,775 1,142,072 124,779 1,142,113 L/445 Page 6

1950 - 1951 Quantity Value Kilos Gourds

Least Tobacco: Canada 2,313 10,394 United States of America 77,579 534,597 Puereo-Rico 2,390 12,779 82,282 557,770

Number Cigars: Canada 112 28 Cuba 97,431 30,558 United States of America 42, 291 6,808 France 25 20 Jamaica 1,010 341 Netherlands 1,000 286 Puerto-Rico 40 17 Dominican Republic 10 350 3,407 Switzerland 1 9000 251 153,259 41,716

Number Cigarettes: Germany 20 1 Canada 1,340 53 Cuba 41,836 647 United States of America 63,088,822 1,209,520 France 120 10 Netherlands 100 9 United Kingdom 5,020 181 63,137,258 1,210,421

Kilos Other: Belgium 4 51 Canada 25 265 Cuba 14 United States of America 159,410 1,417,902 France - 10 159,439 31,418,p243 L/445 Page 7

1951 - 1952 Quantity Value Tobacco and its manufactured products Kilos Kilos Gourds Leaf Tobacco: United States or America 80,519 774,037 Puerto-Rico 323- 3,944 Dominican Republic 11 115 80,853 778,096

Cigars Belgium 802 Canada 57,4 236 Cuba 67,110 35,875 United States of America 18,989 6,606 France 30 60 Netherlands 1,888 941 Puerto-Rico 8,385 4,372 Dominican Republi c 4, 500 1,371 Switzerland 900 265 104,476 50,528

Number Cigarettes Belgium 40 1 Canada 226 25 Cuba 523 126 United States of America 66t297; 251 1,302,666 France 12,000 416 United Kingdom 60 2 Switzerland 1,200 44 66,311,300 1,303,280

Kilos Others Belgium 2 19 Canada . 2 Curacao - 5 United States of America 227,035 2,l54,737 France 2 United Kingdom 30 506 227,067 2,155,271 L/445 Page 8 1952 - 1953 Tobacco and its manufactured products Quantity Value Kilos Gourds Leaf Tobacco: Cuba 293 2,785 United States of America 340988 375,732 Puerto-Rico 223 1,738 Dominican Republ of 186 1 ,103 35,690 382,358

Number Cigar: Canada 50 16 Cuba 32,207 17,707 Curacao 300 166 United States of America 11,927 2,081 Netherlands 346 84 Puerto-Rico 1,376 1,047 Dominican Republie 3.425 1.319 49,631 22,420

Number Cigarettes: Canada 120 12 Cuba 700 27 Curaçao 5,100 æs.228 United States of America 25,404,781 739,634 France 860 28 Jamaica 40 2 Netherlands 1,240 57 Puerto.Rico 50 3 United Kingdom 30,900 823 25,443,791 740,814

Kilos Othrs: Canada - 5 Curaçao 2 196 United States of America168,820 1,609,257 Netherlands 1 29 United Kingdom 2 28 168,825 1,609,515 L/445 Page 9

1953 - 1954 Quantity Value Tobacco and its manufactured products Kilos Gourds Leaf Tobacco: United States of America 85,429 893,384 Dominican Republic _ 461 2,350 85, 890 895,734

Number Cigars: Belgium 150 30 Cuba 18,050 10,433 United States of America 2,227 1,487 Netherlands 635 243 Puerto-Rico 3,950 1,539 Switzerland 10 4 25,022 17,736

Number Cigarettes: Belgium 1,000 47 Canada 200{ 8 Cuba 800 22 United States of America 34,079,882 725,388 France 50,819 766 Netherlands 2,950 105 United Kingdom 21,767 577 Turkey 994 67 34,158,412 726,980

Kilos Other: Belgium 8 2,423, 229 United States of America 248,5201 Jamaica 12 Netherlands 50 74. United Kingdom 2 53 Switzerland 3 248,572 2,423t379 L/445 Page 10

ANNEX C

Tobacco Imports and Total Imports

of the Republic of Haiti

between 1949 - 50 and 1953 - 54 Tobacco and Financial its manufactures General Imports years Gourds Gourds

1949-.1950 2,842 , 258 181,004,620 1.57 1950-1951 392289150 222,585,136 1.45 1951-1952 4,287,175 253,476,761 1.69 1952-1953 29755,107 225,802,543 1.22 1953-1954 4,0599829 237,782,472 1.71 L/445 Page 11

ANNEXD

ACTIVITIES OF THE TOBACCO REGIE Data suppliedby the Tobacco Régie

According to the spirit and letter of the main stipulations of the Act of February 1948 which established the Tobacco Régie, the latter has undertaken in the past few years to give a new imports to tobacco-growing throughout the country. This undertaking involves two aspects: tobacco-growing on the Régiets own plantations, and production by private tobacco-growers. The plantations located in the main tobacco-producing centres of the country, and an experimental station situated noar Port-au-Prince, are under the direct control of the Tobacco Régie. Private production is free, except for the technical assistance it receives through uhe Régie experts. Whereas production in plantations is carried out over undivided areas of between 10 and 40 hectares, tha average area of the peasant holding does not exceed half a hectare.

To lend a commercial basis to its plantations, while preserving their rôle of demonstration centres, the Régie cultivates tobacco by the most modern methods. It has a full mechanized agricultural equipmont, comprising ploughs, tractors, harrows, drill-ploughs, fortilizer-sproaders and sowing machinery, particularly for rotating crops.

The selection work, the work of introducing and acclimatizing foreign varieties required to meet the needs of the Régie factories, utilization of fertilizers and manure, methods of cultivation, disease and pest control are the concern of the agricultural technical exports of the Régie, and contributing very largely to the production of high-quality tobacco and to achieving a satisfactory output. Emphasis should be laid on the predominant place given to the building of drying plants, where the last phase of tha processing of the raw material delivered to our factories is carried out, whether it be strong pipe tobacco (plug tobacco) sincked by the vast majority of workers, or cigar-making tobacco, the production of which is an important source of income for the national economy. Virgizia-type tobacco for cigarettes has lately been produced on a small scale, mainly in our plantations and experimental station. Before long the growing of "Flue-curing" tobacco still be undertaken on a scale enabling us to import only a part of the quantity required to cover our needs. although our plantations supply the Régie factories to a certain extent, there is no doubt, however, that the Régie is supplied mainly by independent tobacco-growers. L/445 Page 12

Notwithstanding the fact that the peasant holdings, where family labour is tha rule, ara split up and disseminated, Régie assistance is constantly on the alert to increase output and ensure high-quality crops from the producer. In all production centres the number of tobacco-growers applying for tech- nical assistance from the Régie is on the increase each season. Disease and pest control by means of fungicides and insecticides which are tested on the plantations, are increasingly used by tho tobacco-growers. Practical demonstrations concerning drying and fermentation processes have likewise shown that the equipment of peasant drying-plants under the supervision of Régie officials should be improved. Finally, the gradual training of a group of skilled tobacco-growers, to be able to work with simple techniques, is constantly pursued on the plantations where the ontire ontire force is recruited from amongst local tobacco-growers, so that those undertakings really serve as technical schools and demonstration centres.

Question 1: Statistics in volume and value over a certain period of years giving: the domestic production with details for coach article concerning ex- ploitation.

Answer: For the period between 1949 and 1952 production of cigarsand leaf tobacco has been relatively low. This is due to the fact that the Régie was carrying out experiments to gather all the elements it required for the full success of its schemes. In the light of the data assembled it has established factories to carry out production on an industrial scale (Table No. 1, or.Annex A page 4). Following the decision of 10 , by the Secretariat of State for Finance, to de-control the sale of tobacco by the producer, the production in the Régie factories of plug tobacco fell from 1,043,000 lbs. for the year 1952-1953 to 328,000 lbs. for the year 1953-1954 (Table No. 1, of. Annex A, page 4). Question 2: Data and prospects of future development of the industry in- cluding, for instance, the production levels envisaged. .Answer: Since the 1947-1948 severe drought, tobacco production ln Haiti has been fairly steady, giving an annual yield of about 1,200,000 lbs. If one hectare of tobacco be taken to produce an average of 750 lbs. the cultivated area may be assessed et about 1,600 hectares. This production being barely sufficient for the requirements of the home market, and the Tobacco Régie proposing to make tobacco one o? our chief export items, the necessary measures have been introduced to double the present areas under cultivation within the next fow years.

Question 3: Price of the imported product and of the national product on the chief market or markets. Answer: (of. Tables 3 and 3 bis). L/445 page 13

Question 4: The number and location of undertakings or firms. Answer: All tobacco factories are located et Port-au-Prince. These are: 1. Régie factory specializing in the manufacture of cigar and plug tobacco. 2. The factory of the "Comme il faut Tobacqo Co." and "San Marco Trading Co.",which makes cigaret tes. Question 5: Number of personnel employed. Answer: Total number of employees ...... 874 Question 6: Average wage level paid.

answer: 1 average wages ...... 132.98 Question 7: Amount of capital invested. Answer: Régie capital at 30 . . . . ¢ 4,468,793.33 Question 8: Net profits and loss. Answer: Profits of the Régie 1949-1954: Year 1949-50 ¢ 2,459,008.88 1950-51 2,285,961.51 1951-52 3,008,273.02 1952-53 2,685,126.16 1953-54 2,268,532.55

Question 9: Data on domestic consumption of the product.

Answer: of a rule thè Régie products are favoured by the consumer, but, as a result of the price difference, "'manoque" pipe tobacco hae to meet severe competition by natural tobacco sold without restriction by the producers. TABLE No.21

' OIGARETTES CIGARS LEAF TOBACO ANDCUT TOBACCO2

Volume in Kgs Value in Gourds Volume in Cigars Value in Gourds Volume Value in Gourds

1949-50 359,100 2,949,464,10 39,625 34,651,20 4,905 70 ,194,14 1950-51 311,086 3,350,782,35 72,271 62,464,45 12,105 104,984,15 1951-E 2 322,283 3,472,777,55 85,580 72,436,90 24,865 190,302,50 1952-53 182,626 1,813,010,35 33,409 29,837,55 817 6,9371,40 1953-54 171,296 2,033,809,15 23,392 21,297,00 2,428 5,290,90

It should be noted that out pipe tobacco is sold et d 45.00 the lb., whereas leaf tobacco is sold at ¢10.00 the lb.

For table 1 of. annex page 4. TABLENo.3

STATEMENT OF SALES

1949 - 1954

Cigar and cigarettes

Year Home-produced cigarettes Imported cigarettes Home-produced cigarsImported cigars Kgs Gourds Kgs Gourds cigars Gourds cigars Gourds

1949-1950 843,449 7,422 351,20 320,,000 4,480,000,00 108.025 12,315,46 37,440 41,614,75 1950-1951 1 ,000,785 9,203,694,27 317,799 4,445,551,90 192,200 28e195550 49,160 48,439,62 1951-1952 1,397,190 12,145,482,90 311,544 4,363,777,20 406,325 39,242,50 88,568 75;941,20 1952-1953 1,263,480 13,86,,901,80 180,186 3,284,184,60 704,925 98,679,50 1,259 5,036,00 1953-1954 1,546,527 14,261,973,90 1832158 1,586,C73,70 2,019,050 222,849,95 2,124 37,845,00

L/445

Page15 TABLE e his F STATEMENT OF SALES

1949 - 1954

Tobacco

Year Home-Grown Tobacco Imported Tobacco Out Tobacco Lbs Gourds Lbs Gourds Lbs Gourds

1949-3 950 12,962 116, 658,)00 77 775,00 1950-1951 3,,741 20,411,00 13,554 121,896,90 46 500,00 1951-1952 1,164 8,824,000 23,800 218,400,00 727 20,386,80 1952-1953 57,806 215,772,50 15, 218 152,180,00 2,081 31.,215,00 1953-1954 314,772 578,283,00 1,773 20,700,00 1,185 1,853,25