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II. trade policy regime: framework and objectives
(1) Overview
1. Suriname gained independence in 1975. Its present Constitution, adopted in 1987, was amended in 1992. Although the domestic legal order suffered a number of disruptions in the years following independence, efforts are being made to consolidate the stable legal framework required for the country's long-term development. This framework has been undergoing a process of modernization and streamlining, including the adoption of new laws and regulations in areas such as foreign investment and international trade, notably import licensing (see Chapters III and IV).
2. Suriname’s trade policy has changed significantly in recent years. Suriname sees both risks and opportunities in the process of globalization, considering that it can take advantage of increased market access and opportunities for economic diversification. A key trade policy objective is to continue the liberalization of trade to enhance efficiency and reduce costs through increased competition. It also seeks to establish a trade and investment climate that is transparent, stable, and as liberal as possible while preserving the interests of the Surinamese economy and its business sector.
3. Suriname’s trade policy is influenced by its participation in the Caribbean Community (CARICOM) and the WTO. Such participation, however, has been hindered by Suriname's limited human, technical, and financial resources. These constraints have also hindered Suriname's active involvement in trade negotiations at the hemispheric level. In this respect, the authorities regard as important the support provided by the Caribbean Regional Negotiating Machinery in various trade negotiating fora.
4. Suriname became a contracting party to the GATT in 1978, and is an original Member of the WTO. Suriname did not participate in the post-Uruguay Round negotiations on financial services or telecommunications, but it made commitments on basic telecommunications in 1998. Its participation in the WTO focuses on the agriculture negotiations. It has submitted several notifications to the WTO but others are pending, which reduces the transparency of its trade regime. The authorities stated that developing countries were by nature not able to submit all notifications because of the structure of the WTO. Suriname has no WTO mission in Geneva.
5. Suriname joined CARICOM in 1995 and became a full member of the group’s common market in 1996. Suriname's negotiations in the FTAA and with the European Union are as part of CARICOM. The authorities note that, as a CARICOM member, Suriname will adopt additional legislation in years to come in areas such as competition policy, anti-dumping, and consumer protection. Although, in principle, regional cooperation gives greater weight to Suriname's position and levers its limited resources, to maximize these benefits Suriname would need to devote the resources necessary for an active participation.
6. Some Surinamese products benefit from non-reciprocal trade preferences, but in practice the majority is traded under duty-free MFN conditions, reflecting the importance of mineral exports. Thus, Suriname’s dependence on such preferences is relatively low, with the bulk of its exports sold in essentially competitive markets. As a result, non-reciprocal trade preferences seem to have had a limited effect on domestic production patterns (rice and bananas being exceptions), and their elimination would likely have only minor, short-term effects in Suriname. In this regard, Suriname appears to be well positioned to benefit considerably from the success of present efforts to liberalize trade and reduce distortions in global markets. The authorities consider that liberalization would benefit Suriname if account is taken of special and differential treatment, and the asymmetrical implementation of market access in the WTO. Liberalization efforts could also set the stage for Suriname to expand its multilateral commitments in order to advance and anchor its domestic reform progamme.
7. Although there are only a few measures involving overt restrictions on foreign investment, net investment flows into Suriname have often been negative. To address this, Suriname adopted a new investment law in 2001. Although the new law applies to a broader range of sectors than its precursor, reliance on fiscal incentives could result in considerable fiscal costs, and create entrenched vested interests and distortions. Moreover, existing business licensing and approval procedures remain complex and burdensome, and involve a considerable degree of discretion. In this respect, the Government has identified the creation of an enabling climate for investors as one of the main principles of its policy to promote sustainable development.
8. Technical assistance from various sources has been instrumental in supporting Suriname's gradual transition to an open trade regime. Nevertheless, the authorities consider that further efforts are required for example at improving inter-agency communication in relation to trade policy formulation.
(2) Trade Policy Formulation and Implementation
(i) General legal and institutional framework
9. Suriname, a former colony of the Netherlands, gained independence in 1975. The country’s political system is defined as a constitutional democracy. From independence until the early 1990s, the replacement of civilian governments by military regimes marked a period of acute institutional and political instability and social unrest, which became major impediments for the development of the country. The Constitution of 30 October 1987, as amended in 1992, is the supreme law of the country.[1] The legal system is based on the Dutch legal system, incorporating French penal principles. Article 55 (2) of the Constitution defines the National Assembly as the highest organ of the State. According to Article 74, the Assembly is responsible for electing the President and Vice-President and for proposing to the President the nomination of the members of the Constitutional Court. The Constitution sets out the overall institutional framework for the formulation of legislation; the mandates of government departments are defined in a state decision issued in October 1999 and amended in February 2002.
10. The Executive Branch – the Government – includes the President, the Vice-President, and the Council of Ministers. It is led by the President, who is Head of State, Head of Government, Chairman of the State Council and of the Security Council. The President is answerable to the National Assembly. The Council of Ministers is the highest executive and administrative organ of the Government; its tasks are to prepare and execute government policy, prepare legislative acts and regulations, supervise execution of decrees under its responsibility, and give direction to administrative organs. The President and Vice-President are elected by the National Assembly for five years[2]. The Constitution makes no mention of any limit to the number of terms a person may serve as a President. If at least two thirds of the National Assembly cannot agree to vote for one presidential candidate, a People's Assembly of representatives from the national, local, and regional councils is polled. The State Council advises the Government on the conduct of policy, as well as on agreements under international law, for which the consent of the National Assembly is required. Eleven of the 15 council seats are allotted by proportional representation of all political parties represented in the National Assembly, two seats are allotted to representatives of labour and the remaining two to employers’ organizations.
11. Article 70 of the Constitution defines that legislative power is exercised jointly by the National Assembly and the Government. The unicameral National Assembly consists of 51 members elected simultaneously, by popular vote and through proportional representation for a five-year term. The Constitution does not limit the number of terms a person may serve as a Member of the National Assembly. The law can only derogate from the five-year term in case of war or other extraordinary circumstances that prevent the holding of elections. The last elections were held in 2000. The National Assembly has the power to decide over all proposals of law, which are submitted to it for approval, and has the right to amend bills proposed by the Government. It also decides by a two-thirds majority on the organization of a People’s Assembly or a plebiscite when it deems necessary. All bills passed by the National Assembly and approved by the President acquire force of law after promulgation.
12. According to Article 103 of the Constitution, international agreements are concluded by, or by authority of, the President. These agreements are communicated to the National Assembly as soon as possible and are ratified by the President only after they have received the Assembly’s approval. Approvals are given either explicitly or implicitly: explicit approval is given by law; implicit approval is given if, within thirty days after an agreement has been submitted, no statement has been made by the Assembly expressing the wish that the agreement be subject to explicit approval. Agreements become effective upon promulgation.
13. Regarding the status of international agreements in the Surinamese domestic legal order, the Constitution provides, firstly, that provisions of international agreements that may be binding on all persons by virtue of their content shall become binding after the publication of the agreement in question; and, secondly, that legal regulations in force in Suriname shall not be applicable if such application is in conflict with provisions of international agreements that bind all persons. The rule that such provisions take precedence over inconsistent domestic legislation applies even when domestic legislation post-dates the international agreement.
14. Apart from the Constitution and international agreements, Suriname's public and administrative law comprises several legal instruments: formal laws[3]; state decisions (staatsbesluiten); district regulations; Presidential decisions and administrative decisions. The latter category comprises Presidential resolutions, ministerial decisions, and decisions of other administrative agencies. A decree (decreet) has the same legal force as a law.
15. In Suriname taxes, including tariffs, are levied by law. Tariff changes require the assent of the National Assembly.
16. The judicial power is formed by the President and the Vice-President of the Court of Justice, the members and the deputy members of the Court of Justice, the Attorney-General with the Court of Justice, the other members of the Public Prosecutors Office, and other judicial officials indicated by law.
17. The Court of Justice is the supreme instance of the Judicial Power entrusted with the administration of justice in Suriname. The Court supervises the regular course and settlement of all lawsuits. Lawsuits not arising from civil law relations may be referred, by law, to administrative judges. As a member of CARICOM, Suriname is a party to the Agreement Establishing the Caribbean Court of Justice (CCJ). Once fully operational, the CCJ would exercise both an appellate and an original jurisdiction. The authorities indicate that the conformation of the CCJ was an ongoing process and that Suriname’s participation in this system was under discussion.
18. The country is divided into ten administrative districts, each headed by a district commissioner appointed by the President. The districts are Brokopondo, Commewijne, Coronie, Marowijne, Nickerie, Para, Paramaribo, Saramacca, Sipaliwini, and Wanica.
(ii) Trade policy objectives and implementation
(a) Objectives and formulation
19. Suriname’s trade policy is formulated within the context of its membership both of the CARICOM and the WTO, as well as existing and planned trade arrangements with countries in Europe and the Americas. Limited institutional capacity has traditionally hindered Suriname designing and implementing trade policy and conducting negotiations.
20. Suriname's trade policy has undergone significant changes over the past few years. Following the country's independence in 1975, and until the restoration of civilian governments in the early 1990s, successive governments pursued inward-looking, isolationist development policies centered on a strong belief in economic self-sufficiency. Suriname began to adopt some measures to open its economy in the mid 1990s, particularly through the unification of the exchange rate and the introduction of a new tariff schedule in 1994, the adoption of CARICOM’s CET and other trade regulations following its accession to the group in 1995, and the abolition of licensing for economic purposes in 1999.
21. In 2001, the Government adopted the Multi-annual Development Plan (MOP 2001-2005)[4], which contains a comprehensive statement of its medium-term policy objectives. The plan articulates the following strategic policy goals: good governance; macroeconomic stability; public sector reform, including rationalization, deregulation and privatization of state-owned enterprises; reduction of poverty through economic growth and the creation of employment; ensuring the accessibility of basic provisions; reform of social policy, including social security, education and healthcare; creation of a climate conducive to private sector development; rehabilitation of infrastructure; and sustainable development and protection of the environment.[5]
22. In the general introductory section of the MOP 2001-2005, the Government identifies policy objectives related to trade, based on an assessment of the implications for Suriname of the process of globalization.[6] The Government considers that this process entails certain risks, but also opportunities for Suriname. First, while the European market will become more competitive partly as a result of the elimination of non-reciprocal preferences, Suriname can take advantage of increased market access opportunities for more processed products. This requires a proactive productive sector capable of identifying market developments and of transforming the traditional production of raw materials into production of higher-value-added finished products. Second, globalization creates possibilities to expand markets, for which the Government emphasizes the importance of Suriname's membership of CARICOM and its participation in the FTAA negotiations. Third, globalization offers opportunities for economic diversification, as in the case of information and communication technology.
23. In a section of the MOP 2001-2005 dealing specifically with trade and industry[7], the government states that one of its principal trade policy objectives is to continue the liberalization of trade and transport in order to enhance efficiency and reduce costs through increased competition. The cornerstone of Suriname's trade policy is the establishment of a trade and investment climate that is transparent, stable, and as liberal as possible while preserving the interests of the Surinamese economy and its business sector. Another objective is to assist the Surinamese business sector in exploring new export markets, particularly by making more active use of the country’s embassies. The same section observes that Suriname's exports, particularly bauxite, rice, and shrimp, have been affected by declining world market prices for raw materials and that with respect to bananas Suriname is faced with a loss of preferential treatment in traditional export markets.