Mashing brakes on foreign-used cars

MINISTER of Trade and Industry Paula Gopee-Scoon has been unequivocal in her rejection of a call for a grace period in relation to the expiration of import licences for used car dealers.

But does the Government’s approach drive home its thinking behind its policies effectively?

It does not appear so.

On November 12, president of the Automotive Dealers Association Visham Babwah issued a plea for a 28-day grace period to make up for port delays.

"As businessmen and car dealers, we don’t own a shipping line," Mr Babwah said. "With everything that’s happening internationally with shipping, the wars, massive problems with forex, some delays may be experienced."

In an almost immediate response, Gopee-Scoon said, "There will be no grace period. We stand firm on what was said in the press release."

To some extent, the minister may be excused for being so blunt, given that this issue isn’t new.

Mr Babwah acknowledged he was resurrecting an entreaty made before; in 2021 he had done similarly. Back then, as well, the ministry’s position was the same.

However, given the sensitive intersections between used-car ownership, infrastructure, foreign-exchange constraints and social issues, it is incumbent on the government to deal with requests like the association’s in a rounder way.

The state maintains there are simply too many cars on the road. It has been said automobile imports suck up US$400 million every year.

Measures and policies over the last nine years introduced in relation to the foreign-used sector implicitly carried the promise of helping to reduce traffic and ease pressure on forex.

Additionally, officials hoped to strengthen consumer protection and improve safety standards.

How have these measures worked?

What has been their impact economically, both in terms of the industry and the economy as a whole?

And have they truly aligned with government priorities, if we assume that the burden of fiscal measures is meant to fall equally on all sectors of society?

The government has not done a good job of creating the impression that its policies have been subject to review and re-evaluation.

There are still 300-500 used car dealers, with at least 10,000 import licences issued in 2024, according to Mr Babwah.

Traffic continues to be a problem.

It may well be that the situation could have been far worse. If so, someone should analyse and detail that.

While it is understandable that the minister wishes to stand her ground, the association’s plea may have been a missed opportunity to demonstrate state officials are capable of listening and not just proselytising.

The fact that global shipping has been disrupted and that port delays are not insubstantial strike us as legitimate factors to be placed within the matrix of policymaking.

Strongly regulating car imports might help ease forex pressures.

But the state also needs to show it is not just targeting the people most likely to turn to used-car ownership while leaving others untouched.