PNG Business EPA Experience

1. PNG Business EPA Experience Wayne Golding, OBE Co-Chair, Import-Export Impediments Sub-Committee Papua New Guinea

2. Format of the Experiences Sessions What liberalization has been agreed to? Have Development Objectives been met EPA, Achievements Challenges and Shortcomings Degree of safeguard of commodity protocol benefits Are rules of origin appropriate and development friendly? New global economic opportunities resulting How should signatories now position themselves in the global economy?

3. What liberalisation has been agreed to Fiji and Papua New Guinea (PNG) have initialled the Pacific ACP Interim Agreement (PACP IA or IA), Carry forward current pre December 2007 trading preferences and add some further preferences contained within the IA. The PNG tariff schedule EU has duty-free access for 82.1% of the tariff lines (88.1% of value) from 1st January 2008. There are no phasing-in periods. The PACP IA Only deals with trading goods. WTO compatible. Rules of Origin effectively grants PACP EU access without tariffs or quotas Services and Development agendas will be dealt with in the Comprehensive Agreement.

4. Have Development Objectives been met? PACP IA parties felt that Development components should be negotiated with other PACP members, many may not sign a trade & goods agreement. Negotiations on the development component of an EU PACP Partnership Agreement have progressed substantially as of November 2007 10 EDF and beyond, Contonou expiration, and Aid-for-trade. The PACP objects strongly to any agreement with the EU which does not embrace /address the vulnerability of PACP States.

5. EPA Achievements, Challenges & Shortcomings The EPA negotiations have been A drawn out affair Lacks structured process and procedures A stepping stone approach may have been better. The stakeholders in both the EU and the PNG did not take ownership early enough which became counter productive as pressure mounted. The IA carried over the trade preferences within the Cotonou into 2008 and beyond. Other PACP can sign on when they are able. The Challenges are To use the benefits contained in the IA to lift PNG’s economy Complete the Comprehensive such that it does not dilute the IA Convince EU that behind-the-border barriers would be counterproductive and totally diluting, Contravene the development objectives of Cotonou, IA and Comprehensive

6. Degree of safeguard for commodity protocol Erosion of preferences serious concern Developing/ LDC and SVEs ? Infant industry provisions Must be dealt with. Are mishandled in trade remedies provisions MFN Equivalent provisions should not have been included. PACPs capacity to lodge or defend AD/CVD has not been dealt with sufficiently in IA

7. ROO appropriate & development friendly? Rights to accumulate inputs from neighbouring countries Needed for global competitiveness Effect depends upon application – untested.

8. New global economic opportunities Potential to partner for economic growth using preferences coupled with internal regulations and incentives. PACPs need to merge our economies to achieve economies of scale & promote diversity Prime example: Tourism

9. How should we position ourselves We have demonstrated willingness to globalisation. Adjustments are huge and politically challenging PNG economic history pitted with mistakes. Today, PNG economically healthy what we need is Tariff regime which allows PNG to enter into any FTA that makes sense. Appropriate development policies. Redirection of resources.

10. Thank you. Wayne Golding Co-Chair, Import-Export Impediments Subcommittee, Papua New Guinea pngmade@global.net.pg