Presentation Global Development Network

1
PresentationGlobal Development Network 

• Understanding Trade-related Reforms, Trade
  Vulnerability Responses and Strategies
• The case of Papua New Guinea.
•  
• Greg Konjib
• University of PNG

2
Background to Papua New Guinea (PNG) -  

•   Overview of PNG
• Inherent characteristics- Endowed disadvantages
•  Trading history- patterns within FICS, ANZ, EU
•   Performance of PNGs economy

3
Institutional Framework and Market Access
Conditions 

• Domestic trade policies and instruments
•  Institutional reform and supply capacity
  building
•  Multilateral, regional and bilateral trade
  negotiations

4
3) Trade Performances 

• 3) Merchandise Trade
•       
• - Trends
• - Commodity Patterns
• - Direction of trade
• -Trade in Services
• (By sector, imports/Exports)

5
4) Impact of Trade Reforms/Liberalization

• Current Trade preferences (LOME, SPARTECA etc)
•    Impact of Globalization
•    Pressure on fiscal balances fiscal
  discipline
•    Others

6
5) Responses and Strategies

•  
• Institutional Framework
•           Governance- Continuity (statutory
  intervention-Organic Law on Integrity of
  Political Parties and Candidates).
•               Aid- ANZ, EU(Slowly
  receding/subsiding)
•               Fiscal arrangements
•               Capacity Building needs time
•               Trade Facilitation
•               Economies of Scales
•               Propelling a manufacturing base

7
4 Experience of PNG as evidenced and re-echoed
by the FICs 

•          FTAs within the region
•               PICTA recently
•               MSG experiencse to date
•               WTO complexity of WTO agreements
  and disciplines to capitalize on WTO benefits,
  requiring technical and financial resources.
•               Currently one of the three members
  of WTO (Fiji and Solomon Is are other two). As a
  member of WTO must take a more proactive role in
  the WTO process to ensure flexible rules.
•               Key obstacle impeding ability to
  take advantage of WTO benefits is complexity of
  WTO agreements and disciplines
•               Policy level - must provide
  appropriate policy responses on multilateral
  trade issues and assist in identifying trade
  opportunities arising from WTO agreements for PIC
  members.
•               Technical level - many agreements
  such as Sanitary and Phytosanitary (SPS),
  Technical Barriers to Trade (TBT), Anti-dumping
  etc, require specialist skills.
•               Cotonou Agreement (June 2002)
  requires PNG to re-negotiate WTO-compatible new
  trade arrangement.

8
5) Strategy

•                Admit that such an international
  trading system is difficult to survive in?
•               1997 FEMM and 1999 FTMM recognise
  need to respond to
•               Steadily eroding trade preferences
  
•               Increasing influence of WTO rules
  on PNG economy
•               Declining levels of aid.
•               Marginalisation of PNG.
•               Strategies pursued by PNG as a
  member of the Forum include
•         PICTA / PACER stepping stone
  approach to global integration
•               PICTA - free trade agreement (FTA)
  amongst the 14 FICs
•               FTA implemented over 8 yrs (FICs)
  and 10 yrs SIS LDCs (6 SIS and 5 LDCs)
•               based on RTA rules of WTO -
  Enabling Clause
•               PACER - trade and economic
  co-operation for all Forum Members - assistance
  to trade facilitation to FICs

9
6) Conclusions 

•               Acknowledged that any trade
  reforms undertaken must be seen to be improving
  the the status quo.
•               The need for ongoing external
  assistance (esp. technical )via development
  partners will be important to assisting reforms
  Financial aid replaced by aid in kind should be a
  way to go. Example, Ausaid Senior bureaucrats in
  key state agencies.
•               A proactive approach need to be
  taken including in-house keeping matters-
  permanent trade policy framework
•               PNG in conjunction with FIC think
  outside the box.