Con Affetto Catering | Papua New Guinea Free Trade Agreements
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Papua New Guinea Free Trade Agreements

Papua New Guinea Free Trade Agreements

Future growth in trade and investment will be guided by increased geopolitical competition between PNG`s major trading partners. PNG has signed several multilateral trade agreements in recent decades, including the Melanesian Spearhead Group (MSGTA) trade agreement, the Pacific Island Countries Trade Agreement (PICTA), the Southern Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) and an interim economic partnership agreement between the EU and African, Caribbean and Pacific countries, approved in July 2009 and ratified by Parliament in May 2011. UNCTAD reported that exports of goods more than doubled between 2005 and 2016, from $3.3 billion to $5.7 billion in 2010, before rising to $8.2 billion in 2016. In 2016, the majority of goods exports were exported by fuels, followed by minerals and metals (19%), agricultural raw materials (18%) manufactured goods (4%). According to UNCTAD, PNG`s services balance remained in deficit from 2016, although it has declined in recent years, from $2.5 billion in 2010 to $1.2 billion in 2014 and $675 million in 2016. Meanwhile, PNG`s trade surplus increased from $1.5 billion in 2005 to $1.8 billion in 2010, before reaching $5.6 billion in 2015 and $5.8 billion in 2016. Data from the European Commission (EUC) show a similar story: the Commission reports that the country`s trade deficit rose from 2.3 billion euros in 2013 to 238 million euros in 2014, before moving to a surplus of 1 billion euros in 2015, after the country`s first major LNG project began exporting to Asian countries. PNG`s trade surplus increased to 1.4 billion euros in 2016 and reached a 10-year peak of 10 billion euros in 2017. Problems related to trade imbalances in the Pacific have created tensions between countries in the region. PNG`s trade relations with Fiji, with which it has a persistent trade deficit, are particularly controversial. In 2014, PNG`s internal trade statistics showed that it exported only 4.4 million PGK (US$1.5 million) to Fiji, while imports from PNG amounted to PGK 48.6 million ($16.6 million). Fiji denies the figure and says that, according to its customs data, the gap is not as large as PNG claims, with the strong Kina largely responsible for a lack of imports from PNG.

After a trip to Fiji in January 2016, Richard Maru, Minister of Trade, Trade and Industry, local media, said he wanted Fijians to buy more canned goods, sugar, coffee, beer and fish products from PNG, while his Fijian counterpart Faiyaz Siddiq Koya expressed concern about a trend for both countries to source more products. , despite the availability of some products in both Fiji and PNG. During his visit, Maru also proposed the opening of a trade office in Fiji to support PNG companies wishing to sell goods there and to address the trade imbalance. According to the NTP, the Interim Economic Partnership Agreement is the only recent trade agreement that has improved and ensured market access for PNG products. In line with the improvement of the rules of origin for processed fish products, the PNG agreement has authorised the export of canned ski jackets and yellowfin tuna to the EU. The plan established that the agreement also supported significant FDI flows in the energy sector. While PACER Plus is unlikely to be undermined in Pacific island industries, most of these markets have limited domestic demand due to their demographic size and average income. However, PNG already enjoys duty-free access to Australia and New Zealand through a number of sectors, so the signing of the PACER Plus agreement may not bring further benefits to local PNG exporters.

In February 2018, the three companies announced that they would add three new trains to PNG LNG, which would increase production by about 8 million tonnes per year. Two of the trains are supplied by Total`s Elk Antelope fields, the third by the

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