PNG Ready to Grow and Deepen Trade and Investment Relationship with the European Union

By: PNG Business News November 06, 2023

Papua New Guinea (PNG) is ready to grow its trade and investment relationship with the European Union (EU), says the Minister for International Trade and Investment, Hon. Richard Maru. Minister Maru said this in his welcome address at the 4th EU-PNG Business, Trade & Investment Conference in Port Moresby.

“We welcome the theme of this year’s conference- ‘Unlocking Sustainable Economic Opportunities for a more ambitious EU partnership with the Pacific’. Papua New Guinea is ready as a Government and I am sure our private sector is ready too to grow our trade and investment relationship with the European Union and its member States under our current Interim Economic Partnership Agreement with the European Union,” said Minister Maru.

Minister Maru reaffirmed PNG’s commitment to EU which was one of PNG’s most important trading partners.

“While we are negotiating Free Trade Agreements with other countries and working hard to walk across Asia, I want to reaffirm our commitment to European Union as one of the most important trading partners that Papua New Guinea has. We recognize fully that the current trade balance is totally in favor of Papua New Guinea with an estimated USD 994 million of goods sold into the European Union each year while European Union only sells USD 100 million to Papua New Guinea. We have built our fishing industry on the back of the free-market access agreement that the European Union has provided for us and for that we are extremely grateful. The European Union is one of the most important trading partners of Papua New Guinea and a relationship that we value very much. Our country showed the value of our relationship by being the first Pacific Island State to enter into the Interim Economic Partnership Agreement with the European Union long before any other Pacific member States did. We will continue to work very closely with the European Union delegation and the European Union to deepen and strengthen our trade and investment relationship now and into the future,” said Minister Maru.

Minister Maru said there were more opportunities for Papua New Guinea to sell more in the European Union market apart from marine products, coffee, vanilla, and gold amongst PNG’s major exports.

“We firmly believe that we can build a bigger and a deeper relationship with the European Union not only in the fisheries sector where we want to downstream process all our tuna in Papua New Guinea and sell to our European Union market as finished goods under their global sourcing provisions within the IEPA. In terms of two-way trade, we are extremely grateful that TOTAL from France, the world’s leading energy company has now decided to invest in Papua New Guinea, and we look forward to the Final Investment Decision (FID) early next year and the construction phase to follow. This is a very welcoming European Union investment in the Papua LNG project by one of our companies from Europe and we would like to see more and more investments in this space by companies from Europe, not only in the gas sector but also in the mining sector. We would also like to encourage more European Union companies to invest not only in the mining and petroleum sector but in the renewable sectors of fisheries, tourism, forestry, agriculture, and manufacturing. There are limitless opportunities in this country, and we look forward to working with the European Union Mission in Papua New Guinea to support European Union and its member States’ investments in Papua New Guinea where we will also be very happy to offer them incentives under the Special Economic Zones Scheme that our Government is now embarking on as our major driver for economic growth,” said Minister Maru.

“We are also aware of European Union member States’ LNG supply difficulties caused by the over- reliance on supplies from Russia during the Russia- Ukraine war and I am sure Papua New Guinea could be considered a good alternative supply source for LNG for European member States in the future,” added Minister Maru.

Minister Maru said Papua New Guinea was aware of European Union’s new laws, regulations, and policies in relation to trade and was committed to taking steps to meet these requirements.

“We are very much aware of the changes in European Union’s rules to ban coffee that is grown and produced in deforested areas, and we want to seek the assistance of the European Union under their Aid for Trade assistance to help our farmers and industry to secure certification, so they are allowed to export to the European Union market. We are also aware of the European Union’s De Facto Suspension of the vanilla extract exports from the United States and the possibility of the ban extending to other parts of the world that use pesticides that contain ethylene oxide, a fumigant for dry food products. Although Papua New Guinea is not using pesticides containing the ethylene oxide on its vanilla, we have to take all actions necessary to protect our vanilla market within the European Union that stands at an estimated USD 6 million annually. Vanilla is a very important export commodity for thousands of our village-based vanilla growers so as a responsible Government, the Marape-Rosso Government will have to ban the import of ethylene oxide into Papua New Guinea. I have issued instructions to the National Trade Office to commence work with the Department of Agriculture, the Health Department and Environment Protection Authority (CEPA), and other relevant Government agencies to have the ban imposed as a matter of absolute priority. I will be making further announcements on this matter shortly,” said Minister Maru.

Minister Maru also called on EU to support the African, Caribbean and Pacific (ACP) Group of States to value-add their resources by going down the path of downstream processing to produce finished products to sell to the European Union market.

“We want to emphasize on unlocking of more export opportunities for exports from ACP Group of States to have access to the European Union market especially for our finished goods rather than our raw materials. The European Union cannot continue to expect the ACP Group of States to continue to be a raw material supplier to their market. We are evolving and we want to export finished goods and not raw materials to the European Union, and we expect understanding and appreciation on the part of the European Union that this is what we want. We are happy to use the European Union technology and capital to walk down this path and get more value from our raw materials and create jobs in our countries rather than exporting jobs and opportunities in products like cocoa, coffee, vanilla, palm oil, kava, etc. If the European Union is serious about unlocking and building a more serious trade partnership with the Pacific, this is the future we are looking at. We are looking to the European Union to acquire their technology and work with their companies even under joint ventures to manufacture our products and export to their markets even under their own local brands. We still need the assistance of the European Union under their Aid for Trade programs to assist us with their technical regulatory requirements and certifications to meet the stringent European Union marketing and legal requirements,” said Minister Maru.

Minister Maru also requested EU for their support in reviewing the National Trade Policy which needed to be updated commencing early next year.

“We will be requesting the European Union to assist us by providing technical expertise. We need a new policy platform that is current with market circumstances today also given the emerging trade opportunities that technology now provides and also a policy that takes into account new and emerging products and services, new regulations, trade partnerships, and taste and preferences of consumers,” said Minister Maru.

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