• Your Excellencies;

• Members of the Diplomatic Corps; 

• Distinguished guests;

• Senior officials;

• Ladies and gentlemen.

 

2050 Strategy, the Pacific Roadmap for Economic Development, and the Pacific Aid for Trade Strategy (2020-2025)

 

• Thank you for the opportunity to present on behalf of the Pacific Islands Forum at the US International Trade Commission’s public hearing on the ‘US – Pacific Island Countries Trade and Investment: Impediments and Opportunities’ report.

• According to the International Trade Centre’s Trade Map, the US is the second largest supplying market for products imported by Pacific Islands Forum Members, and the fifth largest importing market for products exported by Pacific Islands Forum Members. According to the International Trade Centre’s Export Potential Map, the US also has the third largest difference between potential and actual exports in value terms with the Pacific, leaving room to realise additional exports worth $7.9 billion.

• While we welcome the progress on the US Tuna Treaty renewal and the associated funding packages, it is clear that there is significant potential in the broader trade and investment relationship between the US and Pacific Island Countries that has not been fully harnessed, yet. To harness it, we need increased US engagement and responsiveness to the regional economic, trade, and investment agenda, as led by Pacific Island Forum Leaders’ 2050 Strategy for the Blue Pacific Continent, the Pacific Roadmap for Economic Development, and the Pacific Aid for Trade Strategy (PAFTS) 2020-2025.

• The 2050 Strategy for the Blue Pacific Continent has ‘Resource and Economic Development’ as one of its seven thematic priorities, with a level of ambition to ensure that all Pacific people benefit from a sustainable and resilient model of economic development. To progress this thematic area, the development of a Pacific Roadmap for Economic Development is underway, in collaboration and consultation with Forum Members, Council of Regional Organisations in the Pacific (CROP) agencies, non-state actors, development partners and UN agencies for endorsement by Forum Economic Ministers and Forum Leaders in 2023. The key goal of PRED is to grow and diversity Pacific economies, strengthen their resilience against shocks, optimise blue economy potential benefits and future-proof Pacific economies. The implementation of the Pacific Aid-for-Trade Strategy (PAfTS) 2020-2025 is also underway. The PAfTS outlines the region’s aid-for-trade priorities and ensures effective coordination of development partners’ resources around those priorities.

• The Pacific Islands Forum Members believe it is important that where possible, the US supports existing initiatives and mechanisms, and that any new initiatives are streamlined with existing work, given the limited absorptive capacity in the Pacific.

• There is also a strong interest from Pacific Island Countries to formalise the trade and investment relationship with the United States, with the long-term view of securing preferential market access for Pacific exports in the US and more investments from the US into the Pacific. This will require a sustained and concerted effort from both sides noting the well documented trade related challenges confronting the region.

• To support the US in its deliberations, the Pacific Island Forum Secretariat will submit a non-paper on priority areas for closer US-Pacific Island Country engagement on regional trade and investment issues. I’d like to take the opportunity today to emphasis five of the areas listed in this non-paper.

 

Aid-for-Trade

• Firstly, aid-for-trade.

• While increasing market access remains critical, addressing the Pacific region’s trade needs also requires a broader focus on building trade capacity and infrastructure. Our integration into the global economy continues to be hampered by the high cost of doing business due to supply-side, regulatory system, and trade-related infrastructure constraints. We need aid-for-trade resources to turn trade policies and strategies into tangible trade development. We encourage the US to channel aid-for-trade resources through the PAfTS.

• Two important PAfTS initiatives that currently need resourcing are -
  
  • The Pacific E-Commerce Initiative, which is focused on mitigating the constraints that geographical distance imposes on Pacific Island Countries, diversifying economies, and promoting local development. The increased tendency to buy and sell online means equipping Pacific businesses for the digital era is essential to avoid falling behind.
  • The Pacific Quality Infrastructure (PQI) Initiative, which aims to strengthen, educate, and inform quality infrastructure (metrology, standardisation, accreditation, and conformity assessment) in the region. Quality Infrastructure adds value to Pacific goods and services, increases trade competitiveness and access to markets by addressing non-tariff barriers. It also enhances health, safety, environmental and consumer protection.

• We also encourage support for strengthening biosecurity capacity and the negotiation of quarantine arrangements. Addressing sanitary and phytosanitary (SPS) issues for Pacific goods entering the United States will improve our export pathway. The Pacific needs capacity support to strengthen pre-border, border, and post-border biosecurity activities to address SPS issues, and investment in biosecurity equipment and infrastructure.

• Finally, we encourage the US to consider supporting the establishment of a set of “trade and investment hubs”. A striking feature of the US’ activity in Africa is the success of the “trade and investment hubs” and subsequent follow-up initiatives established in various parts of Africa for the purpose of encouraging and facilitating initiatives to expand the trade of African countries both regionally and internationally.

 

Private Sector Development

• Secondly, private sector development.

• The enormous size and complexity of the US market means that establishing a market for a single product can create a new source of export earnings that is very large relative to overall Pacific Island Country exports. However, it also means establishing a market for a new product is a challenging exercise. Much depends on the identification and building of relationships with suitable US commercial partners.

• We encourage the US to consider facilitating a business-to-business forum, trade show or trade mission to connect suitable US commercial partners (social enterprises, businesses with a double bottom line, etc) with Pacific businesses (possible industry sectors, include - fisheries, kava, spices, and cultural products, etc). For example, a business-to-business forum, trade show or trade mission could - explore opportunities for a certain Pacific product in the US market; support the adoption of research and development and technologies by a certain Pacific product to allow it to move up the value-chain; support the strengthening of industry clusters, as there are real opportunities for Pacific businesses to cluster in agrifoods and aquatic foods; or provide information and training on increasing utilisation of the US’ Generalised System of Preferences and accessing the US market.

• We also encourage the US to support the establishment of a Pacific Trade and Invest (PTI) United States office. PTI is a global network of offices in major markets, operating as a trade and investment promotion organisation. PTI supports Pacific businesses through the strategic and targeted provision of resources, and connections to enter and grow in global markets, as well as product development, promotion, and market intelligence.

• Finally, we encourage the US to support strengthening regional and national private sector organisations via engagement with the US Chamber of Commerce. A strong Pacific Island Private Sector Organisation (PIPSO) and national private sector organisations will enhance the region’s enabling environment, and business competitiveness and growth.

 

Preferential Trade Arrangements

• Thirdly, preferential trade arrangements.

• If the Generalised System of Preferences (GSP) were reauthorised, we would encourage the US to extend duty-free and quota-free treatment under the GSP, beyond the preferences for Least Developed Countries, to a range of Pacific Island Country exported products. For example, canned tuna in oil. At present, canned tuna in oil attracts a duty of 35%. Other Pacific Island Country products with potential for considerable export expansion to the US, but which currently lack preferential access, are sugar, textile products, fresh and chilled taro, processed foods, and some value-added timber products.

• We would also encourage the US to change the GSP rule of origin (RoO) threshold of 35% or make the region an approved regional association. Under the GSP RoO 35% of the product must be made or derived in the exporting GSP beneficiary country for the product to be eligible for duty-free entry. Cumulating under GSP RoO is only allowed among members of approved regional associations. This will encourage intra-regional cumulation of inputs and production, especially between Developing Countries and Least Developed Countries, as well as countries with varied products and production infrastructure.

• For example, the duty free access for canned tuna and loins and RoO under the interim EU-Pacific Economic Partnership Agreement is crucial to the commercial existence of tuna processing facilities in Papua New Guinea, Solomon Islands and Fiji. The Agreement has enabled greater diversification and value add for Pacific fishery products.

• While we very much welcome discussions on the re-authorisation of the US Generalised System of Preferences (GSP), the Pacific’s ambition is high. For this reason, we encourage the US to establish a US-Pacific Island Country Trade and Investment Framework Agreement (TIFA). This would serve as a forum for the United States and Pacific Island Countries to meet and discuss issues of mutual interest with the objective of improving cooperation and enhancing opportunities for trade and investment. Possible topics for consultation, include - aid-for-trade; private sector development; labour mobility; fisheries; market access, including the removal of tariff and non-tariff barriers; strengthening the multilateral trading system, including US assistance as is needed to facilitate wider Pacific Island Country implementation of key World Trade Organisation agreements.

• If this was agreeable, we would press the US for recognition of the need for an ongoing agenda item in any US-Pacific Island Country TIFA on the establishment of a Pacific ‘AGOA-equivalent’ agreement. Securing acceptance on this point is critical to Pacific Island Countries.

 

The Rules-Based Multilateral Trading Order

• Fourthly, the rules-based multilateral trading order.

• The rules-based multilateral trading order is of critical importance to the Pacific region. While we have been talking about the elimination of harmful fishing subsidies for twenty years, we are now at a pivotal point where we need to deliver. The WTO Agreement on Fisheries Subsidies will ensure that harmful subsidies are eliminated to protect and sustain our resources for future generations.

• We look forward to the US working closely with the PIF’s WTO Members to implement the WTO Fisheries Subsidies Agreement, and encourage the US to commit to further negotiations to conclude a comprehensive agreement, which includes Special and Differential Treatment for developing and least developed WTO Members. For example, the PIF’s WTO Members would value assistance in conducting a comprehensive assessment on the implications of implementing the agreement. 

 

Investment

• Fifthly, investment.

• Investments in critical infrastructure, especially in activities that support trade, build resilience against climate change, and protect the environment are important requisites for the growth and diversification of Pacific economies. It will help address the connectivity challenges and constraints faced by Pacific Island Countries in developing their supply-side capacity.

• We encourage foreign direct investment (FDI) in conjunction with multilateral development banks and international financial institutions, the US Trade and Development Agency, the Overseas Private Investment Corporation, or in public-private partnerships, in the Pacific region.  Possible FDI focus areas may include roads, bridges, ports, wharves, airports, and renewable energy plants. For example, the US could support the organisation of a regional or national investment symposium, which brings together investment managers, industry professionals and government officials, to network and identify new opportunities in the region.

• We also encourage the US to facilitate discussions on shoring up sea freight and airfreight capacity for Pacific Island Countries.

 

Concluding remarks

• The five areas emphasised today act as both impediments and opportunities for increasing Pacific Island Countries trade with the US.

• Thank you again for the opportunity to present on behalf of the Pacific Islands Forum. Increasingly, political relationships in the Pacific are being defined by the strength of economic and trade relationships, so we strongly encourage the US to continue to be led and guided by the Pacific Island Countries at every stage of its engagement.

 

ENDS