WTO Trade Policy Review of Papua New Guinea

16 November 2010

Statement of the United States Delegation

As Delivered by Mr. David Shark


Thank you, Chair. The United States welcomes Ambassador Peter Maginde and his delegation to the WTO’s second Trade Policy Review of Papua New Guinea. We appreciate the effort that went into the reports that were circulated for our consideration prior to this meeting. We commend the government of Papua New Guinea and the Secretariat for the work you both did to bring to light the government’s current trade policies since its previous review in 1999. I am also pleased to welcome our discussant for this Trade Policy Review, Mr. Atsuyuji Oike, and I would like to thank him for his time and for providing an insightful context for our deliberations so that we can all benefit from a successful TPR of Papua New Guinea.

The United States and Papua New Guinea work closely together on many issues of mutual interest, from fostering economic growth and advancing opportunities for women to combating climate change and protecting the environment. We are committed to deepening our partnership with Papua New Guinea both bilaterally and through our involvement in regional institutions including the Asia-Pacific Economic Cooperation (APEC) and the Pacific Islands Forum. On November 3, Secretary of State Clinton traveled to Papua New Guinea to meet Prime Minister Sir Michael Somare and other senior government officials, women leaders and environmental experts. This visit was part of a larger process of enhancing U.S. engagement in the Pacific.

As Secretary Clinton said during her visit, Papua New Guinea has the opportunity not only to accelerate economic development and provide more benefits for its people, but also to become a strong regional leader and a model for poverty reduction and sustainable development. However, Papua New Guinea’s success requires a renewed commitment to good governance and accountability and transparency. The United States stands ready to help Papua New Guinea translate its natural resource wealth into widespread prosperity.

We thank the Government of Papua New Guinea for the background report it submitted for this review and look forward to a candid and constructive exchange of information regarding the government’s trade policies and practices. It is our hope that this review will serve to recognize and reinforce the trade policy advances that the Government of Papua New Guinea has made as well as to identify areas in which further attention and action is needed.

Much has changed in both the global economy and in Papua New Guinea since the last trade policy review was held in 1999. We were pleased to read in the Secretariat’s report that Papua New Guinea’s steady macroeconomic environment has helped sustain growth since 2000 and that the economy has become more open with fewer import restrictions, lower tariffs, and few non-tariff barriers overall. We also were pleased to learn that the Papua New Guinea Government has also embarked on substantial structural reforms in the communication, transport, and financial sectors, and that business confidence has not been shaken during the recent financial crisis.

However, according to the Secretariat’s report, Papua New Guinea’s trade policy remains aimed at the “domestication” of value added across multiple sectors of its economy. As such, tariffs still create significant (and disparate) barriers for food processing and inefficient manufacturing of other goods despite reforms. Papua New Guinea’s average applied MFN tariff fell from 20.5 percent in 1999 to 5.1 percent in 2006. However, the Secretariat reports that applied tariffs on a handful of items appear to exceed bound rates and we will be interested to hear what the Papua New Guinea government is doing to address this issue. We also take note of the Secretariat’s Report that Papua New Guinea has not fully met its WTO notification requirements since 2000, thereby undercutting transparency in the government’s trade policy. Therefore, we are interested in learning about the government’s plans for acting upon its WTO notification requirements.

Likewise, while Papua New Guinea’s foreign direct investment regime is largely open, foreign investors are still required to be certified and screened, and we are interested in learning whether the Papua New Guinea Government is considering any changes to its approach that might encourage additional investment. We understand Papua New Guinea is undergoing a comprehensive review of all company laws, for instance, and we would welcome additional information on this review. We also look forward to learning more about Papua New Guinea’s legislative improvements on intellectual property protection, including changes to the Copyright & Neighbouring Rights Act, which also could serve to promote investment.

On Papua New Guinea’s sanitary and phytosanitary regime, we have questions regarding the basis upon which Papua New Guinea resorts to broad import bans. Finally, we would be interested in hearing whether Papua New Guinea is considering any changes to the manner in which it operates the state-owned monopoly power utility, to enhance efficiency and reliability, which would lower business costs and support PNG’s further development.

Lastly, we were disappointed to learn from the Secretariat’s report that Papua New Guinea’s reform of its trade related laws has proceeded relatively slowly. Updating these laws and institutions will create the environment necessary to increase trade and investment and also to provide the governance necessary for Papua New Guinea to truly benefit from the major liquefied natural gas (LNG) projects due to come online soon.

In sum, Mr. Chairman, we hope that by calling attention to these areas of concern, we will help Papua New Guinea focus on areas where improvements in trade and investment policy can help Papua New Guinea meet its domestic economic policy and related challenges.

Finally, Mr. Chairman, the United States will continue to work with Papua New Guinea to strengthen and deepen our relationship. We believe that developing countries such as Papua New Guinea have much to gain from a balanced and ambitious result in the Doha negotiations that includes meaningful new market access for all. The United States looks forward to working with Papua New Guinea toward bringing the Round to a successful conclusion. And we offer all good wishes to your government for a successful Trade Policy Review.

Thank you.