Brexit puts PNG tuna exports in danger

PORT MORESBY, (THE NATIONAL) – A study has revealed trade regimes that Papua New Guinea could face possible consequences of canned tuna exports on post- brexit with its trade to United Kingdom (UK) market when it leaves the European Union, says a researcher during the recent 2018 PNG Update in Port Moresby.

Research leader and University of Papua New Guinea’s school of humanities and social science lecturer Michael Kabuni said PNG is not categorised as a least developed or poor country, therefore it cannot access the UK market through Everything But Arms agreement (EBA) since it has not yet notified the EU for GSP, so it cannot continue trade under GSP. Unless a new trade deal is arranged, PNG will pay the World Trade Organisation (WTO) applied tariff of 24 per cent for its exports to UK post-brexit. Currently PNG pays no export tariff to the UK.

“This places PNG in a disadvantage position as it could lose its canned tuna market share to neighboring Thailand and Philippines, which currently have high canned tuna exports to the UK, even though they continue to pay the WTO applied tariff of 24 percent exports to EU markets,” Kabuni said.

“EU representative stated in 2017 that PNG’s tuna exports to the EU increased from K1.7 billion to K2.5 billion (US$524,million)-(US$769 million) after the signing of the EPA. According to the UK revenue and custom’s trade statistics, the average import of canned tuna from PNG is 4 million, which is about K17 million (US$5.2 million) per year,”

He said this places PNG in a disadvantage position as it could lose its canned tuna market share to neighboring Thailand and Philippines, which currently have high canned tuna exports to the UK, even though they continue to pay the WTO applied tariff of 24 percent exports to EU markets.

“The first case that PNG has to avoid at all costs is the tariff rate for canned tuna. 24% MFN Tariff is higher than those in the region (GSP 21 per cent), and countries with 21 per cent tariff rate already have higher exports than PNG.

“Second best option is for PNG to seek GSP/GSP+ from UK. This relationships are unilateral (PNG would have no say in how high or low the tariff should be).

“Third one is an FTA where PNG should consider signing FTA with the UK to maintain free exports to the UK market,” he said.

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