THIS is Part Two of last week's article on trade barriers:
An understanding of the barriers to export is important because they can assist in determining why exporters are unable to exploit their full potential and why many firms fail or incur financial losses in their international activities (Chung, 2003; Leonidou, 1995).
But who really needs trade anyway? Well everybody! A trade barrier is anything that stands in the way or slows down trade.
Last week we introduced the world of tariffs and trade barriers and how as an exporter you must strive to understand them as this greatly affects costs and your profit margins in the end.
Understanding barriers can also help one maximise the full potential of their business or minimise costs through the supply chain to the point of sale.
It can affect how well you can access a market or establishes your selves. On some level, some may refer to trade barriers as tools of discrimination.
But it is understood that the country that is reducing its trade barriers or the country that supports trade liberalisation (relaxing of previous government restrictions) is the country that gains the most.
Trade barriers affect products in the market directly. Some of the barriers or impediments faced by exporters in Fiji include;
European Union Commission (EU) considers foods and food ingredients that have not been used for human consumption to a significant degree in the EU before 15 May 1997 novel foods and food ingredients.
The EU has set up quite strict conditions and standards on foods that enter the market. These standards are so high that many find it hard to satisfy locally.
This also applies to the tuna industry, but fortunately a couple of Fiji vessels have been able to be EU certified, thus showcasing Fiji's capability in advancing in this sector.
Developing countries stand to lose out from trade reforms that are pushing the EU towards more protectionist policies, according to a report by the Overseas Development Institute (ODI) which was released in July 2012.
The EU has a Generalised System of Preferences (GSP) and Economic Partnership Agreements. Fiji with Papua New Guinea has an EPA (Economic Partner Agreement) with EU but has to be fully negotiated and realized. However, the ODI reports states the new trade reforms by the EU, and reform of the GSP will more likely impose more trade barriers on products and countries that do not have a definitive free trade agreement with the EU.
When the GSP came into being in 1971, it ensured that exporters from developing countries pay lower duties on some or all of what they sell to the EU, giving them the access they needed into the European markets.
Only 15 Caribbean countries have signed these EPAs since 2002 when negotiations began on these trade treaties, which aim to open up markets in African, Caribbean and Pacific countries to EU imports. Fiji and Papua New Guinea have also signed but again this has yet to be fully negotiated.
Local companies like Herbex Ltd who export the kura noni juice and kava have had a hard time trying to access the EU and Chinese markets due to trade barriers.
They do not however have any problems with other markets and have proven to be a hit. Kava has a big market locally, but it is unfortunate that some countries ban the export of kava especially in big markets like the EU which has a growing Pacific Island population who consume kava.
Kava is instead transported by individuals as part of personal cargo today. Some companies in Fiji exporting kava are aiming to get their products into the European market.
Market access is the removal of trade barriers and the opening up of new markets and opportunities on the basis of a level playing field for providers and consumers alike where all can compete freely and fairly for the benefit of all.
One of Fiji Export Council's (FEC) main roles is trying to provide market access through it various stakeholders and trade missions over seas. The latest breakthrough in the pineapple and ginger sector in New Zealand and Australia means more market opportunities for local farmers.
For more information on this, one can visit the Biosecurity Authority of Fiji at Takayawa Building in Suva.
The FEC will on November 16 hold its first ever Fiji Export Summit, an event aimed at bringing together the private and government sectors in dialogue to map out the future of the export industry in Fiji.
Over 100 participants are targeted to attend this event, where things like export impediments, market access, capacity building, incentives, forms of assistance and sound export advice will be discussed.
All major stakeholders will be invited to this event, from farmers, manufacturers, businessmen from small medium business set ups to the bigger set ups, bankers, policy makers and government officials.
Those who would like to attend are to contact FEC through emails listed below.
* Jone Kalouniviti is a public relations officer with the Fiji Export Council. Email: firstname.lastname@example.org or email@example.com.