Australia, New Zealand

Fiji exports special feature

New doors open in Australia, New Zealand

As of July 1, Fiji exporters have had easier access to one of their major markets Australia.

Australia’s minister for trade, Mr Dawkins, announced during Fiji’s highly successful Expo in Sydney that concessions already agreed under SPARTE CA would be brought forward to July 1.

This means that all Fiji pro ducts apart from those to which special rules apply, have duty free and unrestricted access to Australia.

But restrictions will remain on automobiles, sugar, steel, gar ments and footwear. Passion fruit will also be subject to a quota until the end of the year.

Governments, on the whole, have done most of what has been asked of them in order to

balance trade between the Forum island countries (FICs) and Australia and New Zea land.

Some exceptions remain, however.

Fiji has been asking Australia for some years, without suc cess, to remove the sales tax on island fruit juices.

The tax is seen in Suva as discriminatory as PNG and New Zealand fruit juices are specifically exempted from sales tax.

It seems to Fiji that this exemption should be extended to all FIC fruit juices as a logical step in regional trade co-opera tion.

This would have a very small impact on the Australian mar ket, bearing in mind the small

fruit juice output of the forum countries and the large imports by Australia of Brazilian and other countries’ fruit juices.

The garment industry is an other exception.

Currently, FIC garment mak ers share a quota of 66,000 units in the Australian market.

This quota is now far too small, as demonstrated by the fact that Fiji, Tonga, Western Samoa, Solomon nlslands, Vanuatu and, more recently, Tuvalu are all competing for a share.

Fiji alone exported over 150,000 units to Australia in 1985 and is likely to export some 300,000 units this year.

All of which makes the 66,000 quota look pretty thin.

To achieve the desired

changes, the FICs, through SPEC, have made a detailed submission to Australia’s Indus tries Assistance Commission which has been conducting an inquiry into the post-1988 poli cy in the textile, clothing and footwear industries.

The FIC request for duty free unrestricted access has been argued out at the lAC which will soon make a recommendation to the government.

The island nations and especially Fiji are particularly keen that the decision should go in their favour.

For if Fiji can show the current level of success in the face of a quota system, the garment industry’s potential must be huge indeed.

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There is, however, another, potentially more serious, problem.

Under SPARTECA, products exported to Australia and New Zealand must have at least 50 per cent local content.

This is especially hard on the islands nations who, lacking domestic resources, are obliged to import large amounts of raw materials.

The rule is intended to stop the islands being used as a conduit for foreign goods to gain easy access to Australia and New Zealand.

FICs, however, have no con trol over the prices of the raw materials they have to import and, with recurring increases, it is becoming harder and harder to meet the 50 per cent require ment.

This is aggravated by the fact that most Fiji manufacturers are aiming at the quality end of the market and are therefore using expensive fabrics.

There are provisions in SPARTECA for movement on the 50 per cent rule, but Fiji’s experience has shown that this

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has been rather strictly con trolled.

Bearing in mind that SPAR TECA is an economic agree ment based on good will and geopolitical considerations, it would be unfortunate if Austra lia and New Zealand became “hung up” on the 50 per cent rule.

For if SPARTECA was in tended to foster economic de velopment and employment in the islands, the 50 per cent rule is currently restricting the very growth that the agreement was intended to produce.