More than one pot of gold
p. 56 · Read in the full issue
JOSEVATA Kamikamica, Fiji’s Deputy Prime Minister and Minister for Finance and Economic Planning, raised interesting points on the value of Sparteca when addressing a meeting of businessmen and government officials in Sydney recently.
He said that Sparteca, the South Pacific Regional Trade and Economic Co-operation Agreement, had been “very beneficial” for Fiji, but he thought many island countries would be disappointed with it.
“It looks generous and accommodating,” he said, “but on closer inspection many of them have found it irrelevant. They do not produce many of the products that Austra lians want to buy. And in general the Australian markets they can supply are small and stagnant. It might even be that Sparteca has diverted the attention of small island businessmen from more promising
opportunities in other parts of the world, under the Lome Convention or the Generalised System of Preferences.”
He said he thought the time was appropriate to consider changes to the agreement, and particularly mentioned inefficiencies that he said were brought about by the rules of origin.
There have been a number of changes made to Sparteca, including some very important ones during its 10 years of operation, and as altered circumstances generate inefficiencies its provisions should and no doubt will continue to be reviewed.
But since I work, as it were, at the coal face of Sparteca, encouraging businessmen and governments to take advantage of this very useful tool, I am also aware that many who could take advantage of it are not, because they have put blinkers on.
Let’s take a quick look at the reason.
Sparteca was established to achieve progressively duty-free and unrestricted access by the Forum island countries to the Australian and NZ markets; to accelerate and foster develop ment of the islands through expansion, development, promo tion and marketing of their exports and through promotion of investment in the islands themselves; and to “promote and facilitate economic co-operation, including commercial, indus trial, agricultural and technical co-operation” among the forum countries.
But from the beginning, many islands saw Sparteca’s access provisions, particularly the promise of unrestricted access, and the rules of origin which define what island goods are as the only pot of gold at the end of the rainbow. If their products could move freely into Australia and New Zealand, the belief was, their economic problems would be solved.
Well, eventually the tariff walls came down and the rules of origin eased. But that did not resolve the economic problems, even for those islands which have gained greatest benefit from the dropping of the barriers, such as Fiji with its clothing industry. The lifting of tariff barriers has eased island trade problems, but the debate on entry has become more sober, more realistic, as it has become clearer that there is no quick and simple formula for economic prosperity anywhere.
As Kamikamica said, the agreement, including the entry concessions, has been very beneficial for Fiji. But it could be
equally good for the smaller islands if they put aside their fixation about getting goods into Australia and NZ and look more closely at the provisions on promotion, co-operation and investment.
Article 8, for example, offers economic, commercial and technical help, and I doubt if all its potential opportunities have been examined. Fiji has certainly used many.
Kamikamica again: “Article 8 of Sparteca has been highly effective in assisting us with promotional efforts. Australian funding un der the agreement has been very efficiently handled, providing us with reliable and timely finance for trade missions and the preparation of promotional materials, in cluding publications, video tapes and inter active information systems.”
Help is available under Article 8 to improve local technology and knowledge of
markets, to broaden the scope of manufacturers and small businesses, to help people develop competitive products for overseas markets not necessarily Australia and NZ.
Businessmen and governments who continue to sit on their hands and believe there are no opportunities for them under Sparteca because they have nothing Australia or NZ will buy, are missing great opportunities in other directions.
For example, the very first item in Article 8 provides for facilitation of co-operation between commercial and industrial organisations in the region, and the simplification of trade procedures and formalities, but this has not penetrated all levels of the business communities in Australia, NZ or the Forum countries. Many business people are unaware even of
Sparteca’s existence.
Much could be done to achieve simplification in customs control, quarantine, money transfer and communications.
Things such as the standardisation of shipping documents, formation of shippers councils and pre-shipment certification could be explored, probably with very good savings in time and money.
Another Sparteca commitment is to provide specific assistance within bilateral aid programs for industrial, agricultural, forestry and fisheries development in the forum countries. Even if these products are destined for export, there is a commitment to help development of appropriate businesses.
Australia and NZ have committed themselves to help forum countries approach international organisations such as the UN and the Commonwealth Secretariat, which are sometimes best placed to provide special help and assistance. But who knows this help is available? There is implicit agreement by Australia and NZ to assist island countries in their efforts to sell to third country markets.
It is precisely because of the various commitments embodied in Sparteca that such a wide range of activities is undertaken by the South Pacific Trade Commission.
Although, as I have indicated, island countries could do more to take full advantage of Sparteca, there is also need for individual business people or firms to take the initiative.
In the final analysis, governments can only set the stage for trade. It is business people who do the business.