spirit of SPARTECA

Business

In keeping with the spirit of SPARTECA

By Yunus Rashid

INTENSE lobbying from Fiji manufacturers and goodwill on the part of Australia have saved an estimated 11,000

Fiji garment factory worker, jobs

The garment industry and I iji government heaved a sigh of relief when an Australian customs delegation arrived in Fiji in July to clear the cloud of

uncertainty hanging oyer the interpret-

ation of SPARTECA s (South Pacific

Regional Trade Economic Co-operation

Agreement) rules °f°n g m dame.

Before the clarification was made, SPARTECA guidelines, could have .., 5 ’ r . . closed down some manufactures and caused massive redundancies.

Businessman and a leading garment exporter Padam Lala, of Lotus Garments in Suva, said the clarification had

improved garment operators’ viability.

According to Lala, manufacturers had been complaining that the Rules of Origin clause of SPARTECA had dampened the spirit of SPARTECA and needed revision. Manufacturers had been put in a situation where it was necessary to be inefficient to qualify for SPARTECA incentives.

SPARTECA’s Rules of Origin clause stipulates that exports should have at least 50 percent local content. Since a large proportion of the local input has

A relook at rules of origin leads to greater confidence in the trade agreement

traditionally been labour, a cost-efficient labour force would have meant a re duction of local content.

Australia clarified the Customs Regu

lation in April which effectively placed

limitations on what could be counted towards the 50 per cent local content requirement under Rules of Origin.

Among items which were excluded were administration, repair and maintenance and packaging costs.

This restriction attracted criticism from Jim Ah Koy, then chairman of Fiji Trades and Investment Board (the government arm for promoting invest ment), and other manufacturers. Fiji’s Prime Minister Sitiveni Rabuka followed up the issue with Australian authorities at the Forum meeting in Brisbane in J ul Y-

Australia responded by sending two

senior customs officials to Fiji to examine and re-interpret the Rules of Origin

clause in accordance with the spirit of

Sparteca.

Lala believes the efforts of Ah Koy, now Trade and Commerce Minister, and, Fiji’s ambassador to Australia, Peter Stinson, helped achieve a new under standing of the clause and this would prove fruitful not for Fiji alone, but for all SPARTECA member countries.

He said some of the Rules of Origin

requirements, which merely needed

clarification, were amiably resolved while others, which local manufacturers thought needed revision, were referred back to Australia for further consider ation.

Eala, however, warned that manufac turers must not become complacent in their search for new markets as a result of the latest development but must find alternative buyers of Fiji made garments outside SPARTECA.

The new definition of local content has been backdated to April 1.