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MELBOURNE, Australia (May 23, 2002 - Oceania Flash)---The newly-created Australia-Pacific Islands Business Council (APIBC), which is tasked with fostering trade exchanges between Australia and its Pacific Island neighbors, is making the affluent French territory of New Caledonia one of its priorities in terms of exchange potentials, Radio Australia's Pacific Beat program reports.

APIBC's executive director, Frank Yourn, said sectors in New Caledonia's economy that are attracting specific interest are the booming nickel mining industry, as well as tourism.

Australia's exports to New Caledonia are now worth AUD$ 231 million (about US$ 110 million) a year, and over the past 7 or 8 years Australia's market share has growth from 10% to 17%.

In March this year, Australia's trade minister, Mark Vaile, lead a high-powered delegation (including APIBC's top officials) to New Caledonia.

During what was his first visit to the French territory, Vaile signed a memorandum of agreement with New Caledonian authorities to promote future trade avenues between Australia and New Caledonia.

The visit, described by Australian media as "groundbreaking," was also the occasion for Vaile to state that Australia was "proud to be the first country" to sign such an agreement with New Caledonia.

As part of its autonomy process set out in the Nouméa Accord (signed in 1998 between prominent pro and anti-independence parties and then French Prime Minister Lionel Jospin), New Caledonia is taking charge of its regional affairs, including entering into agreements with neighboring countries.

"This declaration of intention is an important step in the implementation of the Nouméa Accord, at a time when New Caledonia is strengthening its economic links within the region," the Australian minister pointed out.

The one-page document, which was signed by Vaile -- and on New Caledonia’s part by President Pierre Frogier -- does not bear immediate effects, but is rather a declaration of such general goals as to "develop, liberalize and facilitate trade and investment bilateral ties, as well as any other form of economic link."

Initial talks took place some three years ago between top New Caledonian officials and Australian Foreign Minister Alexander Downer.

Australia is currently New Caledonia's third largest source of imports.

"About twenty Australian companies have official representatives in New Caledonia.

"About 24,000 New Caledonians visit Australia each year while 19,000 Australians visit New Caledonia," Vaile told local media.

The Australian minister also passed on a message from Australian mining companies, which are interested in "actively taking part in New Caledonia's Northern and Southern (nickel) mining projects."

Vaile said this could be done through joint ventures between Australian and New Caledonian companies.

Last month, New Caledonia-based Goro Nickel plant project chairman Pierre Alla signed a 170 billion French Pacific Francs (US$ 1.3 billion) deal with the Brisbane architectural firm of Bechtel, Technip et Hatch (BTH). The agreement is for engineering and construction of the nickel mining project at Goro, in the south of New Caledonia's main island.

The project is a joint venture with Canadian nickel mining giant Inco.

Another nickel mining project is currently under way in the Northern Province of New Caledonia. It is yet another joint venture with a Canadian company, Falconbridge.

The Goro project, when completed by the end of 2004, will become, it is believed, the largest nickel mining plant in the world, with a yearly production capacity of 54,000 tons of nickel and 5,400 tons of cobalt.

The existing nickel company in New Caledonia, Société Le Nickel (SLN, a subsidiary of French giant Eramet) also plans to boost its yearly capacity -- to 70,000 tons of nickel.

Last year, official statistics stated that the trade balance was clearly in favor of Australia, with a deficit of a record 19.6 billion French Pacific Francs (US$ 148 million) for the year 2000.

The French territory's statistics office says the increase of the value of goods imported from Australia is mainly due to a strong dollar rate throughout last year, but also "the dynamism of (Australian) salesmen," the office admits.

One of the main contributors to the deficit were fuel (482,515 tons imported in 2000 for a value of 557.6 million CFP), electrical products (1.77 billion CFP), vegetable products (1.4 billion CFP) and food products (1.28 billion CFP).

The deficit for 1999 was 10.5 billion CFP.

[NOTE: CFP 100 = US$. 0.77405 on May 26, 2002]

Last year, the deficit was believed to have widened, although no official figures are yet available.

This was due primarily to the mad cow and foot and mouth disease restrictions in Europe, which prompted New Caledonia to allow only New Zealand and Australia to so send meat to the territory.

Meanwhile, exports from New Caledonia to Australia (mainly frozen shrimp, nickel ore, cattle hide, copper and aluminum residue), have stagnated.

Yourn also pointed out that the Solomon Islands and Samoa are high on the Australian body's agenda.

Earlier this month, the Fiji government also expressed an interest in "closer trade relations" with New Caledonia.

This followed an April trade mission to the French territory that involved 20 Fiji business leaders.

"This visit has ended with an air of optimism, because of the opportunities for trade and investment in New Caledonia," Fiji's Foreign Affairs and External Trade Minister Kaliopate Tavola, who headed the mission, said.

At the government level, Tavola reported to the Fiji Cabinet that the mission paved the way for "a possible Memorandum of Understanding (MOU) to promote closer working relations between FTIB and its New Caledonian counterpart, ADECAL."

Other avenues were also explored for a general framework agreement between Fiji and New Caledonia, he said, pointing out that "New Caledonia's per capita GDP (Gross Domestic Product) is almost twice that of Fiji."

"Nowadays, one has to think regionally, while remaining open to the rest of the world," Tavola said.

"New Caledonia's market is different (from other Pacific Island countries) in the sense that it has a small population (around 200,000) with a very strong economy. The revenue per head is very high and links with France and Europe are very strong. It can be beneficial to everyone if New Caledonia integrates well with the rest of the region."

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