VANUATU PUTS IMPORT DUTY ON FIJI BISCUITS

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SUVA, Fiji (Fiji Times, Jan. 3) – The Vanuatu Government has imposed a 50 percent import duty on biscuits from Fiji.

Local biscuit maker and chief exporter, Flour Mills of Fiji confirmed this yesterday.

The move is seen by the company as just another way by the Vanuatu Government to try and restrict the sale of Fiji biscuits in the fellow Melanesian Spearhead Group member nation.

[PIR editor’s note: The Melanesian Spearhead Group comprises the four Melanesian states of Vanuatu, Papua New Guinea, Solomon Islands and Fiji. The Group signed the region’s Preferential Trade Agreement in 1994 - a sub-regional trade treaty established to foster and accelerate economic development through trade relations.]

"This 50 per cent import duty will make our biscuits very expensive and uncompetitive in Vanuatu," Flour Mills of Fiji group chairman Hari Punja said. "The Government of Vanuatu is obviously playing games with Fiji.

Punja said the company’s exports to Vanuatu total around FJ$2 million [US$1.1 million] per annum.

"Our company has invested FJ$10 million [US$5.7 million] in the past two years to increase our biscuit production," he said. "Erratic changes to trade rules are very discouraging for investors."

Punja said, since Vanuatu and Fiji are signatories to the World Trade Organization and Melanesian Spearhead Group, that the Vanuatu Government is in breach of the trade agreement.

"We have made a formal request to our government to make appropriate action," Mr. Punja said.

Foreign Affairs and Trade Minister Kaliopate Tavola could not be contacted for comment.

In March last year, Vanuatu banned the importation of Fijian biscuits — the second time in six months.

In a statement to the Fiji Government, Vanuatu said the ban was necessary in order to stimulate Vanuatu's biscuit industry.

In retaliation, the Fiji Government announced on June 13 last year, its intention to stop all trade relations with Vanuatu unless the issue was resolved. That included Air Vanuatu flights here and the importation of Vanuatu kava.

The Vanuatu kava ban was only lifted last month for the sake of free trade on the product among Melanesian Spearhead Group members.

The decision to lift the kava ban comes after Vanuatu lifted its ban on Fiji biscuits on October 25.

Vanuatu exports to Fiji on average 50,000 kilograms [110,000 pounds] of kava per month to Fiji and in the past two years has earned more than FJ$1.6 million [US$924,000]. Vanuatu Kava Exporters Association chairman Peter Colmar assured the Fiji Government it would not over-supply the local market with Vanuatu kava but maintain a quota so prices remained competitive.

He said he had discussions with the Fiji Kava Council on arranging a quota where Vanuatu kava dealers could only export to Fiji a certain amount of kava in any given period.

The Vanuatu tudei kava has been linked to causing health problems affecting the liver and kidney.

January 4, 2006

Fiji Times Online: http://www.fijitimes.com.

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