VANUATU, FIJI KAVA WAR HEATS UP

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By Ricky Binihi

PORT VILA, Vanuatu (Vanuatu Daily Post, Jan. 9) – Now that another trade war is looming between Fiji and Vanuatu following the government's decision to impose a 50 percent import duty on Fiji made biscuits in contravention to the Micronesian Spearhead Group agreement, some kava farmers are urging the government to take precautionary measures, in case Fiji retaliates again.

And one of the proposed plan of action is for Vanuatu to build its own kava factories so that kava destined for the international markets need not be exported through Fiji but instead to be processed before shipped overseas.

A leading ni-Vanuatu kava exporter who has been in the kava business for more than a decade, and now based in Luganville, has reportedly said that Vanuatu does not need Fiji if Vanuatu has its own kava factories.

The kava exporter's comments echoes that of a Vanuatu kava expert Mr Charlot Longwah who last year told the Daily Post that all Vanuatu needed was the 'proper infrastructure' to facilitate the export of kava from Vanuatu to international markets.

According the Fiji Times, Vanuatu exports to Fiji an average 50,000 kilograms of kava per month and in the past two has netted more than $1.6m.

When Vanuatu banned Fiji cabin biscuits and crackers in March last year, Fiji retaliated three months later on June 13 by banning Vanuatu kava.

That ban on one of the maincash crops for the people of Penama, Sanma, and Malampa, resulted in many blaming the action by Minister of Trades, Mr James Bule, since it was him who banned Fiji made biscuits.

The reason given to justify the ban on Fiji made biscuits was to 'stimulate' the Vanuatu biscuit industry.

But now that Vanuatu has imposed a 50 percent import duty it is likely that the very influential manufactures of Fiji biscuit, Fiji Mills and Flour, will use their power to pressure the government in Suva to impose a retaliatory measure against Vanuatu kava again.

The ban on Vanuatu kava was recently lifted following successful negotiations by Finance Minister Willie Jimmy and chairman of the Vanuatu Kava Exporters, Mr Peter Colmar.

While it is too early to speculate what retaliatory measure Fiji would take, the best solution for Vanuatu and its kava producers in the event that Suva imposed a 50 percent import duty on our kava, would be for Vanuatu to build its own kava factories.

If Vanuatu has its own kava factories then naturally the Vanuatu biscuit industry can be protected without much fear.

Trade analysts say Fiji can do nothing much to destroy our biscuit industry since it is them who benefit from the Fiji/Vanuatu trade relations. Fiji nets more than Vt800 Million from its export to Vanuatu compared to Vanuatu_s Vt300 Million worth of exports to Fiji.

January 10, 2006

Vanuatu Daily Post: http://www.vanuatudaily.com

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