FIJI UNDERGOES FIRST TRADE POLICY REVIEW IN 12 YEARS

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Many challenges persist

SUVA, Fiji (Fijilive, March 26, 2009) – Fiji’s interim Attorney General Aiyaz Sayed-Khaiyum has told the Trade Policy Review meeting in Geneva that some of the issues that affected the country 12 years ago continue to pose serious challenges for the local economy.

Speaking at the meeting at the World Trade Organisation (WTO) headquarters today, Sayed-Khaiyum said Fiji’s first and only trade policy review was conducted about 12 years ago and since then, there had been lots of developments at the global and domestic fronts.

And these, he said had had an influence on Fiji’s trade policies and practices.

"As such, this trade policy review is a most timely exercise, and my delegation looks forward to sharing Fiji’s experiences and to hearing your own experiences that may be relevant to Fiji’s attempt to use trade effectively as a tool for economic growth, poverty alleviation and sustainable development," Sayed-Khaiyum said.

He said Fiji was a small, vulnerable economy with a narrow resource base and was import reliant.

"Our few export oriented sectors, such as sugar, garments and fish, are reliant on rapidly eroding preferential market access," Sayed-Khaiyum said.

He said in light of the rapid changes in the global environment, it was a major challenge for Fiji to diversify its economy and develop sectors in which comparative and competitive advantages existed.

Sayed-Khaiyum highlighted the garment industry when during the expiry of the agreement on textiles and clothing at the end of 2004, companies exporting garments to the US shut operations resulting in significant unemployment.

He said the industry contracted from a peak of 23,000 to 5600 workers, and the gross domestic product contracted from a level of 5.5 per cent in 2004 to a recessionary figure of 0.6 per cent in 2005.

"Similarly, the sugar industry which has been the mainstay of our economy for close to a century will be affected by a 36 per cent reduction in preferential price. With approximately 25 per cent of Fiji’s workforce either directly or indirectly dependent on the sugar industry, the erosion of these preferences will have a deleterious socio-economic impact," Sayed-Khaiyum said.

"The fisheries sector, which is a growing export sector with enormous potential, may also face difficulties as a result of liberalisation of the Non-Agricultural Market Access (NAMA) products under the Doha Round," he said.

"These examples, Mr. Chairman, clearly demonstrate how external policies, policies beyond our control, have a devastating impact on a small economy, which has a limited resource base and is highly vulnerable to external trade shocks," he added.

Sayed-Khaiyum informed delegates that Fiji faced huge challenges in its efforts to diversify its economy away from preference-dependent exports, develop export competitiveness and achieve sustainable development.

And concurrently, Fiji was committed to raising the standard of living of its people, including through focusing on the achievement of those Millennium Development Goals (MDGs) still outstanding for Fiji.

"Fiji is fully committed to the overall objectives of the WTO. However, we would like to seek the support of WTO Members to ensure that our development goals are not unnecessarily constrained by WTO rules.

"We need some flexibility, to be able to introduce measures that commensurate with our capacity, level of development and the overwhelming challenges that we face. These challenges that Fiji is facing demonstrates that we would need more time as well as effective technical and financial assistance to be able to fully comply with the WTO rules," he said.

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