A joint feasibility study exploring the prospects of a Free Trade Agreement (FTA) between Papua New Guinea (PNG) and the People’s Republic of China (PRC) will soon take place.
Minister for International Trade and Investment, Richard Maru, this week announced this crucial development on the eve of Prime Minister James Marape's scheduled state visit to China next week for the Belt and Road Summit in Beijing.
The initiation of this joint feasibility study follows an agreement reached between Prime Minister Marape and Chinese President Xi Jinping during the state visit in 2021.
The study, set to begin next week, stems from the collaborative efforts between the National Trade Office and appointed consultants, with the contract execution scheduled for this Friday.
Minister Maru emphasized the significance of the feasibility study, considering China's role as PNG's primary trading partner, accounting for approximately K15 billion in two-way trade annually and steadily growing.
The study, a top priority, aims to fortify the trade and investment ties between the two nations.
Acknowledging the financial support extended by the People’s Republic of China and the Government of PNG, Minister Maru expressed gratitude for the K1 million granted under the Grant Assistance Program by the PRC and an additional K2 million from the PNG government for the study.
The Minister clarified the critical nature of the feasibility study on two fronts.
Firstly, in adherence to the National Trade Policy 2017-2032, a comprehensive Cost-Benefit Analysis (CBA) is imperative, ensuring stakeholder consultation before committing to any trade negotiations or agreements.
Secondly, recognizing China's global economic influence, cautious consideration is essential for the socio-economic impact, especially for PNG's predominantly raw and semi-processed exports.
Minister Maru emphasized the importance of downstream processing policies and reforms to transition from raw material exports to becoming a net exporter of processed goods, aiming at long-term employment and wealth creation for the nation.
The study is envisioned to provide essential data and insights into sectors that should be opened up and those critical to the Government's development policy.
Anticipating a 70-day completion period, Minister Maru outlined the extensive scope of the feasibility study, covering trade in goods, trade in services, investment, intellectual property, MSMEs, climate change, and digital trade and development.
The study will equip negotiators with comprehensive data, facts, and figures to optimize gains in the event of FTA negotiations with China.
"I look forward to the outcome of the study and eventually a Free Trade Agreement between PNG and PRC that is beneficial to both countries," concluded Minister Maru.