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PNG seeking bilateral trade deals with regional neighbors

Xinhua, December 5, 2016 Adjust font size:

Papua New Guinea is seeking bilateral trade deals with its near neighbors rather than signing up to the Australian and New Zealand-led PACER Plus agreement, the country's Prime Minister said Monday.

Australia and New Zealand are helping Pacific Islands Forum (PIF) countries facilitate legal changes and updating customs clearance system after having agreed in principle to the legal text of the Pacific Agreement on Closer Economic Relations (PACER) Plus agreement.

The agreement however is all but dead with the Pacific's largest country confirming it won't be part of the deal, while the region's other heavyweight Fiji remains cautious.

"It does not benefit some of our business, our local businesses in some of our respective countries and what we want to do is much more fairer trade arrangements with Australia, New Zealand and other countries in the region and give real opportunities to our small to medium business enterprises," PNG Prime Minister Peter O'Neill told Xinhua on the sidelines of the 14th bi-annual PNG Mining and Petroleum Investment Conference.

"Ours are very new democracies, modern and independent nations, they need to develop industries and businesses in their respective countries.

"Australia and New Zealand have well established, competitive enterprises that our people simply cannot compete with."

PNG instead is seeking bilateral trade agreements with its regional neighbours that expand, rather than marginalise their emerging small and medium enterprises.

O'Neill is in Australia drumming up renewed foreign investment into its economic driver, the resources and petroleum sector, despite facing pressures from landowners who haven't yet received benefits from ExxonMobil's 19-billion-U.S. dollar LNG project.

The government is eyeing changes to the mining act for new projects -- which may impact a proposed third LNG train at PNG LNG -- to give increased revenue to local stakeholders, but they have been shelved until at least late 2017.

"I want to state categorically that there will be no changes to the Mining Act prior to the 2017 national election," O'Neill said.

"It is only right that the new Parliament be granted the mandate to carry forward any changes to the existing Mining legislation."

Despite undergoing its most significant slowdown in history -- GDP growth fell from 13.3 percent in 2014 to 2.2 percent in 2016 -- from the downturn in global commodities, PNG's economic fundamentals are strong, O'Neill said, noting adjusting to the changing reality has been challenging.

"There are uncertain times ahead in global and regional settings, but I am confident we have established the foundation, substance and capacity to continue to weather this storm," O'Neill said. Endit