A joint feasibility study is set to begin next week for a possible free trade agreement between Papua New Guinea and China.
According to The National, International Trade and Investment Richard Maru said the cost of the study was K3 million (US$813,000) and the national government had allocated K2 million (US$542,000) while the Chinese government would provide K1 million (US$270,000) under the grant assistance programme.
Maru said this on the eve of Prime Minister James Marape’s official state visit to China next week for the Belt and Road Summit in Beijing where one of the key agenda items would be a Free Trade Agreement between the two countries.
“This joint feasibility study is our highest priority as this will serve to further strengthen our trade and investment relationship with China who is our most important trading partner with two-way trade of about K15 billion (US$4 billion) annually and growing,” he said.
“Our second highest priority is to undertake similar study with Indonesia which has the biggest opportunity for us.
Maru said the National Trade Policy 2017-2032 stipulated that a cost-benefit analysis be conducted and all affected stakeholders be consulted before committing the country to any form of trade agreement among other guiding principles and measures.
“China is a global economic superpower and any trade and economic relationship must be treated carefully on the socio-economic impact it will have particularly for a small economy like PNG,” he said.
“PNG exports are mainly raw and semi-processed and the Government is embarking on policies and reforms for the downstream processing of our raw materials and to become a net exporter of processed goods to create employment and wealth for our people in the long term.
“Therefore, the study is important to determine what areas or sectors to open up and reserve sectors that are critical and in line with the Government’s development policy.” Maru said the study would start next week and would be completed in 70 days and negotiations would follow thereafter pending the study’s findings and recommendations.