RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/62
12 November 1999
(99-4888)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
PAPUA NEW GUINEA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Papua New Guinea is
attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Papua New Guinea.Papua New Guinea WT/TPR/G/62
Page 3
CONTENTS
Page
I. MACROECONOMIC PERFORMANCE 5II. TRADE POLICIES AND PRACTICE 6III. TRADE POLICIES BY SECTOR 8
(1) A
GRICULTURE 8
(2) F ORESTRY 9
(3) F ISHERIES 11
(4) M INING AND PETROLEUM 11
IV. CONCLUSION 12Papua New Guinea WT/TPR/G/62
Page 5
I. MACROECONOMIC PERFORMANCE
1. Papua New Guinea has throughout the 1990s experi enced an average growth in real GDP per
capita of approximately 2% per annum.  In 1998 the growth rate was a modest 1.7% after the decline
of 2.8% in 1997.  The predominant feature of growth rates in the 1990s has been their high volatility
with very high growth rates oc curring in 1993 and 1994, fuelled by the development of new mineral
and petroleum deposits and negative growth rates o ccurring in the wake of the decline in commodity
prices caused by the 1997 Asian financial crisis.
2. The Asian financial crisis was also associated with declines in demand as well as prices of
most of the country's important export products including oil, gold, copper and timber.  Gold prices
declined from US$343 per ounce in mid-1997 to US$289 per ounce at the end of 1997.  Gold
continued to trade at such levels and lower throughout 1998 and much of 1999.  Copper prices fellfrom US$1.19 per pound in mid-1997 to US$0.85 per pound at the end of 1997 and to US$0.65 per
pound at the end of 1998.  Crude oil prices over the period fell from almost US$20 per barrel in 1997
to US$13 per barrel in 1998.  By late 1998 oil had dropped to a low of US$9 per barrel.  Log prices
dropped from US$135 per cubic metre in 1996 to US$120 in 1997 and to US$ 61 in 1998.  In 1999
prices have recovered, and average log export prices have recovered slightly to an average of US$70per cubic metre.
3. The Asian financial crisis was not the only exogenous shock to affect the PNG economy in
recent years.  The combination of  the 1997-98 drought and the Tsunami  in the Sepik also adversely
affected exports and GDP growth.  Food production in 1997-98 declined dramatically and it was
estimated that 250,000 people were at risk of starva tion during the drought.  This necessitated a major
food importation and aid mobilization effort, which impacted adversely upon the balance of
payments.  Cocoa production declined from 24,000 tonnes in 1996 to 23,000 tonnes in 1997.  Copraproduction declined from 142,000 tonnes to 124,000 tonnes in 1998.  Overall the drought caused real
agricultural GDP (net of forestry and fisheries) to decline by 2.5% in 1997 and by 18.5% in 1999.
4. Similarly, the drought had severe impact upon the production of minerals that were dependent
upon water for processing or for aquatic transport of exports.  In 1997 copper exports from the Ok
Tedi mine, which is dependent upon passage down the Fly River for copper concentrate exports,declined from an expected volume of 190,000 tonnes to 115,000 tonnes, with exports of only 86,000
tonnes.  In the following year exports doubled to 190,000 tonnes.  Similarly, at the Porgera gold mine,
two months of production were lost because of inadequate water supplies for processing.
5. The World Bank has estimated that the combined effect of the Asian crisis and its ensuing
deterioration in the terms of trade combined with  the drought lowered real GDP growth by 2.5% in
1997 and 2% in 1998.
6. PNG recognizes that while the most recent economic crisis that began in 1997-98 has been
induced by a combination of exogenous factors including the drought and the Asian financial crisis,
policy induced factors have greatly compounded the relatively poor performance of the PNG
economy.  The economic management of previous governments has resulted in economicperformance well below the capacity of PNG and have, in no small measure, compounded the
exogenous sources of low growth rates.
7. The external shocks that occurred were not appropriately addressed by the previous
government which attempted to maintain public spending in the face of a substantial decline in the
terms of trade and deterioration in export volumes described above.  Foreign exchange reserves
dropped to one month import cover by October 1999 compared with five months in mid-1997,WT/TPR/G/62 Trade Policy Review
Page 6
inflation rates reached around 14% in mid-1999 (compared to a long-run trend of 5%), and interest
rates remain at over 20%.  Large unbudgeted expenditure in late 1998 and again over the first eight
months of 1999 have increased pressure on the currency, which declined 45% against the U.S. dollar
over the life of the previous government (July 1997 to July 1999).  By July 1999, the kina was trading
at US$0.29 and there were legitimate fears of an imminent currency meltdown.  The kina has
depreciated a further 13% in the third quarter of 1999.
8. In 1998 the previous government expanded the budget deficit by kina 187 million (2.3% of
GDP) and would have reached 4% of GDP had market interest rates been paid to the Central Bank
and if the new arrears had been included.  Under the previous government the 1999 budget was
supposed to have a deficit of 80 million kina (1% of GDP) but this was based upon optimistic revenue
and expenditure assumptions.  By the first half of 1999 the deficit had risen to kina 200 million(excluding arrears and interest payments of kina 100 million due in interest payments to the Central
Bank).
9. The new Government of PNG, which came to power in July 1999, has now embarked on new
policy initiatives that will begin to rectify the fiscal imbalances created by the previous government
and deal with policy induced constraints to the development of PNG.  The first priority of theGovernment has been to return to some measure of macroeconomic stability.  This began with the
supplementary budget that was introduced into Parliament in August 1999.  The strategy of the
Government was announced in the August session of Parliament.  It has three central tenets:
- Stabilize the value of the kina by decreasing government borrowing from the Bank
of Papua New Guinea, which had previously fuelled high rates of inflation.  The
Government has completed the main elements of negotiations with the IMF and the
World Bank for financial assistance and a structural adjustment programme.
- Responsible budgets.  The Government of PNG has suspended the failed programme
of public service retrenchment initiated by the previous government and invited the
Asian Development Bank to assist in the preparation of a proper system of public
sector reform, which will  lower the costs of public administration.
- Removing obstacles to development through the reform of the existing taxation
system.  The Government has commissioned a major review of the taxation system.
10. The supplementary budget presented to Parliament tightened fiscal policy considerably
through a combination of tax increases, and decreases in expenditure by national departments through
the lowering of supporting overheads.  After incurring a budget deficit of nearly kina 200 million in
the first half of 1999 the supplementary budget projects a surplus of kina 42 million over theremainder of the year resulting in an overall deficit of kina 157 million or 1.8% of GDP.
11. The Government has agreed at cabinet level and announced its intention to introduce a
balanced budget in 2000.  The revenue plus development assistance will not be permitted to rise
above government revenue.
II. TRADE POLICIES AND PRACTICE
12. PNG maintains an international trade policy based upon four key components.  The first and
most important component has been the strengthening of the multilateral trading system.  PNG was a
GATT de facto  Member and became a founder member of the WTO in 1995.  The second leg upon
which PNG trade policy is based is the concept of open regionalism as expressed by APEC leaders.
The third leg of PNG trade policy is the development of regional integration arrangements with thePapua New Guinea WT/TPR/G/62
Page 7
Melanesian Spearhead Group.  Lastly PNG remains strongly supportive of non-reciprocal trading
arrangements such as Sparteca and the Lomé Convention which have assisted PNG and other
developing countries to establish export-oriented industries.
13. PNG is a Member of the WTO and is strongly committed to a multilateral rule-based trading
system.  PNG also supports the integration of developing and least developed countries into the
multilateral trading system and the enhancement and strengthening of special and differentialprovisions for developing countries.  PNG intends to participate fully in the upcoming round of
multilateral trade  negotiations and is aiming to establish a permanent delegation to the WTO in
Geneva in the next two to three years.
14. The Government of Papua New Guinea, as a Member of APEC, is in the process of
implementing its obligations under the Bogor Declaration and the Manila Action Plans to liberalizetrade and investment by 2020.  This objective of achieving free and open trade and investment was
reiterated recently by the incoming government of Sir Mekere Mourata in the 1999 Supplementary
Budget speech.
15. To facilitate the long-term implementation of this policy objective the Government has
introduced a series of measures that will allow it to  gradually phase in the elimination of restrictive
trade and investment measures.  The first reform was the introduction of the Tariff Reform Act of
1998, which phased in a series of reforms to the tariff system that would reduce tariffs substantially
by 2006.  Tariffs were classified into six categories ranging from free to "prohibitive" rates i.e.
75-125% in 1999, which would be lowered to a maximum of 40% by 2006.  The second stage in the
reform process has been the introduction of value-added tax in July 1999, which would allow the
Government to diversify revenue sources when eliminating tariff barriers and thus increase the trade
alignment of the PNG economy to global taxation trends.
16. However, as a result of the gradual re-introduction of needs-based duties, the Government is
now undertaking a review of the taxation system, which includes import duties with an intention of
assuring the continuation of the phased liberalization.  The review will also take into account the
apparent anomaly in the import duty structure that av erage rates of duty appear to discriminate against
downstream processing of unprocessed products.
1
17. In order to meet its APEC obligations PNG has over the last few years also undertaken
policies to facilitate investment.  However the Government recognizes that there is a need to further
streamline investment procedures and create an enabling environment for investment based on
adequately addressing law and order issues, providing a stable policy framework and addressing
issues pertaining to transparency.  The Government will review the reserved list, consider appropriateways to further increase the efficacy of the Investment Promotion Agency and install a uniform and
consistent set of investment incentives applicable to all investors.
18. PNG also supports a trade policy based upon WTO-compatible regional integration
arrangements with the Melanesian Spearhead Group and subsequently with other Forum island
                                                     
1 The observation that average tariffs for processed products are lower than for semi-processed
products is at too high a level of aggregation to conclude that actual discrimination against downstream
processing occurs.  More importantly downstream processing in PNG is usually, though not  exclusively, aimed
at the export market rather than at the domestic market  and hence rates of duty for semi-processed products are
largely irrelevant to the effectiveness of downstream processing.WT/TPR/G/62 Trade Policy Review
Page 8
countries.  PNG recognizes the benefit of regional integration in terms of economies of scale and
expansion of markets.  While PNG does not expect that regional integration measures will in the near
future result in substantial net trade creation the ev idence suggests that there will be some positive net
effects.  The estimates of the benefits of trad e integration within the region have not included
estimates of the benefits from increased economies of scale.
19. Moreover PNG, on the basis of its own experience of liberalization, has undergone regional
trade integration within the MSG and at the same time has pursued a policy of MFN liberalization
within the framework of APEC and WTO.  The So lomon Islands and Vanuatu, PNG's partners within
the Melanesian Spearhead Group, have also actively pursued policies of MFN trade liberalization
while pursuing regional trade integration.  Thus the cautionary note offered in the Trade Policy
Review document that MFN liberalization and regional trade integration may be substitute policiesdoes not appear to apply from the experience of Melanesia.
20. The Trade Policy Review document also suggests that Australia and New Zealand will be
excluded from Forum FTA.  The decision of Forum leaders at the recent Palau summit is that the FTA
will include Australia and New Zealand but that liberalization by Forum island countries towards
Australia and New Zealand would proceed at a pace consistent with the development needs of the
small island States and at a pace to be determined by them.  The Forum Secretariat has been mandated
by leaders to undertake further studies of how the agreement can be extended to Australia and
New Zealand.
21. The last leg upon which PNG trade policy has been based is the system of non-reciprocal
trade preferences.  PNG has been a beneficiary of both Sparteca and the trade preferences available
under the Lomé Convention.  While  trade preferences under Sparteca have been only of very limited
use to the development of PNG exports, the trade preferences under Lomé for canned tuna productshas been important in developing downstream processing of tuna products.  PNG supports strongly
the continuation of the regime of Lomé trade preferences beyond the current WTO waiver, which
expires in February next year.
III. TRADE POLICIES BY SECTOR
(1) A
GRICULTURE
22. Agricultural production in PNG accounts for approximately 25% of GDP.  By far the largest
single component of the agricultural sector is  food production for domestic use.  In this area
government policy has been based on the policy goal of food self -sufficiency.  The purpose of the
policy, as it pertains to trade matters, is:
- to attain food self-sufficiency in rural and urban households through efficient
production systems for traditional staple food crops as well as introduced food crops;
- to improve the distribution and marketing of local food and food products;
- to encourage and promote downstream processing and preservation for value addition
and alternative use of food crops and livestock products.
23. Whereas the Government fully supports these long-standing food policy objectives there has
been an increasing realization that in certain cases the costs of the food self-sufficiency policy have
been high.  The high cost to consumers of food self-sufficiency as reflected in the TPR document
outlining effective rates of protection are well understood by the Government.  The Government of
PNG feels that, in certain cases where there exists a reasonable expectation that new agriculturalPapua New Guinea WT/TPR/G/62
Page 9
products will, overtime, attain a commercial advantage in global markets, temporary
WTO-compatible trade measures should be applied to facilitate development.  Diversification of
agricultural and food production along with downstream processing to add value remain important
policy objectives.  However, in order to assure that the costs of these measures are limited and that
new products that have little long-term potential for attaining a commercial advantage, the
Government has limited the maximum protective tariff to 40% in 2006.  Moreover, the Governmentof PNG is committed to only apply WTO-compatible trade measures in assuring its policy of food
self-sufficiency.
24. In the area of traditional tropical tree crop products the Government has conducted a policy of
attempting to increase efficiency and expanding production in those sectors where the country has
had, over a long period of time, a demonstrable commercial advantage.  The Government has alsoencouraged, to the extent possible, downstream processing and value-adding activities in the copra
and coffee industries.  The development of processed coffee from PNG has met with some success on
global markets.
25. The Government is also pursuing actively a policy of agricultural diversification into
competitive sectors in the production of spices.  These include the development of vanilla, cardamom,nutmeg, chilli, pepper, turmeric and mace.  The Government currently levies a 40% duty on the
import of these products but this is scheduled to decline to 15% by 2006.
26. The agricultural sector in which PNG is currently most competitive on world markets is in the
production of oil palm, which has expanded significantly over the last 15 years making PNG one of
the major global producers.  The PNG Government has traditionally taken an active participatory role
in the establishment of new oil palm projects.  However, with the success and growth of private-sector
activities in this important and flourishing export sector, the Government of PNG has, since themid-1990s, moved to divest its interests in this sector.  The oil palm sector is one in which the
intervention, through government joint ventures to help establish a new industry in which the country
had no commercial advantage, has resulted in the development of a flourishing and profitable export
industry.
(2) F
ORESTRY
27. After subsistence and market-oriented agriculture, the second most important agricultural
sector has been forestry, which after oil and minerals has been the third largest export throughout the
1990s and currently contributes approximately 5% of  GDP.  The policy of the Government of PNG is
to maintain sustainable levels of harvesting in a manner that assures the viability and sustainability of
harvesting in the sector. In 1998 log exports fell to 1.8 million cubic metres in the wake of thecollapse of log demand in Asia, the principle market for PNG forest products.  This level of harvest is
well below the peaks that had been reached in the early 1990s of 3 million cubic metres.  The
Government has suggested that the sustainable harvest is in the vicinity of 3.2 million cubic metres.
28. The Government's policy with regard  forestry remains predicated upon:
- the continuation of environmentally and economically sustainable production;
- the progressive development of viable value-added sectors such as sawmilling, veneer
and furniture production;
- the progressive localization of ownership of logging and processing facilities.WT/TPR/G/62 Trade Policy Review
Page 10
29. To achieve these and other subsidiary objectives the Government employs a series of revenue
and policy measures, which include:
- export taxes on round log exports as an incentive to downstream processing of forest
products;
- restrictions on the export of high-value species such as ebony, black bean, rosewood
etc., as round logs.
30. The WTO TPR document has suggested that:
- the cost of the current system of export taxes falls on the resource owners (p. 99);
- PNG should use a system of auctioning to allocate logging quotas which would
replace all taxes (p. 101);
- PNG should not give incentives to downstream processing of timber products because
this has led to subsidies to inefficient producers (p. 102);
- if auctioning is not accepted then a trade neutral system of stumpage fees should be
employed as a mechanism of rent extraction (p. 101).
31. The PNG Government is of the view that:
- where there are highly imperfect markets and prices are not known by resource
owners (p. 99, para. 55) and massive rents are being earned, export taxes may fall on
the logger and not on the resource owner;
- in a forestry industry dominated by one firm, which controls approximately 50% of
log exports, it is difficult to see how a properly functioning competitive auction could
operate, even with appropriate reserve prices;
- downstream processing is a desirable and important national objective.  The vision of
PNG citizens becoming optimal resource rent earners who do not participate in anydirect way in production is inimical to the development strategy of the country.
32. The WTO TPR report concludes on the recent reintroduction of export taxes (p. 99, para. 58):
"Concerns have been raised in PNG that the recent decision in the Supplementary Budget to
increase log exports to previous levels may overtax the industry at a time when profits are
already low.  This could lead to a contraction of logging, causing exports to fall and exporttax receipts to decline rather than rise."
On the other hand, the World Bank, in its recent review of the PNG economy, Papua New Guinea -
Improving Governance and Performance (22 October 1999, p. 57, para. 2) concludes in regard to
export taxes on forest products:
"Regarding the question of taxation, the Government has re-instated the previous export tax
regime - a welcome move."
In the view of the Government of PNG there is clearly a need for a greater measure of policy
coherence between the multilateral agencies when offering advice on such key issues.Papua New Guinea WT/TPR/G/62
Page 11
(3) FISHERIES
33. The fisheries sector currently contributes approximately 1% to GDP.  However, this figure
greatly underestimates the value of artisanal fishing for subsistence consumption.  The fisheries sector
is largely divided between in-shore fisheries and high seas fisheries for highly migratory species such
as tuna.  The latter is economically the most significant and is almost completely dominated by distant
water fishing nations operating on the basis of bilateral or multilateral access agreements.  Thein-shore fishery is either artisanal in nature as in the case of lobster and barramundi, or based on
domestically-owned commercial operations as in the case of the Gulf of Papua prawn fisheries.
34. The tuna fishery is dominated by purse seiner vessels that operate under bilateral access
agreements which yields the PNG Government returns of 6% of the value of the catch in the case of
bilateral agreements and 10-11% in the case of the multilateral fisheries access arrangement with theUnited States.  The TPR report is critical of the policy of mandatory transhipment of tuna through
prescribed ports as well the requirement to pay the cost of placement of inspectors on board the
vessel.  In the past, transhipment was done on the high seas and with ad valorem  access fees the
incentive and opportunity to under-report was very high.  It is difficult to comprehend how policies
aimed at creating an efficient regulated indust ry that does not engage innefarious commercial
activities would be opposed because it increases costs.  The benefits to all Pacific island countries
from this regional policy of banning transhipment at sea has been shown by the Forum Fisheries
Agency to increase access fees from improved reporting.
35. The TPR report also criticizes the domestication policy inherent in the Palau Group policy of
attempting to decrease foreign purse seiners by 10%.  Domestic vessels are defined by the FFA on a
point system awarded on the basis of nationals employed, local purchases and onshore investment,
This is also seen as raising costs for purse seine vessels.  The TPR report suggests that the policybeing pursued by PNG is "to favour the high risk option of potentially larger but highly uncertain
gains from domestication of the tuna industry over the smaller but more certain benefits from
collecting access fees".
36. An important counter example to the case against domestication has been the experience of
the PNG prawn industry.  In the case of the praw n industry, domestication is already complete and
foreign-owned vessels are prohibited from operating in  the Gulf of Papua.  In the past foreign-owned
vessels operating in this small but profitable fishery had a poor record of compliance with local
taxation laws, rarely if ever earning a taxable profit.  The domestically-owned fleet appears to be
operating profitably and has continued exports in a sustainable manner over the last decade of
operations.
37. The Government of PNG recognizes some of the errors that have been made in the past in
attempting to impose rapid domestic ownership in th e region.  However, there is now developing an
increasing number of individuals with entrepreneurial talent and experience in the fisheries sector.  A
slow process of domestication where PNG nationals are trained to operate in the sector will ultimately
result in transition towards domestic ownership that involves the minimum of disruption to globalsupplies.
(4) M
INING AND PETROLEUM
38. The mining and petroleum industries are together responsible for approximately 21% of GDP
in 1997.  Of this petroleum was 12% of GDP in 1997 and mining was responsible for 9% of GDP.
The importance of mining and petroleum was even more significant during the 1980s and early and
mid-1990s when investment in new mining and petr oleum projects was vital to the PNG economy asWT/TPR/G/62 Trade Policy Review
Page 12
a balance to the structural trade imbalance that existed throughout most of the 1980s until petroleum
production commenced.  Investment in mining peak ed in 1989 at 28% of GDP with capital inflows
for the Kutubu oil project and the Porgera mine.  Investment peaked again in 1996 when it reached
27% of GDP for the Lihir project and the Gobe oil field.
39. PNG policy towards mining and petroleum is based on:
- a stable competitive investment environment in the mining and petroleum sector
including gas;
- equitable benefits to PNG as a whole from the exploitation of non-renewable
resources;
- an appropriate fiscal regime that balances the revenue needs of the state with the
attractiveness of the project and other interested parties benefits;
- development of PNG gas resources, including downstream industries.
40. In terms of specific policy objectives in the immediate future, PNG is aiming to maintain oil
production by developing new fields, thus mitigating production declines of existing producing fields.
However, with the relative paucity of the fields currently awaiting development this is at best a
medium-term solution to the decline in export earni ngs from the sector.  PNG's current gas reserves
are estimated at 15 trillion cubic feet i.e. 26,660 million barrels of oil equivalent are equivalent to
approximately eight times the remaining oil reserves of 340 million barrels.  Therefore the
Government of PNG intends to develop the gas reso urces as a longer-term solution.  The proposed gas
pipeline to Queensland is an important first step to achieving this important objective.
41. In the mining sector, the Government has commenced negotiations for development of the
Ramu Nickel project.  The contract is expected to be signed in December 1999.  The project is
important in that it will result in  a significant diversification of PNG's export sector and will decrease
the vulnerability of the economy to cyclical comm odity price trends.  There are also a number of
highly prospective gold deposits in PNG and they are expected to be developed in the next five years.
IV. CONCLUSION
42. Despite the drought of 1997 and the Asian financial crisis and the ensuing macroeconomic
instability PNG has nonetheless maintained its outward-looking trade policy that began with PNG'smembership of APEC.  There has been no substantive revision of import duties or resort to safeguard
measures.  PNG's outward-oriented trade policy has been based on progressive liberalization on an
MFN basis as well as regional trade and economic integration.  Thus, despite economic instability
caused by external shocks and the mismanagement of  previous governments, trade policy has shown a
remarkable resilience with no apparent political pre ssure for a reversal to the previous inward looking
policies.  In a period when most economic policy was highly contested with each change of
government there has been no change of trade policy despite three changes of government.  The
integration of PNG into the regional and global economy is now a bipartisan issue that has clear
support from all parties in Parliament.
43. PNG as a founder Member of the WTO remains committed to the full implementation of all
its obligations under the multilateral trade agreements.  PNG will complete the implementation of its
obligations under the TRIPS and the Agreement on Customs Valuation within the time periods
allowed in those agreements for developing countries.  PNG is also preparing to fully participate in
the up-coming round of multilateral trade negotiations.Papua New Guinea WT/TPR/G/62
Page 13
44. While PNG remains firmly committed to its full  integration into the global economy, it also
remains committed to a development policy that will see all citizens participate in that development
through investment in business and work in those businesses.  PNG is also committed, in a similarly
bipartisan manner, to developing the economy by adding value to its natural resources and
diversifying its economic base.  A trade and development policy based simply upon Papua New
Guinea being an optimal rent seeker and indefinitely exporting unprocessed raw materials would berejected by any Government of PNG.  To accept such a static vision of the nation's comparative
advantage would be to condemn Papua New Guineans to indefinitely export minerals, round logs and
unprocessed fish.
45. PNG is keenly aware that some of its previous attempts at downstream processing and
economic diversification have been pursued with an inadequate consideration of the long-termeconomic and financial viability of such proposals.  One of the important lessons of the Trade Policy
Review has been precisely this point.  However, some of the attempts at diversification and
downstream processing have very successful such as the development of oil palm exports and
processed coffee which have been understated in the TPR.
46. In PNG trade policy remains a subsidiary of development policy and the expansion of trade is
pursued only to the extent that it is consistent with a policy of sustainable economic development
which lies at the heart of PNG development policy as well as its constitution.  A trade policy based
upon PNG resource owners being passive collectors of economic rent and not directly participating in
the process of development of their resources through labour and investment is at odds with a
reasonable vision of sustainable economic development.  PNG remains committed to a trade policy
which includes economically viable downstream processing, value adding and economic
diversification and rejects any trade policy that would see land and resource owners collectingeconomic rents for it is precisely this rent seeking behaviour that lies at the heart of many of the
nation's governance and land problems.
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