WORLD TRADE  
ORGANIZATION  WT/TPR/M/239 
21 January 2011 
 (11-0351) 
Trade Policy Review Body 
16 and 18 November 2010  
 
 
 
TRADE POLICY REVIEW 
 
PAPUA NEW GUINEA 
 
Record of the Meeting  
 
Chairperson:  H.E. Mr. Bozkurt Aran (Turkey) 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF PAPUA NEW GUINEA 5 
III. STATEMENT BY THE DISCUSSANT 8 
IV. STATEMENTS BY MEMBERS 11 V. REPLIES BY THE REPRESENTATI VE OF PAPUA NEW GUINEA AND  
 ADDITIONAL COMMENTS 22 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 27 
 
Note:   Advance written questions by WTO Memb ers and the replies provided by Papua New Guinea 
are reproduced in document WT/TPR/M/239/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/239 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second Trade Policy Review of Papua Ne w Guinea was held on 16 and 18 November 
2010.  The Chairperson H.E. Mr. Bozkurt Aran (T urkey) welcomed the de legation of Papua New 
Guinea, headed by H.E. Mr. Peter Maginde from th e Papua New Guinea Embassy in Brussels, and the 
discussant, Mr. Atsuyuki Oike  (Japan).   
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by  Papua New Guinea was contained in document 
WT/TPR/G/239 and that of the WTO Secretariat in WT/TPR/S/239. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to  the delegation of Papua New Guin ea:  the United States, India, 
Chinese Taipei, Brazil, the European Union,  Australia, Japan, and New Zealand.   
4. The Chairperson noted that a number of different issues emerged from the two interesting 
reports prepared for this meeting by the Secretaria t and the Government of PNG.  With a view to 
encouraging discussion among Members, the Chairper son made a few observations and focussed on a 
few of these issues, including lessons.   
5. He noted that since PNG's first Trade Policy Review some 10 years ago, greater political 
stability (owing to the 2001 Integrity Law), prudent  macroeconomic policies and structural reforms 
had helped PNG to achieve fairly strong rates of growth in real GDP, especially recently, notwithstanding the onset of the global financial crisis.  The economy had become more outward 
looking as a result of structural reforms, including trade liberalization, and PNG's foreign investment 
regime had generally remained open.   However, in some important areas, reforms did appear to have 
either waned or been slow. 
6. Among the main achievements during the period under review had been the Tariff Reduction 
Program (TRP), which resulted in the average (u nweighted) applied MFN tariff rate falling from 
20.5% in 1999 to 5.1% in 2006, where it had re mained.  The outcome was that whereas tariffs 
accounted for 17.3% of Government revenues in 1998, they accounted for only 3% in 2006.  But 
since then, further tariff cuts had been deferred.  Interestingly, PNG had managed to replace tariff 
revenues to a large extent by establishing a value- added tax (GST) and exci ses, thus showing other 
Members that still relied heavily on tariffs for ta x revenues, some of which had recently been 
reviewed by this Body, how they too could reduce such dependence through accompanying tax 
reform. 
7. Telecommunications reform had been another major achievement, which illustrated vividly 
the benefits of liberalization.  The state-ow ned monopoly concerning mobile telephony ceased in 
2007, when Digicel, a private multinational enterprise,  entered PNG.  As a re sult, Digicel's market 
share rose rapidly to 65% in 2009 while prices fe ll by up to 60% and coverage  and quality of services 
greatly improved, thus reducing to some extent th e costs of doing business in PNG.  He also noted 
that regulation of telecoms was being transferred to a new independent regulator.  Moreover, the 
Secretariat's report mentioned that the state-owne d monopoly over fixed-line services (local, national, 
and international calls) was due to end in A ugust 2010; perhaps PNG's delegation could indicate 
whether this has happened or not.  
8. Reform of PNG's outdated trade -related laws had generally b een impeded by PNG's limited 
institutional, resources, and technical capacities.  Nonetheless, in accordance with the objectives of its 
over-arching development plan, PNG Vision 2050, the Government was seeking to formulate a 
comprehensive trade policy with a view to re ducing its heavy reliance on mineral resources and 
supporting diversification of PNG's economy, in cluding by encouraging economically viable WT/TPR/M/239 
Page 4  
 
  downstream processing of its natural resources.   He  noted that Members would be interested in 
learning more about what new measures were envisa ged and how they and existing measures, such as 
export taxes on logs, might facilitate economically vi able downstream processing in the long run.  He 
understood that trade-related national policies in a number of other key areas (such as electricity and 
transportation) were also envisaged.  The authorities indicated that technical assistance (TA) would be 
welcome in a number of areas, such as institutional capacity building, trade facilitation, SMEs, TBTs, 
IPRs, fishing and tourism.   The question arose, th erefore as to what, if any, contribution this Trade 
Policy Review could make to the formulation a nd implementation of a comprehensive trade policy 
and, indeed, other trade-related policies.   
9. A major economic challenge confronting PNG, w ith wide trade policy implications, was how 
to manage the so-called "Dutch disease" effects of  the kina's appreciation owing to the substantial 
inward foreign direct investment  in LNG and other projects associated with the expected mining 
boom.  Appreciation of the kina would tend to reduce the competitiveness of import-competing activities and traditional exports, thus possibly jeopard izing the Government's efforts to diversify the 
economy.  He noted that Members would be inter ested in learning more about how PNG intended to 
meet this and other formidable challenges.  WT/TPR/M/239 
 Page 5 
 
 
  II. OPENING STATEMENT BY THE REPRES ENTATIVE OF PAPUA NEW GUINEA 
10. A lot of changes have taken place since our last  Review in 1999, so this Review is not only 
timely but an opportunity to reflect, review and move  forward.  This presents an excellent opportunity 
since the PNG government is also reviewing two major policy areas that affects its international 
foreign relations and the trad e and development policies. 
11. PNG recognises the importance of this WTO Re view because we believe in a rule-based, 
transparent multilateral trading system that is equ itable and fair. The Review would also provide a 
useful mechanism to explain our micro and macr o development policies including the long-term 
policy ambitions in a globalised open market trading system. 
12. Since the submission of our Trade Policy Report to the WTO, we have received an 
overwhelming number of written questions from Memb er countries, and written responses have been 
provided to most of the questions already received. We will also do our best to respond to every other 
question, including the oral questions or comments.  I will use this opportunity to underscore some of 
the critical issues for PNG. 
13. PNG is only a very small economy that relies heav ily on its exports and international trade. 
The commodities and exports accounts for about 62.5% of the GDP, while services and utilities 
account for about 30% and the manufacturing sector contributes less than 10%;  our exports and imports grew over 1991-2007.  On average, exports  grew faster by almost 16% per annum.  The 
balance of trade has risen by almost 50% over the same period. 
14. In the years leading up to 2009, PNG recorded an unprecedented eight consecutive years of 
economic growth. However, PNG remains highl y vulnerable to the world commodity price 
fluctuations and the global economic downturn h as also certainly impacted on PNG's trade through 
the international price fluctuations.  Despite been heavily reliant on exports of mineral and 
agricultural sectors, our economy has proved fairly resilie nt to the impact of the global financial crisis. 
Although lower global commodity prices trimmed th e economic growth in 2009, the impact of the 
crisis was cushioned by the large fiscal stimulus  package put in place by the government, together 
with the expectations of a US$15 billion LNG projec t which is likely to come on stream by 2014, and 
a recovery in the commodity prices in the second half of 2009. 
15. Since PNG is very much dependant on its e xports and trading goods from the agriculture 
sector, our economy is very much subjected to the world economic crisis and the drastic movements 
in the commodity sector. 
16. Papua New Guinea remains committed to strengt hening the rules-based multilateral trading 
system and to the WTO objectives of liberalised  and open trade in goods and services.  We 
understand, however, that the political environment fo r trade negotiations is quite challenging. It is 
important, for that matter, that countries do not resort to the protectionist measures at the expense of other smaller developing countries. 
17. As a member of APEC, PNG remains also  committed to the extended commitment on 
standstill, made in 2008, to the end of 2013 to refra in from raising new barriers in investment or to 
trade in goods and services, imposing new export r estrictions, or implementing measures that are 
WTO inconsistent, including those that would s timulate exports.  Furthermore, PNG will also 
continue to exercise maximum restraint in implem enting measures that may be considered to be 
consistent with WTO provisions if they have a si gnificant protectionist effect and promptly rectify 
such measures were implemented. WT/TPR/M/239 
Page 6  
 
  18. Ultimately, an early and ambitious conclusion to the Doha Round of trade negotiations is 
crucial to the multilateral trading system, as it would provide an effective insurance policy against the 
introduction of trade restrictive and welfare-reducing policy measures. 
19. PNG also believes that bilateral and regional tr ade agreements complement and reinforce the 
multilateral trading system. Our economy is small with few exportable commodities and few markets 
in developed and developing countries that provide us preferential trading conditions.  PNG and other 
Pacific island countries are currently involved in various FTA's including the Interim Economic 
Partnership Agreement with the European Union, the Melanesian Spearhead Group Trade Agreement, 
the Pacific Islands Countries Trade Agreement, and the current negotiations with Australia and New 
Zealand on the Pacific islands Closer Economic Re lations (PACER+).  While we acknowledge that 
such arrangements are important, they cannot replace the multilateral fair trading system. Hence, it is 
imperative for an early and successful conclusion to  the Doha negotiations to strengthen the rule-
based multilateral trading system and contribute to increased effective trade between Member 
countries. 
20. The underlying objective of PNG's trade policy ambitions is to promote economic growth 
through trade, thereby improving the welfare of our citizens. This is articulated in the PNG Vision 
2050 which places emphasis on economic growth, povert y reduction and better living standards for 
the people. Thereby we aspire to achieve the Millennium Development Goals. 
21. The Secretariat's Report noted that over the last ten years, PNG has embarked on major 
structural reforms and policy deve lopment and adjustments in the different sectors of the economy to 
enhance economic growth. While this can be attri buted to our membership commitments in the WTO 
and APEC, this process will only be enhanced thr ough the implementation of the PNG Vision 2050 to 
achieve the strategic objective for Papua New Guinea's  development and growth in the next 50 years. 
22. Papua New Guinea is richly endowed with natu ral resources and it gives us a comparative 
advantage for these resources. I am not referring here ju st to exports from gold, copper, oil, gas, fish 
and forest, which are sectors that have seen massiv e investment and growth in the recent years.  
However, the focus must be on developing sectors that will impact positively on the lives of the 
majority of our people. Obviously, these sectors include  agriculture, fisheries, flora and fauna, art and 
craft, culture, tourism and other service-based sector s. These are all renewable and sustainable sectors 
for future generations. 
23. The growth and expansion of trade has been  pursued and implemented through the various 
sectoral policies. Papua New Guinea's trade policy has focused primarily on tariff liberalisation, 
removal of non-tariff barriers to trade, providing tariff protection for specific local industries and 
undertaking negotiations on various trade agreements. 
24. The government has recognised the critical impo rtance that international trade plays in 
creating new opportunities for our producers, service  providers and workers by opening new markets 
and providing tangible incentives to the diversificat ion of our economy, and in doing so alleviating 
people out of poverty. Given that exports constitu te roughly 90% of our GDP, trade liberalisation 
through both regional and international efforts is an  integral part of achieving strong and sustained 
economic growth and development. 
25. The PNG Vision 2050 gives priority and prominence to international trade relations and trade 
policy under pillars No. 2 (wealth cr eation) and No. 4 (security and in ternational relations). The trade 
policy review has reinforced the n eed for the formulation of a comp rehensive trade policy to ensure 
that Papua New Guinea reduces its  excessive reliance on mining and petroleum resources and support 
the diversification of PNG's economy, which must be consistent with our development policies as 
stipulated in the preamble of our Constitution.  WT/TPR/M/239 
 Page 7 
 
 
  26. PNG believes aid as a means that enhances the development efforts and aspiration of 
countries such as us. Aid should not be used as a leverage for trade by big and stronger economies 
that seek to enhance trade.  Aid for Trade should be used to develop capacity and skills development 
in smaller countries such as PNG. This should then in turn improve our ability to compete and trade in 
an open market where the rules are fair and transparent. 
27. In this regard, we are grateful for the assistance from the EU under the Trade-related 
Assistance Project to assist in developing and form ulating a coherent, cohesive and comprehensive 
trade policy framework that will provide the strate gic direction for Papua New Guinea's integration 
into the global economy, as well as adequate ly respond to opportunities in the regional and 
multilateral trading systems. 
28. Primarily, the trade policy must focus on developing Papua New Guinea's natural resources, 
whilst taking into consideration th e developments both at the nati onal and international levels to 
maximize returns and achieve sustainable economic a nd social development.  On the basis of this 
framework, a trade policy focussed on economi cally viable manufacturing and downstream 
processing and value added manufacturing of its natura l resources, as well as economic diversification 
to utilise international trade for economic growth an d development will be elaborated and formulated 
for Papua New Guinea. 
29. We took a decisive step a few years back to fu lly open up our trade and tariff regime and we 
are now WTO compatible allowing over 80% of all items free of duty. International trade therefore accounts for over 90% of our GDP.  Perhaps we have been naive, but we have opened up, hoping and 
believing that we will somehow position ourselves bette r and more efficiently in this unpredictable 
and unfriendly global environment where the survival  of the fittest seems to be the norm in trade 
without due regard.  WT/TPR/M/239 
Page 8  
 
  III. STATEMENT BY THE DISCUSSANT (MR. ATSUYUKI OIKE (JAPAN)) 
30. My presentation today will be consisting of two pa rts.  First, I would like to review some of 
the major progress and achievements that PNG has been making in the areas related to trade and 
investment since the last Trade Policy Review in 1999.  Secondly, I will discuss some of the major 
challenges that PNG is facing, and ask some questions for the PNG delegation.  In the interest of time, 
I will confine my presentation on general issues of cross-sectoral application, and leave the sector-
specific issues to the questions from the Members. 
31. Since the general elections in 2002, PNG has enjoyed greater political stability. The 
government of Prime Minister Michael Somare engage d in a series of structural reform and was able 
to win the general elections in 2007 to serve anot her five year parliamentary term. The Bougainville 
Conflict was brought to an end with the 2001 Peace Agreement, followed by the promulgation of the 
Bougainville Constitution in 2004 and the provincial elections in 2005. The political stabilization was 
indeed a very significant achievement since the last TPR. 
32. PNG's economic performance during the same pe riod has also been fairly positive, with 
strong GDP growth rate in recent years. The count ry experienced, like most other countries, some 
slowdown in growth in 2009 due to the global financ ial crisis and subsequent  reduction in commodity 
prices, but came back to the growth path again with  projected 7.5% growth rate in the current year. 
33. Another positive development can be found in P NG's trade liberalization policies. According 
to the Secretariat Report, the average applied MFN ta riff rate fell down from 20.5% in the first half of 
1999 to 5.1% in 2006. This was a result of the successful implementation of the Tariff Reduction Program which ended in 2006.  Con sequently, over 80% of total tariff lines are duty free, a dramatic 
increase from just 2% in 1999, according to the P NG Government Report. Import values also doubled 
from 42.31 million kinas in 2003 to 84.79 million kinas in 2008. It is important to note that this increase took place with PNG's trade account in surp lus, and therefore, we can safely say that this 
tariff reduction had substa ntial positive impacts on PNG's strong growth rate. 
34. In the context of recent progress and achievements,  I would like to refer to the fairly strong 
development of services industries, particularly construction and communication services. According 
to the Secretariat Report, in telecommunication ser vices, considerable deregulation including the end 
of monopoly in mobile phone services have led to  price decrease of as much as 60% along with 
improved coverage and quality. 
35. Finally, I would like to mention the inflow of ro bust foreign direct investment in recent years. 
This rapid increase of FDI is mainly due to na tural resources boom, but it also contributes to PNG 
economy by creating demands for related services. 
36. While PNG has made many good progress and achie vements, the country is also faced with a 
number of difficult challenges at the same time. Let me  now refer to a few of those serious challenges.  
First, let me refer to PNG's heavy reliance on natural resources and commodities. As you are aware, PNG is endowed with abundant natural resources, which is very much enviable in the eyes of 
resource-poor countries like mine, but this has also  generated heavy reliance on those in export. 
37. According to the Secretariat's Report, PNG's merchandise exports mainly consist of mineral 
resources and crude oil. The share of copper, gol d and crude oil in the entire export amounts to 76%, 
and, if we add agricultural commodities, fishery produc ts and logs to this figure, it is as much as 97% 
in 2009. This means that PNG's economy is extremel y vulnerable to external market conditions of 
those commodities which can be quite volatile fro m time to time.  I understand, from the PNG 
Government Report, that the Government has trie d to diversify industrial structure by supporting 
domestic industries for import substitution and also  for export expansion of traditional commodities.  WT/TPR/M/239 
 Page 9 
 
 
  These are indeed the main features of PNG's comprehensive economic strategy called PNG Vision 
2050.  
38. While I very much commend the efforts of the PNG Government in this regard, I share the 
concern with the Secretariat that so-called "Dutch  Disease" might jeopardize these efforts.  According 
to the Secretariat Report, the "Dutch Disease", in th e context of PNG, refers to the potential economic 
effects of PNG's currency kina's real appreciati on induced by the mineral boom. Whereas the currency 
appreciation will substantially increase the inflow of  foreign investment and export receipts, PNG's 
tradable import substitution and traditional export industries may lose international competitiveness, 
and thus harm the objectives of PNG Vision 2050.  I would appreciate it, if the PNG Delegation can tell us how the Government intends to address th is issue and how they assess the prospect for 
successful implementation of PNG Vision 2050. 
39. The observation on this problem of the "Dutch Dise ase" would bring us to another set of trade 
policy issues of relevance today. Members would certainly appreciate the efforts of the PNG Government to reduce tariffs under the Tariff Reduc tion Program, but I also need to draw your 
attention, as pointed out by the Secretariat Report, to the fact that tariff reduction efforts have 
somewhat waned after 2006. One recent evidence in this respect would be that additional tariff 
reductions were deferred in the 2010 Budget until 2011.  This is of course partly the impact of the 
Dutch Disease. Kina's appreciation has made PNG's exports less competitive and imports more 
competitive. Under such circumstances, domestic in dustries would be more hostile to further tariff 
reduction.  Another aspect to this issue is that  domestic industries are opposing to further tariff 
reduction out of their dissatisfaction with the Govern ment's failure to improve business constraints, as 
pointed out by the Secretariat Report. 
40. Those two elements have intensified pressure  on the Government to protect domestic 
industries in such a way as to provide or mainta in tariff protection for import substitution activities 
and export assistance for traditional exporters. But, I share the concern with the Secretariat that such 
policies would be counter-productive. I believe th at a micro-economic approach would be more 
desirable in tackling these issues. Efforts to impl ement PNG Vision 2050 need to be continued, and 
the 2007 review of the next stages of Tariff Reduc tion Program should be implemented to the extent 
possible. 
41. The key question here is how to utilize the mi ning benefits to improve business environment 
rather than to maintain or even raise barriers ag ainst imports. The PNG Government Report refers to 
the possibility of "partial" or "sector-specific" impl ementation of the program.  In this connection, I 
would like to ask the PNG Delegation to present their views on this issue and advise us with regard to 
the future course of actions that the Government is  trying to take. In this connection, if there is 
anything that this TPR could do in helping PNG achie ve this objective, I am more than happy to hear 
it. 
42. Since I touched on the issue of business envir onment, please allow me to elaborate on this 
issue a bit more. The Secretariat Report refers to some of the important business constraints, 
particularly infrastructure deficiencies such as high cost and unreliable supply of energy, law and order problems, high transportation costs, insufficient professional training opportunities and inadequate network of related services. The PNG Government Report also recognizes that, without 
tangible improvement to infrastructure or estab lishment of an operating platform conducive to 
business, the manufacturing sector will remain in a fragile state with little or no foreseeable 
investment into desired areas. 
43. I am aware that the PNG Government is making various efforts to improve the current 
situation, for example, by introducing Public, Priv ate Partnership to boost private investment and 
management in major infrastructure projects, or by promoting land reform in order to mobilize WT/TPR/M/239 
Page 10  
 
  customary land for economic development, which of course is a very important initiative regarding a 
highly sensitive issue. I also understand that the forthcoming National Electricity Policy is considering focusing on reform to bring about pr ivate sector participation and competition in power 
generation.  All those efforts are encouraging, but  a lot more appears necessary.  I would like to 
welcome any comments from the PNG Delegation concerning the updates of these measures or any 
other policy initiative to improve business constr aints including infrastructure deficiencies. 
44. The challenges that I have described are huge a nd difficult ones. In this context, when the 
Government of PNG makes further efforts to tackle  all of those difficult issues of great magnitude, I 
think that foreign assistance could be of some help. The WTO attaches great importance to aid for trade, and I understand that PNG authorities welcom e technical assistance in a number of areas 
including institutional capacity building, trade facilit ation, SMEs, TBTs, IPRs, fishing and tourism.  I 
would appreciate it, if the PNG Delegation coul d elaborate a bit more as to how the WTO and 
Members can actually help.  I would also like to encourage Members to make suggestions on this 
issue as well. 
45. Papua New Guinea has made considerable econom ic achievements, and many of the policies 
that the Government has implemented are indeed co mmendable. But, at the same time, the country is 
still confronted with formidable challenges, and th ere remains considerable task ahead. I truly hope 
that this Trade Policy Review will be of some help to the Government of Papua New Guinea.   WT/TPR/M/239 
 Page 11 
 
 
  IV. STATEMENTS BY MEMBERS 
UNITED STATES 
 
46. The United States and Papua New Guinea work cl osely together on many issues of mutual 
interest, from fostering economic growth and ad vancing opportunities for women to combating 
climate change and protecting the environment.  We  are committed to deepening our partnership with 
Papua New Guinea both bilaterally an d through our involvement in re gional institutions including the 
Asia-Pacific Economic Cooperation (APEC ) and the Pacific Islands Forum.  On November 3, 
Secretary of State Clinton travelled to Papua New Guinea to meet Prime Minister Sir Michael Somare 
and other senior government officials, women leaders and environmental experts.   This visit was part 
of a larger process of enhancing U.S. engagement in the Pacific. 
47. As Secretary Clinton said during her visit, Papua New Guinea has the opportunity not only to 
accelerate economic development and provide more be nefits for its people, but also to become a 
strong regional leader and a model for poverty re duction and sustainable development.  However, 
Papua New Guinea's success requires a renewed commitment to good governance and accountability 
and transparency.  The United States stands ready to help Papua New Guinea translate its natural 
resource wealth into widespread prosperity. 
48. We thank the Government of Papua New Guin ea for the background report it submitted for 
this Review and look forward to a candid and c onstructive exchange of information regarding the 
government's trade policies and practices.  It is our  hope that this review will serve to recognize and 
reinforce the trade policy advances that the Govern ment of Papua New Guinea has made as well as to 
identify areas in which further attention and action is needed.  
49. Much has changed in both the global economy and in Papua New Guinea since the last Trade 
Policy Review was held in 1999.  We were pleased to read in the Secretariat's Report that Papua New 
Guinea's steady macroeconomic environment has helped sustain growth since 2000 and that the economy has become more open with fewer import restrictions, lower tariffs, and few non-tariff 
barriers overall.  We also were pleased to lear n that the Papua New Guinea Government has also 
embarked on substantial structural reforms in the co mmunication, transport, and financial sectors, and 
that business confidence has not been shaken during the recent financial crisis.     
50. However, according to the Secretariat's Report, Papua New Guinea's trade policy remains 
aimed at the "domestication" of value added across multiple sectors of its economy.  As such, tariffs 
still create significant (and disparate) barriers for food processing and inefficient manufacturing of 
other goods despite reforms.  Papua New Guinea's  average applied MFN tariff fell from 20.5% in 
1999 to 5.1% in 2006.  However, the Secretariat Re ports that applied tariffs on a handful of items 
appear to exceed bound rates and we will be inte rested to hear what the Papua New Guinea 
government is doing to address this issue. We also take note of the Secretariat's Report that Papua 
New Guinea has not fully met it s WTO notification requirements since 2000, thereby undercutting 
transparency in the government's trade policy.  Th erefore, we are interested in learning about the 
government's plans for acting upon its WTO notification requirements.    
51. Likewise, while Papua New Guinea's foreign di rect investment regime is largely open, 
foreign investors are still required to be certified and screened, and we are interested in learning 
whether the Papua New Guinea Government is consid ering any changes to its approach that might 
encourage additional investment.  We understand Papua New Guinea is undergoing a comprehensive 
review of all company laws, for instance, and we  would welcome additional information on this 
review.  We also look forward to learning more  about Papua New Guinea's legislative improvements 
on intellectual property protection, including changes to the Copyright and Neighbouring Rights Act, 
which also could serve to promote investment.   WT/TPR/M/239 
Page 12  
 
  52. On Papua New Guinea's sanitary and phytosanita ry regime, we have questions regarding the 
basis upon which Papua New Guinea resorts to broad impor t bans.  Finally, we would be interested in 
hearing whether Papua New Guinea is considering an y changes to the manner in which it operates the 
state-owned monopoly power utility, to enhance e fficiency and reliability, which would lower 
business costs and support PNG's further development.    
53. Lastly, we were disappointed to learn from the Secretariat's Report that Papua New Guinea's 
reform of its trade related laws has proceeded rela tively slowly.  Updating these laws and institutions 
will create the environment necessary to increase tr ade and investment and also to provide the 
governance necessary for Papua New Guinea to truly benefit from the major liquefied natural gas 
(LNG) projects due to come online soon. 
54. In sum, we hope that by calling attention to  these areas of concern, we will help Papua New 
Guinea focus on areas where improvements in trad e and investment policy can help Papua New 
Guinea meet its domestic economic policy and relate d challenges.  Finally, the United States will 
continue to work with Papua New Guinea to strengthe n and deepen our relationship.  We believe that 
developing countries such as Papua New Guinea have much to gain from a balanced and ambitious 
result in the Doha negotiations that includes meaningf ul new market access for all.  The United States 
looks forward to working with Papua New Gu inea toward bringing the Round to a successful 
conclusion.  
INDIA 
55. PNG with a population of almost 7 million and a constitutional democracy is a resource rich 
country.  In the recent years PNG has enjoyed re latively steady macroeconomic environment.  The 
Secretariat Report has pointed out that this has he lped sustain growth but structural reforms have 
waned recently.  PNG's economy is characterized as  a small commodity exporting economy.  This has 
impacted adversely on the economic performance due  to sharp fall in commodity prices since the 
second half of 2008. 
56. It is heartening to note that the government has introduced the Fiscal Responsibility Act and 
adopted medium term fiscal activity.  The govern ment also deserves appreciation for embarking on 
substantial structural reforms in the communication,  transport and financial sectors.  We have noted 
that the general economic situation has the potenti al to improve further with the launch of LNG 
project with a consortium led by Ex xon Mobil worth about US$12 billion. 
57. India and PNG enjoy warm relations.  We believe that there is substantial potential to further 
expand and deepen our existing relationship.  I ndia's export to PNG during 2006-07 stood at US$10 
million while imports were  approximately US$280 million.  The main items exported by India to 
PNG include textiles, machinery and equipments, f ood items, pharmaceuticals, etc.  While the major 
items of imports from PNG consist mainly of comm odities such as cooper ores, vanilla, coffee, tea, 
etc. 
58. India, since opening its Mission in Port Moresb y in 1996, has been offering skill enhancement 
scholarship under the Indian Technical and Econom ic Cooperation programme and the Colombo Plan 
to PNG nationals.  We are very happy to repor t that over 275 PNG nationals have attended these 
training programmes in diverse fields in India.  In recognition of this, India has increased the number of slots from 20 to 25 per annum.  India has also offered humanitarian and disaster relief to PNG from time to time as a gesture of friendly relations and in solidarity with PNG.  As part of India's Regional 
Assistance Initiatives for Pacific Island countries, we  have offered Grant-in-Aid of US$100,000 for 
supply of equipments and materials for social  and economic programmes and for sustainable 
development.  WT/TPR/M/239 
 Page 13 
 
 
  SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
59. Despite the global recession, Papua New Guinea's GDP growth in recent years has been truly 
impressive, thanks mainly to the combined effects of the government's successful policy of economic 
development and the rising global market prices of several of its natural resources.  We are also 
convinced that, if the government continues with its  programme of reform and liberalization of trade-
related regimes and economic structur es, then economic growth will be sustained.  In this regard, my 
delegation wishes to commend the government of P NG on its policy for the long-term contained in 
the PGN Vision 2050 Framework, and as mentioned in the Government Report. 
60. As we know, PNG may be rich in natura l resources, but its economy remains highly 
dependent on the development of its agriculture.  We therefore had run several technical cooperation 
projects with the Papua New Guinea government on agri culture and fisheries a few years ago.  And, 
in other areas, recognizing the important develo pment role of information and communications 
technology, we have also been running several programmes there in collaboration with the APEC 
Digital Opportunity Centre, aimed at upgrading PNG's ICT application capabilities through training 
courses and by donating personal computers.  As a r esult, I am pleased to say that a close bilateral 
relationship has grown up between us , particularly in the areas of economic and social development. 
61. In the written questions sent by my delegation to PNG in advance, we asked for further 
information on the investment environment and the future plans for the liberalization of the services 
sectors.  Finally, as we have all seen, PNG is an active participant in certain areas of the DDA negotiations and in various WTO activities.  In this  context, my delegation fully recognizes the special 
difficulties faced by the industries of the SVEs.  Th erefore, we wish to take this opportunity to 
reiterate our support for the provi sion of additional flexibilities for SVE Members like PNG in several 
areas of the DDA negotiations, in particular tho se issues relating to agriculture and fisheries. 
BRAZIL 
62. As Brazil has expressed in previous occasi ons, we recognize the many difficulties and 
obstacles standing in the way of least developed Member s.  PNG is a case of point, in its endeavour to 
promote economic diversification, reduce vulnera bility and improve standards of living.  We 
commend PNG for the sustained economic growth that was maintained in spite of the global financial 
crisis, but we cannot fail to note that significan t challenges remain, like the building of adequate 
infrastructure for the development of the economy. 
63. Once over again, Brazil stresses that developed Members, as well as developing Members in 
a position to do so, should put their human and fina ncial resources at the disposal of vulnerable 
economies by developing programmes on aid for trade and by providing real and undistorted market 
access to products originating from them.  This is pa rticularly relevant in the case of economies which 
are so heavily dependent on foreign trade like PNG.  In this regard, Brazil took due note of the list of 
trade-related technical assistance needs attached to  the Report prepared by the Government, and we 
will look at it with attention. 
64. Let me now turn to the commercial ties between  Brazil and PNG.  Bilateral trade figures are 
still very modest.  Trade in 2009 was approxima tely US$4 million up from US$1 million in 2000.  
The way for trade between our countries is thus open and it is our expectation that we maintain this 
growth tendency in the years ahead.  In this cont ext, we would be interested in understanding the 
reasons why PNG maintains a prohibition on the imports of uncooked poultry products. 
65. We note however that, while Brazil has been consistently exporting to PNG since 2000, 
imports are kept at a very low level – actually, in some years, no imports at all have been recorded.  
We stand ready to explore ways to promote an in crease in the flow of goods from PNG to Brazil. WT/TPR/M/239 
Page 14  
 
  66. As the Government Report points out, PNG undertook important structural reforms in 
different sectors of its economy in order to further its economic growth.  The paramount challenge is 
to translate the wealth in natural resources into  income flows that will generate the necessary 
conditions for improved social and economic indicators.   The goals set out in the Government's plans 
provide a sound basis for achieving this objective.  Brazil believes that international trade and 
cooperation may have an important role to play in this process, and we will spare no effort in 
promoting them in the WTO. 
EUROPEAN UNION 
67. The European Union has extensive and impor tant relations with PNG – we have built 
partnerships on the basis of political cooperation and dialogue, and also through trade arrangements 
and development programmes. Today, the Europ ean Union is one of PNG's main trading and 
development cooperation partners.  
68. According to the Secretariat Report, PNG offi cials are hoping that this second Trade Policy 
Review will help them to formulate and implemen t an increasingly modern trade policy. The EU was 
glad that it could facilitate th e preparation of the Government's  report through assistance provided 
under the 9
th European Development Fund's programme "T rade Related Assistance to Papua New 
Guinea".  
69. One of the milestones in PNG-EU relations is  the interim Economic Partnership Agreement 
(EPA) that was signed in July 2009. This agreemen t is aimed at promoting trade and through trade 
contributing to PNG's development, sustainable gr owth and poverty reduction. It includes duty-free 
and quota-free exports from PNG to the EU since 1 January 2008, asymmetric and gradual opening of 
markets to EU goods, liberalizing 88% of EU im ports, but excluding the most sensitive economic 
sectors (e.g. meat, fish, vegetables, furniture and jewellery). It also includes safeguard provisions, 
provisions on technical barriers to trade and SPS measures to help PNG exporters meet EU import 
standards, customs and trade facilitation. 
70. The EU is the second largest development pa rtner of PNG and for the EU, Aid for Trade 
activities and support to institutional capacity build ing are very important aspects of development 
cooperation. Particularly over the past 20 years PNG has received considerable support from the EU 
compensatory finance scheme to stabilise export earnings, called STABEX. Totalling some €85 
million since 1990, STABEX funds have been used to assist economic operators in the three crop 
sectors of coffee, cocoa and copra. 
71. Besides the STABEX funds, the EU supports PNG with more than €75 million from the 9th 
European Development Fund in the education sector, water supply and sanitation and capacity 
building. Under the 10th European Development Fund during 2008-2013, the EU continues to provide 
assistance to address rural economic development a nd supporting human resource development. Part 
of the funds are specifically allocat ed for Trade Support Programmes. 
72. The first Trade Policy Review of PNG took place more than 10 years ago, in 1999. At that 
time, the EU addressed some concerns it had with regard to PNG's trade policy. Among other areas, 
we highlighted the need to improve PNG's capac ity to implement trade policy, to improve the 
business climate, solve some law and order problems and also to participate more actively in the 
multilateral process, including submitting of regular notifications.  
73. Many important domestic developments and reforms have occurred since then . However, 
some of these concerns remain relevant also toda y. The EU already put a number of detailed questions 
in writing on the capacity of PNG to implement tr ade policy and I do not have to elaborate on these 
questions at this point. Very high cost of doing business, law and order problems, limited access to  WT/TPR/M/239 
 Page 15 
 
 
  services concerning electricity, communication, transport infrastructure remain the most important 
impediments to investment and private sector development.  
74. These issues need to be addressed by PNG in a comprehensive and coordinated way. The 
10th  European Development Fund Rural Economic Development Programme will support such 
initiatives, particularly in the rural areas. Taking ow nership for the reforms - as already mentioned - is 
very important also in this regard.  
75. The global economic crisis has also had an imp act on PNG. The Government has informed us 
about the large stimulus package introduced in th e beginning of the crisis to encourage domestic 
economic activity through a supplementary budget in  2008 of over 7% of GDP. The EU would invite 
PNG to provide more information on the stimulus package, including on its duration and 
implementation.  
76. The EU notes and welcomes many achievements by PNG - several laws and amendments in 
trade related legislation have been enacted, includi ng customs legislation. The EU also appreciates 
that ASYCUDA has been upgraded and the overall transparency in customs procedures improved. We 
also welcome PNG as a Member of the World Customs Organization from 2002.   Furthermore, it is a 
welcome development that PNG is a Member of th e OIE, Codex and IPPC, and has published contact 
points and that a list of quarantine pests has been published on the IPPC web page.  
77. As mentioned before, the EU has submitted its written questions and comments to PNG, 
concerning among other areas, fisheries. On this, I would like to raise one important aspect - EU's 
Illegal, Unreported and Unregulated (IUU) Regulation - which is mentioned several times in both the 
Government's and Secretariat's Report as allege dly undermining the market access gains under the 
interim EPA. The Illegal, Unreported and Unregu lated Regulation aims at  eliminating Illegal, 
Unreported and Unregulated fishing, which put at risk the sustainable use of fishery resources and the 
sustainable development of the fishing sector, includi ng in developing countries.  Let me be clear - the 
trade and development benefits st emming from the special origin ru les agreed in the interim EPA 
signed by PNG do in no way derogate from the above mentioned objectives.  In this regard, the EU 
would also like to remind Members that important financial resources have been allocated to Pacific 
ACP countries in the 9th and 10th European Development Fund for capacity building, including for the 
implementation of the provisions of the IUU Regulation. 
78. The EU would also like to clarify that, in th e context of the Western and Central Pacific 
Fisheries Commission (WCPFC), there is a measure on big-eye tuna and yellow fin tuna (Conservation and Management Measure 2008-01), wh ich foresees an array of actions to reduce 
fishing on big-eye tuna, one of them being that the Parties to the "Nauru Agreement" countries will 
continue to implement their Vessel Day Scheme in  order to achieve reduction of catches. The big eye 
measure foresees, as an option, the adoption of a WCPFC measure on Vessel Day Scheme, though 
such measure has not yet been adopted by the WCPFC. 
79. In this regard, I would also like to highlight th at the EU highly values the detailed analysis of 
the fisheries sector in the Government's and the S ecretariat's Reports. We encourage the Secretariat to 
continue its efforts to include information on Member s fisheries sectors also in the future reports, if 
possible.   
80. We are happy to note the steps which PNG has taken since the last Review to make the 
overall environment of the trade regime more effi cient and we encourage PNG to continue on this 
road. The overall objective remains to facilitate trade, increase investments, and strengthen 
administrative capacity and to enhance the overall economic environment in a sustainable way. The 
EU remains confident that at the third TPR we will be able to see further progress, since - as WT/TPR/M/239 
Page 16  
 
  recognised by PNG - trade is an important and effi cient instrument for advancing economic and social 
prosperity. 
AUSTRALIA 
81. Papua New Guinea and Australia have a long-standing relationship marked by our shared 
history of close economic engagement, partnershi p and cooperation bilaterally, regionally and 
multilaterally.  Geographic proximity and histori cal links have given PNG a special place in 
Australia's foreign and trade relations.  The bila teral relationship is one of Australia's most 
wideranging and we have a strong interest in PN G's sustainable development and stability.  The 
presence of approximately 8,000 Australians in PNG and the many Papua New Guineans living, 
working and studying in Australia also unde rscores the closeness of our relationship. 
82. Key aspects of the bilateral relationship are encompassed in a number of formal bilateral 
arrangements including the Papua New Guinea-A ustralia Trade and Commercial Relations 
Agreement (PATCRA II);  the Agreement for the Promotion and Protection of Investment;  the 
Double Taxation Agreement;  the Treaty on Developmen t Cooperation;  the Torres Strait Treaty;  the 
Joint Agreement on Enhanced Co operation agreed in July 2004;  and the Partnership for 
Development, which was signed by the Austra lian and PNG Governments on 21 August 2008. 
83. At Ministerial Consultations in Alotau in 2010, Ministers agreed that the bilateral relationship 
was at a turning point, largely as the result of th e PNG LNG Project which will provide important new 
growth opportunities for PNG.  Reflecting the matu ring bilateral relationship, Ministers agreed to 
explore an umbrella Economic C ooperation Agreement encompassing development assistance, trade 
and economic cooperation.  Ministers agreed to ch art new directions for Australia's development 
assistance cooperation.  Ministers also agreed that  officials would conduct a rapid capacity assessment 
for the PNG LNG Project. 
84. Australia is PNG's largest source of FDI, largest  source of imports, and largest export market.  
Australia is also PNG's largest international de velopment partner, and provides support to PNG under 
the PNG-Australia Partnership for Development. 
85. Trade is essential to both Australia and PNG's economies and Australia welcomes PNG's 
efforts to build trade capacity and, behind the borde r, to reduce trade barriers through investment and 
reform.  PNG's strong record on unilateral trade liber alisation has facilitated trade growth, and helped 
improve the competitiveness of PNG's economy. 
86. The resilience of PNG's economy was demonstrat ed by its sustained growth throughout the 
global financial crisis.  Austra lia welcomes the continued growth  of PNG's economy, and notes the 
important roles that economic reform and prudent  macroeconomic management have played in 
facilitating this growth. 
87. The PNG LNG Project represents an enormous gr owth opportunity for PNG and is expected 
to contribute to an increase of 15 to 20% in GDP  per annum.  Australia and PNG have a Joint 
Understanding on effective and transparent governan ce of the Project's revenue, and we are also 
working closely with PNG on the establishment of  Sovereign Wealth Funds to manage project 
revenue effectively, and to help PNG develop capacity in LNG project-related areas.  PNG's position 
as an economic leader in the region is likely to stre ngthen as the benefits of its growing mineral sector 
continue to be realised. 
88. In our region, Australia also supports PNG's continued participati on in the Asia-Pacific 
Economic Cooperation forum as a key means to in crease its international competitiveness, improve  WT/TPR/M/239 
 Page 17 
 
 
  access to economic opportunities, and facilitate its pa rticipation in negotiations to establish the new 
regional trade and economic ag reement known as PACER Plus. 
89. At the multilateral level, Australia is committed to assisting all WTO Members to participate 
effectively in the multilateral trading system, and welcomes PNG's participation in, and commitment 
to, the multilateral trading system and thei r support for conclusion of the Doha Round. 
90. Australia attaches importance to our cooperation with PNG in the WTO and welcomes the 
commitment of PNG to economic reform and conti nued trade and investment liberalization.  This 
recognition of the importance of trade policy to economic development is a welcome and useful 
underpinning to PNG's domestic reform efforts.  We  look forward to continuing to work with PNG, 
and other Members, to reach ambitious and bala nced outcomes to the Doha Round – outcomes that 
strongly assist developing countries actively and effectively integrate into the global economy. 
JAPAN 
91. I would like to begin our comments with PNG' s macroeconomic environment and policies. 
PNG has shown strong growth performance. After three years of negative growth from 2000, PNG 
has demonstrated positive growth since 2003, and it recorded 6.7% growth in 2008. It also showed 
resilience against the recent global economic and fina ncial crisis, and has maintained positive growth. 
Japan appreciates that the service  sector has been the driving fo rce of the economy, as well as the 
mining, oil and gas sector, with the increasing involve ment of private enterprises. It is also worth 
noting the new LNG Project that will begin operatio n from 2014. Japan expects that this project will 
lead to further economic development.  
92. Japan also welcomes that the SOMARE ad ministration upholds ensuring good governance, 
stabilizing the macro economy, export-driven economic gr owth to further facilita te private investment 
and competition, and rural development, poverty al leviation and improvement in the quality of life 
through human development as its major objectives, and is promoting the recovery of the economy 
and society and strengthening the political administrative system.  
93. As for trade and investment policies, we a ppreciate words by Ambassador Maginde to show 
its strong commitments to DDA and trade liberalisat ion. Japan commends the trade liberalisation and 
investment promotion efforts made by PNG, among others, the reduction of the average applied MFN 
tariff rate from 20.5% in 1999 to 5.1% in 2006 and the introduction of competition in the 
telecommunications market. We hear requests from Japanese enterprises operating in PNG for further 
reduction of tariffs on automobiles and building mate rials. Given the strong demand in construction, 
these would bring considerable benefit to the Pa pua New Guinean Economy. The high corporate tax 
on non-residential companies is also of concern to us. In relation to these tariffs and taxes, there are 
also demands for application of investment incen tive schemes. Therefore, we expect PNG further 
trade liberalization and investment promotion,  taking into account various voices from business.  
94. Finally, let me briefly touch upon on our bila teral relationship with regard to trade and 
investment. As for development assistance, Japan  has been providing development assistance to PNG 
with emphasis on three areas: education, infrastru cture and rural development. Recently, Japan and 
PNG agreed on loan aid for a new sewerage developm ent project in Port Moresby. Also, Japan and 
PNG started negotiation toward a bilateral investme nt treaty this September. We hope that these 
measures will contribute to the further economic de velopment the improvement of the quality of life 
in PNG.  WT/TPR/M/239 
Page 18  
 
  NEW ZEALAND 
95. New Zealand has a significant trade rela tionship with PNG and we recognise PNG's 
substantial economic potential in te rms of natural and human resources.  This, combined with our 
regional proximity and connections, ma ke us believe that there is considerable opportunity for mutual 
benefit arising from increasing trade between New Zealand and PNG. 
96. New Zealand congratulates PNG fo r its successes since its last TPR in achieving substantial 
economic growth and the government's efforts in fiscal and macroeconomic policy.  New Zealand 
shares PNG's views on the benefits of international trade and economic integration, in particular we 
share the conclusion that "trade liberalisation thro ugh both regional and international efforts is an 
integral part of achieving strong and sust ained economic growth, and poverty reduction" 
(WT/TPR/G/239 page 22, paragraph 115). 
97. While New Zealand considers that multilateral ag reements are the most efficient and effective 
means in achieving increased trad e and economic integration given the time periods involved in 
negotiating such agreements, we recognise that regi onal and bilateral agreements can play a useful 
complementary role.  For this reason New Zealand is working alongside PNG on the PACER Plus 
negotiations.  The overriding objective of these nego tiations is to promote sustainable economic 
growth in the Pacific, and enhance the economic de velopment of Pacific island countries.  We look 
forward to continuing to work with PNG in these negotiations. 
98. New Zealand continues to engage with PNG as b ilateral trade and market access issues arise.  
An example is the recent negotiations to exchange  further "fifth freedom" air services access between 
PNG, New Zealand and third countries.  We look forward to resuming negotiations on this and other 
matters. 
99. Finally, we note the comments from PNG regard ing the need for greater technical assistance 
to assist with the trade related needs of PNG.  New Zealand's Official Development Assistance 
relationship with PNG is focussed on the promotion of sustainable economic development, so we welcome continuing discussion on how this assistance can best meet the trade-related priorities of the 
Papua New Guinean Government.  In that regard, we look forward to hosting PNG trade officials in 
New Zealand soon for a trade policy study tour.  This  study tour has been specifically designed for 
PNG trade officials and will be an excellent chance for New Zealand's senior trade policy officials to 
share their experiences in managing and implementing trade policy issues. 
BARBADOS 
100. Barbados would like to commend PNG on the effort s they have made to enhance their trade 
policy and in sustaining a relatively steady period of  economic growth in the face of inherent and 
exogenous challenges faced by small economies worldwide.  Both the Secretariat and the Government 
Report present evidence of the challenges faced  by PNG as a small, open commodity exporting 
economy, a number of which are relevant to many Small Island Developing States. 
101. Moreover, as a SVE Barbados also fully understands the complexity of these circumstances 
and appreciates the efforts being undertaken by the P NG officials in their efforts to reform their trade 
policy and enhance their trade liberalisation efforts. 
102. It is clear that PNG and countries with a simila r economic and trade structure require targeted 
and sustained assistance to allow them to play a great er part in the international trading system.  We 
would urge that the specific trade related technical  assistance identified by the PNG Government, be 
responded to at an early opportunity in order to help address inherent suppl y side constraints and 
develop export competitiveness.  In addition, Memb ers should strive conclude the Doha Round in a  WT/TPR/M/239 
 Page 19 
 
 
  manner which does not impose any additional burden on countries like PNG as it seeks to integrate 
itself more fully into the multilateral trading system. 
103. Although not a resident delegation in Geneva , Barbados appreciates the contribution that 
PNG makes to the work of the SVEs, notably thro ugh the Pacific Islands Forum representation.  We 
look forward to continuing our close collaboratio n with the new Pacific representation, through 
Ambassador Aivu Tauvasa.  
CHINA 
104. China and Papua New Guinea enjoy close ec onomic and trade relations. According to 
statistics of the Chinese customs, bilateral trade in 2009 registered US$890 million with a surplus of 
US$170 million in favor of China. Gladly, the year 2010 has witnessed the continuation of trade 
expansion and at the same time the reverse of tr ade balance between China and PNG. During the first 
nine months, two-way trade already reached US$870 million, growing by 40.6%  over the same period 
of last year. PNG has achieved a surplus of US$340 million. As of December 2009, direct investment 
by China in PNG amounted to US$320 million; business turnover of engineering projects, labor service cooperation and design consulting exceeded US$1.5 billion. 
105. China commends PNG for achieving a robust growth since 2000. The GDP growth rate 
peaked at 7.2% in 2007 and remained at 4.5% in  2009, despite the global fi nancial crisis. Abundant 
natural resources, such as minerals, oil and gas,  forests and fish, alongside relative macroeconomic 
stability to a large extent uphold the economic grow th. However, as the Secretariat Report has noted, 
the pathway from growth to prosperity for PNG is  disturbed by the "Dutch disease". It is a great 
challenge, therefore, for the Papua New Guinea n Government to make significant structural 
adjustment in the non-mining sectors. In this resp ect, the Secretariat Report goes on to suggest that 
WTO Members can help first by ensuring open markets for the exports of PNG and second by providing greater technical assistance and international aid in a more targeted and efficient manner to 
help PNG achieve its priority reforms, and not to compound its economic problems. 
HONDURAS 
106. Papua New Guinea has shown strong economic results  since the year 2000;  the highest level 
of growth, 7.5%, was recorded in 2007, with servic es being the leading growth sector.  Growth has 
also been strong in construction and in the trade sector. 
107. The Report by the Secretariat also states th at trade policy reforms have essentially paused 
since the Tariff Reduction Program (TRP), which ran from 1999 to 2006.  The country's trade policy 
has instead been aimed at increasing value added acro ss various sectors, especially fishing, to promote 
processing, import substitution, and to diversify the economy.  We would like to know about the 
country's experience of this policy, the results achie ved, and its expectations for the future in this 
regard. 
108. We also note that the country is facing various challenges in a number of areas:  in 
macroeconomic terms, with regard to monetary and fi scal policy;  in the field of trade, in respect of 
the management of "Dutch disease", and at sectoral le vel, with regard to subsistence agriculture.  We 
encourage the authorities to continue their efforts so  as to be able to meet development objectives and 
achieve the Millennium Goals. 
109. While trade between Honduras and Papua New Guin ea is sporadic, we hope  that this two-way 
trade flow will continue in the future.  We would also like to point out that our countries have a 
number of things in common;  for instance, we both continue to liberali ze trade and participate WT/TPR/M/239 
Page 20  
 
  effectively in the multilateral trading system with  a view to achieving the economic development of 
our countries.  
TRINIDAD AND TOBAGO 
110. Although Trinidad and Tobago and PNG have not formally established di plomatic relations, 
as Member of the WTO we share similar economic st ructures with regards to our energy sectors and 
cocoa industries.  Furthermore, as we are both SVEs, we share common concerns regarding the 
negotiations in agriculture, NAMA and fisheries subs idies, and in particular, the need for certain 
derogations from multilateral disciplines in order to  enhance our integration into the global trading 
system.  In this regard, my delegation supports th e comments delivered by the delegation of Barbados. 
111. PNG has enormous potential for economic progress and development.  Trinidad and Tobago 
is very heartened by the outlook for PNG with  the anticipated increase in real GDP from LNG 
production in 2014, and the increased activity in the processed fish sector.  With this increase in 
wealth comes also great responsibility for providing a better quality of life for the citizens of PNG, 
including access to education and health services  and opportunities for self development and 
community and national development. 
112. My delegation is impressed with the am bition and scope of PNG's Vision 2050 for 
development and applauds PNG's commitment  to addressing the human development and 
empowerment needs of its citizens, and reforming its  public sector to improve its service delivery and 
cost effectiveness while reducing corruption.  These reforms and development programs will go a 
long way in improving PNG's Ease of Doing Business Index, which will ultimately attract more FDI 
with its attendant benefits for employme nt, and locally-linked business activity.    
FIJI 
113. Fiji and PNG have been close allies and trading partners for as long as Fiji has been 
independent and even longer.  Prior to the recipr ocal regional trading arrangements that are now in 
place, Fiji and PNG had in place bilateral trading ag reements that were only allowed to expire once 
the regional Pacific Islands Countries Trade Agreem ent was in place.  Fiji and PNG are also co-
signatories to the interim Economic Partnership Ag reement with the EU in itiated in 2007 and signed 
in 2009 by all three parties.  This agreement, a lthough primarily intended to secure European markets 
for Fijian and PNG products, will also cover trade between Fiji and PNG. 
114. The founding Prime Ministers of both PNG and Fiji took lead roles in early regional 
integration of the Pacific island countries, their initiatives leading to the creation of the now well-
established Pacific Islands Forum, which initially consisted of just the 14 island countries, later 
expanded to include Australia a nd New Zealand.  With these close links, Fiji is pleased to see the 
effort that has gone into the preparation of this TPR. 
115. PNG is blessed with abundant natural resour ces which it is doing its best to harness 
sustainably in a manner to benefit its communities economically.  Its forestry and mining sectors, 
along with the LNG fields of PNG, provide enormous  potential for the country's development.  Given 
the challenges to its development outlined in th e Government Report, and knowing the difficulties 
faced by the economically isolated and vulnerable c ountries in my region, I trust that this TPR will 
provide an opportunity to see how the WTO community can best be of assistance to PNG to strengthen its regulatory and instit utional frameworks through appropr iate assistance so as to ensure 
that economic activity in these sectors can work towards sustainable development for PNG whilst 
ensuring equitable returns and providing adequa te protection to the environment and to the 
landowning communities for future generations.  WT/TPR/M/239 
 Page 21 
 
 
  116. Aid for trade will play a big part in ensuring that  PNG is able to realize its objectives not just 
in this sector, but also in the agriculture, fisheries, manufacturing, services, and eco-tourism sectors 
that have been identified as focal areas in P NG's Vision 2050, planning document that has set 
ambitious targets for the country that are nonethel ess achievable with the appropriate support of the 
international community.  WT/TPR/M/239 
Page 22  
 
  V. REPLIES BY THE REPRESENTATIVE OF PAPUA NEW GUINEA AND 
ADDITIONAL COMMENTS 
117. Many substantial issues were raised during the first session, which reflect the importance of 
being transparent about our trade policies and practic es and we are truly in a globalized market. I will 
do my best to address some of the issues and c oncerns raised. Written responses to most of the 
questions and comments made here would be appropriat ely attended to within the next month.  At the 
outset, I would like to highlight some of the issues and challenges that confront PNG as a developing 
country in relation to trad e and economic development. 
118. As noted in the Reports, political stability has b een a major contributing factor to the reforms 
that have bolstered economic grow th and development. This was mainly achieved because of the 
Political Party Integrity Law, the Organic Law on the Integrity of Political Parties and Candidates. We 
also have a very independent Ombudsman Commiss ion that maintains a strong leadership code. 
119. In connection with the above,  we also acknowledge that good governance, accountability and 
transparency issues are crucial to our development efforts and aspirations. We  are not oblivious to 
these concerns; we are in fact making efforts to  address these issues through the PNG Vision 2050 
and also the medium term development strategies . This also includes issues relating to poverty 
reduction (wealth creation), the Millennium Deve lopment Goals, aimed to achieve sustainable 
development.  The PNG 2050 Vision sets out the br oad strategic framework for development through 
which PNG undertakes to address some of these concerns . However, I must state that the PNG Vision 
2050 was only recently launched in 2009 and it's at its infant stage. 
120. During the past decade, PNG has made consid erable progress in achieving economic growth 
even during the global financial crisis. The impact of the crises was cushioned by various factors, 
including the large "stimulus pack age". There are two key phases in the Government's plan on the 
stimulus package. Phase 1 provides a substantial shor t-term injection and fiscal stimulus to the PNG 
economy, which was implemented in 2009 which in cluded public investments funded from vastly 
increased budget appropriations, including the 200 9 Development Budget, as well as from funds 
saved from and parked in trust accounts during the high commodity and mineral export prices.   
121. Phase 2, which is expected to be implemen ted over the medium term starting in 2010-15 
which would involve significant investments also in public expenditure programs and infrastructure 
development which are expected to be funded pr imarily from the Government itself and from its 
development budget and possibly ot her donor partners. Phase 2 will not only provide an economic 
growth stimulus, but, crucially, will ensure the continued economic growth and consolidate its 
sustainable measures for socioeconomic development. 
122. Let me highlight two other factors in relation to PNG's development and trade. The country 
relies heavily on international trade, especially from the export of agriculture and mineral exports 
while there is the risk of pri ce instability. We do not have the luxury of a huge Small and Medium 
Enterprise manufacturing sector in the country.  As a small commodity exporting economy, PNG 
therefore is vulnerable to fluctuating price moveme nts, as exemplified by the impact of the global 
financial crisis, and the econom ic crisis which affects negatively small economies like PNG. 
123. The economic outlook for PNG is very positiv e or favourable for the foreseeable future. 
Although economic growth is predicted to ease in 2012 and 2013 as LNG spending on construction 
winds down, we anticipate a more accelerated incr ease in the later part of 2014 and 2015 when the 
LNG production is expected to come on line.  With the onset of the LNG project is amplified, one of 
the concerns raised by WTO members relates to the "resource curse" and the "Dutch Disease". PNG 
has already initiated a "firewall" to address such issues through appropriate policy initiatives. The 
most significant is the PNG Vision 2050, which emphasises on the economic diversification as a  WT/TPR/M/239 
 Page 23 
 
 
  direct response to the purported claim that an increase in revenues from na tural resources will make 
the PNG Kina stronger compared to that of other trad ing currencies (which is manifest in an exchange 
rate), resulting in PNG's exports becoming more  expensive for trade, in turn making the 
manufacturing sector less competitive.  
124. Other policy initiatives include:  Tariff Reform Program (TRP);  structural reforms 
(communications, transport, energy, financial sector, etc.);  the establishment of the Sovereign Wealth 
Fund (we recognise the offer by United States through Secretary of State during her recent visit to Port Moresby this month to assist PNG establish a Sovereign Wealth Fund); and Public Private 
Partnership to encourage investment for infr astructure development, and the energy sector. 
125. The Government understands the impact of th e LNG project and it plans to channel its 
revenue into three funds: a stabilisation fund, an infrastructure fund and a future fund. These funds 
would be saved off-shore to help minimize currenc y appreciation that woul d otherwise hurt domestic 
producers, such as our farmers. 
126. PNG recognises that trade is a tool for devel opment. It is therefore incumbent on the 
Government to come up with a trade policy framework that promotes free, open and fair trade. This is 
consistent with our development needs and objectives. 
127. An initial assessment of PNG's trade policy regime was undertaken by UNCTAD in 2006, 
which resulted in the formulation of a trade policy framework. With greater recognition by the 
Government on the critical importance that interna tional trade plays in creating new opportunities for 
PNG producers, service providers and workers by opening new markets and providing tangible incentives to the diversification of the country's  economy, a comprehensive trade policy framework 
will be elaborated in consideration of the in itial assessment made by UNCTAD and the current 
developments that are taking place, including this Review. 
128. PNG maintains an international trade policy based upon the philosophy of strengthening the 
multilateral trading system and remains committed to  the strengthening of the multilateral rules based-
trading system and the full integration of deve loping and least-developed economies; maintaining 
open regionalism; and continuing to  pursue the development goals of  regional integration and regional 
trade.  Therefore, PNG also shar es the concern that we must expe ditiously conclude the Doha Round 
with equitable outcomes for all Members. All Me mbers view and aspirations, no matter how small 
they may be, must be given due  and fair consideration in th e interest of inclusiveness. 
129. In particular, PNG seeks a fairer multilateral tr ading system that provides specific responses 
to the specific trade development needs of smalle r developing and least developed countries, in 
particular SVEs and LDCs.  On that note, we acknowledge the Member's support for the recognition 
of the inherent challenges faced by the smaller countries (SVEs and LDCs), greater flexibilities for 
SVEs in the DDA negotiating areas such as agri culture, NAMA and fisheries subsidies, and 
undistorted market access in developed markets must be completely integrated. 
130. PNG is a non-Geneva based WTO Member which means that we do not actively participate 
regularly and contribute to the discussions here in Geneva.  Although, we are briefed on recent 
developments concerning the WTO activities, many times, we have missed important meetings and 
opportunities in key bilateral, plurilateral and mu ltilateral consultations with other government 
officials and experts at the WTO level.  We do not want to considered as being "out of sight-out of 
mind". 
131.
 PNG notes the positive remarks made by the Members on the Tariff Reform Programme. The 
TRP has been an important initiative to move tariff policy in the direction of the strategy adopted in 
the government's Medium Term Development Stra tegy, with its emphasis on "interventions on WT/TPR/M/239 
Page 24  
 
  resources, products, and commodities in which Papua  New Guinea enjoys a competitive advantage in 
the global markets". 
132. The PNG Government embarked on the TRP fro m 1999-2006. Under the TRP, tariffs were 
gradually reduced through a planned schedule of redu ctions, which was legislated in advanced within 
the Customs Tariff Act. The final phase of tariff reductions was undertaken  and concluded in 2006. 
133. Tariffs have been substantially reduced under the TRP with over 80% of total tariffs lines 
with duty free status now as compared to just 2% in 1999. PNG believes that this is an unprecedented 
effort and at the end of this Re view, PNG should improve its standing in terms of tariff liberalization 
above many other countries.  PNG recognizes that in its  tariff structure, there are applied tariffs that 
are higher than the bound tariffs. Although, this is co ntradictory to WTO rules, this inconsistency will 
be considered and addressed thro ugh the domestic budgetary process. 
134. A review was undertaken by Professor Robert  Scollay of Auckland University in New 
Zealand in 2007, and provided a set of broad recommendations to guide the program. The review 
noted that the TRP had achieved its expected obj ectives. The review also noted that inadequate 
progress in addressing the structural impediment s and associated business costs has constituted a 
serious policy failure, which must be rectified if futu re tariff policy is to produce its desired results.  
As a result, tariffs were reduced substantiall y but infrastructure development has not been 
complimented and implemented very successfully. The Government has taken the initiative under the 
Public Private Partnership Programme to encourage investment in the infrastructure sector to upgrade 
and improve existing infrastructure, as well as to encourage the development of other new 
infrastructure. 
135. Tariff contributions to government revenue ha ve reduced drastically and now accounts for 
only 3% of the total revenue, whereas in 1998 tariffs accounted for about 17.3% of total revenue. The 
loss of revenues from tariffs is now offset by the revenues from GST and excise duties. Therefore, tariffs is a trade policy tool rather  than for revenue generation purposes. 
136. On the issue of regular notifications, we can only say that we hope to make improvements in 
this area, especially by strengthening the institu tional framework for trade policy formulation and 
implementation.  
137. In conclusion, I would like to take this oppor tunity, on behalf of my delegation and the 
Government, to say how grateful we are to have pa rticipated in this Review exercise. The TPR is a 
useful mechanism to promote transparency and we believe that we have adequately or sufficiently 
explained our trade policies and practices.  We w ould like to thank all the Member countries who 
have participated in our Review and to those w ho have provided constructiv e questions and comments 
on our trade policies and practices. I hope that we can respond to all your questions by the one month 
deadline but more so in the application and inco rporation of your views and comments in our trade 
implementation phases. 
DISCUSSANT 
138. I think there is a general consensus among the delegations that PNG's macroeconomic 
conditions are generally stable with fairly strong  GDP growth rate in recent years, and that the 
Government of PNG has promoted considerable tr ade liberalization, at least until 2006. PNG has 
relatively open trade and investment regime, and we witnessed a big inflow of FDIs in recent years, 
and also some good development of services industri es such as telecommunications and construction. 
I think the delegations would agree that all of  those elements are very much commendable.  WT/TPR/M/239 
 Page 25 
 
 
  139. We heard that PNG is planning to channel its  LNG revenues into three funds, stabilization, 
infrastructure and future funds. I hope that these fu nds are properly managed to reduce the impact of 
so-called "Dutch Disease". I also welcome and appreciate PNG's commitment to DDA negotiations. 
140. However, it also became clear that PNG will ne ed to tackle with a series of formidable 
challenges, particularly the need to improve business environment including the deficiencies in 
infrastructure. Some delegations refer to the n eed to enhance PNG's WTO participation such as 
making due notifications and rectifying applie d tariff rates beyond the WTO bound rates. 
141. At the same time, I would like to note that most of the delegations who spoke on Tuesday 
expressed their country's willingness to support PNG in terms particularly of Aid for Trade and other 
forms of development assistance. I would also like to refer to some of the statements from the 
delegation in SVEs group regarding similarities of  the challenges which their country and PNG are 
both confronted with and the need for due cons iderations in the DDA negotiations about their 
development needs and external assistance. I also reca ll that some of the delegations talked about the 
willingness to explore trade opportunities with PNG. 
142. All of those comments are quite sympathetic towa rds PNG, and I believe that this is very 
much a good and constructive aspect of the TPR. I hope that this TPR provided PNG with good 
opportunities to understand other Me mbers' high appreciation of PNG's trade liberalization efforts, 
frank assessment on PNG's challenges, constructive sugg estions on the future actions and willingness 
to support PNG with aid for trade.  But, at th e same time, this Review gave us a very good 
opportunity to understand the current situation in  PNG more vividly. While I do appreciate PNG's 
trade liberalization efforts and hope for further devel opment in this direction, there also issues which 
cannot be addressed by liberalization. 
143. The WTO is all about trade liberalization, fair and clear trade disciplines and rules, 
transparency in procedures and aid for trade. Ther e is firm belief in this House that all of these 
principles will enhance consumers' welfare, co mmercial opportunities, industrial competitiveness and 
attractiveness as investment destination in Member  countries, and thus contribute to the development 
objectives.  However, when I had some discussions  with Ambassador Maginde and Mr. Chey Scovell 
after the sessions on Tuesday, I came to understand that there are bottleneck s and difficulties that 
might require more to-the-point measures a nd approaches. Those are probably the unique 
development challenges that we need to take in to account in our future discussions with PNG. 
144. PNG has great potential and also a leading nati on in the group of Pacific Island countries, but 
at the same time, the country need to tackle with many difficult issues of unique nature. I wish the 
Papua New Guinean Delegation all the luck in tack ling those issues, and encourage other Members to 
continue its support for PNG. 
UNITED STATES 
145. The government of PNG did not respond to either  of our SPS questions (i.e., one on page 37 
and the other on page 55, paragraph 67).  In light of the "Rules of Procedure for Meetings of the Trade 
Policy Review Body"  when can we expect to receive PNG's re sponses to these questions that address 
basic obligations under the SPS Agreement? 
146. With regard to export assistance (our question on page 48, paragraph 42),  the government of 
PNG stated that its export assistance tax incentiv e is for research, promotion or establishment of 
export markets, and therefore does not fit the de finition of Article 3 of the SCM Agreement on 
prohibited subsidies. However, if the incentive provi des any financial assistance for export promotion, 
the program should be duly notified in accordance with  Article 25 of the Agreement.  When will PNG 
notify the program pursuant to Artic le 25 of the SCM Agreement? WT/TPR/M/239 
Page 26  
 
  EUROPEAN UNION 
147. We have also noted that in the first set of replies received on Tuesday our questions on SPS 
measures, on services and investment and on forestry were replied, but we did receive the revised version this morning and at a first glance it seems that  most of them have been replied, but we do need 
some time to go through them. 
148. On the replies that we received we woul d like to pose a few follow up questions and 
clarification, notably on the replies that we receiv ed on tariff exemptions, social aspects of sustainable 
development, fisheries and airport operation services and ground handling.  In  addition to that, going 
through the replies we came up with a few add itional questions which we would like to submit 
notably on the Environment Act, EPA, approval of  new investment projects, on applied and bound 
tariffs, free economic zones, government procurem ent, and telecommunications services.  We will 
provide them in writing and we expect a reply in due course.  Let me assure you that the number of 
questions and additional questions only demonstrate the great interest of the EU in PNG's trade 
policies and practices, and also the importance we att ach to this exercise which is very important for 
transparency.     
JAPAN 
149. We would like to express our gratitude to the statement of Ambassador Maginde for the 
responses to our comments, as well as our expectation to receive further clarification to our written 
question No. 4.  WT/TPR/M/239 
 Page 27 
 
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
150. This second Trade Policy Review of Papua New Guinea has helped us improve our 
understanding of PNG's recent achievements, partic ularly as regards its trade and trade-related 
policies, and the challenges faced.  Our discussion h as clearly benefited from the active participation 
of the PNG delegation, led by Ambassador Pete r Maginde, as well as from the contribution of our 
discussant, Mr. Atsuyuki OIKE, Minister and Deputy Permanent Representative of Japan, and 
Members' interventions.  PNG's prompt response to the questions was very much appreciated. 
151. Members complimented PNG on its prudent macr oeconomic policies and structural reforms, 
which helped it to achieve reasonably strong rat es of economic growth, notwithstanding the global 
financial crisis.  They recognized that the ec onomy has become more outward-oriented owing to 
structural reforms, including trade liberalization, a nd that PNG's foreign investment regime generally 
remains open.  Members commended PNG on majo r structural reforms, including the Tariff 
Reduction Programme, which resulted in the simple  average applied MFN tariff rate falling from 
20.5% in 1999 to 5.1% in 2006, and r ecent liberalization of telecommunications.   However, Members 
noted that in some important areas, reforms app ear to have either waned or been slow.   
152. Accordingly, Members welcomed Governme nt plans to formulate and implement a 
comprehensive trade policy with a view to reduc ing PNG's heavy reliance on mineral resources and 
diversifying its economy.  At the same time, they enquired how such a policy might address the major economic challenge posed by the so-called "Dutch disease", which could have far-reaching 
implications for such a trade policy.  More specifical ly, the kina's appreciation, owing to large inward 
foreign direct investment (FDI) in LNG and other projects associated with the expected mining boom, 
would tend to reduce the competitiveness of import- competing activities and traditional exports, thus 
possibly jeopardizing efforts to diversify the economy.   
153. Members also raised concerns or sought clarif ication in a number of areas, notably: the lack 
of notifications, which undermines the transparency of trade policy; remaining tariff barriers as 
regards food processing, for example, despite the Tariff Reduction Programme, and that some applied 
MFN tariffs exceeded bound rates; the sanitary and phytosanitary (SPS) regime; measures to 
encourage FDI; improved protection of intellectua l property rights (IPRs); and policies aimed at 
improving essential infrastructure, especially electric ity, telecommunications, and transport, much of 
which is operated by state-owned, including monopoly, enterprises.  
154. Clearly, PNG faces a number of challenges in formulating and implementing the trade and 
trade-related policies necessary to achieve its deve lopmental goals.  Members can help PNG to meet 
these challenges by providing technical assistance to he lp PNG formulate and implement key reforms.  
In this regard, PNG requested assistance in a numbe r of areas, such as institutional capacity building, 
trade facilitation, small and medium-sized enterprises,  technical barriers to trade, IPRs, fishing, and 
tourism.  Members can also help by opening thei r markets further to exports from PNG (as well as 
from other small vulnerable economies) by successfully concluding the DDA negotiations. 
155. This concludes our second Review of Papua New Guinea.  Once again, I thank the PNG 
delegation for its participation, the discussant for his insightful comments, and Members for 
contributing to what has been a very enlightening two days of discussions. 
 
__________