Workshop on SPARTECA Rules of Origin
DSG-EGS Opening Remarks, Workshop on SPARTECA Rules of Origin
28 Aug 2006 00:57:54
REGIONAL WORKSHOP ON SPARTECA RULES OF ORIGIN AND RULES OF ORIGIN CAPACITY BUILDING
SHANNGRI-LA FIJIAN RESORT, SIGATOKA, FIJI
28 AUGUST 2006
OPENING STATEMENT BY MR PETER FORAU
DEPUTY SECRETARY GENERAL, PACIFIC ISLANDS FORUM SECRETARIAT
Participants and Delegates
Observers
Resource Persons
Ladies and Gentlemen
On behalf of the Secretary General, it is my pleasure to extend a very warm welcome to you all and to thank you for sparing time to attend this important workshop. This training program was sanctioned by the Forum Trade Ministers when they met in Nadi in June this year as an opportunity to allow Forum Island Countries to better understand SPARTECA Rules of Origin and for trade representatives to expand their knowledge of Rules of Origin in general. So this workshop is about understanding more about the specific SPARTECA ROO and enhancing knowledge on Rules of Origin that can apply to any trade agreement based on conventional approved methods.
I know a number of you are familiar with these issues and would find that probably the sessions might perhaps just be recitals of what is already known to you. That may be so but as I look through the contents of the program, it appears that there are useful topics that will be discussed which are not usually taught in formal trade courses. In addition rules of origin although based on common principles are usually negotiated and therefore, a lot of value addition will in my view be acquired to what many of you know which in a collective way will contribute to expanding the knowledge-base on rules of origin in our region. I should remind that these are complex issues and training programs such as this can only enhance technical know-how. It is in recognition of the need for greater knowledge of rules of origin that our Trade Ministers called for assistance for this workshop to be organized.
So that we are clear about what the outcomes of this workshop are, may I take a moment to say that although you will be discussing specific SPARTECA Rules of Origin, the discussion will not be a review of the rules as required by Ministers. That requirement will be addressed separately but will inevitably, I'm sure, draw on a number of lessons that transpire particularly from the sharing of country experiences. I hope we are clear about this so that when the review actually happens, you can still be able to contribute.
This leads me to share a little bit about the objectives of the workshop. There are three broad objectives. The first is that there will be better understanding of the importance of ROO in FTAs. Secondly, that we have a better understanding of the substantial and administrative provisions of the SPARTECA ROO. And, finally that we will be able to recognize the different options for new, improved ROO and can use the different methods of the CTC criterion. I'll leave it to the Secretariat Staff and resource persons to elaborate on these but perhaps I can leave behind a message that all this will help FICs to put into perspective the requirements of the SPARTECA ROO and more importantly contribute to the negotiation of better ROO in terms of possible FTAs with the EU and other parties. So there is a bigger interest for the whole region that can be addressed by the enhancement of knowledge that will result from this workshop which adds to the enhancement of your own individual expertise. That in my view is a worthwhile investment, worth our time and effort.
That bigger interest I alluded earlier is connected to the implementation of the Pacific Plan which our Leaders have urged must be seen through in the next three years. In the key pillar of Economic Growth in the Pacific Plan, there are four significant areas of interest in the region. These are the implementation of the Pacific Islands Countries Trade Agreement (PICTA), the development of the Pacific Agreement on Closer Economic Relations (PACER), expansion of market for trade in goods under the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), and the successful negotiation of an Economic Partnership Agreement between Pacific ACP (PACP) and the European Union (EU).
These key activities are crucial to the economic growth of any country which is why Forum Leaders recognised that, in addition to other measures, the growing of the economies of the Forum Islands Countries (FICs) can be facilitated and enhanced by these initiatives. However since these are trade-related, all will require review or negotiation of the necessary ROO at some stage. Obviously if the region has the capacity in terms of expertise in ROO then the task of carrying out either activity will be fulfilled with satisfaction. Therefore the capacity-building aspect of this workshop will obviously serve that purpose.
Recently, there have been heightened interest in SPARTECA. This is understandable in view of the concerns by a number of FICs to increase market access. The agreement is of course a non-reciprocal preferential trade agreement between Australia, New Zealand on the one hand, and the members of the Forum Island Countries, on the other. It had been in effect since 1981. The intentions of the agreement are noble and in the main sought to improve and increase the trade of FICs exports to Australia and New Zealand.
Over the years FICs have utilised the preferential concessions on their exports under the agreement. Unfortunately, as tariff levels declined over the past years, the tariff concessions in some cases, provided real challenges to FICs who were required to make significant adjustments to how their exports are produced so as to meet the rules of origin criteria and hence access the preferential tariff treatment. This has led to the emergence of concerns about the applicability of the changes to the concessions and a call by FICs for revisions to be applied to the new changes.
In consideration of this and as directed by the Forum Trade Ministers, the Pacific Islands Forum Secretariat facilitated informal discussions in 2005 between Members to review the SPARTECA rules of origin (with a view to improving market access for Forum Island Country (FIC) products into Australia and New Zealand. The informal consultations noted a few issues such as:
" Some FICs were already addressing their specific concerns on the SPARTECA ROO at the bilateral level and this could also be done by other FICs;
" It was necessary for FICs to identify specific products or classes of products that had difficulty in qualifying under the SPARTECA ROO requirements so that Australia and New Zealand could actively address them;
" To address some immediate concerns of the current ROO issues, FICs could utilise the derogation options enshrined in SPARTECA;
" The revision of SPARTECA ROO was only an interim issue and wider market access issues would have to be discussed in the context of the successor to PACER at a later stage; and
" Given the move to different methods of ROO, the focus on ROO negotiations may have to focus in changing the value-added approach to a Change in Tariff Heading (CTH) approach.
These matters were noted by the 2006 Forum Trade Ministers who then agreed that a review of the Rules of Origin under the SPARTECA must be undertaken as soon as possible. In particular:
§ A review of the ROO must be applied across all products;
§ Specific products and classes of products were identified as having difficulty in qualifying under the SPARTECA ROO requirements , which would need to be addressed after the 2006 FTOM/FTMM; and
§ That support be given to move to a different method of calculating ROO, in changing from a value-added approach to a Change-in-Tariff-Heading (CTH) approach.
As I said earlier, a review will be commissioned which will address these particular concerns. For the long-term, however, our Ministers have also asked that work be commenced to assess a possible comprehensive trade treaty that will bind all Forum members as a successor to SPARTECA. Arrangements to take that work forward are already in train. We will once again be calling on our members to support the completion of this important work.
Finally, let me conclude by thanking AusAid and NZAid for funding this training program, the resource persons for availing their expertise, for your participation. As I've said we have a lot to gain from the discussions and I must urge all of you to use this opportunity to your advantage, knowing that the new knowledge you gain will be useful to our region as a whole. Thank you very much for your attention and all the best for a successful workshop.
28 Aug 2006 00:57:54
REGIONAL WORKSHOP ON SPARTECA RULES OF ORIGIN AND RULES OF ORIGIN CAPACITY BUILDING
SHANNGRI-LA FIJIAN RESORT, SIGATOKA, FIJI
28 AUGUST 2006
OPENING STATEMENT BY MR PETER FORAU
DEPUTY SECRETARY GENERAL, PACIFIC ISLANDS FORUM SECRETARIAT
Participants and Delegates
Observers
Resource Persons
Ladies and Gentlemen
On behalf of the Secretary General, it is my pleasure to extend a very warm welcome to you all and to thank you for sparing time to attend this important workshop. This training program was sanctioned by the Forum Trade Ministers when they met in Nadi in June this year as an opportunity to allow Forum Island Countries to better understand SPARTECA Rules of Origin and for trade representatives to expand their knowledge of Rules of Origin in general. So this workshop is about understanding more about the specific SPARTECA ROO and enhancing knowledge on Rules of Origin that can apply to any trade agreement based on conventional approved methods.
I know a number of you are familiar with these issues and would find that probably the sessions might perhaps just be recitals of what is already known to you. That may be so but as I look through the contents of the program, it appears that there are useful topics that will be discussed which are not usually taught in formal trade courses. In addition rules of origin although based on common principles are usually negotiated and therefore, a lot of value addition will in my view be acquired to what many of you know which in a collective way will contribute to expanding the knowledge-base on rules of origin in our region. I should remind that these are complex issues and training programs such as this can only enhance technical know-how. It is in recognition of the need for greater knowledge of rules of origin that our Trade Ministers called for assistance for this workshop to be organized.
So that we are clear about what the outcomes of this workshop are, may I take a moment to say that although you will be discussing specific SPARTECA Rules of Origin, the discussion will not be a review of the rules as required by Ministers. That requirement will be addressed separately but will inevitably, I'm sure, draw on a number of lessons that transpire particularly from the sharing of country experiences. I hope we are clear about this so that when the review actually happens, you can still be able to contribute.
This leads me to share a little bit about the objectives of the workshop. There are three broad objectives. The first is that there will be better understanding of the importance of ROO in FTAs. Secondly, that we have a better understanding of the substantial and administrative provisions of the SPARTECA ROO. And, finally that we will be able to recognize the different options for new, improved ROO and can use the different methods of the CTC criterion. I'll leave it to the Secretariat Staff and resource persons to elaborate on these but perhaps I can leave behind a message that all this will help FICs to put into perspective the requirements of the SPARTECA ROO and more importantly contribute to the negotiation of better ROO in terms of possible FTAs with the EU and other parties. So there is a bigger interest for the whole region that can be addressed by the enhancement of knowledge that will result from this workshop which adds to the enhancement of your own individual expertise. That in my view is a worthwhile investment, worth our time and effort.
That bigger interest I alluded earlier is connected to the implementation of the Pacific Plan which our Leaders have urged must be seen through in the next three years. In the key pillar of Economic Growth in the Pacific Plan, there are four significant areas of interest in the region. These are the implementation of the Pacific Islands Countries Trade Agreement (PICTA), the development of the Pacific Agreement on Closer Economic Relations (PACER), expansion of market for trade in goods under the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), and the successful negotiation of an Economic Partnership Agreement between Pacific ACP (PACP) and the European Union (EU).
These key activities are crucial to the economic growth of any country which is why Forum Leaders recognised that, in addition to other measures, the growing of the economies of the Forum Islands Countries (FICs) can be facilitated and enhanced by these initiatives. However since these are trade-related, all will require review or negotiation of the necessary ROO at some stage. Obviously if the region has the capacity in terms of expertise in ROO then the task of carrying out either activity will be fulfilled with satisfaction. Therefore the capacity-building aspect of this workshop will obviously serve that purpose.
Recently, there have been heightened interest in SPARTECA. This is understandable in view of the concerns by a number of FICs to increase market access. The agreement is of course a non-reciprocal preferential trade agreement between Australia, New Zealand on the one hand, and the members of the Forum Island Countries, on the other. It had been in effect since 1981. The intentions of the agreement are noble and in the main sought to improve and increase the trade of FICs exports to Australia and New Zealand.
Over the years FICs have utilised the preferential concessions on their exports under the agreement. Unfortunately, as tariff levels declined over the past years, the tariff concessions in some cases, provided real challenges to FICs who were required to make significant adjustments to how their exports are produced so as to meet the rules of origin criteria and hence access the preferential tariff treatment. This has led to the emergence of concerns about the applicability of the changes to the concessions and a call by FICs for revisions to be applied to the new changes.
In consideration of this and as directed by the Forum Trade Ministers, the Pacific Islands Forum Secretariat facilitated informal discussions in 2005 between Members to review the SPARTECA rules of origin (with a view to improving market access for Forum Island Country (FIC) products into Australia and New Zealand. The informal consultations noted a few issues such as:
" Some FICs were already addressing their specific concerns on the SPARTECA ROO at the bilateral level and this could also be done by other FICs;
" It was necessary for FICs to identify specific products or classes of products that had difficulty in qualifying under the SPARTECA ROO requirements so that Australia and New Zealand could actively address them;
" To address some immediate concerns of the current ROO issues, FICs could utilise the derogation options enshrined in SPARTECA;
" The revision of SPARTECA ROO was only an interim issue and wider market access issues would have to be discussed in the context of the successor to PACER at a later stage; and
" Given the move to different methods of ROO, the focus on ROO negotiations may have to focus in changing the value-added approach to a Change in Tariff Heading (CTH) approach.
These matters were noted by the 2006 Forum Trade Ministers who then agreed that a review of the Rules of Origin under the SPARTECA must be undertaken as soon as possible. In particular:
§ A review of the ROO must be applied across all products;
§ Specific products and classes of products were identified as having difficulty in qualifying under the SPARTECA ROO requirements , which would need to be addressed after the 2006 FTOM/FTMM; and
§ That support be given to move to a different method of calculating ROO, in changing from a value-added approach to a Change-in-Tariff-Heading (CTH) approach.
As I said earlier, a review will be commissioned which will address these particular concerns. For the long-term, however, our Ministers have also asked that work be commenced to assess a possible comprehensive trade treaty that will bind all Forum members as a successor to SPARTECA. Arrangements to take that work forward are already in train. We will once again be calling on our members to support the completion of this important work.
Finally, let me conclude by thanking AusAid and NZAid for funding this training program, the resource persons for availing their expertise, for your participation. As I've said we have a lot to gain from the discussions and I must urge all of you to use this opportunity to your advantage, knowing that the new knowledge you gain will be useful to our region as a whole. Thank you very much for your attention and all the best for a successful workshop.
