Papua New Guinea

Location : Oceania, group of islands including the eastern half of the island of New Guinea between the Coral Sea and the South Pacific Ocean, east of Indonesia

Capital : Port Moresby

Languages : Melanesian Pidgin serves as the lingua franca, English spoken by 1%-2%, Motu spoken in Papua region 

Area : 462,840 sq km

Land Use: arable land: 0.46%; permanent crops: 1.44%; other: 98.1% (2001)

Natural Resources : gold, copper, silver, natural gas, timber, oil, fisheries

Population : 5,545,268 (July 2005 est.)

Population below poverty line: 37% (2002 est.)

Labour force : 3.32 million (2004 est.) 

Labour force participation rate : 59.87% of population (2004 est.)

International Organisation participation : ACP, APEC, ARF, ADB, C, CP, FAO, G-77, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, Interpol, IOC, IOM (observer), ISO (correspondent), ITU, MIGA, NAM, OPCW, PIF, SPARTECA, UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO

GDP per capita : U$2,200 (2004 est.)

GDP Real Growth Rate : 0.9% (2004 est.)

GDP sectoral composition : agriculture: 34.5%; industry: 34.7%; services: 30.8% (2004 est.)

Investment (gross fixed): 13.6% of GDP (2004 est.)

Industries: copra crushing, palm oil processing, plywood production, wood chip production; mining of gold, silver, and copper; crude oil production; construction, tourism 

Agriculture - products : coffee, cocoa, coconuts, palm kernels, tea, rubber, sweet potatoes, fruit, vegetables, poultry, pork

Exports : U$2.437 billion f.o.b. (2004 est.)

Exports - commodities : oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns

Exports - partners : Australia 28%, Japan 5.8%, Germany 4.7%, China 4.6% (2004)

Imports : U $1.353 billion f.o.b. (2004 est.)

Imports - commodities : machinery and transport equipment, manufactured goods, food, fuels, chemicals

Imports - partners : Australia 46.4%, Singapore 21.6%, Japan 4.3%, New Zealand 4.2% (2004)

QUALITATIVE TRADE PROFILE  

PNG has vast natural resources at its disposal. This has meant that the PNG economy has been overwhelmingly based around primary production. Mining makes the single greatest contribution to the PNG economy, accounting for 72% of export earnings and 24% of the GNP while agriculture supports 85% of the population.

PNG bound its entire tariff schedule during the Uruguay Round. Agricultural products were bound at a general rate of 45%, and other products at 40%. However, a small group of items were bound at lower rates, mainly 11%, 20% and 30%, while very much higher bound rates, mainly 55%, 75% and 100%, were applied to a larger group of agricultural products including nuts, certain vegetable oils, and sugar. These bound rates are to be implemented over variable time periods.

Currently, PNG's applied tariffs range from zero to 55%, subject to a few exceptions such as sugar and canned mackerel. However, in 2006 the maximum applied tariff on all lines will fall to 40%.

INSTITUTIONAL FRAMEWORK 

The lead department in trade policy is the Department of Foreign Affairs and Trade. It handles international trade policy formulation and involvement in trade treaties and other trade-related agreements. There are a number of important sector-specific statutory authorities that also have a major bearing on trade-related policies. These include the PNG Forest Authority, the PNG Fisheries Authority and the PNG Tourism Promotion Authority. In addition, responsibilities for trade in services involve the Departments of Transport, Works and Civil Aviation, Communications, and Health and Education.

PNG's trade policies have been conducted on a largely ad hoc basis. No clear trade policy goals were set, and poor coordination of trade policies existed between responsible departments, especially between Foreign Affairs and Trade and Industry prior to trade and foreign affairs functions being amalgamated within the Department of Foreign Affairs and Trade. Trade policy formulation was therefore fragmented and often lacked coherence. Major efforts are currently being directed at improving trade policy formulation and coordination.

Other ministries responsible for international trade matters and other economic policies are the Prime Minister's Department; Commerce and Industry; Treasury and Planning; Agriculture and Livestock; Mineral Resources, Petroleum and Energy; Land and Physical Planning; Provincial Affairs; and Employment and Youth. A number of offices falling within various departments are also relevant, such as Public Enterprises, Rural Development, and Environment and Conservation. The National Planning Office is in charge of development planning and aid coordination.

The private sector has established a close working relationship with the Government, mainly through the PNG Manufacturers' Council, which consults regularly with government departments and statutory bodies. The private sector is therefore actively represented in the decision-making process. Many government delegations to various conferences and negotiations involve private sector representation. Other private associations include the Business Council of PNG, the Chamber of Commerce, and the Chamber of Mines and Petroleum.

TRADE AGREEMENTS

Bilateral

PNG has signed a bilateral accord with Fiji. It also has an agreement with Australia; the Australia PNG Trade and Commercial Relations Agreement (PATCRA). It is also beneficiary of various GSP schemes.

Regional

PNG is a member of the Pacific Islands Forum. It has also signed the Pacific Islands Countries Trade Agreement (PICTA), under which member countries agree to liberalize trade in goods. It also has duty-free access to the Australian and New Zealand markets under the South Pacific Agreement on Regional Trade and Economic Co-operation (SPARTECA). It is a member of the Melanesian Spearhead Group (MSG) under which it seeks to eliminate tariffs between itself, Fiji, New Caledonia, Solomon Islands and Vanuatu. It is also a member of the Forum for Asia Pacific Economic Cooperation (APEC) and the Association of South-East Asian Nations (ASEAN). It is currently negotiating an Economic Partnership Agreement with the EU through the Pacific configuration.

Multilateral

PNG is a member of the WTO and extends at least MFN treatment to all its trading partners.

Source: Commonwealth Yearbook 2005, UNCTAD, World Fact Book, WTO Secretariat.