Customs procedures

ABOUT 10 years ago the Government started reforming customs’ procedures to harmonise them with the rest of the world.
It was also to promote trade and investment as part of the Government’s international commitments.
Part of this reform process involved the elimination of export duties and import tariffs.
In the 2018 National Budget, the Government reversed this policy and imposed tariffs on some imports, including dairy products.
It appears that the Government may have been forced into protecting local producers of import-competing products and to reduce foreign exchange outflows.
The cost-and-benefit analysis and the objective of this policy reversal remains unknown to the public.
The following policy issues should been considered by the Government before introducing the import tariffs:

• Are there any other ways the Government can support domestic industries?
• Is the domestic market big enough to support local production and reduce unit production cost?
• What impact will the tariffs have on the purchase price paid by the consumer?
• Will the tariffs reduce the overall cost of doing business, which is already high in Papua New Guinea?
• What impact will the tariffs have on the economic growth of Papua New Guinea in 2018 and over the medium term?

The Government should remove the import tariffs in the 2019 National Budget as the policy objective of introducing the tariffs remains unclear.

Concerned Consumer