Assistant United States trade representative Edward Gresser speaks to business reporter PETER ESILA about the US Generalised System of Preferences programme.
AMERICANS buy about US$110 million (K362mil) worth of PNG products a year, says Edward Gresser, the assistant United States trade representative from the Office of the United States Trade Office.
“Most of this falls into four major categories – coffee, cacao beans, a few varieties of petroleum products and vanilla.
“Of the export total, Generalised System of Preferences (GSP) exports account for about US$400,000 (K1343,913) per year,” he said.
Trade with the United States is based on the GSP programme which dominated discussions between Deputy US Trade representative Jeffrey Gerrish and Minister for Foreign Affairs Rimbink Pato during the Apec Ministers Responsible for Trade meeting in May.
Gresser and director of GSP Lauren Gamache met with Government and private sector representatives about the programme and how to increase duty-free exports to the US.
“One of the things that the PNG Government expressed interest in several months ago was learning more about the GSP system, so our deputy Jeffrey Gerrish made a commitment to get in the GSP group,” Gresser said.
“What we hope is that the private sector and the Government will have more information about the GSP system and ways PNG can make more use of it.
“There might be businesses thinking about products that might be eligible and the high visibility PNG will have as the Apec host and that will actually bring a lot of businesses here to think about PNG products and that may open up new opportunities.
“There are three products that are really leading PNG in the exports, the first one is coffee.
“You can see PNG coffee in a lot of the American coffee shops, there is also vanilla and cocoa beans. We also see gas.
GSP offers some opportunities to broaden that out – some manufactured goods, maybe some more processed foods.
“I think that PNG is a large traditional export portfolio of resource products than agriculture, and I think developmentally, it is good to add manufacturing and processed foods so it is very useful when you think about the future,” Gresser said.
GSP was created in 1974 to to help countries like Papua New Guinea compete with larger and more diversified exporting countries.
“With this goal, GSP waives tariffs on about 3500 products for eligible low and middle-income countries.
“In return, the programme directs beneficiaries to meet a set of eligibility criteria, including fighting child labour and forced labour, providing adequate and effective protection of intellectual property rights and assuring reasonable access to markets for goods and services.
“In all, GSP covered about US$21.2 billion worth of goods from 120 beneficiary countries and territories in 2017.”
Gresser said the principal PNG product covered by GSP was known as “‘oil cake” – a by-product of coconut processing used for scientific and medical purposes.
“At times, PNG has also exported musical instruments, wooden statuary and a few other products under GSP, but oil cake is the most consistent export,” he said.
“There are a number of fisheries products, such as cultured pearls and processed lobster meat, eligible. Other opportunities include travel goods such as leather bags and luggage (including bilum), wood products (including carvings) and some processed foods.”
Gresser said PNG was enrolled in the programme and was therefore eligible for the benefits.
“To remain eligible in the coming years, primarily the PNG Government must meet the programme eligibility criteria and work with the US government to address any concerns,” he said.
“For individual PNG businesses, it is valuable to keep track of the products being sold and check to be sure whether the products are eligible for GSP.
“Papua New Guinea businesses can use GSP eligibility as a selling point for US buyers, who may or may not be aware of trade preference opportunities.
“When exporting under GSP, it is important to preserve paperwork, including related to sources of raw materials and payment to workers so that the customers can
show that the product is eligible for GSP.
“A country must have income under US$12,055 (K40,502) per capita – Papua New Guinea now has US$2,530 (K8500) per capita – must have expropriation/arbitral awards, taking steps to protect internationally recognised workers’ rights, including stopping child labour.
“The success of PNG exports indicates that PNG has developed a reputation for high-quality tropical agricultural goods.
“From this base of success, PNG has many opportunities to grow and expand a variety of exports to the United States.”