There is an increasing number of Fijian businesses which are looking at Papua New Guinea as a major market for the future in terms of exports.

Many are already exporting and others are in the process of establishing capacities to increase trade with PNG.

And therefore, the threats of an “all-out trade war” from PNG have become anxiety-causing to some businesses here who have growing trade relations with PNG.

FMF Foods is one company which has over the years continuously increased exports into PNG.

Managing director, Ram Bajekal, said the expectation on PNG stems from the sheer size of its population and its economic potential.

“In contrast, though the Fijian economy is buoyant there is limited upside owing to its limited population and market size,” he said.

“Recent initiatives to bolster trade between Fiji and PNG include a direct shipping service between the two countries, something that was badly needed.

In the wake of all this progress therefore, the initial statements from PNG are certainly anxiety-causing to say the least.

“The invitation that followed from Fiji to dialogue was comforting to Fijian trade; but there is silence all round now.”

Mr Bajekal further emphasised they are not aware of whether the two governments are engaged in dialogue or whether there is an impasse.

“Irrespective of whether the initial statement from PNG was an emotional response or a real threat, we feel that ultimately it would be necessary for both countries to sit together, understand each other’s positions and resolve the issue definitively,” he said.

Regional trade reality

Mr Bajekal stressed the Pacific market is very small as it is and there is no room for trade wars within.

“Investments and capacities built will be at risk,” he highlighted.

“Regional trade between the two nations is clearly an opportunity that can and must be tapped into.

“While there might be a trade imbalance at the moment, there is no saying what the future might look like, especially given PNG’s natural resources and its potential in the agriculture and dairy sector.

“PNG has reason to look not only at trade in goods but also in services and investments.

“There is nothing stopping PNG companies from investing in manufacturing or trading sectors in Fiji and making use of Fiji’s growing status as a hub in the Pacific.

“As it is, they have started rolling out investments in the tourism sector with great success such as with The Pearl and the Grand Pacific Hotel and also in Financial services with BSP, Credit Corp and the like.

“Trade wars will only hurt both sides and ruin opportunities. The entire Pacific (and not just Fiji-PNG) needs to work together as a bloc.

“That is if it is to muster enough power to secure fair deals from the more developed economies, example Australia and New Zealand.

“We all have lots to lose from not resolving our differences.”

Feedback:  rachnal@fijisun.com.fj