Moustapha Magumu, Principal Coordinator for the Pacific Region, European Commission: Interview

Interview: Moustapha Magumu

How do you foresee the Papua New Guinea’s relationship with the EU evolving in the coming years?

MOUSTAPHA MAGUMU: Trade relations between the EU and the African, Caribbean and Pacific (ACP) Group of States are based on the Cotonou Agreement, which will expire in 2020. It is set to be replaced by a more comprehensive agreement that is currently under negotiation. Trade cooperation will certainly remain one of the core areas of our relationship with the Pacific. PNG accounts for over 80% of the EU’s trade with the region and the EU sees its trade ties with PNG as a tool for local growth, job creation and poverty reduction. We have a flourishing partnership that is delivering tangible results in PNG and we should both be proud of our achievements.

PNG is one of the real success stories within our Economic Partnership Agreements (EPAs) with ACP countries. The existing Pacific EPA – currently in implementation by PNG, Fiji and Samoa and soon to be joined by the Solomon Islands and Tonga – offers a true partnership in which we can work together to promote export diversification, increase competitiveness and enhance value chains. The EU is committed to strengthening cooperation, trade and investment with PNG in the context of the EPA. Our drive now is to go beyond trade liberalisation to help foster competitiveness and trade-related capacities in PNG.

Where do EU companies experience the most difficulties when doing business in PNG?

MAGUMU: I believe the main challenges relate to the general business climate. European companies and investors look at factors such as transparency, predictability and the stability of domestic and trade policies. Companies from the EU are looking for the government to address challenges related to Customs procedures and regulatory burdens on the private sector, particularly small and medium-sized enterprises. It is clear that our EPA provides some investor comfort, since it is a long-term partnership that ensures not only market access but also a comprehensive dialogue to address different challenges. The agreement serves as a reliable signal of opportunities for and serious engagement with the EU.

The EPA also provides benefits for PNG companies looking to do business with the EU. It offers asymmetric market access, including duty-free and quota-free access for all of PNG’s exports; flexible rules of origin (global sourcing for fisheries products); the chance to shield sensitive sectors from the effects of liberalisation; a large number of safeguards for infant industry protection; and access to international value chains. It also helps PNG trade, cooperate and integrate with its neighbours. Our partnership seeks to help bridge the gap between small producers and the European consumer.

Which sectors of PNG’s economy have benefitted most from the EPA with the EU?

MAGUMU: PNG’s fisheries sector has been arguably one of the most noteworthy successes of the EPA: five major fisheries firms have been established and thousands of jobs created, most of which benefit women. PNG can export all of its products to the EU’s market of over 500m customers with high purchasing power, free of tariffs and quotas. Access to such a market certainly helps PNG attract foreign investment and diversify its exports. The EU supports these trends and is ready to replicate them in other priority value chains such as cocoa, coffee, coconut and vanilla. Overall, the EU is committed to strengthening cooperation assistance for the EPA to help PNG produce and export higher-value processed goods to the region, the EU and beyond. There will also be opportunities in the traditional dominant sectors of PNG’s economy, like hydrocarbons. The French Total gas and oil project is expected to create thousands of jobs and boost local businesses and the economy.