Govt. urged to address market tariffs
The Chinese, Japanese and South Korean market tariffs are making export from Samoa almost impossible.
And the Samoa Association of Manufacturers and Exporters (SAME) have had no response from the Government on their plea for help.
Tariffs are taxes paid on either imports or exports. For Samoa, the exports to China are 20 per cent of the export value.
Japan’s tariff is 19 per cent, and South Korea’s is 50 per cent.
The leadership of SAME said they have not had any response from Government since writing to the Ministry of Foreign Affairs and Trade in August and October of 2017 asking for free trade agreements between China and Japan.
Last Friday, they wrote to MFAT again, following up and asking for South Korea to be included.
"The impact of these high tariff on exports from Samoa to China, Japan and South Korea is significant, and resulting in Samoa being marginalized on its export potential due to competition,” SAME President Tagaloa Eddie Wilson said in the letter.
“Samoa’s 2nd largest export commodity noni juice (based on Central bank of Samoa data CBS 31/12/2018) would triple in export value, if these tariff barriers are removed from these 3 countries alone,” he continued.
Nonu juice customers in South Korea have even asked the exporters from Samoa to ask their government for assistance to negotiate agreements between South Korea and Samoa.
Tagaloa said Samoa is fast approaching the $100 million target set by government in the Samoa Export Plan 2016-2020, but high tariffs are getting in the way.
“The Export plan focuses on increasing exports for Samoa of domestic export commodities from an average of $36m p.a.(last 5 years) to $100m by 2020. To date Samoa is approaching 65% of the target- however, these high tariffs imposed since Samoa’s graduation as a LDC country were imposed are impeding our exports.”
Chief executive officer for MFAT, Peseta Noumea Simi, said the ministry is working on agreements, and will be in contact with Tagaloa in due course. She declined to comment further on the process the ministry is undergoing.
Tagaloa said while the process to get trade agreements must be difficult, he wants the ministry to keep SAME informed along the way. He said he has raised the topic several times with MFAT staff in meetings and forums but has not had any serious response, which led him to write a follow up letter on Friday.
“We haven’t been updated other than an initial reaction acknowledging what we had written, they said they were looking into it, and that’s it,” he said.
“It would be nice, we’re the ones doing the trading, we’re the ones doing the exporting. We are partners; hopefully they don’t look at us like a menace.”
Increasing export and building trade deals are sustainable ways to develop the economy, Tagaloa believes. He wants to see Samoa increase its export market, rather than “asking for handouts” from the same countries slamming Samoa with high tariffs.
“Our competition has already taken the initiative, they have free trade agreements with those countries we’re pushing for, it’s a no brainer,” Tagaloa said. What’s more, Samoa imports much more from China, Japan and South Korea than those countries do from Samoa.
“What we need to do is take a commodity item Japan exports here, and say to them you can bring in your rice, for example, duty free, in exchange for duty free on our exports.”
“It’s not an uncommon thing, that’s the only way to increase export earnings,” said Tagaloa.
Exporter Garry Vui of Nonu Samoa said he and the other nonu exporters fully support Tagaloa’s efforts. With tariffs into South Korea as they are, Mr Vui has missed out on business with importers.
One company he negotiated with decided to work with an American exporter who charged more for nonu juice per litre, but the South Korean company still saved 28 cents per litre because there is no tariff on products from the US into South Korea, Mr Vui said.
“I understand that. At the end of the way, if they could make 28 cents more a litre on their juice and still sell it at the same price, well they want to keep their margins,” he said.
Tagaloa said considering China and Japan in particular are close development and aid partners to Samoa, he sees no reason for barriers to free trade agreements.
He said he expects they will be agreeable to signing agreements which further enable Samoa to stand on its own two feet.
“They are friends of Samoa. I struggle to find why it would be so difficult for government to at least open the discussion. To date, I am not aware if any discussion is ongoing at all.
“We’re busy going on overseas trips asking for aid assistance from these countries instead of asking for trade assistance which long term has more benefits than asking for handouts,” he said.