China and Samoa in free trade talks

Samoa and China have held serious talks about the creation of a free trade agreement between the nations which would open immense economic access for Samoan exporters to the world's largest economy by purchasing power.

Speaking at the 3rd China - Pacific Island Countries Economic Development and Cooperation Forum on Monday, Prime Minister Tuilaepa Dr. Sailele Malielegaoi said he asked for a feasibility study to be conducted as a precursor to a potential Free Trade Agreement (F.T.A.).

China's visiting Vice Premier, Hu Chunhua, said his nation is interested in exploring free trade agreements with Pacific Island countries.

In his remarks, Vice Premier Hu Chunhua said: “China would work with the Pacific Island countries to expand trade and investment ties and explore F.T.A.s, expand cooperation in agriculture, forestry, fisheries, energy and resources, marine and tourism to foster more bright spots for growth.”

The two men held closed door discussions on the issue on Saturday.

Tuilaepa said market access should be prioritised because the flow of trade between China and Pacific Nations is unequal.

In August James Marape, Papua New Guinea's Prime Minister asked for an agreement, while early this year the Chinese government examined the possibility of granting Fiji access t its markets. 

“Bilateral trade between China and the Pacific Islands last year reached US$8.6 billion, an increase of five per cent from the previous year,” Tuilaepa said.

“While we welcome the gradual increase in bilateral trade, we should also note that exports from China to the Pacific Islands doubled.

“It is important, therefore, for both sides to address and implement the goals in the economic development plan of action… to boost cooperation in investment, infrastructure, tourism, transportation and agriculture.”

Tuilaepa said an F.T.A with China would facilitate trade arrangements and help exporters battle the rising costs of doing business.

The high cost of tariffs in China at to Pacific exporters to China since the country lost its less developed country classification has led to complaint by organisations such as the Samoan Association of Manufacturers that market access can be prohibitive.

He also said Samoa, like the rest of the Pacific, struggles with remoteness and mixed air and sea freight, an added challenge to exporting its goods.

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And with 200 private sector delegates in Samoa this weekend to survey what the country has on offer, more business partnerships and investments which might take advantage of an F.T.A could be on the horizon.

“Needless to say, the future of the Pacific, in terms of our economic and social development resulting from increased trade and tourism industries lies in Asia, especially in China where the most populous consumers of our produce live,” said Tuilaepa.

“That is the reality of today’s world.”

Pacific analyst Dr. Tess Newton Cain said she was not surprised to learn F.T.A.s are under discussion in the region, especially in Samoa where relationships with China are strong.

But the challenge will be in how long it takes to negotiate and deliver one, she said. 

“This is something that could take some time between floating the idea and seeing it locked down and something people are prepared to sign.”

Dr. Newtown Cain said she imagines bilateral F.T.A.’s between China and other Pacific Islands like Samoa would focus on resources, and especially fisheries. 

“What is significant is the fact that this is even on the table. 

“It’s a way of demonstrating what the nature of this relationship is and what it should be in the future,” she said.

“To my mind it indicates that what China and the Pacific Islands are saying is that yes, there has been a lot of aid and assistance and investment but we see that there is more to this relationship going forward  and we see it being one based around trade, not necessarily around aid.”

In 2017, Samoa hosted a China-Pacific Economic Cooperation Forum on the sidelines of the 48th Pacific Island Forum Leaders Meeting.

Minister of Commerce, Industry and Labour Lautafi Fio Purcell said back then that losing zero tariff access to China after Samoa graduated from Least Developed Country status has added pressure to agriculture export companies to keep up.

He pointed to Fiji pursuing an F.T.A for products like Fiji Water as one that should be something to consider for Samoa.

“What avenues are there to assist exporters in terms of financing, partnership with Chinese companies, marketing and exporting?” he asked.

“Have Pacific island governments put in place the necessary frameworks required to assist exporters?”

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