Specials Environment

A Programme for Sustainable Development in the South Pacific

Posted June 1996

Policies for Sustaining Food and Agriculture in the South Pacific - Part 1

Technical Consultation of South Pacific Small Island Developing States
on Sustainable Development in Agriculture, Forestry And Fisheries
Apia, Samoa, 6-9 May 1996

Food and Agriculture Organization of the United Nations
and South Pacific Regional Environment Programme


Prepared by FAO with the assistance of Mr. Allan N. Rae, Massey University, New Zealand


Table of contents

Executive summary

I. Introduction

  1. Ecological Typologies
  2. Globalization and Agricultural Development
  3. Imported versus Domestic Food Sources

II. Issues and constraints

  1. Recent Economic Performance and Agricultural Trade
  2. Nutritional Regimes
  3. The Resource Base and Primary Production
  4. Human Resources and Institutions
  5. Trade Outlook
  6. Erosion of Preferential Treatment
  7. Other Trade Considerations

Part Two

III. Possible actions for sustainable development / IV. Conclusion / References / Appendices


EXECUTIVE SUMMARY

South Pacific Small Island Developing States, while not all similar in terms of size, geological origins and other characteristics, share many common features such as their remoteness from markets, limited and fragile agricultural, forest and inland fisheries resources, scarcity of skilled manpower, high population growth, and fragile economies and environment.

Agriculture, forestry and especially fisheries will continue to dominate the region's economies. The efficient use of the resources of the agricultural sector calls for urgent policy reforms. The new, more liberal international trade regime will have serious consequences for these countries which will have an impact on their agricultural sector, and impose restrictions on domestic policies. In the light of trade, economic and environmental considerations, governments are faced with difficult choices between domestic and foreign sourcing for essential goods, especially food. Boosting domestic production could be costly; increasing dependence on foreign supplies is not without risks.

Economic performance during the 1980s and early 1990s was poor in most island countries of the region, and economic growth was often outpaced by population growth.

Diets have been changing, with greater emphasis on western-style eating habits which call for products which cannot readily be domestically-produced. Traditional diets are generally healthier. The incidence of non-communicable (diet-related) diseases are increasing along with increasing imports and declining production of local food crops.

In small island states, even more than in larger countries with a broader resource base, an integrated approach to development is essential. There is much room for improvement in resource use, often possible by careful inter-sectoral planning.

In the export markets, the region faces several difficulties, among which the erosion of preferential treatment its products have long been benefiting from, and difficulties in conforming to increasingly severe sanitary and phytosanitary regulations. Some countries have found, and successfully developed, niche markets for particular fruit and vegetables, as well as biologically-produced agricultural produce. Care should, however, be taken in placing too much reliance on exports as a motor for development.

The public sector remains very strong in most countries of the region and there is scope for considerable privatization which normally should lead to more efficiency. Investors will be all the more willing to take over as macro-economic reforms, accompanied by measures to increase productivity of labour and capital are taken. Three major weaknesses which could deter investors are the relatively high wage rates (usually determined by public sector wage levels), a dearth of sufficiently qualified manpower, and unrealistic exchange rates.

Governments will retain a role, alongside the private sector, to define national policy goals, correct market failures and ensure environmental sustainability and social well-being and equity.

A wide panoply of fiscal, market and technical measures can be used by governments to achieve their defined goals. Their actual application will depend on available human and financial resources and the need to conform to some degree to internationally accepted guidelines on market mechanisms.

In the light of the volatility of international markets, and the fragility of local resources, national and community-based food security stocks would appear a necessary instrument for attaining a reasonable degree of stability on domestic food markets.

On the international level, no single island state will bear much weight alone. The small island developing states of the region might wish to consider the establishment of an economic union. Moreover, various regional institutions already exist, such as the Pacific Economic Cooperation Council and the Asia Pacific Economic Cooperation, which small island developing states might consider useful to be associated with.

As for the World Trade Organization (WTO), membership would have advantages and disadvantages for South Pacific small island developing states. Advantages include increased negotiating power, access to information and technical assistance in trade matters, and settlement of disputes through the WTO mechanisms. Disadvantages include loss of autonomy to determine policies regarding agriculture and food, and environmental protection; states with such fragile economies and resources may have great difficulty facing up to international competition, but WTO rules provide for special measures for smaller and poorer countries. South Pacific small island developing states should therefore carefully assess such a move before making it.

In the fisheries area, regional cooperation is well developed and generally beneficial and efficient but it would gain by being extended to commercial matters.

Finally, suggestions are made for possible action on various issues raised in the document. More specifically, integrated national action and regional cooperation could assist South Pacific small island developing states to make best use of limited collective resources. Many of these actions require political will as much as investments. Funding most of them should be within the scope of available resources, provided the latter are applied to the national interest. Donors may be more inclined to provide funding if a strong sense of commitment to sustainable development were shown and the right policy environment were created.

I. INTRODUCTION

While the Global Conference on the Sustainable Development of Small Island Developing States, held in Barbados in 1994, provides a useful overall context for sustainable development, time is ripe for South Pacific Small Island Developing States (SPSIDS) to consider in more detail their agricultural, fisheries and forestry resources and the policies needed to ensure sustainable development.

1. Ecological Typologies

It is appropriate to begin by recalling that the South Pacific region covers an area of 525.000 km2 with a total population of some 6 million, spread over 30 million km2 of ocean. There is substantial diversity amongst the states of the region in terms of physical size and characteristics and in the extent and diversity of their natural resource endowments.

Papua New Guinea, the Solomon Islands, Vanuatu and Fiji are large, rugged, mainly volcanic land masses which are generally rich in biological and physical natural resources. Mineral wealth is substantial in some, especially Papua New Guinea, Vanuatu and Fiji.

At the opposite end of the spectrum are the atoll nations whose resource endowments are very limited. These include Kiribati, the Marshall Islands, Tokelau and Tuvalu. These nations are small and isolated and have very poor soils. The major economic development opportunities lie in the marine resources of their exclusive economic zones.

Between these two extremes are the Cook Islands, the Federated States of Micronesia, Tonga and Samoa which are intermediate size volcanic islands with rich soil but little or no mineral wealth. These countries have some potential for further development of land resources for agriculture and forestry, and considerable opportunities for the development of marine resources within their exclusive economic zones.

While Pacific island countries are undoubtedly small and remote, it is becoming clear that "smallness" need not be a handicap to development. Strategies and policies adopted by governments can promote development, provided they have sustainability as their objective.

2. Globalization and Agricultural Development

The General Agreement on Tariffs and Trade (GATT) negotiation processes, but also unilateral trade and policy reforms, are strengthening the global trend towards a "single market place". These, together with rapid technological advances in communications, are making national borders of less relevance economically, and are greatly facilitating the movement of goods, finance and information. These kinds of developments are nowhere seen more clearly than in the Pacific Rim markets of East Asia and Oceania.

The anticipated impact of the Agreement on Agriculture of the Uruguay Round on SPSIDS includes expected changes in the market for agricultural commodities and more importantly, changes in the policies countries could adopt in the future. Policies allowed under the Agreement are those which have minimal trade or production distortion effects. Policies that do not meet this basic criterion may be kept but expenditures on them have to be reduced. This has implications for minimum safeguards that SPSIDS may want to establish to protect themselves against world market volatility and for the means they need to develop to pay for necessary imports.

Agriculture (including fisheries and forestry) will undoubtedly remain the basis of the economies of most SPSIDS. Policy reforms on several fronts are necessary to reduce the distortions and current disincentives to efficient resource use, and to help overcome development constraints.

3. Imported versus Domestic Food Sources

A fundamental dilemma for SPSIDS in planning their economies is the interface between imported and locally-produced agricultural products and the degree of reliance to be placed respectively on imports (assumed to be cheaper, though some predict a 10% rise in food prices globally as a result of more open markets) compared to expanding local production (which will require substantial investments). Strong reliance on imports assumes there will be sufficient foreign exchange earnings to pay for them. But what are the sources for this? Increased domestic production has spin-offs such as rural employment, domestically-generated food security, better quality (fresh) foods and improved nutrition, higher rural incomes, and local control over resources. Trade is an attractive option for countries with exportable products in which they have an international comparative advantage, which seems not to be the case for most SPSIDS.

An aspect of the food situation to be faced in the future is the possible rise in food prices on international markets following trade liberalization (see above). Will this eventually lead to a need for subsidies on domestic markets? If so, who will pay? Will it stimulate domestic production? If domestic production is to be boosted, what can be done to ensure it does not entail irreversible environmental damage (especially in upland and coastal areas)? Should food production areas be designated as protected zones where crop and land conversion is severely prohibited and monitored? Decisions on import/domestic food sourcing policy options involves various sectors, including not only agriculture but also health, finance, and education.

Finally, while examining (or advising on) policy options for SPSIDS, account must be taken of special features such as the magnified effect of certain natural disasters and economic occurrences, the disproportionately high degree of economic dependence on a small range of commodities with volatile markets, the limited possibilities for diversification, distance from markets and related high costs of transport, low technical skills, poor marketing, difficulty in reaching quality standards, erosion of preferential margins, high current account deficits, and in general the fragility of their economies and their environments and their vulnerability to external and domestic factors.

II. ISSUES AND CONSTRAINTS

1. Recent Economic Performance and Agricultural Trade

The economic performance of SPSIDS was weak and unstable during the 1980s (PECC, 1995). With Gross Domestic Product (GDP) growth often outpaced by population growth, several of these countries showed almost no rise in average real per caput incomes over the period, which was possibly linked to the high levels of aid received and remittances from family members working overseas (see Appendix 1South Pacific Small Islands: Basic Indicators). Between 1980 and 1989, average real income performance per caput ranged from -2.0% and 0% per year in Fiji, Papua New Guinea and Vanuatu, and zero and +2% per year in Samoa, Kiribati and Tonga.

The situation in the early 1990s was in most cases little different. Annual rates of growth in total GDP were between 1% and 3% in Fiji, 3% and 5% in Tonga, and zero to less than 4% in Vanuatu, while in Samoa during 1991 and 1992 it was negative (Decloitre, 1995). At the same time, population growth rates in the region were among the highest in the world. Some Pacific island economies did expand at somewhat faster rates over the early 1990s however. GDP growth in Papua New Guinea ranged between 8% and 14%, and in Tuvalu between 8% and 11%. GDP in the Cook Islands grew by 7% and 11% in 1991 and 1992 respectively, but fell to only a little over 1% the following year. Within this overall picture, distribution of the fruits of economic growth has often been unequal.

The export sector of most SPSIDS comprises a narrow range of primarily agricultural commodities. Tree crops, sugar and fruits and vegetables are the major agricultural exports from the region. Australia, New Zealand, Japan and the USA are the region's major export destinations (see Appendix 2 South Pacific Imports and Exports). Intra-island trade is small, doubtless mainly due to similarity of commodities on offer and diseconomies of scale for strengthening trade links between small countries.

Exports are therefore vulnerable to external disturbances, including recession in trading partner countries, the effect of weather on export supplies, and strong competition from larger low-cost countries of the region having greater comparative advantage (e.g. the Philippines).

Average annual growth rates in nominal export revenues of the South Pacific island economies over the period 1980-1993 are given in Table 1 below. The export receipts of the SPSIDS are relatively unstable especially for Samoa, Tonga and Fiji.

Table 1: Average annual growth in nominal merchandise exports (fob) and export instability, 1980-1993
CountryAnnual growth
% per yr
Relative
instability
Fiji4.423.5
Papua New Guinea6.618.0
Solomon Islands2.914.5
Tonga5.524.9
Samoa-7.527.8

Note: Relative instability = standard error of differences between export receipts and their trend values, relative to the mean export receipt. (Source: ADB)

The average annual evolution of the terms of trade between 1982 and 1991 shows that Fiji's and Tonga's terms of trade have improved over time (2%), but the prices of exports relative to imports have trended downwards in the cases of the Solomon Islands and Samoa resulting in annual evolutions of -7.8% and -3.8% respectively.

With respect to food supplies, changing diets (see later) have entailed increasing reliance on imports. 90-100% of cereals supplies in the region were covered by imports in 1992, though Fiji managed to cover 60% of rice needs from local production in the same year. Potatoes constitute the main import in terms of starchy foods though there is 80-90% coverage of all starchy foods from local production. A large share of meat and milk are imported (over 70% in Tonga, over 50% elsewhere, although production is rising in Fiji, Papua New Guinea, Samoa and Vanuatu). More surprisingly, even fish and seafood supplies are imported in large quantities (in Samoa, local production satisfies only 15% of consumption).

Such a high degree of dependence on imports for basic food supplies lays open the economies to threat from disruptions in international markets, such as the current high cereals prices, with potentially serious consequences for SPSIDS which already have severe balance of payments difficulties.

Fisheries licensing arrangements with distant-water fishing nations such as the USA, Japan, Republic of Korea and Taiwan (Province of China) are an important source of revenue which enables many states to finance food imports.

2. Nutritional Regimes

Over the past twenty years, food consumption patterns in the region have changed dramatically. Average energy availability has increased, but there has been a general trend towards more reliance on cereals and sugar, less consumption of traditional roots and tubers, and a growing consumption of fats and oils. Availability of protein has also risen, with a significant increase of protein from animal sources, while proteins of vegetable origin have declined in relative terms. This move towards more European-type diets is mainly being achieved through increased imports of cereals, sweeteners, meat, milk products, fish and seafood (see above).

Fish forms a major part of SPSIDS diets. Per caput fish consumption in the South Pacific is among the highest in the world and fish is fundamentally important for food security. Fresh fish consumption however, is being augmented by consumption of imported canned fish: due to lack of refrigeration, and the absence of a tradition of fish processing such as smoking or drying, the widespread marketing of fresh fish is inhibited.

The increasing problems related to nutrition which most SPSIDS are facing stem in particular from past emphasis on exports of primary products, leading to changes in the traditional food production systems, and the increase in the population which has put pressure on land and resulted in a decline in agricultural productivity. Food insecurity in urban areas is not uncommon (e.g. Vanuatu). The change from healthy traditional Pacific island diets to imported foods rich in sugar, fats and salt is leading to a rising incidence of non-communicable (lifestyle diet-related) diseases in adults (e.g. Cook Islands, Fiji, Samoa), under-nutrition of children under five years (e.g. Vanuatu), and anaemia among women in the childbearing age group (FAO, 1994).

In the Solomon Islands for example, the implications of dietary patterns at macro- and micro- levels include: increasing trade deficits and drain on foreign reserve; inequity between urban and rural households; increasing health and other social expenditures; and tenuous status of households food security.

3. The Resource Base and Primary Production

By definition, small states, and especially small island states, have a narrow resource base. In most SPSIDS, that base has been degraded by the establishment and expansion of plantation crops, and more recently, population pressure.

Agricultural, forestry and fisheries in the region are practically everywhere under threat from over-exploitation and in need of urgent measures to preserve and regenerate them, while ensuring their rational exploitation for the present generation. Productivity of both crops and livestock is low and pests and diseases pose serious problems.

Arable land is a particularly scarce resource. Yet problems such as land tenure disputes, lack of new technology to extend land use, and urban and communications developments are leading to loss and inefficient use of that resource. Governments have little jurisdiction over land and though they promulgate environmental conservation decrees, these are unenforceable due to customary ownership.

Traditional, subsistence agriculture (over half of all farms), using family labour and few purchased inputs, remains dominant and has the advantage of being (in principle) environment-friendly but the disadvantage of low productivity. But population and economic pressures are severely disrupting ecologically sound farming practices such as fallow rotation systems. What might be termed moderate input systems are therefore becoming common, with family labour being complemented with paid seasonal workers and some purchased inputs. Due to poor management, these inputs are often used less than effectively, leading to economic losses and environmental damage. Commercial agriculture, long practised for export products such as coconut, has been developed for niche products such as squash and ginger, usually with expatriate capital.

With the exception of atoll nations which are sandy and infertile, larger and volcanically formed SPSIDS have more extensive land masses with agriculture and inland water systems capable of supporting tropical agriculture and a broader range of economic activities.

Various pressures (population, urbanization, tourism, logging, clearing for agriculture or human settlements, firewood) are leading to rapid depletion of forest resources. Deforestation is having severe consequences in terms of erosion, loss of genetic resources, and flooding. Although programmes for planning and management of natural forests and afforestation exist, little progress has been made in this sector. Traditional forestry agencies have focused heavily on commodity production. Given the state of forests, for most countries, counting on increasing wood and forest product exports may not be a viable option. More emphasis needs to be put on other forest goods, services and values as well as the forests' important functions in sustaining watersheds and soil productivity. The potential of agro-forestry and the development of non-wood forest products exits, provided it is promoted with the participation of traditional and local customary ownership.Water quality is also deteriorating due to chemical and sewage pollution and rising sea levels. At the same time, demand for water is increasing rapidly due to urbanization, industries, and tourism.

Although tourism could provide outlets for domestic produce, it often competes with labour and contributes, in some countries, to a downturn in agricultural production. Constraints to local supply of agricultural commodities include inadequate infrastructures and lack of access to small farmers to means to meet the quality standards and regularity of supply required by hotels and tourism resorts.

Small-scale coastal fisheries production (artisanal and commercial) in the South Pacific is about 110,000 tonnes per annum, of which approximately 75% is for subsistence purposes. However, away from urban centres and smaller population concentrations, small-scale fishermen have limited scope for commercial activities, except in the collection and limited processing of non-perishable products such as shells and bêche-de- mer. Inland fisheries resources, once abundant and seemingly boundless, are subject to overfishing, fishing of juveniles and producing females, destructive techniques (use of chemicals and dynamite), and reef bleaching.

Industrial offshore fisheries production in the South Pacific, and in particular tuna, from both regional and distant-water fishing fleets stands at about 1.0 million tonnes per year. This level of production ranks the region as the world's most important tuna fishing area. A proportion of this catch (estimated to be 200,000 tonnes per annum) is processed at canneries in American Samoa, Fiji and the Solomon Islands.

Natural resources tend to be seen by modern society as goods to be exploited in order to draw maximum economic benefit from them. Local people often view such resources in other ways, attributing cultural, religious or simply recreational value to them. In envisaging policies for natural resource conservation, such local values must be taken into account. By making people aware of the fragile and finite nature of those resources in today's conditions, and rehabilitating traditional attitudes and community-based approaches which are being eroded by "modernization", natural resource conservation could be strongly promoted, provided communities are made fully responsible for managing them.

4. Human Resources and Institutions

The total population of the South Pacific sub-region is presently estimated at nearly 6.3 million and will double to 12 million in 30 years' time if the current annual population growth rate of 2.3% continues unabated (UNFPA, 1995). The Marshall Islands population has been rising at 4.2% per year and the Solomon Islands at 3.5% per year. Natural, financial and human resources are already strained by the growing demands for goods and services by the expanding population. Moreover, the failure of the economies of the Pacific to generate sufficient wage employment opportunities is producing a major strain on traditional support networks and is a serious threat to the cohesion of Pacific societies (UNDP, 1994). The current age pyramid contains a strong challenge in about 15 years of how to create enough jobs, given the weak economic situation and constrained development potential.

Currently, the fisheries sector, both small-scale and industrial, plays an important role in providing employment. Fishing fleets operating in the South Pacific, and the tuna processing facilities together employ an estimated 1,500 persons, representing the major source of industrial wage employment for some states.

While most of the population of the South Pacific have basic literacy skills, education conditions are inadequate to meet development challenges (PECC, 1995). Agricultural and industrial skills, technical, and managerial abilities are in short supply in most SPSIDS of the region. Many SPSIDS depend on foreign expertise agricultural research and technical innovation, as well as in entrepreneurship. These constrain responses to opportunities.

For example, most national fishery administrations in SPSIDS would have no more than 10 professional staff, generally all male and many of whom are required to perform a variety of administrative as well as technical tasks. Moreover, high rates of staff turnover are characteristic, and well-trained fisheries personnel are often either called upon by their governments to take up higher-level duties unrelated to the fisheries sector, recruited by the private sector, or in some cases, migrate overseas.

5. Trade Outlook

There are certainly opportunities in export markets to be seized by small islands of the region. However, a careful assessment must be made of the implications of pursuing an export-led policy for development and of the risks involved in counting on unstable and unreliable export markets subject to the vagaries of market forces and the international economy.

The world's fastest-growing economies (especially the Asian "tigers") include those that have experienced rapid export growth through the encouragement of an internationally-oriented and competitive economy and are frequently given as examples to other countries. Trade measures can involve the reduction or elimination of non-tariff barriers to trade, the reduction of import duties, and the deregulation of domestic markets to allow internal prices to adjust to international levels. But the South-East Asian "tigers" did not achieve their economic take-off thanks to free market forces; on the contrary, it required very substantial and long-term public investment and encouragement, including subsidies and border protection. SPSIDS have little chance of following such patterns due to constraints such as their narrow natural and human resource bases, limited public finances, isolation and many others factors already mentioned.

An exception here is Fiji, which is among the largest of those states and benefits from a large expatriate (Indian) workforce. The case-study of Elek et al (1993) indicates how an island state can benefit from economic liberalization. Earlier, the Fiji Government had pursued inward-looking polices and import substitution, policies that supported inefficient import-replacement industries and that discriminated against exports. Since 1987, the Government has embarked on a tariff-reduction programme, import licensing requirements have been eliminated and firms exporting over 95% of their output have been exempted from import duty payments. Many import tariffs are still rather high but their reduction has exposed many firms to import competition for the first time, enhancing efficiency throughout the economy, and indirectly contributing to Fiji's recent boom in garment exports, according to Elek et al. Behind these encouraging macro-economic statistics, it should be asked what the cost of these reforms has been in terms of wage levels and jobs.

6. Erosion of Preferential Treatment

Among the risks looming in the near future is the loss or erosion of preferential treatment which has facilitated exports in the past. SPSIDS export agricultural products duty-free or under preferential arrangements into a number of countries. These include duty-free access to Australia and New Zealand under the South Pacific Trade Agreement (SPARTECA), and duty-free or preferential access to the European Union under the Lomé Convention. Following the implementation of the reductions in trade barriers agreed within the Uruguay Round, these special advantages will be eroded. Thus, due to unilateral trade reforms taken by New Zealand, many tariff lines now enter at a zero tariff rate. Of the remaining items, duties within the 15-20% band are to be progressively reduced to 10%, and those over 20% to 15%, between July 1996 to the year 2000.

The same seems set to happen for tree crop commodities entering into the European Union under Uruguay Round commitments since in many cases the bound reduction in Most Favoured Nations (MFN) tariff rates in the European Union's Uruguay Round schedule is substantial. Grynberg (1994) concludes that the loss or diminution of these margins could reduce incentives to produce tree crops in SPSIDS, or purchase from them. If export volume falls, revenues received from Stabex, the EU's commodity stabilization programme, will also decline since payments to countries under this scheme depend upon the volume of exports to the EU.

Sugar is Fiji's major export, earning in 1993 about 30% of total export revenue and the EU takes nearly half of this through a quota agreement under the terms of the Lomé Convention. This sugar is sold at the EU's intervention price, usually two to three times the world price. The resulting transfer of funds from the EU to Fiji is estimated by Grynberg to have been worth in 1991 $90 million, or 4% of Fiji's GDP. Sales are also made to the USA under quota arrangements. The European Union is committed to cutting its own subsidised sugar exports from a base of 1,617 million tonnes to 1,277 million tonnes by the year 2000. Will this involve a downward adjustment in the intervention price? The current Lomé Convention will expire on 29 February 2000. If it were not extended, Fiji's sugar industry will need to face the adjustments necessary to survive with lower prices and it may be wise to make contingency plans for this eventuality.

Similarly, market access arrangements for canned tuna to the European Union market under the Lomé Convention are important for SPSIDS. While the Uruguay Round has not affected the level of concession for canned tuna afforded to ACP states, the tariff rate for non-ACP states has declined (e.g. the Philippines and Thailand). This tariff reduction may affect the competitive position of SPSIDS if their canned product is competing in the same markets as product from non-ACP states.

7. Other Trade Considerations

Certain SPSIDS have met foreign competition, with a degree of success, by exporting to small niche markets commodities such as squash, papaya, ginger, vanilla, pepper, taro and cut flowers. This has been termed "flexible specialization" and involves competing on the basis of product (e.g. value-added or organically grown products) rather than price in small-scale, high-price products. Producing for niche markets has several advantages, including the often high labour requirement and high economic returns. Caution should be used, however, in looking to such niche markets as a basis of export diversification or agricultural development. In the first place, such markets are by definition small and their expansion is limited. Second, in the absence of collaboration and coordination, other SPSIDS have tended to quickly latch on to such new openings, resulting in gluts, price collapses and considerable losses. Third, the amounts to be shipped will not be sufficient to attract new shipping or air routes to ensure regular deliveries.

With respect to sanitary regulations, provided SPSIDS can succeed reaching international standards, the Uruguay Round Agreement on Application of Sanitary and Phytosanitary Measures (SPS) could provide major benefits to horticultural exports from SPSIDS. There are three main parts to this Agreement. First, non-discrimination requires that the importing country apply the same sanitary and phytosanitary standards to all supplying countries as it does to its domestic production, and hence cannot discriminate among suppliers. Second, equivalence requires that the importing country indicate the required security levels, but that the treatments or processes necessary to reach those levels be decided by the supplying countries - in other words, different treatments may be equivalent in reaching a particular standard. Third, when an importing country imposes SPS measures, they must be technically justified and cannot be maintained against scientific evidence, to the contrary. Obviously, maintaining the integrity of their certification procedures is an issue for the exporting nations, including SPSIDS.

For some states exporting fish and agricultural commodities from the region, more important considerations lie in the effects of other sanitary and trade measures. The Agreement on the Application of Sanitary and Phytosanitary Measures, which has the potential to be used in a discriminatory way to restrict trade, and tariff barriers (e.g. 3.5% on sashimi-grade tuna being airfreighted and marketed in Japan), may affect the scope, direction and extent of the marketing of fish and agricultural products from the South Pacific. Consequently, the impact of these sanitary and trade measures needs to be kept under review by SPSIDS. The application of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) for endangered/protected species/products produced in the region (e.g. giant clams and crocodile skins) should also be kept under review by SPSIDS as CITES regulations could affect trade flows. In particular, states that produce products subject to CITES for international markets need to ensure that proper, internationally recognized certification procedures are in place for cultured species/products so as to ensure that exports are not interrupted. Also significant for South Pacific states may be the strict interpretation and application of the "rules of origin" provisions of the Lomé Convention concerning the harvesting of tuna. Indeed, these rules could be more important from a trade perspective than other considerations such as product definition and target markets.

Continues: Policies for Sustaining Food and Agriculture in the South Pacific - Part 2 | Appendices


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