WORLD TRADE WT/TPR/M/24
23May1997
ORGANIZATION(97-2167)
Trade Policy Review Body
9-10April 1997
TRADE POLICY REVIEW
FIJI
MINUTES OFMEETING
Chairperson: H.E. Ms.Anne Anderson (Ireland)
Page
I. INTRODUCTORY REMARKS BYTHE CHAIRPERSON 2
II. OPENING STATEMENT BYTHE REPRESENTATIVE OFFIJI 3
III. STATEMENT BYTHE FIRST DISCUSSANT 6
IV. STATEMENT BYTHE SECOND DISCUSSANT 9
V. STATEMENTS BYMEMBERS 11
VI. REPLIES BYTHE REPRESENTATIVE OFFIJIAND
ADDITIONAL COMMENTS 15WT/TPR/M/24
Page2
I. INTRODUCTORY REMARKS BYTHE CHAIRPERSON
1. ThefirstTrade Policy Review ofFijiwasheldon9and10April 1997. Intheabsence of
theChairmanoftheTradePolicyReviewBody,AmbassadorMunirAkram,AmbassadorAnneAnderson
ofIreland waselected Chairperson forthemeeting.
2. TheChairperson welcomed thedelegation ofFiji,ledbytheHonourable Mr.James AhKoy,
Minister forYouth, Employment Opportunities andSports, andthediscussants, Ms.Vibeke Roosen
ofDenmark andMr.JoséAntonio S.Buencamino ofthePhilippines. Asusual, bothdiscussants would
actintheirpersonal capacities. Thediscussants hadmade available, inadvance, outlines ofthemain
issues theyintended toraise.
3. TheChairperson recalled thepurpose oftheTrade Policy Reviews andthemain elements of
theprocedures forthemeeting. Thereport bytheGovernment ofFijiwascontained indocument
WT/TPR/G/24andthatoftheWTOSecretariatindocumentWT/TPR/S/24.Copiesofwrittenquestions
submitted byfourdelegations, (Australia, European Communities, NewZealand andUnited States)
hadbeentransmitted tothedelegation ofFiji.Iffullreplies could notbeprovided during themeeting,
supplementary written replies could beprovided later.
4. TheChairperson noted thedecision ofMarch 1997 toaccord regular observer status tothe
EBRD, EFTA, FAO, OECD andUNCTAD. Inaddition, theIMFandtheWorld Bank hadobserver
status byvirtue ofagreements concluded between theWTO andthese organizations.WT/TPR/M/24
Page3
II. OPENING STATEMENT BYTHE REPRESENTATIVE OFFIJI
5. Therepresentative ofFijithanked theSecretariat foritsverycomprehensive report, which
hebelieved, together withthePolicy Statement bytheFijiGovernment, provided auseful basis for
discussions. Hisdelegation fullysupported theTPRprocess, which provided anexcellent stocktaking
opportunity forFiji. Fijihadinstigated these discussions, underlying itscommitment toexamine the
impact ofpolicies thathadbeenintroduced since 1987, especially theireffects oneconomic growth,
thequality oflifeandwelfare oftheFijian people. Thediscussions would helptoidentify areas of
trade policy thatmight require adjustment toensure consistency withWTO guidelines.
6. Fijiwasaware that,asasmall island economy andsmall-scale producer, itseconomic success
could bebetter. Thepopulation, landarea, anddomestic market were small andtheislands were
vulnerable tofloods andcyclones, which often adversely affected agriculture andother economic
activities. Thesizeofthedomestic market prevented Fijifrom benefiting from economies ofscale.
Itwasdependent onanarrow range ofexports suchassugar, tourism andgarments foreconomic growth
andsocial progress; remoteness fromitsmajor export andimport markets wasasignificant constraint
tofurther expansion oftrade.
7. Inlate1987,followingconsultationswithkeysectorsoftheeconomy,theGovernmentintroduced
animportant change ofpolicy direction. Themain focus wasswitched from animport-substitution
toaprivate-sector, export-led growth strategy, inamove towards more market-oriented and
outward-looking development. Trade liberalization, public sector reform, andinvestment promotion
were important components ofthestructural adjustment programme. Tocreate acompetitive
environment,importlicensingwasremovedandreplacedwithhightariffs,whichweregraduallyreduced
overanumber ofyears. Thetariff structure hadsince beensimplified andthemaximum advalorem
tariff onalmost alllineshadbeenreduced from 50percentin1991 tothecurrent levelof22.5per
cent. Advalorem tariffs nowapplied toabout 96percentoflines. Specific rates applied onlyto
beverages, tobacco, mineral fuelsandfireworks; tyresandvehicles weresubject toalternative rates.
8. Inorder topromote investment andrestore investor confidence, theGovernment provided
generous incentives foritsexport-processing scheme; tax-free factories exporting 80percentormore
oftheiroutput qualified forsuchconcessions, down from 95percentin1996. These factories were
notconfined toaspecial zone; theGovernment wasdeveloping infrastructure fortax-free zones, with
thefirstsuchzonetobecompleted byJuly1997. TheGovernment 'scurrent re-examination ofthe
incentive scheme should leadtoanautomatic andtransparent structure, more easily administered and
consistent withWTO rules.
9. Fiji'sprosperity washighly dependent onsustainable trade. Sugar remained themostimportant
export commodity, withrevenue accounting for12percentofGDP and40percentoftotalforeign
exchange earnings. Thesugar industry provided direct employment toover 12percentofthe
285,000 working population.
10. Jobcreation would continue tobeofgreat importance inFiji. Aministerial working group,
along withtraining institutions, employers andtradeunion organizations, wasworking onanIntegrated
Human Resources Development Programme, which would review existing employment-related laws
andpolicy, tomake them more responsive tochanging market conditions. Theprogramme would
helptoimprove thequality ofexisting products andservices andcreate anenvironment attractive to
newinvestments.
11. Manufactured exports, other thanprocessed rawmaterials, hadbeenverylimited. Aseries
ofimportant measures taken inthepastdecade hadledtothetransition fromasingle-commodity-based
economy toonethatwasgradually developing anddiversifying itsmanufacturing base. TherapidWT/TPR/M/24
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increase inexports ofgarments under thetax-free factory scheme, from $8million in1986 toover
$200 million, hadbeenasignificant development. Oflate,there hadalsobeennotable increases in
exports offishandfish-based products, aswellastimber andgold. Exports ofservices, dominated
bytourism, hadalsogrown considerably. Tourism wasthesingle largest source offoreign exchange
earnings.
12. Fiji'smain trading partners hadremained virtually thesame overtheyears. Imports came
predominantly fromAustralia andNewZealand, andmore recently Japan andtheUnited States. The
majorbuyersofFiji'sproductswereAustralia(26percentoftotalexportearnings),theUnitedKingdom
(23percent) andtheUnited States (13percent). Japan, NewZealand, Malaysia andCanada were
growing markets.
13. Thesystem oftrade preferences hadsignificantly contributed tothecountry 'seconomic
development andtradeexpansion. Fiji'sexports ofsugar totheEuropean Union (EU)wereatfavourable
prices under theLomé Convention; following theintegration ofagriculture intotheWTO, itwaslikely
thatthese preferences would beeroded andsugar prices ontheEUmarket would bereduced. The
Government welcomed theGATT waiver onLomé IVuntiltheyear2000 andhoped thatthespirit
ofsolidarity infavour ofvulnerable countries would continue toprevail infuture WTO decision making.
While recognizing thatchanges inthemultilateral trading environment would further erode trade
preferences, Fiji,along withtheACP countries, strongly believed thattrade preferences should be
maintained.
14. Exports totheUnited States hadincreased asgarment producers hadbegun todiversify beyond
thetworegional markets (Australia andNewZealand). Trade withAustralia andNewZealand had
grown inimportance, helped byduty-free access tothese markets under theSouth Pacific Regional
Trade andEconomic Cooperation Agreement (SPARTECA). However, Fiji'stradedeficit withthese
twocountries hadwidened significantly, andwasincreasing atanalarming rate. TheGovernment
hoped thatchanges would bemade under SPARTECA toallow moreliberal rulesoforigin forgarments,
where Fiji'sindustry wasmade upofwholly Australian-owned companies andAustralian-Fijian joint
ventures. Requests forreductions inlocal-content definitions hadgone unheeded. Fijiconsidered
thatthetrade deficit gapcould notbebridged without changes under SPARTECA tocorrect the
imbalance.
15. Fiji'snetexport ofgarments toAustralia, taking intoaccount thecostoffabric fromAustralia,
wasonlyF$31 million. TheuseofAustralian fabric inFiji'sgarment manufacturing meant thatthe
Australian content ofgarment exports wasashighas67percent. Current rules oforigin limited
incentives toimprove efficiency intheindustry andlargely negated Fiji'schances ofaddressing the
highly competitive global apparel market.
16. Theexpansion insugar, tourism andgarments hadcontributed significantly toFiji'seconomic
recovery in1989 and1990. RealGDP hadincreased atanaverage annual rateofabout 2.5percent
intheperiod 1991 to1995. Latest estimates indicated thattheeconomy would grow by3percent
in1996. Medium-term projections were for3percentannual growth overthenextthree years.
17. Under itsreform programme, Fijihadtaken thefirstsubstantial stepstowards integration into
themultilateral system, including lowering tariffs andremoving import controls thatdidnotcover
health, security, environmental andconservation considerations. Trade policy reforms hadaided in
allocating resources efficiently andsetting upasimple andtransparent trade policy structure. This
hadhelped toremove distortions intheeconomy, minimized thescope fordiscretion, andreduced
administration costs.WT/TPR/M/24
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18. TheGovernment ofFijirecognized thattrade reform needed tobeconcurrent withreforms
inother sectors oftheeconomy. Only anintegrated approach, recognizing theinterdependency of
different sectors oftheeconomy, would besuccessful inattaining anefficient allocation ofresources
onasustainable basis. Thepaceofprivatization would alsoneedtobeexpedited. Thekeyprinciples
inpublic sector reforms hadbeentransparency, efficiency andthewithdrawal oftheStatefromactivities
thatcould bemore efficiently performed bythecommunity orprivate enterprise.
19. TheGovernment wascurrently formulating aservices sector policy tofacilitate development
andprovide openings fornewtradeable services.
20. Fijirecognized theimportance ofincorporating WTO Agreements intodomestic laws.
Accordingly, theGovernment hadchanged thecustoms valuation system, haddrafted anewCopyright
Billandhadrequested technical assistance fromWIPO toexamine other legislation under theTRIPS
Agreement. Anti-dumping, countervailing andsafeguard measures were alsobeing examined with
aviewtostrengthening existing legislation toeffectively address suchissues along WTO lines.
21. Fiji'sfirstattempts atmeeting itsWTO notification obligations andpreparing fortheTrade
Policy Review hadbeen alearning process. Skilled manpower resources were scarce andnew
multilateraltradeissueshadtobeaddressedastheyarose.Technicalassistanceandinstitutionalcapacity-
building assistance would continue tobeneeded forsome years.
22. Hereaffirmed Fiji'scommitment toamultilateral trading system thatwastransparent, equitable
andfair. Fijiwasdoing itsbesttokeepitstrade policy within theWTO guidelines butneeded time
toadjust. Fijibelieved thatthenature ofitsproblems, including alimited resource base, thesmall
domestic market, labour force, vulnerability tonatural disasters andremoteness ofitsworld markets,
warranted particular consideration within theWTO system.WT/TPR/M/24
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III. STATEMENT BYTHE FIRST DISCUSSANT
23. Thefirstdiscussant (Ms.Vibeke Roosen) noted thatFiji'sgeography hadmade itanattractive
tourist destination, andthatitsclimate andposition hadallowed ittodevelop itsagriculture, inparticular
thegrowing ofsugar cane, butalsoforestry andfishing. Theislands alsohadvaluable rawmaterials
suchasgold, silver andcopper, andduring the1990s Fijihadbecome animportant manufacturer,
making itsgarment industry thesecond biggest export sector. Fijihadthelargest economy ofthePacific
Islands.
24. Although Fijihadcome alongwaysince independence in1970, problems imposed onitby
itsformer rulers remained. Thelabour force imported from India attheturnofthecentury and
consequent special preferences given totheindigenous population, inparticular political rights and
landownership, stillhadsevere repercussions forthecountry. Thetwomilitary coups in1987 had
ledtoconstitutional changes entrenching Melanesian political domination. Theconsequent significant
exodus ofcitizens ofIndian origin, currently recorded atmorethan300permonth, waslikely toincrease
theexisting shortage ofskills andexperience.
25. Until thelate1980s, markets wereheavily regulated, withimport licences andprice controls
providing highlevels ofprotection. However, theeconomy hadresponded favourably tofundamental
changes infavour ofanopenmarket economy, introduced since 1989. Fiji'smacroeconomic reform
programme hadmainly focused onrestoring stability through prudent management offiscal, monetary
andexchange ratepolicy. Ithadswitched itstrade policy from inward tooutward oriented. Tariffs
were nowthemain instrument oftrade policy, currently applied atanaverage of22.5percentfor
themajority ofproducts; however Fijimaintained export taxes onsugar andgold.
26. Adjustment efforts were aimed atcreating anenvironment conducive toattracting foreign
investment andincluded deregulation, taxincentives andprivatization. TheGovernment alsooffered
specific investment incentives inthetourism sector which currently contributed approximately 20per
centofGDP.
27. Despite these efforts, theeconomy started tostagnate in1991. Annual average growth rates
of2.5percentfrom1991to1995weredisappointing, when compared withgrowth ratesintheprevious
twoyears andwithother countries intheregion; Fijiwasamong thecountries withthelowest growth
among thePacific Island economies. Unless growth wasrestored atsustainable levels, theGovernment
might notbeabletomaintain popular support foritseconomic reforms. Ahigher growth ratewas
alsorequired toimprove social conditions andtomeet demands foremployment from aworkforce
thatwasincreasing atafaster ratethanthepopulation.
28. Thefiscal situation threatened todeteriorate. Although theGovernment recognized theneed
toreduce thedeficit, ithadnotindicated howthismight beachieved. Furthermore, Fiji'stradedeficit
ingoods reflected private consumption rather thaninvestment; thisdeficit haduntilnowbeenlargely
offset byservices receipts, mainly fromtourism. Sherequested comments onthese observations from
thedelegation ofFiji.
29. Fijialsofaced major challenges duetoachanging global economy. TheUruguay Round
Agreement would eventually leadtoalower sugar priceandanerosion ofFiji'spreferential advantages.
Increasing international competition inthetextile andgarments industries would result from the
implementation oftheTextiles Agreement andanerosion oftariffpreferences would continue inFiji's
traditional markets.WT/TPR/M/24
Page7
30. TheGovernment alsoneeded toaddress Fiji'slowrateofinvestment, which wasoneofthe
lowest among countries intheAsiaPacific region. Since 1990public andprivate investment hadbeen
flatordeclining. Thenextfewyears would bring tremendous competition forforeign investment and
Fijiwould havetocompete withother countries notonlyintheregion butglobally. There wasaneed
todealwiththeunderlying reasons forlowinvestment inFiji.
31. TheGovernment ofFijineeded totakemeasures toreconcile thedifferent ethnic groups and
torestore thepolitical rights totheIndian population. Italsoneeded toredress theproblems ofthe
landtenures system, which hadbecome pertinent asthelandleases werebeginning toexpire. Ethnic
Indian farmers were faced withtheprospect ofbeing displaced aslandwastobereturned tothe
indigenous owners. Ethnic Indians, whoaccounted foraround 45percentofthepopulation, owned
lessthan2percentoftheland, andwere constitutionally referred toashaving aminority rolein
Government. Uncertainties ofthiskindmight influence theeconomic performance ofthecountry.
32. There wasalsoaneedtorebuild policy credibility withtheprivate sector. Although important
advances hadtaken place, therehadalsobeenadelay intheimplementation ofsome structural measures.
TheGovernment wasaware oftheimportance ofaccelerating privatization, thecommercialization of
public enterprises andmoving forward withtrade deregulation. Thesizeofthecivilservice should
alsobereduced inorder tolower expenditure onwages andsalary-related costs thataffect wage
settlements intheprivate sector.
33. Itwasimportant forFijitodiversify itsexport markets. Ithadbuiltanimportant partofits
economy onthetrade distortions ofthepreferential schemes forsugar andgarments. Shewondered
howwellFijiwasprepared forthesubstantial changes thatcould beexpected inthenearfuture in
thesystem ofpreferences ofitsmajor trading partners. Inthelonger perspective lessreliance on
preferential market access would bebeneficial totheexport sectors, which would havetobecome more
competitive inorder tosurvive. Inaddition, therestructuring ofthese sectors could leadtothe
channelling ofresources intoother sectors oftheeconomy which would contribute tothemuch needed
sectoral diversification andthusstrengthen Fiji'sinternational competitiveness.
34. Withthisinmind,andtheneedforincreasedproductivityduetoadeclineintheruralpopulation,
Fijishouldreorientitsagriculturalstrategytowardsencouragingcommercialization,increasedefficiency
intheuseofresources anddiversification. Although sugar growing might continue tobeprofitable
forsome time,duetoguaranteed prices under theLomé Convention, increased emphasis onagricultural
research might identify other crops thatcould besuccessfully cultivated. Thegrowing ofginger was
aninteresting example.
35. Strengthened productivity wasalsonecessary toenable thegarments industry tocompete on
theglobal market. Thetourist sector seemed tooffer amajor areaforfuture growth, andthe
Government hadrecognized theneedbothtobroaden therange oftourism services andtoaddress
areas suchasairaccess andmarketing.
36. Fiji'sendorsement oftheNational Environmental Strategy wasawelcome stepforward; ways
toimplement thisstrategy werebeing examined. Sherequested anindication ofhowtheGovernment
might dealwiththegrowth intheurban population andindustry; howitmight envisage protecting
renewable resources likeforests andfishing stocks against exploitation; andhowitintended tocombine
further expansion ofthetourism sector withtheneedtoprotect theenvironment.
37. Shebelieved thattheGovernment ofFijishould promote public sector investment, andenforce
fiscal compliance, especially withregard tothevalue-added tax,where compliance wasparticularly
low.WT/TPR/M/24
Page8
38. Onthedevelopment ofhuman resources, shenoted thatthestandard ofeducation andhealth
seemed generally satisfactory, withaliteracy rateofaround 90percent,though slightly lower among
women. TheGovernment should continue tostress education; aneducated workforce, bothmenand
women, wasnecessary totakeadvantage ofnewtechnology, tosuccessfully diversify theeconomy,
andtoincrease productivity. Highquality education wasalsoavitalvehicle forattracting foreign direct
investment. Skilled labour wasaprecondition fortheproduction ofhigh-value-added goods, andwould
benecessary toenable sufficient growth oftheeconomy. Countries thatwereactive ininternational
trade andexported high-value-added goods tended tohavehigher growth rates thancountries that
exported basic goods.
39. With reference totheSingapore Ministerial Declaration andtoFiji'sobservance ofthecore
labourstandards,sheenquiredwhatactionhadbeentakenbytheGovernmenttoabidebythesestandards.
40. Shenoted thatthesituation ofwomen alsodeserved attention. Shewasinterested ingender
disaggregated statistics foremployment, bysector, inorder todetermine howwomen andmenwere
affectedbyFiji'stradepolicies,particularlywithregardtoemployment,incomedistributionandpotential
forimprovement instandards ofliving.
41. Fijihadgreatpotential andconsiderable resources. TheGovernment hadshown astrong will
toundertake thenecessary stepstocreate anopenmarket economy. Certain issues stillneeded tobe
addressed butiftheGovernment wasabletomaintain reform andcreate thenecessary competitive
environment, Fijishould beabletoreturn tothelevelofeconomic growth ofthelate1980s andto
thatofitspartners intheAsian Pacific region.WT/TPR/M/24
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IV. STATEMENT BYTHE SECOND DISCUSSANT
42. Thesecond discussant (Mr.JoséAntonio S.Buencamino) congratulated Fijiforthereduction
ofitsmaximum tariff onthemajority ofimported products from 50percentatthebeginning ofthe
decade tothecurrent level of22.5percent. Thesimple average rateof12.4percent, which was
comparable tothose ofadvanced developing countries, wasalsocommendable.
43. However, there wasnotable escalation intariffs, especially forimports ofgeneral consumer
goods, particularly beverages, tobacco andvehicles. Furthermore, while thesimple average tariff
formostgroups ofproducts wasrelatively low,therange waswideinanumber ofgroups, forexample,
liveanimals, vegetable products, andprepared foodstuffs.
44. Itwould beworthwhile forFijitoconsider narrowing thedispersion ofitstariffs andminimizing
theincidence ofescalation. Thiscould leadtolower effective ratesofprotection andpromote amore
efficient allocation ofresources. Ashiftfrom specific duties toadvalorem values would alsoallow
better assessment ofapplied tariff levels. Itmight beuseful fortheauthorities toreview howapplied
ratescompared tobound rates, particularly withrespect tobeverages andtobacco, toensure thatbound
rateswere respected.
45. Henoted thatFijididnotmaintain quantitative import restrictions, including tariff quotas,
andjustified existing prohibitions forenvironmental, health, moral andsecurity reasons. However,
controls onforeign exchange payments forimports appeared tobestringent inthatallpayments were
subject toapproval. Herequested clarification fromFijionthisaspect ofexchange controls. Healso
requested comments ontherequirement forrepatriation andconversion inFijiofallforeign exchange
earnings, andhowthismight encourage exporters tounder-declare theirearnings.
46. Regarding fiscal performance, although thebudget hadbeenrestored toapproximate balance
by1995, itwould require efficient revenue collection andprudent expenditure decisions tosustain fiscal
discipline. Some 46percentofFiji'sbudgetary revenue wasfrom tariff collection. However, the
Secretariat report indicated thattariffconcessions hadledtoforgone revenue equivalent toaround 70per
centofallrevenue collected attheborder. Inaddition, revenue buoyancy waslowered byanumber
ofVAT exemptions andzeroratings. Excise taxation ofcigarettes, tobacco andspirits could be
improved, forexample, withtheimposition ofauniform, specific oradvalorem excise rateontobacco
products, regardless oftheorigin ofinputs. Aswellashaving positive effects onrevenue, thiswould
simplify administration ofthelaw.
47. Industrial promotion schemes, while necessary foradeveloping country likeFiji,could have
revenue andresource allocation implications. Inparticular, hedrew attention tothewidepractice of
dutydrawbacks withnotimelimits formaking claims; thefinancial concessions granted bythetax
freefactory/tax freezoneauthorities; theExport Credit Finance Facility 'sconcessionary interest rates;
andtaxrebates under theFTIB Export Promotion Incentive Scheme thatexceeded theaccrued tax
value.
48. These factors hadhadnegative effects onrevenue generation andwould haveanimpact on
resourceallocation,especiallyinsituationswhereauthoritiesfounditnecessarytoapplytariffconcessions
andVAT exemptions toonlyselected beneficiaries, notuniversally. Heasked thedelegation ofFiji
tocomment onthismatter.
49. Heencouraged theFijiauthorities tomake anotification onsubsidies. AsofOctober 1996
Fijihadnotsubmitted anynotification. Inhisview, although aMember whonotified subsidies would
beunder pressure toclarify itsprogrammes, itwould gainfromthenon-confrontational criticisms and
comments ofother Members.WT/TPR/M/24
Page10
50. Henoted thatFijihadnolegislation ontrade remedies suchascountervail, anti-dumping and
safeguards; nordidithavelegislation intheareaofcompetition. Such legislation could become
necessary asFijicontinued itsprogrammes ofliberalization, deregulation andglobalization. Heasked
forcomments onFiji'sintentions inthisrespect andanelaboration oftheassistance thatmight beneeded
from other Members oftheWTO andtheSecretariat.
51. With regard toprice control, hewondered ifFijishared theviewthatthiswasatbestavery
short-term measure foremergency situations andthat,inthemedium andlonger term, itserved only
todiscourage investments inthecontrolled industries, todistort price signals, limitsupply, andlead
toevengreater upward pressure ontheprices oftheproducts itsought tocontrol.
52. AsFijiwasnotamember oftheParis Convention fortheProtection ofIndustrial Property,
thereciprocal protection granted under theConvention wasnotavailable toother WTO Members,
parties totheConvention. Protection could beobtained inFijionlythrough patent registration under
thePatents ActandRules ofFiji. According totheSecretariat report, nopenalties were provided
intheActforcases ofinfringement; parallel imports intoFijicould beprevented orbanned from
commercial distribution uponrequest oftheowner ofaright; andworks deemed toinfringe intellectual
property rights inFijicould beseized bycustoms. Heasked theFijian delegation toexplain whether
apatent holder withapatent registered inacountry thatwasamember oftheParis Convention could
invoke suchrights inFiji.
53. Finally, heasked forcomments onFiji'splans fortheliberalization oftransport,
telecommunications andfinancial services intheWTO context.WT/TPR/M/24
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V. STATEMENTS BYMEMBERS
54. Members commended Fiji'scommitment tothemultilateral trading system andliberalization
andeconomic reform already undertaken. They welcomed thechange inemphasis from aninward
tooutward-oriented trade policy andencouraged Fijitocontinue towork towards liberalization and
consistency withWTO obligations.
55. Therepresentative ofAustralia noted hiscountry 'sstrong relationship withFijiinthecontext
ofbilateral andregional agreements andoftheWTO. Hecommended Fiji'spolicies aimed atgreater
diversification ofitsexport baseaswellasthestructural reform programme thathadincluded thephased
elimination ofquantitative restrictions andthereduction oftariffs. Australia strongly encouraged Fiji
tocontinue these efforts.
56. Heasked about thereasons fortheslowed paceoftariff reform inrecent years, aswellas
whatdirection thetariff reduction programme would takeinthefuture, andwhich sectors would be
thefocus oftariffreform. Fiji'stariffs onbeverages andtobacco wereabove thebound ratesspecified
initsSchedule ofConcessions, andexcise duties werehigher forcigarettes andmanufactured tobacco
containing imported tobacco. Australia wasinterested toknow when Fijiwould comply withtherelevant
WTO rules.
57. Heasked about theproposed coverage ofthenewCopyright Billandforanindication ofwhen
itwasexpected topassthrough Parliament. Alsoofinterest wasthemodified FairTrading Decree,
which would incorporate anti-dumping measures. Heenquired when thiswasexpected tocome into
force andwhether countervailing duties would alsobecovered. Further information would alsobe
useful onthescope andtiming ofaproposed policy statement onservices.
58. Fijihadentered intoanumber ofbilateral andregional trade agreements atatimewhen the
paceofdomestic tradeliberalization hadslowed andglobal tradeliberalization hadincreased. Heasked
about Fiji'sintentions withregard toexisting andfuture tradeagreements, andwhether theywereseen
ascompensating inpartforthelossofpreferential access under reduced MFN protection.
59. Withregardtotariffconcessions,hewasinterestedinwhatmeasureswerebeingtakentoaddress
theproblem offorgone revenues, howtheywerebeing implemented, andtheresults ofanymonitoring
ofthesuccess ofanychanges.
60. Given Fiji'sdependency onattracting foreign direct investment toimprove itsinfrastructure
andcreate anenvironment conducive tosustainable economic growth, thetransparency ofFiji's
investment policy needed tobeincreased. TheSecretariat report noted informal requirements for
investment inagriculture anddiscretionary approval processes rather thanprovisions inaforeign direct
investment Act.
61. Therepresentative ofNewZealand noted thatFiji'scommitment tothemultilateral process
hadledthewayforother Pacific Island nations.
62. Fiji'stariff bindings under theUruguay Round significantly increased thepredictability ofits
traderegime. However, the1996and1997budgets announced thattherewould benofurther reductions
intariffs andthatthepaceofimport liberalization would havetobemonitored. Trade liberalization
wasakeyelement ofeconomic reform andheencouraged Fijitocontinue itsefforts inthisdirection.
63. Hecommended Fijiontheinitiatives under wayinservices andintellectual property, andon
thePublic Enterprises Reform programme. Thelevelling ofopportunities forpublic andprivate sectors
wouldhelptocreateanenvironmentconducivetocompetitionandgrowth.NewZealandwouldcontinueWT/TPR/M/24
Page12
tosupport Fiji'sreform efforts, andstrongly encouraged further deregulation andimprovements in
market access. Hisdelegation hadraised several written questions regarding Fiji'strade regime and
looked forward toreceiving theresponses.
64. Therepresentative oftheUnited States noted thatFiji'strade barriers hadbeenlowered or
eliminated, although implementation oftariffreductions andpublic enterprise reform hadbeendelayed.
TheGovernment hadsought tomitigate some oftheinternal factors restricting Fiji'scompetitiveness
ininternational markets.
65. Fijihadmade progress inrecent years inaffording internationally recognized workers rights
toitslabour force. Fiji'sParliament hadenacted legislation in1994, which addressed anumber of
specific ILOconcerns. Fijihadbeenrecognized bytheUnited States as"taking steps" toafford
internationally-recognized worker rights toitsworkers. Hisdelegation wasalsopleased tonotethat
export-processing zones weresubject tothesame lawastherestofthecountry andthatunions had
negotiated collective-bargaining agreements withmany firms inthezones.
66. Theresults ofFiji'seconomic andsocial reforms appeared tohavebeenpositive, although
some concerns remained regarding investment restrictions, price controls, customs implementation,
andintellectual property rights protection. Hisdelegation hadsubmitted written questions onthese
subjects.
67. TheUnited States encouraged Fijitocontinue tosetanexample tomany other developing
countries experiencing difficulties withimplementing WTO obligations andopening theireconomies,
andtopersevere initswork towards attracting domestic andforeign investment.
68. Therepresentative oftheEuropean Communities noted thatFiji'sgeographical composition,
constituted astrong economic disadvantage thatincreased theneedforasound development strategy.
Important components ofthisstrategy weretradeliberalization, economic deregulation, andopenness
toprivate investment. Asound andconsistent policy framework provided byGovernment, andaflexible
andresilient private sector would provide thebasis forsuccess. Hisdelegation strongly encouraged
Fijitocomplete itsreform programme inorder toimprove itscompetitiveness intheworld economy,
andbelieved thatFiji'sobjectives andparticipation intheWTO should besupported.
69. Henoted thatadetailed report hadrecently beenreceived fromFijionvaluation policies and
procedures andhoped thatfurther notifications would follow.
70. Hisdelegation hadsubmitted written questions onvarious subjects andhelooked forward to
theresponses.
71. Therepresentative ofJapan welcomed thereduction ofFiji'smaximum tariffto22.5percent
onalmost allproducts. Heasked about thestatement bytheMinister ofFinance whereby hedeclared
thatFijiwould review tariff ratesinearly 1997, and,inparticular, whether Fijiintended toreview
itstariff ratesof50to60percentonnewautomobiles and40percentonprocessed rice.
72. Heenquired whether, inthelightoftheimproved investment climate, Fijiintended tomodify
theConstitution andtheAgricultural Landlord andTenant Act. Fijiencouraged foreign investment
intheform ofjoint ventures andhewondered whether investors were restricted tothistypeof
investment. Capital transfers wererestricted toF$15 million ayearpercompany, andpriorapproval
wasrequired fortheissueofshares inFijitoanon-resident; heasked whether Fijiintended toreview
theserestrictions. Regarding future policies, hisdelegation wasinterested toknow whether Fijiintended
toadopt anti-dumping andsafeguards legislation andwhether Fijiwould jointheAgreement on
Government Procurement.WT/TPR/M/24
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73. Therepresentative ofNorway noted thateconomic growth inFijihadslowed during the1990s
duetolagging investment andcontinued emigration. Shewondered whatmeasures werebeing planned
bytheGovernment tomeetthesechallenges. Withregard totheactivities oftheFijiSugar Corporation
andtheNational Trading Corporation Ltd., sheasked whether Fijihadmade anynotifications tothe
Working Party onStateTrading, andifnot,whether suchnotifications could beexpected. Commenting
onFiji'slackofsafeguards, anti-dumping andcountervailing measures sheasked whyFijihadnot
made anegative notification inthisrespect. Shenoted thatimport andexport-prohibited goods were
stipulated intheFisheries Actandasked whatkinds ofproducts were included andwhy.
74. Therepresentative ofCanada, commended Fijionthesuccess ofitspolicy shiftfromaninward
tooutward focus, anditsreduced reliance onimport duties asasource ofrevenue. Considerable trade
liberalization hadtaken place. Henoted, however, thatauthority togrant concessions wasdescribed
asdiscretionary, andsought comments from thedelegation ofFijionthisissue.
75. While services contributed 60percenttoGDP, thetransport sector remained highly regulated.
Herequested comments onthescope forliberalization inthisarea. Hewasalsointerested inanyplans
forprivatizationinthetelecommunicationssector,whichwascurrently100percentgovernmentowned.
76. Fijiexpected thatnational standards would reflect those ofAustralia andNewZealand. While
understanding therationale forbasing national standards onthose ofmajor trading partners, hepointed
outthatunder theTBTAgreement Members should basenational standards oninternational standards.
77. Hecongratulated Fijionitssystem ofconsultation, which allowed theprivate sector toexpress
itsviews withregard totrade policy. Heasked whatother consultations tookplace withtheprivate
sector, andwhether there were consultations withtheacademic community.
78. According totheSecretariat report, there hadbeenathree-fold increase intheproduction of
canned fish. Heasked whether thiswasderived primarily from canned tuna. Herequested further
details onFiji'spolicy onlong-term sustainability inthemanagement offisheries resources; andon
theprocess andpermission requirements forexporting livefish,turtle shells, etc.,andwhether the
Ministry ofAgriculture, Fisheries andForests considered these tobeendangered species. Noting the
relatively hightariffof22.5percentonfishimports, herequested details ofthevolume offishimported
andthetopfoursource countries forsuchimports. Regarding agriculture, heasked whether Fijiadopted
international sanitary andphytosanitary standards; ifso,which standards oragreements didFijiadhere
towhen implementing itsSPSregulations.
79. Therepresentative ofPakistan commended Fiji'ssignificant liberalization efforts since 1989,
including features suchastariff reductions, rationalization oftheimport licensing system andavery
short negative list.However, hewascurious toknow whyliverabbits, andweighing machines with
alternative graduations, were included onthislist. Oneofthefuture challenges forFijiwasfull
compliance withitscommitments under theUruguay Round Agreements, including notifications on
subsidies, butnot,intheviewofhisdelegation, involving corelabour standards.
80. Thecombined effects ofthephasing outofquantitative restrictions intextiles andclothing and
thepossible erosion ofpreferences inbothclothing andsugar required concerted efforts toimprove
thecompetitiveness ofFiji'sexports. Private sector participation would increase competition and
investment, andimprove management practices, resulting inincreased overall productivity and
competitiveness. Diversification ofexport markets could alsobehelpful. Rationalization ofthesystem
oftariff concessions wasnecessary toimprove economic efficiency.WT/TPR/M/24
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81. TherepresentativeofMauritius,statedthatactiveinvolvementoftheprivatesectorwasnecessary
forFijitoadapt tothemultilateral trading system. Inaddition, steps tobring about amore fraternal
society inFiji,would provide abasisforsustainable economic growth. Heencouraged theGovernment
ofFijitotakethenecessary measures toenable economic growth toreturn toprevious levels.
82. Therepresentative ofHong Kong waspleased tonotethatmost applied tariffs inFijiwere
below thebound ratesandthatthesimple average applied ratehadbeenreduced to12.4percentin1996.
However, further reductions ofremaining tariff peaks, andthegradual removal oftariff escalation
would bewelcomed. Fijihadnotmade anofferintheFinancial Services negotiations, andhisdelegation
wished toencourage Fijitotakeamore active partintheresumed negotiations. Henoted thatthere
wasnoobligation foraWTO Member tointroduce trade remedy legislation ortakesuchactions.
Hisdelegation believed thatquestions ofcorelabour standards should betaken upintheILO.WT/TPR/M/24
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VI. REPLIES BYTHE REPRESENTATIVE OFFIJIAND ADDITIONAL COMMENTS
83. Thereplies bytherepresentative ofFijiweredivided intothree themes: macroeconomic and
structural questions; general trade policy questions; andspecific areas ofconcern.
(i) Macroeconomic andstructural questions
84. Fiji'seconomic performance inthe1990s hadbeen modest. However thishadbeen an
improvement from thevolatile fluctuations ofthe1980s. Ithadalsobeeninlinewithglobal trends
butsomewhat lower thantheaverage forthedeveloping countries asagroup; theexcellent performance
oftheSouth-east Asian countries continued to"prop up"thegrowth ratesofdeveloping countries.
While Fijiwould verymuch liketoemulate itsAsian neighbours, thereality wasthattheireconomies
werenotsimilar. Fijifaced special features ofasmall market, frequent natural calamities andisolation
from major markets. Fijiwaslearning appropriate lessons from thepolicies andeconomic progress
ofSouth-east Asian countries.
85. Fortheperiod 1991 to1995, thebudget deficit averaged 2.3percentofGDP. Fiscal policy
wasgoing through anadjustment phase having toaccommodate one-off expenditures likethenational
population census, andsupport fortheNational Bank ofFijiandsome public enterprises. Thedeficit
roseto4.6percentin1996 andwasexpected toincrease toover6%in1997.
86. TheGovernment clearly recognized theneedforfiscal consolidation .Amedium-term strategy
wasaimed atachieving abalanced budget bytheyear2000; thiswould beachieved through restraint
onoperating expenditure andimproved revenue compliance. Measures tostreamline government
operations included theformulation ofcorporate plans bydepartments, theimplementation ofaccrual
accounting, andpartdivestiture ofgovernment shares inpublic enterprises. The1996and1997Budgets
hadbeenformulated onweakdomestic investment andmodest economic performance. TheGovernment
wastherefore intheprocess ofre-orientating itsexpenditure toward priority sectors andtothekey
social areas ofhealth, education andhousing.
87. Income taxaccounted foraround 22percentofbudgetary revenue andindirect taxesforaround
53percent,reflecting adeliberate shiftaway fromincome taxes toprovide incentives forhardwork
andeffort. Value-added tax(VAT) exemptions andzeroratings were kepttoaminimum mainly to
facilitate taxadministration, toreinforce Fiji'sexport-led strategy andtoreflect itslarge agricultural
base.
88. Fijifaced adaunting challenge inthefuture. TheGovernment wasmoving simultaneously on
severalfrontstopromoteinvestment.Progresswasbeingmadetoresolvetheconstitutionalandland-lease
issues, withaJoint Select Committee ofParliament reviewing these matters; incentives hadbeen
announced topromote construction ofhotels; exchange controls hadbeenprogressively relaxed, which
shouldhelpbuildconfidenceintheeconomy;waystostreamlineapprovalproceduresandfiscalincentives
were continually being explored; andtheGovernment wasmounting trade promotions domestically
andabroad.
89. Regarding thespecific questions raised onforeign direct investment, these required detailed
andconsidered answers which would beprovided within amonth.
90. Fiji'sbalance oftrade wastraditionally indeficit duetoitsnarrow resource base. Imports
ofgoods included essential rawmaterials forproduction. While abalanced commodity account was
preferable, thiswould notbepossible norwould adeficit constrain Fiji'seconomic performance. Fiji's
current account turned tosurplus in1996 anditwashoped thatsurpluses would bemaintained inthe
nextthreeyears. Thestrength ofFiji'sbalance-of-payments position wasreflected inthelevelofforeignWT/TPR/M/24
Page16
reserves interms ofmonths ofimports, which haddoubled from three months prior to1987 tothe
current levelofoversixmonths. Furthermore, Fijihadmanaged tokeepitsinflation tosingle figures
andwascurrently at3.2percent. Fijihadsecured macroeconomic stability inrecent years, which
should provide afirmfoundation forfuture growth andemployment.
91. Inresponsetoquestionsaboutpaymentsrestrictions,FijihadmettherequirementsofArticleVIII
oftheIMF, withnorestrictions oncurrent payments. Atthesame time, given itsnarrow export base
andsusceptibility toexternal developments, thesurrender requirements ofallforeign exchange had
served Fijiwell. Thiswould bere-examined periodically andapprovals werenowgiven toexporters
toretain upto20percentofexport proceeds inforeign currencies. Exporters would needforeign
exchange topayfordomestic costs.
92. Several frameworks wereinplace forconsultations withtheprivate sector. TheGovernment
hadconvened aNational Economic Summit in1995 andvarious sub-committees hadbeensetupto
implement therecommendations. Inaddition, discussions were heldregularly withprivate sector
organizations liketheChambers ofCommerce, FijiEmployers Federation, NGOs andothers.
93. Onprice control, thelistincluded intheSecretariat Report wasforitems under control prior
toJune1996. Thelistofadditional items included in1996wasbeing circulated. Thequestion regarding
Fiji'simposition ofdifferent methods ofpricecontrol forlocalandimported products required adetailed
response which would beprovided later.
94. Fijirecognized thathuman resources development wascrucial tothedevelopment oftrade
andhadputinplace several measures inits1997 Budget including improved freeschooling; better
teacher training; andincreased incentives forteachers toserve inruralschools. These measures would
helptoincrease thenumber ofstudents thathadaccess toeducation, aswellasimprove thequality
ofeducation. Fijiwasalsoimplementing aNational Human Resources Development Programme with
theassistance oftheILO.
95. Thefirstdiscussant asked whether efforts toaddress thefiscal deficit would include reductions
inthesizeofthepublic sector. Shesought clarification onwhether newaswellasexisting investments
weregranted national treatment, andonthediscretionary powers oftheinvestment board. Shebelieved
thatthediscretionary approval process could beanimpediment toforeign direct investment. Shealso
sought clarification oftherestrictions onforeign investment insugar milling. With regard tohuman
resource improvements, shecommended Fijiforraising theleveloffreeschooling, however shenoted
thatschooling wasnotcompulsory andwondered whether thiswasreflected inthegender ratioin
schools. Sheenquired about efforts forvocational training, which wasimportant forthedevelopment
ofskilled labour.
96. Thesecond discussant, while noting thatdetailed responses toquestions onpricecontrols would
beprovided atalaterdate,enquired whether theFijiconsidered thatpricecontrols should beapermanent
feature ofpolicy orashort-term measure. Therepresentative oftheUnited States asked whether the
application ofprice restrictions hadresulted inincreased smuggling orother activities tooffset the
resultant limitation ofprofits.
97. Therepresentative oftheEuropean Communities requested clarification ontheoperation of
theFijiTrade andInvestment Board. Therepresentative ofNewZealand asked forfurther information
ontheimplementation ofthePublic Enterprise Act.
98. Inresponse, therepresentative ofFijistated thatconsultations wereongoing andefforts were
being made toreduce thesizeofthepublic sector. Concerning foreign direct investment, hebelieved
thatFijiwasoneoftheeasiest countries inwhich toinvest. Approvals werenormally given withinWT/TPR/M/24
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sixweeks bytheFijiTrade andInvestment Board (FTIB). Thediscretionary powers werevested in
theMinister ofCommerce, Industry andPublic Enterprises andtheMinister ofFinance andEconomic
Development, whose signatures were required ontheapprovals. These discretionary powers were
veryrarely exercised, however, asthetwoministries wererepresented ontheapproval board. Investors
notrequesting concessions werenotrequired toapply forapproval bytheFTIB, andwereunder no
obligation totakeonajointventure partner. Aninvestment bill,elaborating allrequirements for
investors, wascurrently being examined byaSelect Committee before passing through Parliament.
Fijigranted national treatment toallinvestments without discrimination. Withregard tothequestion
oninvestment restrictions insugar milling andsugar canebuying, thesewerenotexclusive businesses,
butwere notattractive toinvestors duetohighcapital requirements.
99. Onthequestion ofhuman resources, vocational training centres existed, suchastheFijiNational
Training Council andtheFijiInstitute ofTechnology, andtherewasnogender discrimination inaccess
toeducation.
100. Price controls were important onabasket ofbasic commodities. Almost 60percentofthe
population lived inrural areas andwere engaged onlyinsubsistence farming. These people were
dependentonthebasiccommodities,andpriceswerecontrolledtopreventprofiteering.TheGovernment
wasunder pressure fromtheunions toretain pricecontrols astheyaddressed theneeds ofthemasses.
Hestated thatnosmuggling hadbeennoted bytheauthorities.
101. ThePublic Enterprise Actwasnowinplace anditsimplementation wascurrently under
examination.
(ii) General trade policy questions
102. Fijiagreed withtheview thattrade liberalization needed totakeplace inconcurrence with
reforms inother sectors oftheeconomy. Inthepastnineyears, efforts hadbeenconcentrated ontrade
liberalization through removal oflicences, andreduction intariffs. However, inasmall economy such
asFijiwithitsstructural disadvantages, thechallenge would betoreduce protection toalevelatwhich
itcontinued tospurlocalefficiency, productivity andcompetitiveness without sacrificing large parts
oflocalbusiness. Hence thepaceofdomestic deregulation hadtobeincreased through other reform
measures inorder toencourage localcompetitiveness.
103. Tariff reform hadbeenslowed inrecent years toallow otherelements ofFiji'seconomic reform
programme tobebrought uptospeed. These elements included labour, capital market andpublic
sector reform. Tariff reduction hadbeenpartially successful ininducing domestic efficiency through
competition fromimports. These needed tobecomplemented byimproving competitiveness through,
forexample, newtechnology, newequipment, design, packaging, andbetter quality rawmaterials.
Thiswould address theso-called level-playing fields intheglobal markets. Further tariff reductions
would await theoutcome oftheDeregulation Policy Review thatwaspresently being conducted.
104. TheDeregulation Policy Review wascommissioned following recommendations arising out
ofthe1994 National Economic Summit andasubsequent Cabinet decision. Itwasfeltthatthepace
oftrade deregulation (inparticular tariff reform) wastoofarahead ofother complementary policies
suchasthederegulation inother areas, andasaresult theprivate sector wasfinding theadjustment
painful. Private sector representatives onthederegulation panel wereappointed fortworeasons: to
haveanindependent assessment -earlier studies wereconducted generally byGovernment; andthey
were better abletoarticulate theviews ofthegroup mostly affected. Intheirindividual capacities,
theyhadthenecessary skills andexperience toundertake thissurvey.WT/TPR/M/24
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105. Licence control onbutter wasremoved in1995, andin1997 theGovernment removed
concessions andimport quota restrictions onpowdered milk.
106. AttemptstorelaxtheSPARTECArulesoforiginhadbeenunsuccessfulandtheideaofabilateral
arrangement withAustralia andNewZealand wasbeing explored asanalternative. Thetransition
fromregional non-reciprocal (SPARTECA) tobilateral reciprocal arrangements wasintended toassist
Fijicompanies toadjust toanopennon-preferential trading environment. Thebilateral arrangements
withtheotherSouth Pacific Island countries werepartofFiji'soverall policy toharmonize andliberalize
tradepolicy onaregional basis. Onthequestion ofLomé andGSP, discussions werenowunder way
regarding these issues andFiji'sposition could begiven atalaterdate.
107. Onthewider regional interests, Fijiwasclosely watching thedevelopments within APEC with
aview toaligning itstrade reform policies withAPEC policies. Recent entry intotheMelanesian
SpearheadGroupwasindicativeofFiji'sdesiretoenterintoregionaltradeagreementswithneighbouring
countries intheregion.
108. Fijialready hadcompetition law,theFairTrading Decree 1992. This legislation wassimilar
totheAustralian Trade Practices Act.TheDecree hadthree main sections: Consumer Protection,
Restrictive Trade Practices andWarranties andGuarantees. Thesection onrestrictive trade practices
prohibited anumber ofanti-competitive practices thathindered orprevented themarket fortherelevant
goods orservices from operating freely. Ifnewlegislation waswarranted inthefuture, Fijiwould
consider it.
109. ThedraftCopyrightBillwasnowbeingexaminedinconsultationwithWIPOanditwasexpected
tobesubmitted toParliament bytheendoftheyear. Further, Fijiwascurrently consolidating its
request forapackage oftechnical assistance bothforaligning domestic intellectual property legislation
withtheTRIPS Agreement andforinstitutional capacity building including modernization ofintellectual
property lawsandadministration. WIPO hadalready conveyed thepossibility ofproviding therequested
assistance.
110. Since adoption oftheInvestment Policy Statement inAugust 1996, work wasprogressing on
aligninginvestmentrelatedlegislation/regulationwiththeStatement.Thiswouldpreparethegroundwork
forfinalizing thedraftInvestment Bill.Fijiwould continue toofferincentives andconcessions toattract
foreign investment andalsowould focus onimproving theinfrastructure, suchasroads, policing and
security, aswellasonlowering business costs, suchasonelectricity andcommunications.
111. Thequestion ofbringing down theapplied tariff ratesonalcohol andtobacco totheirbound
rateshadtobelooked atholistically fromtheaspects ofhealth, revenue andWTO time-frames. Rice
andpowdered milkwere bound at46percentbutcurrent rateswere now40percentforrice,and
35percentforpowdered milk. Most other agricultural imports nowboreatariff of22.5percent;
andallagricultural rateswere below thebound levels.
112. Theconcern raised inregard tosome aspects ofcustoms valuation were covered inother
supplementary legislation under theCustoms Act.Fijiwasintheprocess ofupdating thelegislations
andthese issues would beaddressed.
113. Hisdelegation hadnoted theconcerns raised overmatters relating tocorelabour standards.
Thisissuewasasubject ofdiscussion atthefirstWTO Ministerial Meeting inSingapore. Itwasagreed
atthatmeeting thattheILOwasthecompetent bodyinthearea,andhisdelegation believed thatthese
matters should bedealtwithintheILO.WT/TPR/M/24
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114. Inregard tovaluation ofcarrier-media-bearing software thishadbeenaddressed internally
bytheissuance ofofficial andpublic circulars.
115. Fijiintended toeliminate theimbalance intherates ofexcise duty charged onlocally
manufactured cigarettes containing imported tobacco andthose withdomestically grown tobacco. The
introduction ofspecific ratesonimported alcoholic beverages andcigarettes wasarevenue-generating
measure. Thehighratesofdutyimposed initially onmotor vehicle imports wasintroduced toraise
revenue; theywere nowbeing systematically reduced.
116. Thequestion ofdrawback ofdutyonrawmaterials usedbyFiji'smanufacturers waspartof
anincentive package. Most oftheimported rawmaterials usedlocally bytax-free factories were
imported duty-free, sothequestion ofdrawback didnotarise.
117. Inregard tonarrowing thedispersion intariffs andtherecommendation toshiftspecific to
advalorem rates, these measures werepartoftheGovernment 'seffort toprevent revenue evasion by
importers. However, Fijiwasmindful ofitsWTO obligation inregard toreducing these tariff levels.
118. Ontheissue ofdutyconcessions andVAT, these remained theprerogative oftheMinister
ofFinance andEconomic Development, under theadvice oftheComptroller ofCustoms. VAT was
applied generally, except forthose exempted under theVAT Decree.
119. Thefirstdiscussant asked whether, inorder toimprove productivity, Fijiintended tochange
thesystem ofpayments, forexample inthesugar industry, toreward quality products. Under the
current system thesamepayments weremade regardless ofthequality ofthesugar cane. Inefficiencies
alsoexisted inthecutting andtransport ofthecane. Inthegarments sector, labour costs weremuch
higher thanother producers inAsia.
120. Thesecond discussant reminded Fijithat,withregard totheprotection ofintellectual property
rights, thelimited timeframe fordeveloping countries tobring theirlegislation intoconformity with
WTO obligations started ontheentry intoforce oftheWTO. Regarding bound rates, hebelieved
thattariffs ontobacco andalcohol should bedelinked from theissue ofhealth oranyrevenue
considerations.
121. Therepresentative oftheUnited States stated thatthere wassome room fordiscussion inthis
forum regarding developments intheareaofhuman rights. Henoted thattheUnited States Country
Report onHuman Rights Practices forthepastyearindicated thatinFijithelawprotected therights
ofworkers toformunions andthat,inpractice, theauthorities respected these rights. Thereport also
stated thatthelawrecognized therighttoorganize andbargain collectively. However, thelawpermitted
restrictions tobeapplied ingovernment employment andintheinterests ofdefence, public safety,
public order, public morality orpublic health, etc.Several issues regarding Fiji'simplementation of
ILOConvention 98wereunder review bytheILO,e.g.theCounter-inflation Remuneration Actcould
leadtorestrictions inwage increases negotiated under voluntary collective bargaining agreements.
Inconsultationwithworkers,theGovernmentwasconsideringlegislationtoprotectworkersorganizations
against actsofinterference byemployers. Fijihadbeenasked tokeeptheILOinformed ofdevelopments
intheseandother areas, andhewasinterested tolearnwhether theGovernment hadhadtheopportunity
toresponded tothisorhadplans torespond totheILOCommittee ofExperts. Finally, hewasinterested
toknow whether wage increases had,inpractice, beenlimited bytheCounter-inflation Act.
122. Therepresentative ofPakistan enquired whether Fijiwascurrently negotiating accession to
theMSG trade agreement andifso,howsoonitexpected tobecome amember oftheagreement.
Regarding dutydrawback, heasked whether there wasanybudget allocation forthispurpose. HeWT/TPR/M/24
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reminded Members ofthetextsetting outthepurpose oftheTPRM andreiterated hisdelegation 's
belief thattheissue ofcorelabour standards wasnotrelevant inthisforum.
123. Therepresentatives ofAustralia, Colombia, Cuba, Hong Kong, Mexico, NewZealand, Peru
andSingapore speaking onbehalf ofASEAN, expressed theirsupport fortheopinion ofthedelegation
ofFijithattheILOwastheforum forquestions oncorelabour standards.
124. Therepresentative ofNewZealand asked when thereview onderegulation policy would be
concluded andwhether adecision would immediately follow itsconclusion. NewZealand believed
thatalthough rapid reforms weredifficult toundertake, theybrought fargreater improvements interms
ofglobal competitiveness andeconomic efficiency. Ithadbeenshown thatbestresults wereachieved
when allaspects ofreform wereundertaken concurrently. NewZealand therefore strongly encouraged
Fijitocarry outreforms onaconcurrent basis. Therepresentative ofAustralia wasinterested inthe
timeframe forthereview onderegulation policy andwondered whether thedelegation ofFijihadany
expectations ontheoutcome ofthereport.
125. Therepresentative ofCanada noted thathisdelegation wasflexible about theraising ofquestions
regarding theILOintheTPRB andbelieved thatamember wasfreetoreply tothese questions or
merely statethattheywere continuing tocooperate withtheILOonthese matters.
126. Therepresentative ofJapan asked forfurther clarification onthesystematic reduction ofthe
highrates ofdutyonautomobiles mentioned bythedelegation ofFijiandforfurther information
regarding themodification oftheConstitutional LawandtheAgricultural Landlord andTenant Act.
With regard totheraising ofquestions ontheissue ofcorelabour standards, while saying hehadto
check theofficial position ofhisGovernment, heassociated himself withthecomments bythe
representative ofCanada given thattheTPRM wasaforum where questions could beraised inabroader
context ifaMember State considered them toberelated totrade policies.
127. Therepresentative oftheUnited States stated hisdelegation 'sbelief thatthequestions raised
regarding labour standards were amatter oftransparency, which wasoneofthecoreprinciples of
theWTO, andthuswere reasonable andrelevant toraisehere.
128. TheChairperson stated thatthebasic textsguiding theTPRB were Annex 3oftheMarrakesh
Agreement andtheSingapore Ministerial Declaration. Theinterpretation ofthesetextsbythevarious
speakers would bereflected intheminutes ofthemeeting. Shewould alsomake afullreport tothe
Chairman oftheTPRB onthedegree towhich thematter oflabour standards hademerged. There
wasawider issue herewhich theChairman would nodoubt wishtodiscuss further withMembers;
itwould notbecourteous tothedelegation ofFijitoallow theissue todominate thepresent review.
129. Therepresentative ofFijistated thathisGovernment wasaware oftheneedtolookatamethod
ofpayment forquality. Discussions were currently being heldwiththemillers andthegrowers on
amethod ofpayment based oncanesucrose content.
130. Regardinginefficiencyintransportingcane,thiswasprobablyinadequacyratherthaninefficiency.
About 4million tonnes ofcanewere produced eachyearofwhich about twothirds wastransported
byrailtothemills. Theinfrastructure andthecostoftransporting byrailwasforthemillers 'account.
Thebalance ofabout onethirdofcanewasmoved byroad, thecostofwhich wasforthegrowers '
account. Thecostsofhaulage byroadwereescalating, which wasbeyond theindustry 'scontrol, and
thegrowers were suffering because ofthese escalating costs. About 22,000 canegrowers produced
thecane, allofwhich wasmanually harvested. Trials hadbeencarried outonpartially mechanized
harvesting, butonaverage-sized holdings of15acres itwasnoteconomical.WT/TPR/M/24
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131. Onthequestion ofpayratesforgarments workers, weekly wage ratesinthegarment industry
were much higher thanintheSouth-east Asian economies duetotheefforts ofthestrong labour
movement. Fijitherefore hadtofind"niche" markets.
132. Concerning intellectual property rights, Fijiwasaware ofthetimeframe required byWTO
andwasworking toward meeting it.
133. Regarding thequestions raised oncorelabour standards, therepresentative ofFijistated that
hewasnotcompetent tocomment onsuchasensitive issue andwould leave ittotheILO.
134. Onthederegulation review, itwashoped thatthiswould befinished byJune1997. Regarding
thesystematic reduction ofthetariffonvehicles, hestated thatin1988thedutyhadbeen200percent
compared to60percentin1997.
135. Constitutional review wasaverysensitive issue; thiswasoneofthereasons whyParliament
hadformed ajointSelect Committee frombothsidesoftheHouse. Fijiwasdealing withthismatter
internally.
(iii) Specific areas ofconcern
136. Onquarantine issues, thepolicy switch from zero-risk tominimal-risk hadrelaxed thetight
controls onimports andatthesame timeopened upimports ofpoultry meats fromtheUnited States
andagricultural products fromtheother South Pacific Island countries. These sources wereexcluded
under theoldregime.
137. Theincrease inproduction ofcanned fishduring theperiod 1986-1995 wasdivided between
mackerel andtuna. Written responses would beprovided latertospecific questions onfisheries and
agriculture.
138. Thesugar industry constituted thebackbone oftheFijieconomy. Thestable levelofearnings
under membership oftheSugar Protocol hadcontributed immensely tothesocio-economic development
ofFiji.This, inturn,hadhelped intheestablishment andtheoperation oftheother industries inthe
manufacturingsector.Fijiexpectedareductioninsugarpricesandtheerosioninthepreferentialmargins
under theSugar Protocol andwasintheprocess ofimplementing structural changes inorder toimprove
efficiency andproductivity inallfacets ofthesugar industry. However, thetrade preferences would
stillbeneeded intheforeseeable future inorder forFijitoremain competitive.
139. Fijirecognized theneedtodiversify itseconomic basesoastolessen itsdependence onsugar.
However, thediversification hadtoco-exist withthesugar industry. Experience hasshown thatsugar
canecontinued tobethebestcropinterms ofeconomics andlandutilization. Furthermore, sugar
hadproved overtheyears tobethemostviable agricultural crop, being themostadaptable toclimate
andsoilconditions andbestabletorecover fromnatural disasters suchasfloods, droughts andcyclones.
140. Fijihaddiversified itseconomy significantly since 1987. Inparticular manufacturing had
increased itscontribution, anddiversification efforts would continue inthelongterm. Butintheshort
termagriculturewouldcontinuetobethemainstay.TheGovernmenthadagreedtoestablishacommodity
development framework forother agricultural crops inorder towiden theagricultural produce base
andtomaximize returns fromlandresources. Competitiveness wasthekeytosuccessful diversification,
andmeasures were being implemented toreform thepublic sector andraiseproductivity, including
wage determination andthesetting upoftheProductivity Board. TheGovernment hadalsoannounced
theremoval ofthepower board monopoly.WT/TPR/M/24
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141. TheFijiSugar Corporation Ltd.(FSC) wasapublic listed company inwhich theGovernment
held68percentoftheshares; itwasnot,therefore, astate-owned enterprise. Defacto, FSCwas
thesolebuyer ofsugar caneandmanufacturer ofrawsugar; however, itdidnothaveexclusivity.
142. Inefforts toassist thegarment industry copewiththeremoval ofpreferences astudy hadbeen
commissioned in1993. Technical assistance wascurrently being sought fortheimplementation of
itsrecommendations ontrading andskilldevelopment toenable theindustry topenetrate low-volume,
high-quality niche markets.
143. Diversification ofexports intheservices sector wasanimportant initiative byGovernment
andwork towards aservices policy wascurrently being undertaken.
144. Onthetransportation sector, animportant factor forregulating public transportation (road,
sea,air)wastomake itaffordable tothepopulation ofwhich 60percentlivedintheruralandremote
areas andrelied heavily onpublic transportation.
145. Withregardtoqueriesonnotificationoftheabsenceofanti-dumpinglegislation,Fijihadrecently
updated itsnotification compliances onallAgreements except theAgreement onSubsidies and
Countervailing Measures, which wascurrently being prepared.
146. Thefirstdiscussant, referring totheFijiSugar Corporation, asked whether the32percent
ofshares notheldbytheGovernment wereheldbyprivate shareholders andwhether efforts werebeing
made tofurther reduce theGovernment 'sshare ofthiscompany. Sheasked whether private capital
could alsobeinvested inthisarea. Sheasked about thesteps thatmight betaken tocopewiththe
growth intheurban population; whatmight beenvisaged toprotect renewable resources likeforest
andfishing stocks against exploitation; andhowtheGovernment intended tocombine further expansion
ofthetourism sector withtheneedtoprotect theenvironment.
147. Therepresentative ofNorway appreciated theefforts made byFijitoupdate theirnotifications
andwondered whether thisalsoincluded so-called "negative notifications".
148. Therepresentative ofAustralia asked whether further information wasavailable regarding the
policy statement fortheservices sector.
149. Therepresentative ofFijireplied thatthe32percentofstocks notheldbytheGovernment
intheFSCwere heldbyindividuals orcorporations onaprivate basis. TheGovernment hadbeen
unable todispose ofits68percentoftheshares because theseshares weretraded onthestock exchange
andthere were nowilling buyers. TheGovernment heldthese shares notforregulatory purposes,
buttoassist theindustry which wassovitaltotheeconomy, andonwhich theGovernment feltitrequired
awatching-brief.
150. Onthequestion ofenvironment, Fijihadeco-tourism andwasdeveloping aframework to
safeguard theenvironment. Forexample, inthepineindustry thefocus wasonrenewable resources.
Environmental issues werebeing taken veryseriously andlawswere nowbeing implemented, e.g.,
people were nowfined onthespotforlittering.
151. Onthequestion ofservice policies, apaper being prepared wasprobably going tobepresented
toCabinet nextweek.
152. Regarding restricted exports andimports, certain items wererequired intraditional ceremonies,
e.g.,whale 'stoothwashighly significant andwasaprohibited export. Theexport ofturtle orturtlemeat
wasalsoprohibited. Thiswasadelicacy inFijiandtherewerealsospecific seasons where killing turtle
wasprohibited. Cabinet hadrecently enacted aDecision prohibiting theexport andkilling ofturtle
forfiveyears inorder topreserve stocks. Thiswastherefore alsoaconservation measure.