Fiji’s commitment to the Interim Economic Partnership Agreement (IEPA) with the European Union (EU) will lead to an annual revenue loss of $737,000 due to a reduction in import duties. However, this revenue shortfall is being balanced by the country’s $132 million in exports to the EU.
Deputy Prime Minister and Minister for Trade Manoa Kamikamica made this announcement in Parliament on Monday. He explained that a reduction in Fiji’s market access commitment from 80 percent to 75 percent involves technical amendments to the trade pact, resulting in the removal of tariffs on 4,916 specific items imported from the EU.
Kamikamica noted that fiscal duties on 32 percent of these items are already zero because of the Most Favored Nation (MFN) clause, meaning Fiji only needs to liberalize the remaining 43 percent. “Implementing the reduction in import duties on this remaining 43 percent is estimated to result in a revenue loss of approximately $737,000 per year,” he stated. This estimate is based on the average import duties collected over the last six years on the tariff lines that Fiji has agreed to eliminate under the IEPA.
He emphasized that the benefits of trade significantly outweigh any revenue loss from removing tariffs on EU goods. Fiji currently exports products such as tuna, ginger, mineral water, garments, and kava, totaling $132 million.
Looking ahead, Kamikamica assured that the government would closely monitor the impacts of tariff eliminations to ensure they contribute positively to the local economy and promptly address any challenges that may arise.