Fiji’s decision to reduce import duties as part of its commitment to the Interim Economic Partnership Agreement (IEPA) with the European Union (EU) is expected to lead to an annual revenue loss of $737,000. However, this loss is being balanced by Fiji’s substantial exports to the EU, which amount to $132 million.
This information was shared by Deputy Prime Minister and Minister for Trade Manoa Kamikamica during a ministerial statement in Parliament on Monday. He noted that the commitment to market access would decrease from 80 percent to 75 percent due to technical amendments to the trade agreement, resulting in the removal of tariffs on 4,916 items imported from the EU.
DPM Kamikamica explained that currently, fiscal duties on 32 percent of these items are already set at zero because of the More Favourable Nations (MFN) clause, meaning that Fiji only needs to liberalize the remaining 43 percent. He estimated that the duty reduction on this portion would lead to a revenue loss of approximately $737,000 each year, based on the average import duties collected over the last six years for the tariff lines designated for elimination under the IEPA.
He emphasized that the advantages of trade significantly surpass the anticipated revenue loss from eliminating tariffs on EU goods. Fiji exports a variety of products, including tuna, ginger, mineral water, garments, and kava, collectively worth $132 million.
Looking ahead, the Deputy Prime Minister assured that the government would continue to monitor the implementation of tariff eliminations to ensure they positively impact the local economy, allowing for quick responses to any arising challenges.