Fiji’s decision to reduce import duties as part of its Interim Economic Partnership Agreement (IEPA) with the European Union (EU) is projected to lead to an annual revenue loss of $737,000. This loss, however, is being balanced by the country’s $132 million in exports to the EU.
Deputy Prime Minister and Minister for Trade Manoa Kamikamica shared this information during a ministerial statement in Parliament. He explained that the adjustment in Fiji’s market access commitment from 80% to 75% will eliminate tariffs on 4,916 individual items imported from the EU.
Currently, fiscal duties on 32% of these items are already zero due to the More Favourable Nations (MFN) clause, necessitating a liberalization of the remaining 43%. “The estimated revenue loss from reducing import duties on the remaining items is approximately $737,000 annually,” Kamikamica stated. This estimate is based on the average import duties over the last six years for the tariff lines Fiji has agreed to eliminate under the IEPA.
Kamikamica emphasized that the trade benefits significantly outweigh the anticipated revenue loss resulting from the removal of tariffs on EU goods. Fiji exports products like tuna, ginger, mineral water, garments, and kava, totaling $132 million in trade.
Looking ahead, the Deputy Prime Minister assured that the government would monitor the effects of these tariff reductions to ensure they positively impact the local economy and allow for timely responses to any challenges that may arise.