Fiji’s decision to reduce import duties as part of its Interim Economic Partnership Agreement (IEPA) with the European Union (EU) is expected to result in an annual revenue loss of $737,000. However, this loss is being balanced by Fiji’s substantial exports worth $132 million to the EU.
Deputy Prime Minister and Minister for Trade Manoa Kamikamica made this announcement during his statement in Parliament on Monday. He explained that the reduction in Fiji’s market access commitment from 80 percent to 75 percent, through technical amendments to the trade agreement, will eliminate tariffs on 4,916 individual items imported from the EU.
Kamikamica noted that currently, 32 percent of these items already have zero fiscal duties due to the More Favourable Nations (MFN) clause. Consequently, Fiji only needs to liberalize the remaining 43 percent. He stated, “Implementing the reduction in import duties on the remaining 43 percent is estimated to result in a revenue loss of approximately $737,000 per annum.” This figure is based on the average import duties collected over the past six years for the tariff lines Fiji has agreed to eliminate under the IEPA.
The Deputy Prime Minister emphasized that the benefits of trade significantly outweigh the revenue loss resulting from the elimination of tariffs on EU goods. Fiji currently exports tuna, ginger, mineral water, garments, and kava, contributing to the $132 million worth of exports.
Looking ahead, Kamikamica assured that the Government would continue to monitor the impact of the tariff eliminations on the local economy to address any challenges that may arise effectively.