Report on the Implementation of the derogation to ... - Trade Websites
Report on the Implementation of the derogation to ... - Trade Websites
Report on the Implementation of the derogation to ... - Trade Websites
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Final <str<strong>on</strong>g>Report</str<strong>on</strong>g><br />
RoO Derogati<strong>on</strong> under <strong>the</strong> PACP-IEPA<br />
EXECUTIVE SUMMARY<br />
Background<br />
After several years <strong>of</strong> negotiati<strong>on</strong>s <strong>to</strong> establish a WTO-compliant reciprocal Ec<strong>on</strong>omic Partnership<br />
Agreement (EPA) between <strong>the</strong> European Uni<strong>on</strong> (EU) and <strong>the</strong> Pacific-ACP states (PACPs), <strong>the</strong> EU and<br />
PACPs agreed <strong>to</strong> <strong>the</strong> terms <strong>of</strong> an Interim EPA, which was initialled in November 2007 by Papua New<br />
Guinea and Fiji, and later signed in July and September 2009, respectively.<br />
As part <strong>of</strong> this agreement, a special derogati<strong>on</strong> <strong>to</strong> <strong>the</strong> standard Rules <strong>of</strong> Origin (RoO) for processed<br />
fish was negotiated. This derogati<strong>on</strong>, <strong>of</strong>ten referred <strong>to</strong> as ‘global sourcing’, permits PACPs <strong>to</strong> source<br />
raw material from any vessel regardless <strong>of</strong> flag or where it was caught, provided it has been<br />
‘substantially transformed’ by a PACP-based processing facility in<strong>to</strong> canned tuna or frozen cooked<br />
loins. This was a <strong>on</strong>e-<strong>of</strong>f and specific excepti<strong>on</strong> <strong>of</strong>fered exclusively <strong>to</strong> PACPs because <strong>of</strong> <strong>the</strong>ir<br />
his<strong>to</strong>rical lack <strong>of</strong> RoO compliant fish under <strong>the</strong> prior RoO due <strong>to</strong> limited fishing capacity <strong>of</strong> PACP<br />
fishing fleets, reduced processing capability due <strong>to</strong> physical and ec<strong>on</strong>omic fac<strong>to</strong>rs, geographical<br />
isolati<strong>on</strong> and distance from <strong>the</strong> EU market, as well as a low identified risk <strong>of</strong> destabilising <strong>the</strong> EU<br />
market.<br />
On 13 March 2008, PNG submitted a notificati<strong>on</strong> <strong>to</strong> <strong>the</strong> EU for use <strong>of</strong> <strong>the</strong> derogati<strong>on</strong> for processed<br />
fishery products. In meeting <strong>the</strong> review requirements specified in <strong>the</strong> PACP IEPA text (Pro<strong>to</strong>col II,<br />
Art. 6), this report <strong>on</strong> <strong>the</strong> implementati<strong>on</strong> <strong>of</strong> <strong>the</strong> RoO derogati<strong>on</strong> was commissi<strong>on</strong>ed for completi<strong>on</strong><br />
no later than three years after PNG’s notificati<strong>on</strong> had been lodged <strong>to</strong> c<strong>on</strong>sider <strong>the</strong> following:<br />
• Development effects <strong>on</strong> PNG ec<strong>on</strong>omy – l<strong>on</strong>g-term income and employment generati<strong>on</strong>;<br />
• Effective c<strong>on</strong>servati<strong>on</strong> and sustainable management <strong>of</strong> fishing resources (including<br />
compliance with sanitary and phy<strong>to</strong>sanitary (SPS) regulati<strong>on</strong>s and support for combating<br />
illegal, unregulated and unreported (IUU) fishing in <strong>the</strong> Western and Central Pacific Ocean<br />
(WCPO)).<br />
In additi<strong>on</strong>, <strong>the</strong> review also c<strong>on</strong>siders <strong>the</strong> impacts <strong>of</strong> <strong>the</strong> RoO derogati<strong>on</strong> <strong>on</strong> <strong>the</strong> EU canned tuna<br />
market and EU fishing and canned tuna processing industries.<br />
Impact <strong>of</strong> RoO derogati<strong>on</strong> <strong>on</strong> PNG development<br />
The impact <strong>of</strong> PNG’s global sourcing RoO derogati<strong>on</strong> <strong>on</strong> development effects <strong>on</strong> <strong>the</strong> PNG ec<strong>on</strong>omy<br />
has been negligible since 2008, given that existing canners have made very little use <strong>of</strong> <strong>the</strong><br />
derogati<strong>on</strong> <strong>to</strong> date.<br />
In <strong>the</strong> medium term future (2011-2016), with <strong>the</strong> potential development <strong>of</strong> an additi<strong>on</strong>al five<br />
processing plants, <strong>the</strong> derogati<strong>on</strong> is expected <strong>to</strong> have a partial impact <strong>on</strong> development effects <strong>on</strong> <strong>the</strong><br />
PNG ec<strong>on</strong>omy, given global sourcing is <strong>on</strong>ly <strong>on</strong>e c<strong>on</strong>tributing fac<strong>to</strong>r <strong>of</strong> several in attracting new<br />
<strong>on</strong>shore investment <strong>to</strong> PNG.<br />
Onshore tuna processing facilities<br />
Currently, PNG has three tuna processing facilities handling canned tuna and cooked loin producti<strong>on</strong>,<br />
with a combined maximum processing capacity <strong>of</strong> 520 mt/day (130,000 mt annual raw material<br />
throughput). In September 2011, actual producti<strong>on</strong> was around 280 mt/day (70,000 mt/year). From<br />
2008-2011, global sourcing has had little influence <strong>on</strong> growth <strong>of</strong> PNG’s existing tuna processing<br />
Linpico s.a.r.l. Page 1