Papua New Guinea seeks free trade talks with Japan, PM says
Nikkei Asia | 17 July 2024
Papua New Guinea seeks free trade talks with Japan, PM says
by SHAUN TURTON and RURIKA IMAHASHI
TOKYO — Japan and Papua New Guinea have discussed the path toward a potential free trade agreement, PNG Prime Minister James Marape told Nikkei Asia on Wednesday.
Marape spoke with Nikkei in an exclusive interview on the sidelines of the 10th Pacific Islands Leaders Meeting, where the Papuan leader has held bilateral discussions with Japanese counterpart Fumio Kishida. The two leaders discussed the steps forward in pursuing an FTA, Marape said.
"It was part of our discussions in [these] bilaterals, and it has been going on for some time," he said. "My trade minister will come back and visit Japan, and likewise a Japanese trade team will also visit us. The initiation will start, and then we will proceed with the study."
Japan replaced Australia as Papua New Guinea’s largest export destination in 2022, the Papuan National Statistics Office reports, while China ranked third. PNG was Japan’s fifth-largest source of liquefied natural gas in 2023, according to Japan’s government.
Marape said Kishida had asked for continued supplies of LNG.
"We have had a consistent supply of LNG since 2014, and there are more gas projects to be developed in our country," he said. "[Kishida has] placed a special request for supply of gas to Japan."
Marape said his vision for an FTA fits with ambitions to expand the trading relationship with Japan. He said he wants Japanese manufacturers to set up operations in PNG special economic zones and wishes to boost his country’s fishery and agricultural exports.
Marape said he hopes to "wrap up" the feasibility study for the trade agreement in time for the 50th anniversary of the country’s independence in September 2025.
But it is unclear how far the proposal has progressed on the Japanese side. A senior official from Japan’s Foreign Ministry was unaware of the discussions.
Papua New Guinea is conducting a feasibility study on a free trade deal with China, which the prime minister said was "almost completed." Marape said 50% of the country’s trade is with China. He said the government was also pursuing measures to deal with the ongoing shortage of foreign currency. These include asking exporters in the mining and gas sector to bring some of their earnings back into Papua New Guinea’s central bank and using Chinese renminbi as a currency for trade.
"We’re also looking at the possibility of using Chinese renminbi as a currency of trade so those that import and export out of China could bypass the need to use the U.S. dollar," he said. "I have my key economic ministers looking into this, how it will add value to our economy by bypassing the need for U.S. dollars."
Beijing is working to extend its reach in the Pacific, triggering a response by the U.S., Australia and New Zealand, which have moved to shore up their ties in the region.
Papua New Guinea last year signed a defense cooperation agreement with the U.S., giving American forces access to six sites including airports, ports and a naval base. It also inked a broad security agreement with Australia.
Adm. Samuel J. Paparo, commander of the U.S. Indo-Pacific Command, this week led an interagency delegation to PNG’s capital, Port Moresby, to meet with officials.
Marape said the cooperation agreement, under which the U.S. will help train the Pacific country’s military and upgrade facilities, was a "work in progress."
In January, PNG Foreign Minister Justin Tkachenko told Reuters that China had approached the country about a policing pact, though the top diplomat quickly poured cold water on the idea.
Asked about the approach by Beijing, Marape said PNG had sufficient security relationships elsewhere, and the China relationship would "remain in the space of commerce and trade."
During World War II, PNG was the site of fierce battles between the U.S. and Japan. Asked about the growing geopolitical rivalry in the region, Marape said coexistence and trade were his priorities.
"I don’t predict the future ... whatever happens to our big superpowers is entirely up to them. But as far as those of us who live and stay in the Pacific, we want the Pacific space to be free of war, free of violence, free of territorial disputes," he said. "These are the intentions of the Pacific island family of nations, including Papua New Guinea."
