Export Challenges Increase, Access Not Enough

Export Challenges Increase, Market Access Not Enough, Oti Told International Fincancers

Solomon Islands exporters face increasing challenges from competitors that even preferrential market treatment does not significantly adress the trade imbalance, Minister of Foreign Affairs Patteson Oti told the Asian Development Bank-sponsored conference on Wednesday.

Mr Oti was speaking on the importance of 'Aid for Trade', the international assistance to promote export industries in Small Island States and Least Developed Countries such as Solomon Islands.

The Minister said the difficulties created by Solomon Islands' large distance from its main trading partners and the low volume of goods that transit along its most important trading routes - both of which increase the cost of moving goods abroad and reduce the competitiveness of Solomon Islands' exports relative to its competitors.

He said the problems that domestic firms face challenges such as the high costs of telecommunications and domestic transport, and the small domestic market prevents Solomon Islands' firms from exploiting economies of scale locally to reduce their costs before moving into the more competitive world of international trade.

The Minister noted that Solomon Islands has received preferential access to foreign markets such as the European Union since the mid-seventies, but has been unable to capitalise on this privilege to build export industries that add significant value to its commodities.

He said that market access alone is not enough to enable the necessary development of Solomon Islands' economy.

Instead, a programme of trade facilitation, in part financed by international donors - so-called 'Aid for Trade' - would need to build capacity in the private sector as well as streamlining government departments such as customs, quarantine and testing laboratories, used to check that locally produced goods conform to strict international standards.

He said that assistance to the private sector could valuably improve the quality of fundamental business functions such as accountancy, management and technical aspects of manufacturing and production.

Mr Oti expressed the hope that his ministry could play a central role in attracting international funding and coordinating its effective delivery to those areas in both the public and private sector in which it will be most effective - a task that the ministry's ambitious project to analyse the country's current needs and capacity gaps, called the 'Integrated Framework', was designed to address.

A variety of issues associated with trade facilitation is being discussed, providing a forum for countries throughout Asia and the Pacific to share their experiences and identify opportunities to harness international support to develop successful export industries, particularly in those countries in the region that have not yet been able to take full advantage of the benefits of increased global trade.

The conference entitled "Mobilising Aid for Trade: Focus Asia and the Pacific", is hosted by the World Trade Organisation and Asian Development Bank.

ENDS

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