Economist Tim Harcourt has called for a trade pact between Pacific nations and Australia and New Zealand to support small exporters throughout the region to expand their export potential.
Recent data on trade and export across the Pacific, provided to the UNSW Business School, indicates that Fiji is the biggest exporting nation (25 per cent of exports), followed by Samoa, Tonga, Vanuatu, Cook Islands and the Solomon Islands and they faced significant financial, transport and labour issues.
"There is no scale in the Pacific, so they have to export to the largest markets, such as Asia, the US, Australia and New Zealand, instead of to their Pacific neighbours,” says Mr Harcourt, a UNSW Business School economist. “This increases their transport costs and erects a further barrier to their export success.
“It is in their interest to have a formal trade pact, across nations, with Australia and New Zealand, which will reduce trade costs between countries.
“In particular they want foreign investment in their companies, not aid. The cost of capital is high in these places.”
The Pacific Export Survey 2014, by Pacific Islands Trade and Invest and the Department of Foreign Affairs and Trade, is the first comprehensive collection of data about export markets and exporters across the Pacific.
Over half the Pacific nation exporters are small with less than 20 employees and less than AUS$1m revenue. More than a third of them only started exporting in the past three years. Agriculture, tourism, manufactured goods and services (evenly divided) made up the majority of the exports with resources only representing around five per cent.
“Of course, some countries have exported their best rugby players to Australia! – but they are also proactively trying to expand their markets across a range of products and services.”
One surprising finding was the number of businesses headed by women CEOs or proprietors – around 27 per cent. “There has been a great growth in female entrepreneurs. It is not just a man’s game anymore,” says Mr Harcourt.
Tim Harcourt: +61 408 485 479
Janine MacDonald +61 478 492 110