For the first time in 50 years, the Government of Papua New Guinea (PNG) through the Minister for International Trade and Investment Richard Maru, formally conveyed to the Japanese Government that PNG is very keen and anchor its trade and relationship with Japan through a Comprehensive Economic Partnership Agreement (CEPA) into the future.
Minister Maru conveyed this through their Minister for Economy, Trade and Industry Koga Yuichiro, during their first formal meeting on Tuesday in Tokyo, Japan.
Minister Maru, on behalf of the PNG Government, thanked the Japanese Government and people for 50 years of friendship which had evolved to one of the most important and enduring bilateral diplomatic and trade relationship.
“Our country has benefited very immensely from Japan through scholarships and development aid through organizations like Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation (JBIC). The most recent examples are the Tomodachi International Airport at Nadzab in Lae, Morobe Province, and three weeks ago JBIC announced a loan of K1.8 billion to bankroll the funding the Papua LNG Project.
During our disasters, Japan has always been one of the first countries to come to our aid. I want to express to your government and your country our heartfelt gratitude for such enduring, warm and lasting relationship that has evolved over the last 50 years,” said Minister Maru.
He alluded that Japan was PNG’s biggest export market comparable only to China.
“We truly appreciate that trade is in our favour. At the moment, Japan is importing an estimated US$4 billion from PNG, and they only export about US$250 million to PNG annually. Trade is very much in PNG’s favour but we think there is a lot more scope and potential for more investment and more trade flows between our two countries.
There is a lot of opportunities for mutual cooperation where both sides can benefit if we strengthen the relationship and anchor it through a proper agreement which we have not had in the last 50 years. We think it’s time to reset our relationship and anchor our future on the back of a CEPA between our two countries. This should be the new chapter after 50 years of our relationship, anchored on trade and investment as the foundation,” said Minister Maru.
Minister Yuichiro acknowledged the proposal by Minister Maru; however, he said both countries needed to deal with fundamental trade issues if we are to take their trade and investment relationship to the next level, ensuring there is direct flight between the two countries, issuance of visa on-arrival for the Japanese standard passport holders to enter PNG, and look at other fiscal and non-fiscal incentives including giving duty-free market access for Japanese goods to enter the PNG market to show PNG’s commitment to Japan.
Minister Yuichiro also requested PNG to provide the framework for the proposed CEPA if PNG was serious to go down this path.
He said the PNG Government will take note of Minister Yuichiro’s comments and will work on the framework for the proposed CEPA as a matter of priority so the negotiations can start this year.
Minister Maru further expressed his gratitude for the Japanese investment in the LNG sector and encouraged Japan to take more active interest in investing in PNG LNG projects.
“PNG currently supplies 6% of the Japanese energy market. Japan is the anchor customer of our LNG. However, they own only 5% of PNG LNG. I want to encourage Japanese companies to take up more than 5% stake in our project. Japan should not be a passive investor. We will be grateful to see Japan own larger portions of our LNG projects in the future, and even in our mining and petroleum industry and other industries,” said Minister Maru.
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