1st Pacific –EU Business ForumPort Vila. Vanuatu. 11th to 12th June 2012

By:Eddie L. Wilson

Chairman-International Kava Executive Council & Managing Director-Wilex-Samoa Group

Involved in Agro-Processing and Export development over 25 years

Website links: www.ikec.org. www.wilexsamoa.net

Export of Agriculture and Agro-Value added products from the Pacific is becoming more and more difficult, if not impossible with increasing globalization and imposition of non-tariff restrictions by the stronger trading partners. In essence the Pacific Agro-Trade and Export operates in an environment that is best described as -SWIMMING AGAINST THE TIDE. And with climate change issues-THE TIDE GETS STRONGER EVERY DAY

“The man who is swimming against the stream knows the strength of it.”

 Woodrow T. Wilson quotes (American 28th President of the United States 1856-1924)

WORLD BANK PAPER TO G20 FINANCE MINISTERS-UK March 2009 (“Swimming against the tide”)

CHALLENGES OPPORTUNITIES

Trade restrictions (kava example-www.ikec.org)

Quality assurance Scientific research Capacity to implement

Quality standards and processes

Product and market development

Natural products-for health care/organic cert

Natural alternative to synthetic medicine

Uniqueness to the Pacific-Gi-registration/fair trade-Pacific Product group-piggy-back on existing lines

Products with Supply Capacity

Alternative markets- New Research/Science

COMPETITIVE MARKET ENVIRONMENT * Non Trade barriers * Logistics/High Transportation costs

Prevention of Trade restrictions * Kava Issue: imposed by some EU countries-provide a grave shadow of doubt over the

safety and efficacy of Pacific Kava-despite clearance of the traditional kava drink as safe by WHO and numerous scientific studies;

* Other Pacific Products at risk-noni

• Product and Market Development- Capital Intensive * Market research * Product development/launch * Scientific Research

HIGH COST OF FINANCE/INVESTMENT CAPITAL * Accessibility for new project funding-difficult * Accessibility to investment funding/partners-difficult

TECHNICAL Quality control standards in process of implementation-needs resources and capacity

building to establish, implement and monitor High Capital cost for testing facilities and sustainability

SUPPLY CAPACITY SMALL VOLUME USE= HIGH COST RAW MATERIALS LOCAL SUPPLY POTENTIAL-BUT VERY LIMITED due to limited market opportunities –due to restrictions

on the trade  

LOCAL AND EXPORT MARKETS New product and market development opportunities-Gi; fair

trade, organic certification; IP; niche marketing; branding Development funding opportunities for Local value added

chain-key to enhancing competitiveness and export potential (such as IACT/SPC; ACP/EU MTIS; Private Sector development funding-such as AUSAID; NZAID; UNDP)

USE OF LOCAL ABUNDANT RESOURCE-LAND AND LABOUR-* COTTAGE INDUSTRY DEVELOPMENT-for niche marketing of GI

registered product, kava bars; etc ENVIRONMENT PROTECTION OPPORTUNITIES (high return

/yield means reduced requirements of acreage for commercial agriculture and exploitation)

INVESTENT OPPORTUNITIES-FOR FURTHER VALUE ADDED ; PRODUCTION AND MARKET DEVELOPMENT-for instance-new products for Asian and EU countries

MARINE/SEAFOOD SUGAR WOOD PRODUCTS NONU/NONI PRODUCTS COCOA/COCONUT KAVA /HERBS AND NATURAL PRODUCTS VANILLA/SPICES HANDICRAFTS/ARTS & CRAFTS/CULTURAL GARMENTS

INCREASED TRADE (REDUCE TRADE IMBALANCE)-

FOSTER GOODWILL SUSTAINABILITY AND ENHANCEMENT OF

COMPETITIVENESS OF PACIFIC PRIVATE SECTOR REDUCTION EU AID ASSISTANCE TO PACIFIC LONG

TERM JOB CREATION FOR PACIFIC AND EU COMMUNITIES ENHANCE GENDER BALANCE-IN TRADE AND SOCIO-

ECONOMIC DEVELOPMENT• INCREASE EXPORTS FROM EU TO PACIFIC (two way trade-e.g.

equipment/machinery/technical)• INCREASE INVESTMENT

PRODUCT AND MARKET DEVELOPMENT/EXPLORATION TARGETING THE EU AND OTHER MARKETS Success example-Japanese technical support for PIC exports

to Japan (Jetro-e.g. recent PIC Exhibition in Tokyo, May 2012)-ROLE MODEL??

REGULAR PACIFIC TRADE EXHIBITIONS and business matchmaking IN EU

ACP-EU PRIVATE SECTOR SUPPORT-CDE/ETC

INCREASE INVESTMENT AND ENHANCE PRIVATE SECTOR ACCESS TO FINANCE AND INVESTMENT CAPITAL-EIB; ETC

TECHNICAL KNOW-HOW/TRANSFER KNOWLEDGE-CDE/PROINVEST/TRADECOM/ACP-EU MTIS/IACT

LOCAL SUPPLY CAPACITY BUILDING –IACT/SPC

CONCLUSIONPRIVATE SECTOR-WANTS TO SWIM-IN ORDER TO SURVIVE-

NEEDS:MARKET ACCESS

ACCESS TO CAPITAL & TECHNICAL KNOWHOWLONG TERM-NO MORE HAND OUTS/AID MONEY

“Only when the tide goes out do you discover who's been swimming naked” (i.e. current trade imbalance between the Pacific & EU)

 Warren Buffett quote