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Wednesday, 10 November 1976

At present Papua New Guinea's exports to Australia consist mainly of foodstuffs and raw materials. However, Papua New Guinea has indicated its intention to establish new industries. Australia can assist in this development by allowing the products of Papua New Guinea industries to enter Australia duty free provided adequate safeguards are available to protect Australian industry. The Agreement, therefore, provides that Australia accord duty free entry to imports from Papua New Guinea on all but some 270 highly sensitive items. In addition there are 210 items, which are specified in the agreed minutes attached to the Agreement, and in respect of which Australia may take unilateral protective action if damage is caused or threatened to an Australian industry producing those goods. In those items where duties on a wide range of industrial and other products have been eliminated for Papua New Guinea, safeguards to protect Australian industry are included in the Agreement where serious injury is caused or threatened. There are also special provisions covering rules of origin, deflection of trade, dumping or subsidised trade and the suspension of obligations in exceptional or emergency circumstances.

The Australian Position under the Agreement

Whilst the Agreement meets the requirements of the free trade provisions of the GATT it is not the intention of the Australian Government to ask the Papua New Guinea Government to discriminate in favour of Australia as against third countries. Australia will receive no better access than any other country. The Agreement provides no special conditions in relation to Australian investment in Papua New Guinea. In this respect the Agreement is similar to the Lome Convention under which the European Economic Community grants non-reciprocal tariff preferences to a large number of developing countries and to which Papua New Guinea has received approval from the Council of the Economic Community for accession. At the same time Australia's most favoured nation position in Papua New Guinea is protected under the Agreement by the provision pursuant to which each Government agrees to accord the other treatment no less favourable than that accorded to any third country.

Trade with Third Countries

Any diversification of trade affecting third country suppliers to the Australian market will be gradual and will take place over a long period of time. Papua New Guinea is not expected to move in the foreseeable future to develop industries other than those based on its traditional exports. With regard to developing countries, nothing in the Agreement precludes Australia from continuing the liberal access it has already granted developing countries through its generalised scheme of preferences, or from making a positive contribution to the development of international trade through the GATT.

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