Predicting the Impact of PNG’s 2018 and 2019 Tariff Increases: A Review of PNG’s Trade Policy History

27 Pages Posted: 25 Nov 2019

Date Written: November 1, 2019

Abstract

The two-decade long tariff reduction program (TRP) represents a push by Papua New Guinea (PNG) toward a more open trade regime, beginning in 1999. The 2018 and 2019 tariff increases have reversed this process. By reviewing the experiences of previous trade policies, and the relevant trade literature, it is possible to make informed predictions regarding the impact, efficacy, and equity of the recent tariffs. This study draws on the experiences of two companies that enjoyed trade protection in the 1980s and 1990s: PNG Halla Cement Limited and Ramu Agri-Industries (formerly Ramu Sugar Ltd). Although the national government and companies enjoyed substantial rent from trade protection and government equity, underperformance, a lack of competitiveness, high cost structures, and high prices to consumers resulted.

Keywords: Papua New Guinea, PNG, tariff, trade policy

JEL Classification: F13, F63, O1

Suggested Citation

Laveil, Maholopa, Predicting the Impact of PNG’s 2018 and 2019 Tariff Increases: A Review of PNG’s Trade Policy History (November 1, 2019). Development Policy Centre Discussion Paper No. 85. Available at SSRN: https://ssrn.com/abstract=3481547 or http://dx.doi.org/10.2139/ssrn.3481547

Maholopa Laveil (Contact Author)

University of Papua New Guinea ( email )

P.O. Box 320, University Post Office
National Capital District
Papua
Guinea

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