DP85 Predicting the impact of PNG’s 2018 and 2019 tariff increases: a review of PNG’s trade policy history

Development Policy Centre Discussion Paper No. 85

By Maholopa Laveil

November 2019

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.

Laveil, M. 2019, ‘Predicting the impact of PNG’s 2018 and 2019 tariff increases: a review of PNG’s trade policy history’, Discussion Paper No. 85, Development Policy Centre, Crawford School of Public Policy, Australian National University, Canberra.

Maholopa Laveil

Maholopa Laveil is the FDC Pacific Fellow at the Lowy Institute, seconded from the University of Papua New Guinea.