13 May 2005

Tonga on track to join WTO, says government

10:48 am on 13 May 2005

The Tonga government says it hopes to have completed bilateral market access negotiations, crucial for World Trade Organisation membership, by the end of this month.

Tonga is in the tenth year of its WTO accession process and is aiming to become a full member by the end of this year.

However, the secretary for the Ministry of Labour, Commerce and Industries, Paulo Lautoke, says whether Tonga joins or not is decided by the Working Party that has been established to examine its accession.

The Working Party includes WTO members who have trade interests with Tonga.

Mr Lautoke says bilateral market access negotiations have been completed except for one remaining member of the party...

"And once that is completed, then the WTO secretariat can put together a consolidated schedule of goods and services which will be attached to our working party report. So we are hoping to complete the bilateral market access negotiation on the goods with this member by this month."

Meanwhile, the government has defended its revenue and tax reform as being essential for the development of the country.

The Acting Minister of Finance, Aisake Eke, says he is aware of the concern among businesses, especially growers, that the new Consumption tax will have a negative impact on their industry.

However, Mr Eke says the government intends to provide a mechanism to ensure no exporters are disadvantaged due to the tax.

Paulo Lautoke, supports the minister's words saying tax reform is being driven by the need for Tonga to have the right policies in place in order to benefit from the changing face of international trade in the Pacific.

The whole idea is to improve the investment and tax environment and encourage investors to start business, and not to focus only on the domestic market which is very small but to look out to the export market - the big picture and long term. It's something that we have to do because the whole international trading system is changing and we have to something, otherwise we will be left out in the cold.