Papua New Guinea Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Trade relations with the EU The EU 27 has long been the most important trade partner for Papua New Guinea after Australia, China, Singapore and Japan. For the EU, PNG is the most important partner in the Pacific. The relations between PNG and the EU are also important because of the common interest in solving global challenges, especially in the field of climate and environmental protection.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 137.2 117.6 138.1 91.6 85.5
Imports into the EU (million EUR) 776.8 788.1 742 769.3 940.7
Balance with the EU (million EUR) 639.6 670.4 603.9 677.8 855.2

Source: European Commission

Trade relations with the Czech Republic

Due to the relatively small total volume, mutual trade between the Czech Republic and PNG is characterized by relatively large year-to-year fluctuations in the quantity and composition of products. A higher volume was recorded in 2018, which can be associated with Czech subcontracts intended for the construction of a hospital in the city of Goroka, the new contract of the VAMED company for the construction of a hospital facility in the city of Wewak from 2019, after a short pause, began to be reflected again in the amount of Czech exports and its commodity structure during 2020. The composition of imports from PNG to the Czech Republic corresponds to the export profile of PNG. In 2021, coffee and vanilla, tuna, palm oil or fats and other vegetable oils dominate again. The most important items of Czech exports to PNG in 2020 were gas turbines and construction materials – steel structures, electrical installations, cement/concrete products, plastic pipes, and also e.g.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0 0.1 0 0.1 ON
Imports to the Czech Republic (billion CZK) 0.1 ON ON ON ON
Balance with the Czech Republic (billion CZK) 0.1 -0.1 0 -0.1 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 8,579.0 8,889.9 9,218.7 7,837.2 9,143.0
Imports to countries outside the EU (million EUR) 1,919.5 1,989.6 2,683.2 1,756.6 1,837.0
Balance with non-EU countries (million EUR) 6,659.5 6,900.2 6,535.5 6,080.6 7,305.9

Source: EIU, Eurostat

Foreign direct investment

PNG aims to increase foreign direct investment (FDI) in the mining and oil and gas sector to up to US$100.0 million by 2022.

FTAs and treaties

Treaties with the EU

PNG was the first country from the region to sign an Economic Partnership Agreement with the EU in 2009, which allows PNG duty-free and quota-free access to the EU’s common market.

Contracts with the Czech Republic

The Czech Republic has no bilateral agreements with PNG.

Developmental cooperation

PNG is a recipient of financial aid for development cooperation from the European Development Fund (EDF). From this financial instrument, within the multiannual programming period 2021-2027 for PNG (https://ec.europa.eu/international-partnerships/system/files/mip-2021-c2021-8989-papua-new-guinea- annex_en.pdf) allocated 20ml. EUR. EDF mainly supports reforms in areas that have a strong multiplier effect. In particular, this concerns 1/ support of a favorable business environment, 2/ ensuring access to the market and integration of regions, 3/ investment in backbone infrastructure, 4/ establishment of proper regulatory and institutional frameworks and 5/ investment in human capital. The aid provided through the EU Delegation to PNG has therefore long-term focus on providing long-term support for rural businesses – specifically improving the livelihoods of farmers through regional development plans, investment and trade. PNG is also a recipient of financial assistance based on the Cotonou Agreement between the European Union and its members and African, Caribbean and Pacific countries.

Through 4 small local projects of the Ministry of Foreign Affairs of the Czech Republic, the construction of schools and medical facilities was implemented in PNG in 2007, 2010, 2017 and 2021. The construction of the medical office in the Ohu locality, Madang province, was built by the entomological research center “New Guinea Binatang Research Centre”, led by the Czech scientist prof. Vojtěch Novotný, and now serves 6 other catchment villages (2-3 thousand inhabitants), which until then were without the possibility of basic health care. In the case of the projects “Schola Ludus: a new chance for children from the village of Nagada, New Guinea” and “Didactica Magna – a new chance for the children of the village of Riwo, New Guinea”, it was the construction of primary schools together with reservoirs for drinking water.

Prospective fields of study (MOP)

Although the PNG market is not very large, there are opportunities for promoting Czech supplies in a number of fields:

Energetics

Current PNG government strategies prioritize infrastructure development and electricity generation and distribution as key prerequisites for the country’s further development. Due to the large and as yet untapped potential of the country’s water resources, the most promising renewable energy sources are small hydropower.

Mining

Opportunities in this sector stem from PNG’s economic orientation towards the mining industry (PNG LNG and Papua LNG megaprojects, opening and expansion of precious metals mines), which is however in the hands of foreign multinationals or joint ventures with resident firms. Especially in the implementations of multinational companies, it is possible to consider subcontracting in a number of items.

Water management and waste management

PNG has abundant water resources, but is struggling with their pollution, so water management and water treatment technologies can be considered promising. Other equipment in the field of environmental protection can also become a very promising export item to PNG (incinerators, cogeneration units using biomass, etc.), although this country does not yet consider the issue of environmental protection as a priority at the given stage of development. The trend is increasing demands for security and reducing the negative consequences of numerous natural disasters, including floods, landslides, consequential damages and declines in agriculture.

Agriculture

Due to the agricultural orientation of the vast majority of the population, they have the perspective of supplying more modern agricultural technologies for small farms, mainly low-cost technologies with easy maintenance.

Papua New Guinea Trade