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ASCOC HEAD PROPOSES BILATERAL TRADE AGREEMENT FOR TWO SAMOAS

The American Samoa Chamber of Commerce (ASCOC) believes that trade and investment are generally private sector activities, but that governments have an essential role to play, especially in matters that cross borders, says Chamber of Commerce President, Lewis Wolman representing American Samoa’s Chamber of Commerce at the inaugural meeting of the two Samoa’s economic integration initiative to the Samoa , or pre-summit.

 

“We believe that governments should proactively and reactively reduce the ‘friction’ that inhibits desired trade and investment across borders, and take steps to encourage desired trade and investment. The seven items we would like the Two Samoa leaders to consider are: easing travel restrictions, including border control and capacity; facilitating the physical flow of goods; establishing an institutional framework for making progress on policy and technical matters that have been identified and arise in the future; recognition of the role of incentives and concessions; recognition of the importance of tourism collaboration; recognition of the realities of comparative advantage and initiating specific steps towards creation of a bilateral Trade Agreement,” said Wolman.

 

Wolman says ASCOC recognizes that there are many relevant matters affecting increased trade and investment, but by limiting our list to seven items, we hope to focus attention to these important areas.

 

“Note that our list relates to matters that can and should be resolved by the two Samoas without the involvement of, for example, the United States or international organizations.

 

Note as well that this statement assumes the desirability of increased trade and investment between the two Samoas.”

 

TRAVEL RESTRICTIONS

 

Existing regulations make it inconvenient for Samoans to travel to American Samoa and for US Nationals to travel to Samoa. “We call for both governments to eliminate requirements for advance permission and special fees. Alternative measures to address issues of overstayers and other documentation matters should be developed as necessary.

 

At a minimum, frequent travelers should be able to obtain multiple-entry permits that eliminate the need to secure entry permits every time they go back and forth.

 

Border control rules, regulations, and procedures should also be devised that are mindful of our efforts to jointly promote the two Samoas as complementary visitor destinations.

 

ASCOC are mindful of the legitimate public interest in effective border control, but believe such control can be achieved in a way that is less inconvenient to business travelers, shoppers, tourists, and the general public.

 

Wolman points out the small aircraft serving the Two Samoas routes do not meet the expectations of international visitors, are uncomfortable for local passengers, and limited in their ability to carry freight. Moreover, the lack of an online booking system creates further transactional friction that constrains economic activity.

 

FLOW OF GOODS

 

According to Wolman’s statement at the meeting although the distance between the two Samoans is not great, it is expensive and difficult to arrange transportation and export of goods between the two. “Although the Lady Naomi provides regular service, as do the two airlines, the unit costs for freight are high and the reliability factor is low.

 

Moreover, the cost and hassle of getting clearances from the appropriate government authorities also discourages the smooth flow of goods. Larger ships carrying containers do not provide service between Pago and Apia. With the exception of Lady Naomi freight, all Pago-loaded cargo is routed to New Zealand before being landed in Apia.  Also, he noted,  it’s very difficult to substantially increase trade without better ocean freight service.

 

This situation might take care of itself through market mechanisms if there were a regular high volume flow of goods that allowed for competition and economies of scale, but there is a bit of a chicken-or-the-egg problem in getting to that point.

 

Wolman points out that it may require special concessionary efforts to get past the chicken-and-the-egg stage, to a point where there is enough trade occurring that no concessions are needed to ensure that speedy, reliable, affordable freight arrangements can be easily made.

 

INSTITUTIONAL FRAMEWORK

 

Wolman says there are many details that need to be looked at and addressed to reduce the transactional friction affecting trade and investment between the two Samoas. Many of these details do not rise to the level of “policy” and do not require the attention of the most senior leaders of the two governments.

 

However, such details do require the attention of government officials and leaders if they are to be addressed and resolved. (For example, scheduling and cost of inspections for freight arriving on incoming vessels and aircraft.)

 

“We call for the creation of a Two Samoa’s Point of Contact in each government. The POC should create and manage a formal list of items that need attention, and ensure that appropriate government entities are addressing them.

 

As new items arise, they can be vetted and placed on the official list, and the POCs can ensure that progress is being made.

 

The POCs can issue semi-annual reports on the progress and status of items that are carryover as well as new items.

 

New items can get on the list at the request of either the Prime Minister or the Governor, or via resolutions approved by the Boards of Directors of the Samoa Chamber of Commerce and the American Samoa Chamber of Commerce.”

 

Samoa News will report tomorrow on the rest of Chamber of Commerce President, Lewis Wolman’s presentation on behalf of American Samoa’s Chamber of Commerce at the inaugural meeting of the two Samoa’s economic integration initiative to the Samoa , or pre-summit.