(APIA, Samoa) — The American Samoa Chamber of Commerce (ASCOC) presented seven items for the Two Samoa leaders to consider at the inaugural meeting of the two Samoa’s economic integration initiative to the Samoa, or pre-summit.

Yesterday’s Samoa News (see Thurs. June 26 issue) featured the first three items put forward by Chamber of Commerce president, Lewis Wolman — easing travel restrictions, including border control and capacity; facilitating the physical flow of goods; and establishing an institutional framework for making progress on policy and technical matters that have been identified and arise in the future.

Today’s part two of Wolman’s presentation will discuss recognition of the role of incentives and concessions; recognition of the importance of tourism collaboration; recognition of the realities of comparative advantage, and finally, initiating specific steps toward the creation of a bilateral Trade Agreement.

Wolman says ASCOC recognizes that there are many relevant matters affecting increased trade and investment, but by limiting their list to seven items, they hope to focus attention on 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.”

INCENTIVES AND CONCESSIONS

Wolman said that the private sector decision-makers are constantly evaluating not merely whether to make investments, but where.  “A country should have excellent infrastructure, a good workforce, and a stable political environment to attract investors, but those elements may not be sufficient."

“In today’s global economy, government must provide incentives and concessions to encourage investors to choose their country for their investment. This is particularly true in remote, small island states like Samoa and American Samoa, where it is inherently risky and difficult to finance and launch successful enterprises.

Some economic activity happens “on its own”, without special incentives or concessions, due to favorable conditions in the market. But many desirable economic activities do not and will not take place absent special incentives or concessions because the activity is deemed too risky or difficult or unprofitable by the private sector, or because competing locales (e.g., Fiji) offer favorable incentives and concessions that sway a private sector decision-maker.”

He stated that simply, if the government wishes to encourage certain kinds of economic activity, the private sector should be provided incentives or concessions. This might include tax treatment, assistance with land matters, training programs, expedited permit reviews, or other forms of special assistance.

TOURISM COLLABORATION

ASCOC recognizes that there is existing collaboration between the visitor industries in Samoa and American Samoa, and called for a continuation and deepening of that collaboration.

This includes marketing, product alignment and bundling, training, and a host of other matters (including the practical logistics of air and sea travel between our islands).

“We call for a high-level recognition and affirmation of the importance of this collaboration, which will be carried out by members of the private sector and the Samoa Tourism Authority and the American Samoa Visitors Bureau, with close involvement of the two governments.”

COMPARATIVE ADVANTAGE

ASCOC further recognizes that there are some areas in which Samoa has a comparative commercial advantage over American Samoa, and vice versa.

For example, Samoa has more land, lower wages and a larger population, while American Samoa has excellent access to the US market, a large-scale food-processing industry, and a 3000-ton shipyard.

ASCOC calls for a high-level recognition that these differences provide opportunities for working together in a way that takes advantage of our comparative advantages to nurture viable economic activities that strengthen local economies and serve local consumers, and make both Samoas more resilient in today’s global economy.

BILATERAL TRADE AGREEMENT

A bilateral trade agreement is the appropriate vehicle to tie together all the various matters that will need to be addressed if trade and investment are going to increase, according to Wolman.

“Although creating such an agreement will not be easy or quick, we call for an affirmation by the leaders that such an agreement is the direction we should start heading.”