SI graduation from LDC status likely to threaten duty free access to EU tuna market

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SOLOMON Islands graduation from its LDC (Least Developing Country) status would mean having to lose benefits associated with the status.

According to Forum Fisheries Agency (FFA) Trade and Industry News Volume 11, Issue 3, May to June 2018, should Solomon Islands graduate from its LDC status, benefits like exporting tuna to the EU duty-free and quota-free with exception of armaments under EU’s Everything but Arm’s (EBA) initiative would no longer be enjoyed at the same time threatening the country’s tuna industry.

The agency stated that this move if taken by Solomon Islands would jeopardize Soltuna’s direct onshore employment of 2,350 people where 67 percent are women, bringing in annual employment earnings of around US$12 million into the economy.

Additionally, FFA said a conservative multiplier effect for indirect and induced employment would push this to at least 7,000 jobs and more optimistically, over 13,000.

Moreover, given the great importance tuna processing is in the country, it was expressed that the Commonwealth Secretariat undertook an analysis of the ‘competitiveness challenges’ of graduation for Solomon Islands’ position in the global value chain in tuna.

The LDC status calculated was based upon three measures namely; Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI).

GNI is taken from national accounts data and converted into US dollars, HAI is a composite of human health and education while EVI comprises of 8 indicators which include population size, export concentration, remoteness, share of primary sector in GDP (agriculture, fisheries and forestry), as well as the vulnerability to trade shocks and environmental change and disasters.

As for GNI and HAI, FFA stated that Solomon Islands was above the eligibility threshold in the UN Committee for Development Policy’s 2015 review.

Also noted was that the United Nation’s LDC Identification Criteria and Indicators do not take into account counter-factuals should a country graduate from its LDC status, particularly, economic vulnerability.

Hence, if Solomon Islands graduates from its LDC status, the loss of the duty-free access to the EU market may undermine the government’s attempt to ease logging and engage in reforestation.