The President signed the Executive Order No: 34 which created the National Trade
Facilitation Committee (NTFC) on the 14th of January 2008. The NTFC is chaired by the
Vice President who reports to the President, Congress and EPIC/CEC. The Secretaries and Directors of the National Government departments and offices are ex officio members of the NTFC. The current members are the Secretary of the Department of Foreign Affairs (DFA), Resources and Development(DR&D), Finance and Administration, Justice (DOJ), Transportation, Communication and Infrastructure (TC&I), Health and Social Affairs (HSA), Education (DOE), National Oceanic Resources Management Authority (NORMA), Office of Statistics, Budget and Economic Planning, Overseas Development Assistance and Compact Management (SBOC), Office of Environment and Emergency Management (OEEM) and one Non-Governmental Organization (NGO) representing the collective interests of this sector in the FSM. At the State level, the members of the NTFC are the Chairman of the State Trade Facilitation Committee and one private sector representative, representing the collective interests of all the business community from each State.
The Chairperson of the NTFC may establish sub-committees composed of technical experts in various fields to further the work of the Committee. The Chairperson of such a sub-committee becomes a member of the NTFC ex-officio. The Draft Trade Policy recommends that the chairperson of the National Offshore Fisheries Association (NOFA) be the chairperson of the fisheries subcommittee, and the Chairperson of the FSM Visitors Bureau be the Chairperson of the tourism sub-committee and the DR&D to be the interim chair of the sub-committee on agriculture pending the establishment of a National Farmers Association. The NTFC will assist with identifying FSM’s trade needs and priorities and facilitate the implementation of the Trade Policy including the relevant trade agreements. The Secretary for Foreign Affairs/SBOC should be the chairperson of the sub-committee on Aid for Trade.
The National Trade Facilitation Committee must have a legal basis and the same must apply to the State Committees. This will ensure that the Trade Policy will be implemented and people will be held to account for the areas they are responsible for. This is important to ensure continuity of the office, institutional memory and implementation. There are also six sub-committees which will be dealing with specialised issues. The membership of these committees is open but the chairperson must have special skills in the area concerned. The DR&D must set aside budget for the people from the States to come for the NTFC meetings which should be held on a quarterly basis or when the need arise.
FSM needs a list of all investors, exporters, importers, and a database of the key stakeholders must be maintained. A trade website must also be created to allow information sharing and discussion of problems affecting producers, importers and exporters.
1.3.1 General Duties and Responsibilities of the members of the National Trade
Secretary of the Department of Resources and Development (DR&D) or designee
The department serves as the secretariat to the NTFC and is responsible for coordinating development and Trade Policy issues relating to marine, agriculture and tourism, the three key priority sectors. The DR&D is in charge of international trade and facilitates trade and investment matters with States. The department also serves as the interim Chair for the sub-committee on Agriculture pending the establishment of a National Farmers Association (NFA).
Secretary of the Department of Justice (DoJ) or designee
The Department of Justice is responsible for looking at the legal issues pertaining to trade agreements such as PICTA, PACER, EPA, US and also to improve the registration of businesses, enforcements of contracts and upholding the rule of law to create a good environment for business. It is also responsible for dealing with labor and immigration issues that affect trade and investment.
Secretary of the Department of Foreign Affairs (DFA) or designee
The Department should assist with mobilizing Aid for trade from FSM’s trading partners to implement the Trade Policy, promote commercial diplomacy and ensure that its overseas missions are staffed with officials who are knowledgeable on trade, investment and tourism promotion and find markets for the goods and services that are produced in FSM. There is also a need for the DFA to assist FSM producers and exporters with joining organizations that will assist exporters to access export markets.
Secretary of the Department of Finance and Administration (DF&A) or designee
The Department needs to ensure that the tax reform goes ahead smoothly to ensure that the negative effects of trade liberalization are minimized. The Customs and Tax Administration is also responsible for reviewing the customs legislation to comply with international trade obligations especially tariff reduction schedules, customs surveillance to ensure compliance with rules of origin. It is also the responsibility of this department to facilitate trade and to ensure that all the red tape that is inhibiting imports and exports is removed and this includes working with regional and international customs organizations such as the World Customs Organization, Oceania Customs Organization (OCO), and WTO to upgrade customs procedures and standards to facilitate trade.
Secretary of the Department of Health and Social Affairs (DHSA) or designee
The Department is responsible for establishing or upgrading a Competent Authority to ensure that fish and fish products and other food products meet the requirements of import countries, particularly the EU. This requires a lot of technical and financial resources but most of the funding can be obtained from the donor community. There is also a need to strengthen the functions of the department to ensure that FSM is protected from unsafe imports of food, drugs and other products.
Secretary of the Department of Education (DoE) or designee
Education plays a vital role in trade and its role is rarely acknowledged in economic development. For any nation to prosper in trade there must be a good education system especially the production of relevant skills that are needed to turn around the economy. Areas such as mathematics, science and ICT are some of the areas that warrant attention. There is also a need to prioritize Technical and Vocational Education Training Centres (TVET) to enable the nation to develop the skills that are needed in the economy and also export the surplus skills and earn remittances.
Secretary of the Department of Transportation, Communications and Infrastructure
(TC&I) or designee
Transportation is a key issue in FSM particularly for exporters. The department of TC&I needs to work with all the stakeholders to address the transportation (air, maritime-MSC,) problems. Telecommunication is also another issue that affects the FSM business environment and the relevant policies need to be put in place to address these problems in order to promote trade and investment. Another critical area that is under the management of TC&I is the Infrastructure Development Plan (IDP). There is a need to ensure that the right infrastructure is put in place to reduce the costs of doing business in FSM. Quality infrastructure related to tourism, fisheries and the agricultural sector need to be prioritized in order to promote trade in these sectors.
Director of Statistics, Budget and Economic Planning, Overseas Development
Assistance and Compact Management (SBOC) or designee
There is a need to ensure that trade statistics in general and on GDP, investment, services and remittances is improved to enable FSM to monitor progress and take the necessary remedial action. The Budget allocation must be sensitive to projects that are aimed at facilitating trade in tourism, fisheries and agriculture and Compact funding in general and under the Private Sector Development should fully support these priority areas. The Overseas Development Assistance division should work with Foreign Affairs and DR&D to secure Aid for Trade from FSM’s trading partners to support trade and investment activities highlighted in the Trade Policy. The unit responsible for Compact management must ensure that trade and investment activities are prioritized in Compact funding and there is also a need to improve the trade preferences that were given to FSM because these
preferences have been eroded and have lost their value. The division that is responsible for economic planning needs to review the SDP and to ensure that it is implemented properly.
Director of the Office of Environment and Emergency Management (OEEM) or designee
Development in a small island is prone to natural disasters and global shocks. These are serious challenges and the office of EEM needs to be vigilant in protecting the environment because the threats of climate change have the effect of wiping out all the economic gains that FSM would have made through trade and investment. There is a clear link between trade and environment and this theme is gaining prominence at the global level and the Office of the EEM needs to monitor these developments to ensure that trade and economic endeavour is undertaken in a sustainable manner.
Executive Director for National Oceanic Resources Management Authority
NORMA in collaboration with the fisheries industry, DR&D and the States are responsible for the fisheries policy and the management of oceanic resources to ensure that these resources are not depleted and also to ensure that FSM obtains the best value from its resources.
FSM Alliance of Non-Governmental Organizations (FANGO)
FANGO is an umbrella organization responsible for coordinating all the input and comments from the NGOs and defending these interests in the NTFC. NGOs can also send their comments or input via their State Trade Facilitation Committees (STFC).
State members of the NTFC
The Chairman of the STFC is responsible for coordinating with the NTFC including the Department of R&D. All the trade information is sent directly from the national government to the sates via the chairman of the STFC who is obliged to share the information with all the state stakeholders. The chairman of the STFC can also convene the meeting of the STFC to discuss trade and investment issues and formulate the state’s position on various trade including PICTA, PACER, EPA and the US. The role of the private sector members of the NTFC is to ensure that the interests of the business community are fully represented at the NTFC and also in all the trade agreements that are negotiated.
In order to improve understanding of the key trade issues, it was recommended that the R&D Committee be actively involved in the formulation and implementation of the trade policy. This is important because Congress will be responsible for approving the
ratification of various trade agreements and allocating funding that is needed to implement the Trade Policy.
The Vice President can establish specialized sub-committees to deal with technical issues and formulate plans on issues such as agriculture, fisheries, tourism/services/investment, market access, trade-related issues and Aid for Trade. The Chairman of the sub-committee can work closely with interested stakeholder and present their recommendations to the NTFC.