CHARTING ECONOMIC PROGRESS: RE-EXPORTS AND FIJI'S POLICY LANDSCAPE

Abstract

Re-exportation, the process of exporting commodities that undergo minimal or no value addition, has gained substantial prominence within the realm of international trade over the last decade. This surge in re-export activity has been closely linked to the growth in global trade, improvements in logistical efficiency, and the addressing of asymmetrical information. Notably, Hong Kong's re-export share has expanded from 20% in the 1960s to a staggering 90% of current exports. A concurrent increase has been witnessed in the re-export volumes of China and Hong Kong, rising from $179 billion in 2000 to $491 billion in 2016, as reported by the World Trade Organization (WTO). This phenomenon has also been influenced by factors such as escalating global transport volumes, evolving tariffs, quotas, and taxation regimes. Efficient logistical operations, as demonstrated by ports, play a pivotal role in facilitating cost-effective and competitive transportation, ensuring timely delivery of goods. Moreover, the acquisition of specialized knowledge on Chinese products by Hong Kong traders has enabled targeted marketing based on demand. However, concerns have been raised regarding the propagation of grey markets and tariff evasion by Hong Kong traders. Similar trends have been observed in other regions, such as Latvia, where re-exports have significantly contributed to merchandise exports. This study explores the dynamics of re-export behavior within the context of Fiji, an upper middle-income nation. The analysis encompasses an evaluation of the types and volumes of commodities traversing the Fijian hub. By shedding light on the re-export landscape, the study aims to offer valuable insights for Fiji's policymakers, fostering their understanding of how Fiji can effectively participate in the global re-export market. In this endeavor, the study examines the existing literature, presents an empirical model and data description, reveals empirical results, and concludes by providing a comprehensive outlook on the implications of re-export behavior for Fiji's economic integration into the global market