Regional Trade Development and Integration

What We Do:

Achieving high levels of sustained economic growth is an important development policy objective for Forum countries. The Framework for Pacific Regionalism (2014) recognises the need for a new inclusive and game-changing approach that enables Leaders to realise the unmet development needs of its people. The Blue Pacific narrative presents an opportunity to further demonstrate the value of interconnectedness within the Pacific – between traditional knowledge, science and integrated ocean management – and the fundamental nexus between oceans and trade and economic development.
The Forum is united by its shared values which guide all its policy development and implementation, and one which is committed to deepening regionalism through the auspices of economic and trade policy development (cooperation, integration, improved access to markets (goods, services, labour) and capital/finance.  There are opportunities abound for the region, including the emerging economies to our north, new trade arrangements in the PACER Plus for trade and investments and reinvigoration of existing trade agreements in the region.
The Secretariat will work towards improving management for public finances and diversifying the sources of finance, support the private sector through its Pacific Trade and Invest Offices (Australia, New Zealand, Japan, and China, with others to follow), improve access to private capital, expand space for markets between members through existing treaties and the multilateral trading system, increase investment and improve infrastructure in the region.
The Forum Secretariat’s policy work to address these challenges are focused in two broad areas Regional Trade Development and Integration and Economic Policy in terms of advisory and advocacy work.

Forum Trade Ministerial Meetings  

The Forum’s Trade Ministers’ Meetings is the main decision making body for the 18 Forum Member Countries on regional trade and investment. Specific issues that require high level strategic Political Leadership are referred to Forum Leaders for their further consideration.  It is through this Ministerial Meeting where regional mandates are set and trade policy development initiatives are progressed through the Secretariat for the region.  It is represented by Forum Trade Ministers.

Mechanisms to support Regional Integration

Regional Trade arrangements play an increasing role in shaping the trading environment, labour mobility, investment and contribute to the sustainable development goals.  The regions trade integration regime has been underpinned through several mechanisms: non-reciprocal arrangements of the South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA), the free trade arrangements under the Pacific Island Countries Trade Agreement (PICTA) and Pacific Closer Economic Relations plus (PACER Plus) between Pacific Islands Forum Countries and Australia and New Zealand. The regions market access to the EU is set by an Economic Partnership Agreement, and other EU unilateral preference arrangements such as the Everything But Arms (EBA) for Least Developed Countries and the Generalised Scheme of Preferences (GSP) for developing countries.
 

What is EBA?

The Everything But Arms scheme grants full duty free and quota free access to the EU Single Market for all products (except arms and armaments).
A country is being granted EBA status if it is listed as a Least Developed Country (LDC) by the UN Committee for Development Policy.
Countries do not need to apply to benefit from EBA, they are added or removed to relevant list through a delegated regulation.
EBA preferences can be withdrawn in case of some exceptional circumstances, notably in case of serious and systematic violation of principles laid down in fundamental human rights and labour rights conventions (see article 19 of Regulation (978/2012).
More Information on EBA, https://trade.ec.europa.eu/tradehelp/everything-arms

What is Standard GSP?

Standard GSP reduces EU import duties for about 66% of all product tariff lines.
Any developing country will benefit from Standard GSP unless:

  • it has another type of special trade access to the EU granting the same tariff preferences as the scheme, or better, for substantially all trade
  • it has achieved a high- or upper-middle income economy status during three consecutive years according to the World Bank classification

Countries do not need to apply to benefit from Standard GSP; the EU adds them to or removes them from the relevant list through a delegated regulation.
The EU can withdraw Standard GSP in exceptional circumstances, notably serious and systematic violation of fundamental human rights and labour rights conventions.
More Information on GSP, https://trade.ec.europa.eu/tradehelp/standard-gsp

Regional Trade Agreements

1. SPARTECA

The South Pacific Regional Trade and Economic Cooperation Agreement was signed in 1980 in Tarawa, Kiribati and entered into force on 1 January 1981.  It is a non-reciprocal trade agreement in which Australia and New Zealand offer duty-free access for specific products originating from the Pacific Island Countries.
Access the South Pacific Regional Trade and Economic Cooperation  Agreement (SPARTECA) Here.

2. PICTA

The Pacific Island Countries Trade Agreement has been operational since 2007, to promote regional integration and moving towards wider integration with the global economy. Eight countries trade under PICTA: Cook Island, Fiji, Kiribati, Niue, Samoa, Solomon Islands, Tuvalu and Vanuatu. Nauru, Papua New Guinea (PNG) and Tonga are yet to utilise the agreement. Federated States of Micronesia (FSM), Palau and the Republic of the Marshall Islands (RMI) are yet to become parties, whilst New Caledonia and French Polynesia are able accede as per Article 27 of the Agreement.
The PICTA Trade in Services (TIS) Protocol was concluded in 2012 and ratified by four signatories (Samoa, Tuvalu, Republic of the Marshall Islands and Nauru) however, is yet to enter into force.
The Pacific Island Countries Trade Agreement
Rules of Origin Manual
Trade Mainstreaming Guide for Pacific Island Countries

3. PACER Plus

The Pacific Closer Economic Relations Plus Agreement was signed in Nuku’alofa in Tonga on 14 June 2017. Ten Forum Members are signatories:  Australia and New Zealand and the Cook Islands, Kiribati, Nauru, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Three have ratified. PACER Plus covers goods, services and investment and is yet to enter into force.
Access the PACER Plus document Here.
Access Rules of Origin Manual Here.
Access more Information on the PACER Plus Full Agreement, https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/pacer/pacer-plus-full-text/

4. Economic Partnership Agreement

The Economic Partnership Agreements are trade and development agreements negotiated between the Pacific ACP and the European Union.  To date Papua New Guinea and Fiji have signed and ratified interim EPAs, with Samoa and Solomon Islands intending to accede.
Access the Economic Partnership Agreement Here.
Rules of Origin Full Manual: (https://trade.ec.europa.eu/tradehelp/economic-partnership-agreements-epas)
 

Sub Regional Trade Agreements

Overview:

Forum Members are Parties to sub-regional trade agreements, the most significant being the Melanesian Spearhead Group Trade Agreement amongst the 4 MSG Countries (Fiji, Papua New Guinea, Solomon Islands, Vanuatu) and the Micronesian Trade and Economic Cooperation, amongst the Federated States of Micronesia, Marshall Islands, and Palau.

MSG Trade Agreement

The MSG is a free trade agreement between Fiji and Papua New Guinea, Vanuatu and Solomon Islands (New Caledonia joined as an observer.) The MSG Trade Agreement is established to foster and accelerate economic development through trade relations and provide a political framework for regular consultations and review on the status of the Agreement, with a view to ensuring that trade, both in terms of exports and imports is undertaken in a genuine spirit of Melanesian Solidarity and is done on a Most Favored Nation (MFN) basis. Negotiations are held regularly between the members’ Leaders to consider the progress and development of the Agreement.
Access the Melanesian Spearhead Group Trade Agreement Here.
More Information on Melanesian Spearhead Group is available at https://www.msgsec.info/

Micronesian Trade and Economic Cooperation

The Treaty establishing the Micronesian Trade and Economic Community (MTEC) was negotiated between 2012 and 2014 and was concluded and signed recently on September 3, 2014 by the Presidents of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. The vision and long-term goals of the MTEC are to endeavour towards the creation of a trade and economic “community” of shared prosperity to support the achievement of sustainable and equitable socio-economic development of the Member States and improve the standard and quality of life of their People.
 

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