Solomon Islands Government

Ministry of Foreign Affairs and External Trade

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Economic Partnership Agreements (EPAs) are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) states engaged in the process of regional integration. The aim is to promote EU and ACP trade and contribute to poverty reduction and sustainable economic growth through trade and investment. The EU represents a major trading partner with the Solomon Islands, considering the distance of the market. Solomon Islands exports predominantly primary goods to the EU, namely palm oil and tuna.

EPAs are WTO compatible but, much like PACER Plus, are supposed to go beyond the scope of conventional FTAs, to focus on ACP development. Though reciprocal, the agreement would offer Solomon Islands a long transition period to open up partially to EU imports and protection for sensitive sectors, as well as provide for a wide range of cooperation on areas such as SPS and other standards.

The Pacific ACP (PACP) States, collectively the FICs, have been negotiating an EPA since 2004. The agreement covers trade in goods, trade in services, development cooperation and trade related issues like food health and safety issues, technical barriers to trade, agriculture, sustainable development and competition.

Since 2012, negotiations have been suspended due to a lack of consensus amongst FICs and the EU on a number of contentious issues.

An interim EPA has been signed by Fiji and Papua New Guinea, to guarantee preferential market access to EU markets for their exports. Solomon Islands is currently undertaking the necessary national consultation processes and conducting internal analysis to consider the Interim EPA, as well as all other available options, until formal negotiations on the EPA resume.

For more information visit the PIFS website

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The Pacific Agreement on Closer Economic Relations (PACER) Plus is a regional trade agreement between the FICs, Australia and New Zealand. Initiated in 2009, the Agreement aims to achieve closer economic integration and trade relations within the Pacific and is intended to be a development friendly deal that facilitates sustainable growth for FICs. It is envisaged that the Agreement will provide a long-term opportunity to create jobs, enhance private sector growth, raise standards of living, and boost economic growth in the FICs. Negotiations include trade capacity-building and development assistance designed to strengthen the FICs’ ability to trade. In this regard it is not considered a typical WTO style trade agreement.

The agreement covers priority areas on Customs Procedures and Rules of Origin, Sanitary and Phytosanitary (SPS) measures, Technical Barriers to Trade (TBT), Labour Mobility, and Development Assistance, as well as the traditional chapters on Goods, Investment and Services.

In recognition of the challenges faced by the FICs, the Office of the Chief Trade Adviser (OCTA) was established in 2009 to provide independent advice and technical support in the PACER Plus negotiations. OCTA assists FICs to analyse trade policy issues, develop negotiating strategies, facilitate the development and coordination of negotiating positions, build trade negotiation capacity, and advance their positions in trade negotiation meetings.

Negotiations have been cloncluded and PACER Plus has been finally signed. 


 

For more information visit the OCTA website

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Under PICTA, Solomon Islands has made reciprocal commitments on trade in goods to the other Forum Island Country (FIC) members. Solomon Islands signed on to PICTA on the 6 August 2002.

The Agreement has entered into effect between some of the signatories. However, Solomon Islands has not yet ratified and indicated its readiness to trade under the agreement.

Negotiations of the PICTA Trade in Services Protocol (PICTA TIS) were completed in 2012. Ten of the fourteen FICs have signed, including Solomon Islands, but the Protocol has not yet entered into force. Solomon Islands is yet to ratify the Protocol. When the Protocol enters into force, it will provide for preferential trade in services among the parties, albeit on a fairly narrow range of services (in the areas of professional, telecommunications, construction, financial, tourism and transportation services) and with more expansive safeguards provisions than are found in many trade in services agreements.

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Australia and New Zealand provide non-reciprocal preferential access under South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), which entered into force on 1 January 1981. Under SPARTECA Australia and New Zealand made commitments to provide duty free access for products from Solomon Islands (and other Forum Island Countries) to their markets.

The aim of the Agreement was to accelerate the development of the Forum Island Countries (FICs) through the expansion and diversification of trade to Australia and New Zealand, promotion of investment in the FICs and the facilitation of economic cooperation including commercial, industrial, agricultural and technical cooperation.

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The Melanesian Spearhead Group (MSG) was initiated by Heads of Governments of the Melanesian countries – Solomon Islands, Papua New Guinea, Vanuatu, Fiji and New Caledonia, represented by Kanak Socialist National Liberation Front (FLNKS) – in 1986 in response to the recognition of the importance of having common positions and ensuring solidarity when spearheading regional issues. The aim of MSG is to ensure mutual cooperation and dialogue to promote a prosperous and stable region and encourage the growth of each economy.

The MSG Secretariat, based in Port Vila, is responsible for serving the members of the MSG to work towards a progressive and prosperous Melanesia. It provides policy advice, facilitates implementation of decisions, advocates Members’ interests on the regional and international stages, and manages the resources of its members. Further information on the functions and programmes of the Secretariat can be found in the link below.

Trade between countries in Melanesia has been occurring for millennia and represents the lifeblood of the culture and the population it sustains. As natural trading partners for many years, the countries of the MSG recognised the importance of trade for enhancing the prosperity of their economies. The initiation of a trade agreement sought to formalise these trading relationships and guarantee unfettered market access for the populations of each economy.

The original MSG Trade Agreement (MSG TA) was signed in 1993 and governed the three Melanesian States of Vanuatu, Papua New Guinea and Solomon Islands. Fiji signed the agreement in 1998, after joining the MSG the previous year. FLNKS has permanent observer status to the Agreement.

The MSG trades under 3 trade agreements; MSG Trade Agreement, MSG Trade Agreement 2 and MSG Trade Agreement 3. MSG TA covers 180 goods, which are now traded duty free among members. MSG TA2, signed in 2005, establishes a free trade agreement among the Members. Import tariffs are eliminated on all products exported from other Members, with the exception of those items which individual Members have declared excluded, for reasons due to health or the protection of the environment.

In 2017 Solomon Islands will provide duty free access to all but a few exempt products from the MSG Members and in return, products from Solomon Islands will have duty free access to the markets of other MSG Members.

MSG TA3 is intended to consolidate the progress made towards economic integration among the MSG Members, as well as provide a platform for broader and deeper economic integration over time. The draft contains substantive chapters on trade in goods, customs, sanitary and phytosanitary measures (SPS), standards and conformance and dispute settlement, together with supporting institutional arrangements. The MSG TA3 is also considering expanding to include services, investment and labour mobility.

MSG Secretariat website

  1. Regional Trade Agreements