Regional Trade
Pacific Island Countries Trade Agreement (PICTA)
The Pacific Island Countries Trade Agreement (PICTA) is a free trade agreement among the Forum Island Countries (FICs) signed in 2001, aimed at liberalising the trade of goods between parties.
The 14 Pacific Island Countries that are parties to the PICTA are: Cook Islands, Federated States of Micronesia (FSM), Fiji, Kiribati, Nauru, Niue, Republic of Marshall Islands (RMI), Palau, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.
The implementation of the Agreement commenced in 2007, and only seven countries to date have announced their readiness to trade under PICTA and are currently implementing the Agreement. These countries include Cook Islands, Fiji, Niue, Samoa, Solomon Islands, Tuvalu and Vanuatu.
What does the PICTA cover?
The PICTA covers trade in goods between its members. It does not cover trade in alcohol and tobacco products, and Government procurement rules are also excluded.
The Agreement also provides a list of exceptions, ensuring that the FICs can continue to restrict trade for the usual range of reasons generally allowed in international trade agreements. This includes things like the prohibition of dangerous goods such as explosives, or the restriction of trade necessary to protect human or animal health (i.e. Quarantine).
Requirements
In order to qualify for preferential entry, goods must comply with the rules of origin as set out in the PICTA. These are based on 40% local content criteria.
What is the local content criteria?
To qualify for PICTA preferences, originating goods must fall into one of two categories:
1. Goods must be wholly produced or obtained in the Territory of a Party
These are goods which have undergone no process of manufacture and contain no foreign parts or inputs.
2. Goods must have undergone ‘substantial transformation’ in the Territory of a Party
These are manufactured or processed goods which consist of materials and/or processing activities which are attributable to countries – not all of which may necessarily be PICTA members.
The criteria for manufactured goods to qualify as originating through having undergone substantial transformation are two-fold:
- the last process of manufacture must be performed within a Party to the PICTA; and
- not less than 40% of the factory cost of the final good must be represented by qualifying expenditure.
The documentary evidence, which must be supplied by the exporter to support a claim that the goods are originating in Fiji, is the PICTA Certificate of Origin or the Form “FIC1”. The FIC1 form must be completed by the exporter and authorised by the Fiji Customs and Revenue Services (FRCS) for the PICTA preferential duty rates to be applicable.
The Annex IV of the PICTA Rules of Origin Manual contains the sample PICTA Rules of Origin Certificate (FIC1) along with guidelines for its completion.
The PICTA Rules of Origin manual can be found here.
The PICTA can be found here.
South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA)
South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) is a non-reciprocal and non-discriminatory agreement, where Australia and New Zealand provides duty-free unrestricted access to all products originating in the Forum Island Countries (FICs). SPARTECA was signed in 1980, and entered into force on 1 January 1981.
Access Provisions
New Zealand: provides duty free and unrestricted access to all products originating in the FICs.
Australia: allows duty free and unrestricted entry to all FIC products except for sugar.
The aim of the Agreement was to accelerate the development of Fiji (and FICs) through the expansion and diversification of trade to Australia and New Zealand, promotion of investment and the facilitation of economic cooperation including commercial, industrial, agricultural and technical cooperation.
SPARTECA Rules of Origin
To qualify for the duty-free access, goods must meet the rules of origin set out in SPARTECA.
The general principles agreed to on Rules of Origin in the SPARTECA require that:
- the goods being unmanufactured raw products or wholly obtained from Fiji; and
- goods wholly or partly manufactured in Fiji:
- the last process of manufacture of the goods must be performed in Fiji; and
- not LESS than 50% of the factory cost must be represented by qualifying expenditure.
In the case of SPARTECA, exporters are required to make self-declarations on invoices accompanying shipments on which preference is claimed. A sample of this declaration form can be found in Appendix 1 (page 30) for exports to Australia and in Appendix 2 (page 31) for exports to New Zealand, in the SPARTECA.
The SPARTECA can be found here.
Pacific Agreement on Closer Economic Relations (PACER)
Pacific Agreement on Closer Economic Relations (PACER) is an agreement between the members of the Forum Island Countries (FIC) which provides a framework for the future development of trade and economic cooperation.
The FICs are Australia, Cook Islands, Federated States of Micronesia (FSM), Fiji, Kiribati, Nauru, New Zealand, Niue, Palau, Papua New Guinea (PNG), and Republic of the Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.
It was signed on 18 August 2001, and entered into force on 3 October 2002. The PACER does not contain substantive trade liberalisation provisions, but provides a step-by-step process of trade liberalisation.
The PACER is aimed at:
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- providing a framework for cooperation leading over time to the development of a single regional market;
- fostering increased economic opportunities and competitiveness through more effective regional trade arrangements;
- minimising any disruptive effects and adjustment costs to the economies of the Forum Island Countries, including through the provision of assistance and support for the Forum Island Countries to undertake the necessary structural and economic adjustments for integration into the international economy;
- providing economic and technical assistance to the Forum Island Countries in order to assist them in implementing trade liberalisation and economic integration and in securing the benefits from liberalisation and integration; and
- being consistent with the obligations of any of the Parties under the Marrakesh Agreement Establishing the World Trade Organization.
The PACER agreement can be found here
Trade and Investment Framework Agreement (TIFA)
The Trade and Investment Framework Agreement (TIFA) is a bilateral arrangement between the United States of America (US) and the Republic of Fiji, which was signed on 20 October 2020. The TIFA creates a platform on which to further expand and deepen bilateral trade and investment ties between the two countries.
Apart from being the first trade and investment Agreement signed between the US and Fiji, the US-Fiji TIFA is also the first Agreement signed by the US with a Pacific Island Country. TIFA is aimed at strengthening the economic commitments between the two countries. Under the TIFA, the United States and Fiji will consult on a wide range of issues related to trade and investment. The two sides also aim to explore ways to increase trade in goods and services, and to encourage further investment between the two countries.
Two-way goods trade between Fiji and the US totaled nearly $918.54 million in 2021. The US exported $476.33 million worth of goods to Fiji in 2021.
The TIFA can be found here
Agreement on Climate Change, Trade and Sustainability (ACCTS) – under negotiation
The Agreement on Climate Change, Trade and Sustainability (ACCTS) initiative was launched to generate momentum towards developing a wider, globally agreed solution to environmental challenges.
On 25 September 2019, in the margins of the United Nations General Assembly (UNGA), Fiji, Costa Rica, Iceland, New Zealand and Norway announced the launch of the ACCTS initiative. Switzerland officially announced its participation in the margin of Davos, in early 2020.
Given Fiji’s international leadership on Climate Change, Fiji seized the opportunity to be a part of ACCTS. The ACCTS considers a range of trade related issues that have the potential to contribute meaningfully to address climate change and other serious environmental issues. The ACCTS aims to demonstrate in a substantive and concrete manner, how trade, climate and environmental policy can be mutually reinforcing. The Agreement is underpinned by four(4) key pillars:
1. the removal of tariffs on environmental goods;
Liberalisation of environmental goods products means they will become cheaper to buy in each of the ACCTS countries, accelerating access and uptake, and so helping to improve the environment.
2. the establishment of new and binding commitments for environmental services;
Liberalisation of environmental services products means they will become cheaper to buy in each of the ACCTS countries, accelerating access and uptake, and so helping to improve the environment.
3. the establishment of disciplines to eliminate harmful fossil fuel subsidies; and
Disciplines to eliminate fossil fuel subsidies will help remove the perverse effects of these environmentally harmful and socially regressive subsidies. This has the potential to deliver many trade, economic, social and environmental benefits.
4. the development of guidelines to inform the development and implementation of voluntary eco-labelling programmes and mechanisms.
This will help support the development of high-integrity eco-labels that are transparent in their criteria and meaningful to consumers.
The objectives behind the ACCTS remain relevant in this pandemic. The economic and financial responses that the individual countries are taking have climate change impacts. Fiji’s voice will be valuable in addressing the climate change crisis that the small island developing states are facing.
Fiji remains committed to the ACCTS negotiations to reach a meaningful and balanced outcome that addresses the challenges of the Small Island Developing States (SIDS).
Melanesian Spearhead Group Trade Agreement (MSGTA)
The Melanesian Spearhead Group (MSG) was formed in 1986 by Fiji, New Caledonia, Papua New Guinea, Solomon Islands, and Vanuatu (Melanesian countries). The formation of the MSG ensured solidarity when Melanesian countries spearheaded regional issues.
The original Melanesian Spearhead Group Trade Agreement (MSGTA) was signed in 1993, by three Melanesian States: Vanuatu, Papua New Guinea and Solomon Islands. Fiji signed the agreement in 1998. Kanak Socialist National Liberation Front (FLNKS) has a permanent observer status to the Agreement. The MSGTA formalised trading relationships of the MSG countries and aimed at granting unrestricted market access opportunities.
The MSG trades under 3 trade agreements:
- MSG Trade Agreement one (MSGTA1);
- MSG Trade Agreement two (MSGTA2); and
- Melanesian Free Trade Agreement (MFTA).
The MSGTA1 covers free trade in goods among members subject to meeting the rules of origin (ROO) criteria for the product. However, this excludes products such as sugar, salt and mackerel.
The MSGTA2 was signed by the four parties in 2005. In this revised agreement, tariffs on imports are eliminated on all products exported from other Members. However, this excludes items which individual Members have declared excluded, for reasons due to health or the protection of the environment.
The MFTA 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 MFTA is also considering expanding to include services, investment and labour mobility.
Fiji and Solomon Islands have signed the MFTA in 2017, whilst PNG and Vanuatu are yet to sign. The MFTA will come into effect after the two countries ratify the agreement. Currently, trade between the MSG is governed by the MSGTA2.
Requirements
In order to qualify to trade under the MSGTA2, the product must meet the Rules of Origin (ROO) criteria.
The ROO criteria outlines that the goods will only be accepted as originating from Fiji if it has been:
- Either wholly produced or obtained in Fiji; or
Wholly obtained products are basically raw products of Fiji and contain no materials imported from outside Fiji.
- Sufficiently worked or processed in Fiji;
These are manufactured or processed goods which consist of materials not all of which may necessarily be from Fiji but processing activities must occur in Fiji.
The preferential treatment provided for under this Agreement applies to products or materials, which are transported directly between the territories of the Parties.
The exporter is required to fill in the Certificate of Origin (MSG Form A) to support a claim that the goods are originating from Fiji. The form can be authorised by the Fiji Revenue and Customs Services (FRCS). This will deem the goods eligible for the MSGTA’s preferential duty rates.
The MSG Form A, along with guidelines for its completion can be found in Annex 5 (page 40 – 41) of the MSGTA rules of origin handbook.
The MSGTA rules of origin handbook can be found here.
The MSGTA can be found here.
United Kingdom (UK)-Pacific States Interim Economic Partnership Agreement (IEPA)
The United Kingdom (UK) formally exited the European Union (EU) on 31 January 2020. The UK’s withdrawal from the EU is known as “Brexit”. A trade agreement was necessary to ensure that there were no trade disruptions to trade. Therefore, the UK and Fiji replicated the EU-Pacific Interim Economic Partnership Agreement (IEPA), as much as possible, into a standalone trade agreement. Fiji signed the UK-Pacific IEPA on 14 March 2019, in London and has been provisionally applying it since.
The Agreement provides duty free and quota free access into the UK for goods originating from Pacific States. It also provides for a gradual reduction of duties in the Pacific States for goods originating in the UK.
As Pacific parties to the EU-Pacific IEPA, other Pacific Island Countries can also accede to the UK-Pacific IEPA, to enable them to continue unaffected market access to the UK. The countries currently covered by the UK-Pacific IEPA are Fiji, Papua New Guinea, Samoa and Solomon Islands.
Requirements
In order to qualify for the preferential duty treatment, the exporter must follow the rules of origin (ROO) criteria of the Agreement, which falls under Protocol II provision.
The ROO criteria states that the following products shall be considered as originating in a Pacific State if:
- products wholly obtained in Fiji, within the meaning of Article 5 (pages 581-582) of Protocol II; and
- products obtained in Fiji incorporating materials which have not been wholly obtained in Fiji, provided that such materials have undergone sufficient working or processing in Fiji, within the meaning of Article 6 (pages 582 – 583).
In order to export to the UK, the exporter shall apply for a movement certificate with the Fiji Revenue and Customs Services (FRCS). The FRCS will issue a movement certificate (form EUR.1) to the exporter once all appropriate documents proving the originating status of the products concerned are submitted by the exporter, as well as the fulfillment of the other requirements of this Protocol.
The EUR.1 form can be found in Annex III (page 683 – 684) of the UK-Pacific States IEPA.
The application for a movement certificate can be found in Annex III (685 – 686) of the UK-Pacific States IEPA.
The UK-Pacific States IEPA can be found here
Pacific State Eco Part II (Click Here to View)
Pacific State Eco Part III ( Click Here to View)
European Union (EU)-Pacific States Interim Economic Partnership Agreement (IEPA)
Fiji’s trade relations with the European Union (EU) is guided by the EU-Pacific Interim Economic Partnership Agreement (IEPA). The EU is a Customs Union and consists of 27 member countries that form a single territory for customs purposes. The EU member countries include: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
Fiji initialed the IEPA in 2007, and subsequently signed in 2009. Fiji notified the EU of the provisional application of the IEPA, in July 2014, in order to protect the duty and quota free access of exports to the EU, to avoid disruptions to trade. The agreement was ratified by the European Parliament in January 2011, and by Papua New Guinea (PNG) in May 2011. Samoa acceded to the IEPA on 21 December 2018, and Solomon Islands on 17 May 2020, and are applying the Agreement since then.
The EU is a traditional market for Fijian sugar, whilst products such as fish, garments, mineral water and a few agricultural commodities are also establishing their presence in this lucrative market of approximately 400 million people.
The Agreement provides duty free and quota free access into the EU for goods originating from Pacific States. It also provides for a gradual reduction of duties in the Pacific States for goods originating in the EU.
Requirements
In order to qualify for the preferential duty treatment, the exporter must follow the rules of origin (ROO) criteria of the Agreement, which falls under Protocol II provision.
The ROO criteria states that the following products shall be considered as originating in a Pacific State if:
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- products wholly obtained in Fiji, within the meaning of Article 5 (pages 572-573) of Protocol II; and
- products obtained in Fiji incorporating materials, which have not been wholly obtained in Fiji, provided that such materials have undergone sufficient working or processing in Fiji, within the meaning of Article 6 (pages 573 – 574).
You can use the My Trade Assistant to find product-by-product information on tariffs, rules of origin, product requirements, customs procedures etc. for the selected market on https://trade.ec.europa.eu/access-to-markets/en/home
In order to export to the EU, the exporter shall apply for a movement certificate with the Fiji Revenue and Customs Services (FRCS). The FRCS will issue a movement certificate (form EUR.1) to the exporter once all appropriate documents proving the originating status of the products concerned are submitted by the exporter, as well as the fulfillment of the other requirements of this Protocol.
The EUR.1 form can be found in Annex III (page 673 – 674) of the EU-Pacific States IEPA.
The application for a movement certificate can be found in Annex III (675 – 676) of the EU-Pacific States IEPA.
The EU-Pacific States IEPA can be found here.