Vanuatu currently trades with Australia, New Zealand, the MSG Group (Papua New Guinea, Fiji, Solomon Islands, - New Caledonia accepted by the MSG has an 'Observer' status), EU and other island countries in the region. Vanuatu export products are mostly primary (raw or semi-processed) goods. They include coconut based products (copra, oil), timber, beef, cocoa, kava, fish, coffee and small quantities of root crops. To date, the principal

items involving processing have been powdered kava, fish, timber, coffee, T-shirts, and button blanks. Some artefacts are also exported.

The Government's policy is to continue to promote and encourage development of export industries in the private sector. The policy is outward-looking geared towards removing protection measures to encourage competition and promote export.

Exports

In general there are no restrictions on exports from Vanuatu. Under the SPARTECA Agreement, virtually all goods exported from Vanuatu are allowed to enter duty-free into Australian and New Zealand markets, provided Vanuatu products meet their import and quarantine requirements.

Under the MSG (Melanesian Spearhead Group) trade arrangements Vanuatu has acess to member countries' markets, especially Fiji and New Caledonia markets, which is a closest neighbour with huge potential for Vanuatu products and Vanuatu plans to futher develop and strengthen the trade relations with the French territory in the near future.

The Melanesian Spearhead Group, its Headquarters resently establihed in Port Vila, Vanuatu, is comprised of the Melanenian countries, namely Papua New Guinea, Solomon Islands, Fiji, and Vanuatu. New Caledonia has been given membership on an Observer Status'.

Preferential Trade Agreements

The Republic of Vanuatu is a beneficiary under three important trade agreements; SPARTECA, ACP-EC/LOME IV Convention and GSP.

Under these agreements special treatment is afforded to imports from developing companies in the form of a reduction or total waiver of customs duties on a non-reciprocal basis.

The agreements are in operation with 23 donor countries, being;
Australia, Austria, Bulgaria, Canada, Czechoslovakia, Finland, Hungary, Japan, New Zealand, Norway, Poland, Switzerland, United States of America, USSR, and the European Community (EC) which comprises Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain and the United Kingdom.

The European Union (EU) applies the Lomé Scheme whilst Australia and New Zealand apply SPARTECA to the South Pacific Island Countries who are members of the South Pacific Forum.

Manufactured products wholly or in part from imported materials or components, or of which the origin is unknown, must have undergone a substantial transformation in the beneficiary country.

Melanesian Spearhead Group Preferential Trade Agreement

The Melanesian Spearhead Group (MSG) Preferential Trade Agreement is a trade treaty governing the four (4) Melanesian States of Vanuatu, Papua New Guinea, the Solomon Islands and Fiji. New Caledonia has an observer status in the grouping.

The MSG Headquarters is based in Port Vila, Vanuatu.

The MSG Trade Agreement signed in 1994 is a sub-regional trade treaty established to foster and accelerate economic development through trade relations and provides 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 the Melanesian Solidarity and is done on a Most Favoured National (MFN) basis.

The MSG Trade Agreement is GATT consistent and has recently been approved and accorded recognition by the World Trade Organisation (WTO) Committee on Regional Arrangements to be compatible and meeting the requirements of Article 24 of the GATT/WTO Agreement.

This Agreement covers over 180 Tariff lines of the Harmonised Systems of Customs Tariff Code and is consistent to agreed trade rules and obligations.

Negotiations are held regularly between the leaders of the four countries to consider the progress and developments of the MSG Trade Agreement.

The MSG Trade Agreement is by and large, the most effective sub-regional economic cooperation arrangement between the four countries and is likely to include issues of Intellectual Property Rights and Trade-in-Services.

The Government of Vanuatu is currently re-negotiating its accession with member governments of the Multilateral Trading System for membership into the World Trade Organisation (WTO), after the first attempt was abandoned in 2001.

More detailed information is available on request from The Department of Trade, Industry & Tourism.

Director
Department of Trade, Industry & Tourism
PMB 030, Port Vila, Vanuatu.
Phone: +678 22770
Fax: +678 25640
Email: mmatariki@vanuatu.gov.vu