Nearly all the domestic exports are primary goods. These include 6 principal items: Coconut based products (copra, oil & fuel), Beef, Cocoa, Kava, Fish and a variety of root crops. These products are mostly exported as raw or semi-processed goods. To date, the principal items involving processing have been powdered kava, canned beef, T-shirts, microcircuits and button blanks. Some artefacts, snails and fish are also exported.

The Government's policy is to continue to promote the development of export industries in the private sector, which are economical and beneficial to Vanuatu. It has adopted an outward-looking policy and is gradually removing protection measures to encourage more competition and promote more export.

Exports

Generally speaking 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 the Australian and New Zealand markets, provided they effectively satisfy the country's quarantine requirements.

In addition to this, the Melanesian Spearhead Group reached in 1996 also allows duty free access to a larger range of locally manufactured products to the Melanesian markets. (Papua New Guinea, Solomon Islands, Fiji, and Vanuatu)

Preferential Trade Agreements

Fortunately the Republic of Vanuatu is a beneficiary country 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 Community (EC) 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.

Although manufactured 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 recently, Fiji.

The MSG Trade Agreement signed in 1994 is a sub-regional trade treaty 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 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 as we approach the new millennium.

The Government of Vanuatu is currently negotiating its accession with member governments of the Multilateral Trading System for membership into the World Trade Organisation (WTO).

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

Mr. Timothy Sisi
Acting Principal Trade Officer
Department of Trade, Industry & Investment
PMB 030, Port Vila, Vanuatu.
Phone: +678 22770
Fax: +678 25640
Email: trade@vanuatu.com.vu