Global IssuesInternational OrganisationsAfricaAsia NorthAsia South and SoutheastAustraliaEuropeLatin AmericaMiddle EastNorth AmericaPacificEnvironmentFisheriesNZ Tuvalu immigrationRegional SecurityTokelauTradeWhos who
Start writing the country or territory name in the box. Typing more letters narrows the search. Click "go" or hit "Enter" to go to the information paper on the country or territory.
(We don't have information papers on all countries and territories.)
Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
The Pacific is an important market, with New Zealand's exports to the region now worth more than NZ$1 billion a year. The market offers opportunities for a wide range of products. New Zealand's imports from the Pacific have remained fairly stagnant, but the Pacific Islands are looking for improved opportunities in New Zealand, including for horticultural products and efforts are being made to assist them. Institutional arrangements, until now dominated by SPARTECA (the South Pacific Regional Trade and Economic Cooperation Agreement), are receiving more attention.
A number of Pacific markets offer expanding opportunities for a wide range of products from manufactured goods, to food and beverages, marine equipment and consultancy expertise. The American Pacific and in particular Guam, offers exciting prospects for growth. New Caledonia and Papua New Guinea also stand out as markets in which New Zealand could improve its markets share.
New Zealand Trade and Enterprise can provide more detailed information on potential market opportunities. The New Zealand Pacific Business Council, New Zealand Fiji Business Council, New Zealand Papua New Guinea Business Council and the Pacific Islands Chamber of Commerce may also be able to assist. See related resources.
In July 2004, the then Minister for Trade Negotiations, Hon Jim Sutton, led a business delegation to Fiji and Parliamentary Private Secretary for Trade, Laumanuvao Winnie Laban led the delegation on to Papua New Guinea and Guam. In March 2005 the then Minister for Foreign Affairs and Trade, Hon Phil Goff, supported by Laumanuvao Winnie Laban led a delegation which included representatives of 23 companies and various officials to New Caledonia and French Polynesia, New Zealand’s second and third largest Pacific markets. In October 2007, Associate Economic Development and Pacific Islands Affairs Minister, Hon Laumanuvao Winnie Laban led a delegation representing 22 New Zealand companies to Guam to explore opportunities in the construction, building materials, machinery supplies and consultancy sectors in the Pacific. The delegation attended the United States Department of Interior's annual Island Business Opportunities Conference, where leaders of Island nations with formal ties with the United States gave presentations on upcoming business opportunities and engaged in discussions with the private sector.
Ministers have addressed the New Zealand Pacific Business Council on a number of
occasions and calls on the Council have been arranged for appropriate overseas visitors.
With our large Pacific Island population and our relative geographic proximity, New Zealand offers a potential market for Pacific Island exporters.
New Zealand provides duty free and unrestricted access to almost all products originating in Pacific Island Countries under the South Pacific Regional Trade and Economic Cooperation Agreement, SPARTECA. This agreement, dating from 1980, was designed to provide more certain market access for Pacific Island countries and to stimulate trade, investment and economic growth. It is now of diminishing relevance, however, because of New Zealand’s declining external tariffs.
Forum Island countries have pressed for improvements to the rules of origin applied under SPARTECA. New Zealand has pointed out that it would be more appropriate to develop new rules of origin as part of a negotiation on a more comprehensive agreement for the future covering trade and economic integration within the region.
The Pacific Agreement on Closer Economic Relations (PACER) entered into force on 3 October 2002.
It is a framework agreement that sets an outline for the future development of trade and economic relations across the Forum region as a whole.
It does not contain substantive trade liberalisation provisions; rather it envisages a step-by-step process of trade liberalisation. This starts with a free trade agreement in goods among Pacific Island countries (PICTA – the Pacific Island Countries Free Trade Agreement), now in the process of implementation and later likely to be extended to services. PACER provides for programmes of assistance to the island country members with trade facilitation and capacity building. It also foreshadows future negotiations on Forum-wide reciprocal free trade (including Australia and New Zealand). For the moment these negotiations are not scheduled until 2011, but they are likely to be brought forward as a consequence of the Pacific Island countries’ negotiation of an Economic Partnership Agreement with the European Union.
In May 2005, Forum Trade Ministers decided that there was a need to move beyond SPARTECA towards a more comprehensive framework for trade and economic cooperation between Australia, New Zealand and the FICs, as provided for under PACER, to foster economic growth, investment and employment in the Pacific region. They called for a study to investigate the potential impacts of a move towards such a comprehensive framework and for an analysis of FIC needs in regard to capacity building, trade promotion and structural reform. Terms of reference for the study were approved in 2006 and a draft of the study presented to Trade Ministers in 2007.
Forum Trade Ministers agreed in August 2007 that an informal meeting should be held in New Zealand in early 2008 to discuss issues related to the way ahead under PACER. This will provide an opportunity for informal reflection on how the region might move towards an agreement which advances the goal of a single market, while supporting the sustainable development of Forum Island countries and their progressive integration into the world economy. Negotiations under PACER should also give New Zealand a chance to prevent its exporters being placed at a tariff disadvantage vis a vis third countries in Pacific Island markets.
PACER includes a Regional Trade Facilitation Programme to improve the trading capacity of Pacific Island countries. This provides technical assistance at a regional level through the Pacific Islands Forum, Secretariat of the Pacific Community and Oceania Customs Organisation on a number of key issues in regards to customs facilitation, quarantine procedures and standards and conformance assessment. New Zealand has committed a total of $1 million so far to support this regional trade facilitation work - an initial $250,000 at the time PACER was concluded and and additional $750,000 pledged over three financial years, 2004 to 2007. Further assistance will depend on the outcome of a review being undertaken of the Programme's management and effectiveness.
A key element for improving intra-regional trade will be to improve air services and shipping links in the region, so that goods can be moved more quickly through the region and to other markets. The Pacific Islands Air Services Agreement (PIASA) which came into force in October 2007 is intended to lead to a single aviation market and bring benefits in terms of increased access to air routes between Pacific Island Countries, more airline alliances and code-sharing arrangements, and cost savings for airlines and travellers.
Progress in opening up the aviation market follows success by the region in improving shipping. In 1977 the Pacific Islands Forum set up the Pacific Forum Line, a regional shipping line with the mandate to function both as a business and means of regional development. The company, headquartered in Auckland, began trading in 1978. It struggled in its early years but is now profitable. The New Zealand Government is a shareholder in the line. Work is proceeding under the Pacific Plan on options for improving feeder shipping services to a number of small island states.
PICTA, a free trade agreement grouping most of the Forum Island Countries, came into force back in 2003, but implementation was delayed and the Agreement only became operational from 2007, when a number of island states indicated their readiness to commence preferential trade. As a result of the delays, the schedule for elimination of tariffs on intra-regional trade now extends out to 2021.
New Zealand exporters to the Pacific may gradually find themselves at a tariff disadvantage to competitors based in Forum Island Countries, such as Fiji and Papua New Guinea, as a result of the preferences extended under the agreement. New Zealand exporters will continue to face Most Favoured Nation (MFN) tariffs in the island countries, while competitors will enjoy PICTA concessional rates. This disadvantage is likely to increase over time, potentially affecting the competitiveness of some New Zealand’s exports to the Pacific in such important sectors as building supplies and processed foods.
PICTA goods are defined as those where 40% of the value has been added in PICTA member countries. Each member’s tariffs on such goods will drop on implementation by five to ten percentage points, and then phase progressively down to zero over an extended period.
The objective of PICTA is to foster regional integration and trade development in the island states through creation of a single regional market, as a precursor to their progressive involvement in the wider regional and world economy. The aim is to encourage their economic and social development and improve living standards.
The Pacific Island Trade and Investment Commission (PITIC NZ) provides support for the trade, tourism, investment and labour promotion efforts of Pacific Island countries within the New Zealand market. New Zealand fully funds this branch of the Pacific Islands Forum Secretariat to the tune of close to $1 million per year. A dedicated Pacific position in Biosecurity New Zealand within the New Zealand Ministry of Agriculture and Forestry, facilitates the consideration of Pacific Island applications for the establishment of quarantine pathways to allow the export of fresh produce to New Zealand. Aid funding has been drawn on at times to temporarily fund the position and to advance risk analysis of Pacific Islands produce.
Contact:
Brian Smythe
Regional Trade Advisor
Pacific Division
Ministry of Foreign Affairs and Trade Tel 04 439 8248
brian.smythe@mfat.govt.nz
