Palau

The Republic of Palau is one of the world’s smallest countries by land area, comprising approximately 340 islands and home to around 18,000 people. 

Palau is an independent nation in Free Association with the United States, a status established in 1994—the same year New Zealand and Palau formalised diplomatic relations. Palau manages its own domestic and foreign affairs, while the United States retains responsibility for defence and security.

Palau is home to some of the most biodiverse marine ecosystems in the world and leads one of the most ambitious ocean conservation efforts globally – the Palau National Marine Sanctuary.

New Zealand’s relationship with Palau is built on shared interests in key Pacific issues, including climate change, ocean governance, and regional security. Both countries are active members of the Pacific Islands Forum(external link) (PIF) and participate in the Council of Regional Organisations of the Pacific (CROP), including agencies such as the Secretariat of the Pacific Regional Environment Programme (SPREP).

Development cooperation and sustainability

New Zealand provides bilateral development support to Palau as part of our wider North Pacific development programme, which also includes the Republic of the Marshall Islands and the Federated States of Micronesia. Our cooperation focuses on economic resilience, sustainable fisheries and ocean management, climate change adaptation, tertiary education, and child and maternal health.

For example, New Zealand partners with Palau on marine spatial planning assistance(external link) to support biodiversity and sustainable resource use. Some of our support is delivered through the North Pacific Development Fund(external link) which provides small grants to community-led projects that promote income generation, employment, training, disaster preparedness, and local development.

Palauan scholars are eligible for the Manaaki New Zealand Scholarship Programme(external link) which offers undergraduate and postgraduate tertiary scholarships, thematic short-term training, and vocational/professional short-term training. More information, including availability and application processes, are available here(external link).

For detailed information on New Zealand’s development cooperation activities in Palau—including project descriptions, timeframes, sectoral focus, and expenditure—visit DevData(external link).

Trade and investment

Due to the geographic distance between New Zealand and Palau, and the absence of direct shipping links, two-way trade remains modest. For the most up-to-date information on New Zealand’s trade profile with Palau, including export and import data, visit the New Zealand Trade Dashboard(external link).

Palau’s economy is primarily driven by tourism, which contributes nearly half of its GDP. Its proximity to Asia makes it a popular destination for regional visitors. The other major source of revenue is financial assistance provided through Palau’s Compact of Free Association with the United States

People and culture

New Zealand and Palau share a warm and growing relationship, grounded in strong Pacific cultural ties and a shared commitment to regional cooperation.

Our engagement reflects mutual interests in areas such as climate change, ocean conservation, and regional security, and is supported through diplomatic, development, and community-level partnerships