This unit aims to identify and increase market access opportunities for Tongan exports and advance Tonga’s gains from international trade through trade agreements and arrangements that Tonga is a party to and through initiatives of International and Regional trade-related organizations:
Trade Agreements & Arrangements
World Trade Organization
Tonga officially became the 151st member to the World Trade Organization on 27 July 2007. Some of the benefits that is attained through membership to the WTO includes the certainty that goods and services can be traded in a stable and rule-based environment but also accessing technical and capacity building assistance to build the capacity of member countries to better integrate into the global economy.
a. Pacific Island Countries Trade Agreement (PICTA)
A Free Trade Agreement among fourteen Forum Island Countries (FICs) excluding Australia and New Zealand that has entered into force on 13 April 2003 while trade under the agreement became operational on 1 January 2007.
The agreement covers trade in goods not including alcohol and tobacco products. Tonga signed the agreement on 18 August 2001 and ratified 27 December 2001 but has yet to declare its readiness to trade under the agreement. Only eight FICs (Cook Islands, Fiji, Kiribati, Niue, Samoa, Solomon Islands, Tuvalu and Vanuatu) have announced their readiness to trade under PICTA.
In 2004, the scope of the PICTA was broadened to include Trade in Services (TiS). PICTA TiS covers eleven (11) services sectors: business communication, construction, distribution, educational, environmental, financial, health, tourism, recreational and transport. Tonga has signed the PICTA TiS agreement but has not ratified it.
b. South Pacific Regional Trade and Economic
Co-operation Agreement (SPARTECA)
Tonga signed onto the SPARTECA in July 1980 and which governs trade in goods between Australia, New Zealand and the Forum Island Countries (FICs). The agreement entered into force in 1981, it is a non-reciprocal trade agreement whereby Australia and New Zealand offer duty-free and quota free access for a wide range of products originating from Tonga and Forum Island Countries.
The rules of origin under SPARTECA require manufactured goods originating from the FIC to incorporate a minimum of 50% local value added to benefit from the duty-free, quota free access into Australia and New Zealand. Tonga has benefitted from this agreement especially the TCF (Textiles, Clothing, and Footwear) Scheme. SPARTECA TCF expired on 31 December 2014.
c. Pacific Agreement on Closer Economic Relations Plus
The Pacific Agreement on Closer Economic Relations (PACER) Plus is a regional development-centered trade agreement which covers goods, services, investment, temporary movement of natural persons, development and economic cooperation, institutional arrangements and transparency.
Negotiations commenced in 2009 and concluded in Brisbane on 20 April 2017. PACER Plus opened for signature on 14 June 2017 in Tonga and has been signed by Australia, New Zealand, Cook Islands, Kiribati, Nauru, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Tonga is the Depositary to the Agreement.
Tonga ratified the PACER Plus Agreement on March 27, 2020 after completing her internal requirements. So far eight countries have ratified the Agreement (New Zealand, Australia, Samoa, Kiribati, Tonga, Solomon Islands, Niue and Tuvalu), the agreement entered into force on 13 December 2020.
Trade Policy Review
Tonga completed its Second Trade Policy Review on the 14 & 16 April 2021. In accordance with the Trade Policy Review Mechanism (TPRM) of the World Trade Organization (WTO), all Members’ national trade policies and practices are required to be periodically reviewed. Tonga’s initial Trade Policy Review was conducted in 2014.
Demand Driven Aid for Trade Grants
The Ministry is pleased to convey the availability of demand driven Aid for Trade Grants for your perusal if interested.
The STDF is a platform whereby international and regional organizations and donors collaborate to support developing country government and private sector to address sanitary and phytosanitary (SPS) capacity gaps to facilitate safe trade. The STDF also promotes innovative and cross-cutting approaches to sanitary and phytosanitary (SPS) capacity building.
Agencies that are considering to apply should identify the critical need/gap that is to be addressed, examples of projects that other countries have completed or is in progress is included herewith to provide some ideas. Applications may be submitted at any time during the year but must normally be received at least 60 working days in advance of a Working Group meeting to be considered at that meeting. Applications submitted after the 60 working day deadline will be considered at the subsequent Working Group meeting. If you require more information you can access on the links https://www.standardsfacility.org/project-preparation-grants https://www.standardsfacility.org/project-grants
Grants are provided to target the application of SPS-related capacity evaluation tools, preparation of feasibility studies and/or formulation of project proposals to address specific SPS capacity building needs linked to trade. Examples of country projects completed:
Grants aim to address key food safety, animal and/or plant health issues that affect the ability of developing countries to gain and/or maintain market access. Examples of country projects that are in progress:
The Global Alliance for Trade Facilitation (‘the Alliance’) is a collaboration of international organizations, governments and businesses. Projects under the GATF is designed to assist least developing and developing countries in the implementation of the Trade Facilitation Agreement whereby ensuring that international trade is faster and more cost effective. Some of the activities that the Alliance is involved in, includes establishing public private dialogues on trade facilitation and delivering country trade facilitation projects. Examples of country projects initiated under the GATF include:
For GATF, as an alternative, you can write an official request for assistance signed by government and private sector and address it to the GATF Director. There is no deadline for submission of applications for this grant, more information can be accessed on https://www.tradefacilitation.org/as-a-government/
The TFAF provides two types of grants to assist developing and LDC WTO members who have not secured support for their Trade Facilitation Agreement commitments which are as follows:
This grant is available to Member countries that require additional support to successfully implement its Category C provisions.
This grant will be available for implementation of applicants’ specific Category C provisions of the TFA.