Trade Negotiation & Policy

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:

Tonga’s Memberships

  • World Trade Organisation (WTO)
  • Organization of African, Caribbean and Pacific States (OACPS)
  • Pacific Island Forum Secretariat (PIFS)
  • Pacific Agreement on Closer Economic Relations (PACER Plus)
  • Cotonou Agreement

Trade Agreements & Arrangements

  1. Multilateral trading system

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.

  1. Preferential Trade Agreements

      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. 

  1. Standards and Trade Development Facility (STDF)

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

  1. Preparation Grant (PPG) up to US$50,000

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:

  • Strengthening the national food control system – Kiribati
  • Livestock identification and registration – Mongolia
  • Improving phytosanitary inspection – Azerbaijan
  1. Project Grant – US$250,000 and US$1 million

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:

  • Laboratory capacity building to support fish exports – Solomon
  • Improving Food Inspection through a virtual school – Belize, Coasta Rica et al
  1. Global Alliance for Trade Facilitation (GATF)

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:

  • implementing a risk management system for the National Food and Drug Surveillance Institute – Colombia (completed)
  • modernizing licensing for customs clearing agents –Malawi (ongoing)
  • supporting countries to introduce ePhytos –digitizing trade in plants and plant products – in practice:Morocco

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/

  1. Trade Facilitation Agreement Facility (TFAF)

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:

  1. Project Preparation Grants (PPG) up to US$30,000

This grant is available to Member countries that require additional support to successfully implement its Category C provisions. 

  1. Project Implementation Grants up to US$200,000

This grant will be available for implementation of applicants’ specific Category C provisions of the TFA. 

There is no deadline for submission of applications for this grant.  For more information, please visit   https://www.tfafacility.org/grant-program  and https://wto.formstack.com/forms/tfaf_ta

  • This unit seeks to improve collaborations with stakeholders to streamline, implement and monitor trade policies and agreements to promote private sector led growth.
  • Updates on the following trade policies, agreements & projects:
  • Tonga Trade Policy Framework (TTPF)
    • This framework was launched in August 2020 together with the e-Commerce Readiness Assessment. The outcome of this framework intends to enable Tonga to create an inclusive, sustainable and competitive trading environment leading to better trade performance.
  • National e-Commerce Readiness Assessment
    • The assessment was conducted in 2019 and later launched in August 2020. The report provides a basic analysis of Tonga’s current e-commerce environment; the findings are broken up into the following 6 areas:
  1. Status of e-Commerce Development and Government Vision.
  2. ICT Infrastructure, Connectivity and Affordability.
  3. Trade Logistics and Trade Facilitation.
  4. Legal and Regulatory Frameworks.
  5. Payment Solutions, Digital Financial Inclusion and Access to Financing.
  6. Skills for e-Commerce Development.
  • Tonga e-Commerce Strategy & Roadmap
    • This strategy is aligned with the Pacific Regional E-Commerce Strategy and the Tonga Strategic Development Framework (TSDF) with the mission to accelerate Tonga’s Digital Transformation, the strategy targets four Overarching Outcomes, (1) more online consumers; (2) more online businesses; (3) an increasingly banked population and its corollary the reduction of cash handling; and (4) a digital literate population.
  • Legal Options Paper on E-Commerce laws
    • The Options Paper provides a description of the status of e-commerce related laws in Tonga in relation to the review of the following legislative areas;
      • i) Electronic Transactions
      • ii) Consumer Protection
      • iii) Data Protection and Privacy
      • iv) Cybercrime and Cybersecurity
      • v) Electronic Payments
  • Cross Border Paperless Trade Readiness Assessment
  • Develop and coordinate COVID-19 programs
  • Policy Identification and advice within the Ministry
  • Improved collaborations with stakeholders to streamline, implement and monitor trade policies to promote private sector led growth (this is the unit output as per CP)
  • Tonga Informal Business Survey 2021
    • The implementation of the report was initiated by the Ministry of Trade and Economic Development through this division. This was financed by the Pacific Private Sector Development Initiative (PSDI) in partnership with Asian Development Bank (ADB), the Government of Australia, and the Government of New Zealand.  
    • The report has information about the type of economic activities, challenges and opportunities from 2,301 economic units in 1,519 sampled households involved in the informal sector.
  • Create awareness on Ministry’s services through MTED Trade Week
  • Provide statistics and analysis within the Ministry
  • Update the public with news bulletin, website/press releases, surveys and databases
  • Improve staff capacity with trainings