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The Pacific Island Countries Trade Agreement (PICTA)

PICTA is a free trade agreement amongst the 14 Forum Island Countries (FICs). Under this agreement, virtually all barriers (import tariffs and quotas) to merchandise trade between FIC countries will be subsequently removed. The initial PICTA which only covers Trade in Goods (TIG) was ratified by ten (10) FICs. The agreement was signed in 2001 and came into force in 2006. Fiji ratified the agreement in 2002.
The PICTA was initially a trade in goods agreement in which countries adopted a negative list approach. Negative list approach requires countries to list products which they do not want to trade in, which may include sensitive products or products associated with infant industries. The rationale for adopting a negative list was to enhance greater liberalization of trade in goods amongst the FICs. To demonstrate its commitment to regional integration and its openness to trade, Fiji did not include any products on negative list in the PICTA.

In 2004, the PICTA Trade Ministers' agreed to broaden the free trade area among the FICs to include trade in services (TIS). The PICTA TIS mirrors the multilateral rules for international services trade under the WTO General Agreement on Trade in Services. It covers eleven (11) services sectors: business communication, construction, distribution, educational, environmental, financial, health, tourism, recreational and transport.

The PICTA TIS under negotiations includes two areas:

  • Trade in services for sectorial liberalization and
  • Temporary Movement of Natural Person. (labour mobility)

Current Status

Currently 11 out of the 14 FICs have ratified PICTA, and only 6 FICs have announced their readiness to trade, presenting considerable challenges in the implementation of the agreement. The FICs that have ratified the PICTA are Cook Islands, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. The FICs have also, to date, undertaken four rounds of PICTA TIS negotiations, however, no substantial commitments or progress has been made in services sector liberalisation or the liberalisation of temporary movement of natural persons. Talks are expected to further in the fifth round of negotiations and perhaps commitments may be made by members.