Pacific Islands Forum: Overcoming trade challenges in the Pacific Islands

Mr Andrea Giacomelli, Advisor at the Pacific Islands Forum (PIF) Secretariat in Geneva.

What are some of the challenges faced by the Pacific Islands?

As some of the smallest and most geographically isolated nations in the world, Pacific Island countries face significant trade constraints. Because domestic markets are so limited, no industry can realistically become competitive by relying solely on local consumers. As a result, accessing foreign markets remains the best option for sustainable development. However, the distance from vital foreign markets poses extra challenges, such as increased trading costs.

What is being done to overcome these challenges?

In 2020, Pacific trade ministers adopted the Pacific Aid-for-Trade Strategy to improve Pacific Island countries' trade competitiveness and reduce the impacts of isolation. The strategy focuses on key priority areas, including e-commerce, services, connectivity, and deepening PIF markets through better trade policies and trade agreements.

What are some of the successful initiatives?

Over the past eight years, the PIF Secretariat has launched several initiatives, such as the Pacific Quality Infrastructure Initiative, the Pacific E-Commerce Initiative, the Pacific Trade Facilitation Initiative and the Pacific Trade in Services Initiative. These programmes aim to strengthen trade policies, improve digital trade and establish better quality infrastructure.

There is a lot of talk about e-commerce. How does it help Pacific businesses?

E-commerce is a game-changer! It reduces the impact of distance by allowing businesses to sell products and services online. In 2022, ministers approved the Pacific Regional E-Commerce Strategy and Roadmap, which includes 54 priority measures. A total of 26 per cent of these – including harmonized e-commerce laws, training programmes, and the expansion of IT infrastructure – have already been implemented. More details are available on the Pacific E-Commerce Portal.

What about ensuring the quality of products? If entrepreneurs in the Pacific want to export, will their products meet international standards?

That’s where the Pacific Quality Infrastructure Initiative comes in. It has already helped to develop two regional standards, for cassava and energy efficiency in buildings. Other achievements include introducing bulk procurement for trade measurement equipment and green-lighting the development of a three-tier regional laboratory system for product testing.

And what about trade facilitation? Some trade processes can be quite slow.

That’s true. Pacific Island countries’ trade facilitation implementation rate is currently 42 per cent – much lower than that of Australia and New Zealand. To improve this, the Pacific Regional Trade Facilitation Strategy was developed. This includes 22 regional actions, including enabling better border controls, faster clearance processes, and electronic information exchange. These efforts could help boost trade efficiency significantly.

What about services? Many Pacific Island economies rely on tourism and other service-based industries.

The services sector generates the majority of GDP in Pacific Island nations. To support this, the Pacific Trade in Services Initiative was launched. This includes conducting Rapid Trade in Services Assessments (RTISA), which help Pacific Island countries clarify the role of services in economies, address regulatory barriers and develop new export sectors.

Are there any specific industries getting extra attention?

Efforts to further develop value chains in kava and apiculture (beekeeping) are ongoing. These include ensuring quality standards and improving export opportunities with support from development partners, including Australia, the European Union, the Enhanced Integrated Framework and the Standards and Trade Development Facility.

What more can be done?

Given Pacific Island countries will likely face funding challenges in the future, I believe the PIF’s work in the region provides a good example of how to do more with less. It focuses on a limited set of long-term initiatives and identifies regional actions that our members can pursue by pooling resources, with coordinated support from donors and implementing agencies. Placing greater emphasis on regional initiatives could pave the way for even more successful trade support going forward.