Vanuatu is currently a signatory to a sub-regional and regional free trade agreement, MSGFTA and PICTA, while negotiations on the EU-EPA and PACER Plus are still ongoing and are expected to be concluded soon. The obligation to participate in such a free trade agreement stems from the national trade framework that integrates trade into Vanuatu`s national development strategies, including the Priority Action Programme (AAP). Vanuatu clearly has an interest in integrating free trade policy into national development strategies, as free trade is seen as the engine of increased economic productivity, which leads to stable and sustainable economic growth. The creation of the WTO is based on the philosophy of free trade, where each member is encouraged to liberalize trade in their territory in order to promote economic growth by increasing investment opportunities, resource use, market efficiency, increased employment opportunities and improved income prospects. MSG (Melanesian Spearhead Group Free Trade Agreement) Vanuatu is a party to the MSG Free Trade Agreement, a sub-regional free trade agreement between Vanuatu, Papua New Guinea, Fiji and the Solomon Islands. Under the TRADE agreement FREI, MSG, duty-free goods were exempt from tariffs between the various parties in the MSG countries. There are two approaches to trade, the positive list approach, which allows zero tariffs, and the negative list approach, which is to gradually reduce safeguard tariffs. However, both approaches have come to an end since January 1, 2013, when Vanuatu fully liberalized its MSGTA tariff plan. This means that all products that meet the MSG criteria of origin can benefit from preferential access duty-free. Products that can be traded under the MSG Free Trade Agreement must meet the MSG original criteria, which are based on the Change of Tariff Heading (CTH) on a tariff level of at least six digits, and be accompanied by a DMSG certificate of origin A from the exporting country. Goods that are in transit for reconditioning are not eligible for MSG`s tax concession.
To view the MSG Certificate of Origin (click on ROO FORMS) PICTA (Pacific Island Countries Trade Agreement) although Vanuatu has signed and announced its intention to conclude the PICTA agreement as one of the least developed countries in the Pacific Forum Island Countries, the tariff reduction period will come into effect on January 1, 2009. Until recently, there is almost no trade between Vanuatu and PFIC members under the PICTA agreement, but MSG member countries prefer to act under the MSGTA over PICTA. The picTA (ROO) rules of origin are based on the value creation method of a 40% local component. To view the original PICTA Certificate (click on ROO FORMS), the national point of contact for PICTA is the Department of Foreign Affairs.PACER (Pacific Agreement on Closer Economic Cooperation) Vanuatu answered all written questions, about 90 asked by members. This TPR will be completed once Vanuatu has responded to all outstanding follow-up questions that have arisen during the meeting in one month.