1. PICTA Preferences Trade in Goods
Hello, welcome to the UNCTAD distance learning course on the Agreement on Agriculture
Technical Workshop on International Merchandise Trade Statistics: Focusing on goods traded under the preferential trade agreements 26 February-3 March Pacific Islands Forum Secretariat, Suva
UNCTAD, 2008

2. Contents PICTA State of Play Qualification Provisions/Criteria
List of Products Exempted from Liberalization and Applicable Tariffs
Timetable for Elimination of Tariffs on Excepted Imports
Liberalisation Schedule for SIS, LDCs and Developing Member Countries
Margins of Preference: Fresh and Processed Tuna
Summary: Benefits and Challenges

3. PICTA: State of Play 8 PICs Trading Under PICTA:
Cook Islands, Fiji, Niue, Samoa, Solomon Islands, Tuvalu and Vanuatu.
Latest addition: Kiribati announced its readiness to trade under PICTA in 2017.
September 2017: Leaders called for establishment of PICTA RoO Committee.
PIFS AND OCO convened a side event in the margins of the Regional Trade Mainstreaming Meeting
UNCTAD, 2008

4. Qualification Provisions/CRITERIA in PICTA
Nature of Agreement: Reciprocal Preferential Trade Agreement on Goods Only for Forum Island Countries.
Market Access: entails principles and obligations regarding elimination of tariff and non- tariff measures among partners, including for fisheries products (Chapter 3).
Rules of Origin (ROOs): There are rules of origin on various products to ensure consistency in determining when a product (including fisheries) is deemed to ‘originate’ from one member country to be able to benefit from preferential tariff in the importing member state.
Annex I, 1 (a) of PICTA:
“Wholly produced or obtained goods” in a PICTA Party are goods which contain no materials imported from outside the PICTA area and comprise two general categories of goods:
Products that have been obtained in an unprocessed state, i.e. raw produce. For example fresh fish caught and exported by a fishing vessel registered in Samoa will be granted PICTA origin. So too would fresh fish caught in Niue territory by a fishing vessel are registered in Niue, when exported directly from the vessel to a PICTA Party.
Products that are produced in a PICTA Party exclusively from products derived from that country. For example, frozen or dried fish from Papua New Guinea (PNG) by PNG fishermen and vacuum packed in crates produced from packaging materials made in PNG. The production may also involve a degree of processing – which in this case would be the drying, packaging, labelling, storing and finally exporting.

5. cont… Annex I, 1 (b) of PICTA:
The final process of manufacture must take place in a PICTA Party, and total expenditure on originating materials, labor and overhead costs is not less than 40% of the total expenditure, whether or not incurred in a PICTA Party. A 2% margin of tolerance may be applied upon agreement by the parties for a limited period of time only.
Example: Canned Tuna
The above paragraph gives rise to two distinct issues, which are:
Where the final process of manufacture took place – Qualitative criteria [single or multiple manufacturing process]
Percentage of total cost incurred in a PICTA Party - Quantitative criterion [value-added]

6. List of Products Exempted from Liberalization and Applicable Tariffs
Country
Taxable Products
Tariff Rate
Cook Islands
None
0% : all PICTA originating pdts
Fiji
0% :all PICTA originating pdts
Niue
Samoa
Paints and Varnishes, including enamels and lacquers (oil , and water based)
20%
Mineral waters and aerated waters ill sealed containers holding 2.5 litres or less
ST$1.00
Birds eggs, in shell, preserved or cooked
Building blocks and bricks of cement or concrete
10%
Kiribati
0%: All imported products
Natural Honey, Noni Juice
Coconut Oil

7. List of Products Exempted from Liberalization and Applicable Tariffs
Country
Taxable Products
Tariff Rate
Tuvalu
Coconut Oil
20%
Sausages (Pork and Fish)
40%
Soap (laundry bar, cakes or powder; Surface active agent (detergent
30%
Solomon Islands
16 products
Vanuatu
Meat and edible offal of the poultry-fresh-chilled or frozen; Birds’ eggs, in shell, fresh, preserved or frozen; ice cream; fruit juices; toilet paper;
50%
Canned beef
25%
Paints and vanishes (water or oil based) and other paints; Pigments used to manufacture paint and dyes
350 vatu per litre
Fibreglass tanks (exc.300 ltrs); pre-fabricated buildings
Fibre glass boats; wooden furniture ( offices, kitchens, bedroom, other); others
35%
Solomon Islands: Frozen Poultry; Wheat flour; Mixes and dough for bakers ware; prepared food obtained by the swelling or roasting of cereal or cereal products; bread, pastry, cakes and other bakers ware (excl. buscuits); water; soft drinks; swine feed; paints and vanishes (water and oil); Soap-Laundry bar, cakes, or powder; surface active agent (detergent); Men’s or boys’ suits, ensembles, jackets, trousers and shorts; women’s or girls’ suits, ensembles, jackets, dresses, skirts, divided skirts, trousers, breaches, and shorts; Men’s or boy’s shirts; women’s or girls’ blouses, shirts and shirt blouses
UNCTAD, 2008

8. Timetable for Elimination of Tariffs on Excepted Imports
Non SIS and LDCs
Year
1.1.07
1.1.08
1.1.09
1.1.10
1.1.11
1.1.12
1.1.13
1.1.14
1.1.16
Ad- valorem Base Tariff
40%
35%
30%
25%
20%
15%
10% 5% 0%
Specific (100% entry of force) Base Tariff
85%
70%
60%
50%
Despite being SIS and LDC, in 2015, Kiribati removed duties on all imported products-regardless of the country of origin
SIS and LDCs
Year
1.1.07
1.1.08
1.1.09
1.1.10
1.1.11
1.1.12
1.1.13
1.1.14
1.1.15
1.1.16
Ad-valorem (%base tariff)
50%
40%
35%
30%
25%
20%
15%
10% 5% 0%
Specific (%Base Tariff)
90%
80%
70%
60%
UNCTAD, 2008

9. LIBERALISATION SCHEDULE FOR PIC SIS, LDCs and DEVELOPING MEMBER COUNTRIES
Ad valorem tariffs on originating goods imported into Parties, other than SIS and LDCs, shall be reduced and eliminated according to the following timetable:
Ad valorem tariffs on originating goods imported into PIC Small Island States and LDCs shall be reduced and eliminated according to the following timetable:
Maximum tariff on goods from:
Base tariff on goods on the
entry into force of this Agreement
more than 20%
20%
15%
10% 5% 0%
more than 15% but not more than 20%
more than 10% but not more than 15%
not more than 10%
Maximum tariff on goods from:
Base tariff on goods on the
entry into force of this Agreement
More than 25%
25%
17.5%
10% 5% 0%
More than 20% but not more than 25%
20%
15%
More than 15% but not more than 20%
More than 10% but not more than 15%
Not more than 10%

10. cont……
Specific tariffs or fixed tariffs on originating goods which are imported into Parties, other than SIS and LDCs, shall be reduced and eliminated according to the following timetable:
Maximum specific or fixed tariff on goods, as a percentage of base tariff (value), from:
% of Base Tariff
(value)
80%
60%
40%
20% 0%
Specific tariffs or fixed tariffs on originating goods which are imported into PIC Small Island States and LDCs, shall be reduced and eliminated according to the following timetable:
Maximum specific or fixed tariff on goods, as a percentage of base tariff (value), from:
% of Base Tariff
(value)
80%
60%
40%
20% 0%

11. Margin of Preference: Fresh and Processed Tuna
Tariffs
Preferential Tariffs
WTO Bound
MFN
Applied
iEPA/EPA
EBA
(for LDCs)
GSP
GSP+
PICTA
Tuna: fresh (0304)
18% 0%
9.25
Tuna: Processed(1604)
24%
21%

12. Summary: Benefits & Challenges
RoO determination criteria:
wholly obtained from PICTA Member Country; or
transformed (40% value of factory costs incurred) within PICTA member
Confirmed by PICTA certificate of origin, Products meeting the above criteria are eligible for free market access
Special and Differential Treatment: SIS & LDCs allowed a longer liberalisation period-allowing in-country businesses a gradual transition AND adaption.
However:
PICTA RoO are stringent compared to recent trade agreements. Review of PICTA RoO is necessary-and is underway.
Any export intending to exploit PICTA preferences must be accompanied by PICTA certificate of Origin. The certificate illustrates if the export meets PICTA product criteria.
UNCTAD, 2008