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PICs: Trade and implications for the environment

Most of the PICs enjoy trade agreements with Australia and New Zealand (the South Pacific Regional Trade and Economic Cupertino Agreement - SPARTECA) and the European Union (the Lome Convention). However only Fiji and to a lesser extent Tonga and Samoa have been able to take significant advantage of these agreements.

Papua New Guinea:

PNG by far the largest economy in the region, has not been able to move the composition of its exports away from resource intensive products. On the basis of available data, Asia (including Japan) has been PNG's largest trading partner and this relationship was strengthening. Australia still remains the main source of imports. Exports are highly concentrated in minerals and oil followed by unprocessed log exports and agricultural commodities. Given the expected growth in oil and gas production early in the next century the industrialising countries of Asia were expected to become even more important markets for PNG resource exports for years to come.

Solomon Islands:

Solomon Islands' trade patterns have undergone marked and significant changes in recent years. Logs have now replaced tuna and agricultural commodities as the principal exports. Agricultural commodities, particularly coffee, remain the largest employers of labour. Like PNG, its trade has been effected by the closure of logging in Sabah and Sarawak, and that may of the Southeast Asian logging companies that are operating in PNG are also operating in the Solomon Islands. The boom in log exports since 1993 has meant that the Solomon Islands current account deficit has been rectified. However the current level of exports are no way near sustainable. Asia, including Japan, is now the Solomon Islands largest trading partner. There are significant canned tuna exports to the UK as the result of a 24 per cent margin of preference under the Lome Convention.

Vanuatu:

Vanuatu, of all the PICs, is the country whose trade has changed least since the colonial area. Vanuatu does not have the forestry resources of PNG and the Solomons, or minerals of PNG. Copra continues to dominate exports - most of which until recently was shipped to Europe (the last few years have seen a shift of copra exports to Bangladesh). While the economic sustainability of the copra industry remains problematical, coconuts are a highly sustainable industry from an environmental viewpoint. Vanuatu's trade deficit can now be regarded as structural with exports usually only accounting for around 25% of imports.