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PICTA Preferences Trade in Goods

PICTA Preferences Trade in Goods. Technical Workshop on International Merchandise Trade Statistics: Focusing on goods traded under the preferential trade agreements 26 February-3 March 2018 Pacific Islands Forum Secretariat, Suva. Contents. PICTA State of Play Qualification Provisions/Criteria

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PICTA Preferences Trade in Goods

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  1. PICTA PreferencesTrade in Goods Technical Workshop on International Merchandise Trade Statistics:Focusing on goods traded under the preferential trade agreements26 February-3 March 2018Pacific Islands Forum Secretariat, Suva

  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.

  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

  7. List of Products Exempted from Liberalization and Applicable Tariffs

  8. Timetable for Elimination of Tariffs on Excepted Imports • Non SIS and LDCs • SIS and LDCs

  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:

  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: 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:

  11. Margin of Preference: Fresh and Processed Tuna

  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.

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