RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/TON/4/Rev.4 
28 October 2005 
 (05-5022) 
Working Party on the 
Accession of Tonga  
 
 
  
 
DRAFT REPORT OF THE WORKING PARTY  
ON THE ACCESSION OF TONGA  
TO THE WORLD TRADE ORGANIZATION 
Revision
  WT/ACC/SPEC/TON/4/Rev.4 
 Page i 
 
 
TABLE OF CONTENTS 
I. INTRODUCTION ................................................................................................................... .1 
DOCUMENTATION PROVIDED ......................................................................................................1  
INTRODUCTORY STATEMENTS....................................................................................................1  
II. ECONOMIC POLICIES..........................................................................................................2  
- Monetary and Fiscal Policy..................................................................................................... .2 
- Foreign Exchange and Payments ............................................................................................3  
- Investment Regime.............................................................................................................. ......5  
- State Ownership and Privatization .........................................................................................8  
- Pricing Policies ............................................................................................................... .........10  
- Competition Policy............................................................................................................. .....11  
III. FRAMEWORK FOR MAKING AN D ENFORCING POLICIES ....................................12  
IV. POLICIES AFFECTING TRADE IN GOODS ...................................................................15  
- Trading Rights ................................................................................................................. .......15  
A. IMPORT REGULATION......................................................................................................16  
- Customs Tariff ................................................................................................................. .......16  
- Other duties and charges....................................................................................................... .17 
- Tariff rate quotas, tariff exemptions.....................................................................................18  
- Fees and charges for services rendered.................................................................................19  
- Application of internal taxes to imports ...............................................................................20  
- Quantitative import restrictions, includi ng prohibitions, quotas and licensing 
systems ........................................................................................................................ .............22  
- Customs valuation.............................................................................................................. .....24  
- Rules of origin ................................................................................................................ .........27  
- Preshipment inspection ......................................................................................................... .28 
- Anti-dumping, countervailing duties, safeguard regimes ...................................................29  
B. EXPORT REGULATION......................................................................................................29  
- Customs tariffs, fees and charges for serv ices rendered, application of internal 
taxes to exports............................................................................................................... .........29  
- Export rest rictions ............................................................................................................ ......29  
C. INTERNAL POLICIES A FFECTING FOREIGN TRADE IN GOODS .........................30  
- Industrial policy, including subsidies....................................................................................30  
- Technical barriers to trade, sanita ry and phytosanitary measures ...................................33  
- Trade-related investment measures ......................................................................................38  
- State-trading entities......................................................................................................... ......39  
- Free zones, special economic areas........................................................................................39  WT/ACC/SPEC/TON/4/Rev.4 
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-
 Government procurement......................................................................................................40  
- Agricultural policies.......................................................................................................... ......40  
- Trade in ci vil aircraft........................................................................................................ ......41  
V. TRADE-RELATED INTELLECTUAL  PROPERTY REGIME.......................................41  
- GENERAL........................................................................................................................ .......41  
- Intellectual Property Authorities...........................................................................................42  
- Intellectual property legislation.............................................................................................4 2 
- Participation in international intellectual property agreements ........................................42  
- SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING 
PROCEDURES FOR THE ACQUISITION AND MAINTENANCE OF 
INTELLECTUAL PROPERTY RIGHTS ...........................................................................43  
- Copyright and related rights..................................................................................................4 3 
- Trademarks, including  service marks...................................................................................43  
- Geographical indications, including appellations of origin.................................................44  
- Industrial designs............................................................................................................. .......44  
- Patents........................................................................................................................ ..............44  
- Plant variety protection....................................................................................................... ...44 
- Layout designs of integrated circuits ....................................................................................45  
- Requirements of undisclosed information, including trade secrets and test data.............45  
- MEASURES TO CONTROL ABUSE OF INTELLECTUAL PROPERTY 
RIGHTS......................................................................................................................... ..........45  
- ENFORCEMENT...................................................................................................................4 6 
VI. POLICIES AFFECTING TRADE IN SERVICES..............................................................50  
- Publication of information on trade......................................................................................52  
- Notifications.................................................................................................................. ...........53  
VII. TRADE AGREEMENTS .......................................................................................................53  
CONCLUSIONS .................................................................................................................... ..............55  
ANNEX 1 ........................................................................................................................ ......................56  
ANNEX 2 ........................................................................................................................ ......................66  
 
  WT/ACC/SPEC/TON/4/Rev.4 
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 I. INTRODUCTION  
1. The Government of the Kingdom of Tonga applied for accession to the World Trade 
Organization in June 1995.  At its meeting on 15 November 1995, the General Council established a 
Working Party to examine the application of the Government of Tonga to accede to the World Trade 
Organization under Article XII of the Marrakesh Agreement establishing the WTO.  The terms of 
reference and the membership of the Working Party are reproduced in document 
WT/ACC/TON/2/[Rev.8]. 
2. The Working Party met on 26 April 2001; and ………………... under the Chairmanship of 
H.E. Mr. S. Harbinson (Hong Kong, China). 
DOCUMENTATION PROVIDED 
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the 
Foreign Trade Regime of Tonga (document WT/A CC/TON/3), the questions submitted by Members 
on the foreign trade regime of Tonga, together with the replies thereto, and other information provided 
by the authorities of Tonga (WT/ACC/TON/4; WT/ACC/TON/5; WT/ACC/TON/9 and Revision 1; WT/ACC/TON/11; WT/ACC/TON/12; WT/ACC/TON/13, WT/ACC/TON/14; WT/ACC/TON/15; 
and WT/ACC/TON/16), including the legislative text s and other documentation listed in Annex I. 
INTRODUCTORY STATEMENTS 
4. The representative of Tonga said that the Kingdom  of Tonga was a small island nation with 
limited human and financial resources.  Tonga had a total population of 102, 000 and a Gross domestic 
Product equivalent to US$ 163 million.  Its ecosyst em was fragile and highly vulnerable to natural 
disasters and adverse external changes.  Rising sea leve ls represented a direct threat to his country.  
Tonga's economy relied heavily on im ported goods and a few external financial sources.  The trade 
balance deficit was largely finan ced by remittances from Tongans liv ing abroad.  The main industry, 
the fishing industry, had witnessed significant improve ments over the past decade, but its performance 
was undermined by weather disturbances and high transportation costs.  These factors made it 
difficult for the country to attract foreign investment.   
5. In Tonga, accession to the WTO was seen as a powerful instrument  to enhance trade security, 
create new trade and investment opportunities, and strengthen multilateral cooperation.  It was 
considered important to foster competitiveness and development and help Tonga better integrate into 
the world trading system.  His Government had put in place a national mechanism to coordinate accession to the WTO, and had taken a number of measu res to bring Tonga's trade regime in line with WT/ACC/SPEC/TON/4/Rev.4 
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 WTO requirements.  Tonga had established a Nati onal Codex Alimentarius Committee.  Tonga had 
also become Member of the World Intellectual Property Organization (WIPO) in July 2001, and new 
legislation had been drafted to ensure  compliance with WTO TRIPS regulations. 
6. Members of the WTO welcomed the applicati on from the Kingdom of Tonga to join the 
Organisation.  Members were impressed by the effo rts undertaken by Tonga so far, but noted that 
further work would be required, particularly in the area of legislation, for Tonga to be in compliance 
with WTO requirements.  WTO Membership was seen by some Members as a powerful tool for 
Tonga to achieve its developmen t objectives and reduce the business costs for local enterprises.  
Members looked forward to a rapid and smooth accessi on process, resulting in terms that would strike 
an appropriate balance between the rules and requirements of the WTO and Tonga's level of 
development.   
7. The Working Party reviewed the economic polic ies and foreign trade regime of Tonga and 
the possible terms of a draft Protocol of Accession to the WTO.  The views expressed by members of the Working Party on the various aspects of Tonga 's foreign trade regime, and on the terms and 
conditions of Tonga's accession to the WTO are summarized below in paragraphs 8 to [184]. 
II. ECONOMIC POLICIES  
- Monetary and Fiscal Policy 
8. The representative of Tonga said that the central bank, the National Reserve Bank of Tonga, 
was responsible for the formulati on and implementation of Tonga's monetary policy in coordination 
with the Ministry of Finance.  The main objectiv es of Tonga's monetary policy were to ensure a 
sufficient level of foreign exchange reserves to meet  import requirements, maintain a stable exchange 
rate for the national currency - the Pa'anga (TOP),  and to slow the increase in bank lending to the 
private sector.  Instruments used to this end in r ecent times included adjustments of interest rates and 
increases in mandatory reserve requirements for the commercial banks.   
9. Fiscal policy aimed primarily at balancing th e budget (an objective wh ich had been achieved 
in recent years); increasing the efficiency of government services; promoting private sector 
development through the application of stricter economic, financial, and e nvironmental criteria for 
borrowing, together with improved debt recordi ng and reporting systems; improving public debt 
management;  and strengthening the monitoring and ma nagement of public enterprises.  Taxes levied 
in Tonga in 2004 included the individual income tax, the corporate income tax, a sales tax (5 per cent), a fuel sales tax, and a port and services tax (20 per cent).  A fiscal deficit had been  WT/ACC/SPEC/TON/4/Rev.4 
 Page 3 
 
 
 registered in 2003-2004.  The deficit had been fi nanced by foreign concession loans, domestic bond 
reserves, and governmental cash reserves. 
10. He added that a tax reform pr ogramme had been developed w ith a view to enhancing the 
effectiveness and transparency of the tax admini stration and fostering the development of a fair 
business environment.  Under the new taxation system, emphasis had been moved from trade to internal taxes.  The new system was based on a sm all number of broad based taxes.  The new taxation 
regime was being introduced gradually.  The re form involved the introduction of a broad based 
consumption tax, the Consumption Tax; the simp lification of the individual income tax; the 
establishment of single corporate income tax to en sure greater fairness; and the introduction of a 
single customs duty rate and excise duties on imports  and domestically produced alcohol and tobacco 
products (see paragraph 71 below) .  The Consumption Tax (15 per cent) had been introduced on 
1 April 2005 in replacement of the sales tax, port an d service tax, and fuel sales tax, which had been 
abolished.  The draft Income Tax Bill modifyi ng the individual and corporate income taxes was 
expected to be submitted to Parliament in 2005 a nd to enter into force by 1 December 2005.  Under 
the new system, it was estimated that taxes on international trade and transactions would make up 
57.9 per cent of government revenue , domestic taxes on goods and services 22.7 per cent, income and 
profit taxes 18.1 per cent, and property and other taxes 1 per cent.  
- Foreign Exchange and Payments 
11. The representative of Tonga said that the value of the currency of Tonga - the Pa'anga - was 
determined on the basis of a weighted basket of  currencies comprising the U.S. dollar, the New 
Zealand dollar, the Australian dollar, and the Japanes e yen.  The exchange rate of the Pa'anga against 
the U.S. dollar, which was the intervention currenc y, was determined daily by the National Reserve 
Bank of Tonga (NRBT), while the rates for the other currencies, for transactions of the Reserve Bank, 
were determined based on the cross rates provided by the Bank of England.  The NRBT was allowed 
to vary the value of the Pa'anga relative to the bask et, at its own discretion, by 5 per cent per month.  
In May 2005, one Pa'anga boug ht approximately US$ 0.52. 
12. Tonga was a member of the IMF.  All current payments were free and any capital introduced 
into the country was free to be repatriated provi ded that documentary evidence was provided to the 
NRBT for verification.  The NRBT sometimes put guidelines in place to be followed by foreign 
exchange dealers prior to allowi ng these remittances.  This was neces sary to assist the NRBT with 
management of foreign reserves, the calculation of  balance of payments a nd enhancing Tonga's anti-
money laundering and anti-terrorist  financing regime.  The NRBT was entitled to impose repatriation 
requirements pursuant to the Foreign Exchange Co ntrol Act No. 9 of 1963, the Foreign Exchange WT/ACC/SPEC/TON/4/Rev.4 
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 Control Regulations of 1965, and the Foreign Exch ange Control Regulations  (Amendment) Act of 
2000.  Currently, prior approval was required from the NRBT for (i) all outward transfers of 
TOP 50,000 and above; (ii) all capita l transfers; and (iii) all loans in excess of TOP 50,000 to any 
corporate body resident in Tonga controlled by non-residents.  Tonga stressed that the NRBT's 
requirements of prior approval for transfers of TOP 50,000 and above was only for information gathering purposes; all current payments were a llowed to be made.  Capital transfers included: 
transfers for purchase of property, migrant transfer s and debt forgiveness; acquisition and disposal 
and non-financial assets such as patents; direct  investment, including equity capital; portfolio 
investment, including equity, debt securities and fina ncial derivatives; other investments, including 
trade credits, loans and deposits.  Capital transfers were minimal in quantity and size.  The NRBT had 
delegated to commercial banks appr oval authority for (i) outward transfers amounting to less than 
TOP 50,000 and (ii) outward transfers from fore ign currency accounts.  Commercial banks were 
required to notify the NRBT of outward transfer s from foreign currency accounts no later than one 
day after the transfer had been effected.  In repl y to questions, the representative of Tonga said that 
Tonga had no plans to change these requirements, but was ready to conform to any relevant WTO 
provisions.  
13. In answer to questions, the representative of Tonga said that the repatriation requirements 
described in the previous paragraph had been introduc ed in July 2000 following the decline in official 
foreign reserves under 3 months of import cover.  Because of the high dependency of the Tongan 
economy on imports, a level of foreign reserves of 3 to 4 months of import cover was regarded as 
essential to protect the country from sudden external shocks.  Repatriation requ irements were still in 
force and were being monitored by the NRBT.  Tonga's  official international reserves fluctuated quite 
considerably: they had amounted to US$ 13 million as of the end of September 2002 and US$ 41.8 million at the end of August 2005.  His G overnment would be able to consider removing the 
repatriation requirement once it was clear that Tonga's official foreign reserves could be maintained at 
a level of 3 to 4 months of import cover, currently  considered to be approximately US$ 30 million to 
US$ 40 million, in the long-term.  He emphasized that Tonga had accepted Article VIII of the Articles 
of Agreement of the IMF, that the NRBT's require ments of prior approval for transfers of TOP 50,000 
and above was only for information gathering purposes and that all current payments were allowed to 
be made.  In January 2003, the N RBT had authorized the writing of forward contracts for bona fide 
importers and exporters by commercial ba nks for an amount up to US$ 2 million. 
14. The representative of Tonga confirmed that, from the date of accession, his Government 
would ensure that the authority in Tonga's laws to apply measures for balance of payments purposes 
would be applied in a manner consistent with th e requirements of the understanding on balance-of- WT/ACC/SPEC/TON/4/Rev.4 
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 payments provisions of the GATT 1994, as well as Article XII of the GATT 1994.  The Working 
Party took note of these commitments.   
- Investment Regime 
15. The representative of Tonga said that his Govern ment encouraged foreign investment.  The 
1978 Industrial Development Incentives Act, Cap. 114 (the IDI Act) aimed at fostering the 
establishment of manufacturing, processing, and assembling industries;  tourism projects, including 
accommodation, vessels, sport facilities and tourist sites;  service-oriented repair activities;  and 
agricultural and fishery enterprises.  Incentives were  provided through a system of tax exemptions.  
Potential benefits included (i) income tax holid ays including, for non-resident investors, on the 
withholding tax for up to five years; (ii) accelerated depreciation of assets; (iii) exemption from customs duties on imported capital goods for up to two years; (iv) duty drawback on imported raw 
materials and components; (v) a 50 per cent exemption from Port and Services Tax;  and (vi) the right 
for non-resident companies and shareholders to re patriate profits and capita l gains.  Any person, 
irrespective of nationality, wishing to benefit fro m these incentives had to apply for a Development 
Licence to the Minister of Labour, Commerce and Indus try.  Benefits granted depended on the nature 
of the project and were listed in the Development Licence .   
16. Applicants for Development Licenses were re quired to complete a form and provide 
information on the nature of the project, its cost a nd financing;  employment requirements, including 
the employment of expatriate staff;  potentia l markets for the products;  details on the incentives 
sought;  information on the experience and financial background of the applicant and all shareholders;  
and needs for electricity and water.  In addition,  applicants were request ed to submit financial 
statements or bank references indicating their fi nancial strength, and a business plan including 
information on proposed production, market prosp ects, financial matters, personal arrangements, 
office and land lease, and cash flow projections for the first three years of activity.  In the case of 
tourism prime facility projects, a construction plan  duly approved by the Ministry of Health and 
Ministry of Work was required.  A TOP 200.00 (U S$ 100) fee was charged for each application for a 
Development Licence.   
17. Applications were examined by a Standing  Advisory Committee established within the 
Ministry of Labour, Commerce, and Industry.  The Committee included the Minister and Secretary of 
Labour, Commerce and Industry; the Secretary of Finance; the Managing Director of the Tonga Development Bank; the General Mana ger of the Bank of Tonga; the Director of the Central Planning 
Department; and ad hoc members as required.  The Committee made recommendations to the 
Minister.  Applicants were informed in writing of th e decision and, in case of approval, of the terms of WT/ACC/SPEC/TON/4/Rev.4 
Page 6  
 
 the licence.  The licence could be used to obtain a work permit – or Temporary Residence Visa – from 
the immigration authorities.  Licence holders had to  register their company with the Registrar of 
Companies as provided for in the Companies Act, Ca p. 27.  Registration was subject to the approval 
of the Privy Council.  Although not specifically stated  in the Act, in case of rejection, the refusal to 
deliver a licence could be appealed to the Ministry of Labour, Commerce, and Industry.  In 2003, 44 projects involving a total investment of over US$ 17 million had been approved, mainly in 
manufacturing and tourism.  Be tween 1999 and 2003, a total of 250 licenses had been delivered 
(Table 1).  He provided detailed information on the incentives granted under the IDI Act between 
1999 and 2003 in Annex 1 of document WT/ACC/TON/11. 
18. Domestic and foreign investors were entitled to  the same benefits and subject to the same 
procedures.  However, in the case of foreign inv estment the Committee would study the extent to 
which the project provided substantial and continui ng benefits to the people and economy of Tonga 
and include these considerations in the recommenda tion to the Minister.  The Committee examined 
whether the project (i) involved the processing of local  resources; (ii) substantially contributed to 
local added value; (iii) was labour intensive; (i v) had export potential; (v ) contributed to import 
substitution; (vi) had a reasonable level of local pa rticipation; (vii) would have a multiplier effect 
leading to the creation of ancillary enterprises; (viii) was likely to complement other domestic 
manufactures; (ix) and satisfied any other criteria the Committee might consider relevant.   
19. Several Members were seriously concerned a bout the discretionary powers exercised in 
investment approval decisions in Tonga and some of  the criteria used in deciding whether to grant a 
licence for foreign investment.  These Members obser ved that the benefits provided under the IDI Act 
would seem, in law or in fact, to be contingent  upon export performance, im port substitution, or local 
content requirements.  The concerns raised by Me mbers are discussed below in further detail in the 
sections "Industrial policy, including subsidies" a nd "Trade-Related Investment Measures (TRIMs)". 
20. The representative of Tonga replied that the criteria causing concern to Members had never 
been applied in practice.  He could therefore conf irm that no benefits under the IDI Act had been or 
would be made contingent upo n export performance, import s ubstitution, or local content 
requirements.  He noted that the provisions of th e IDI Act exempting investment licence holders from 
the port and services tax had ceased to have effect when the Consumption Tax had been introduced on 
1 April 2005.  The IDI Act would be suspended on 1 Ju ly 2006.  The Act would be repealed following 
the introduction of the single customs duty rate (of 15 per cent).  He confirmed that benefits granted to 
investors under the Act would be eliminated upon revocation of the Act.   WT/ACC/SPEC/TON/4/Rev.4 
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 21. He noted that Parliament had passed a new la w - the Foreign Investment Act 2002 - with a 
view to bringing Tonga's legislation on registratio n of foreign investment into line with WTO 
provisions.  The new Law would become effective upon entry into force of the implementing 
regulations − the Foreign Investment Regulations 2002 − expected by December 2005.  Under the 
Foreign Investment Act, any foreign investor ca rrying on any activity for the purpose of generating 
revenue in trade, commerce or industry, including any trade, profession or calling, was required to 
obtain and hold a valid foreign investment registration certificate.  The Foreign Investment Act 
detailed the regulations for foreign investment in to Tonga, the registration requirements for foreign 
investors and the duration of registration certificat es; established reserved, restricted, and prohibited 
activities; detailed the terms for transfer of regist ration, cancellation of registration and the means for 
appeal if registration was refused; and set out tran sitional arrangements for foreign investors already 
operating in Tonga at the time of the legislation be ing implemented.  No benefits or incentives were 
offered or provided under the Foreign Investment Ac t.  Reserved activities, i.e. activities that could 
only be carried out by Tongans, were listed in Sche dule 1 of the draft Foreign Investment Regulations 
2002.  Restricted activities were activities open to fo reign investors under the conditions specified in 
Schedule 2 of the draft Foreign Investment Re gulations 2002.  Restricted activities included 
commercial fishing and agricultural supply stores dist ributing seeds, fertilizers, chemicals.  As for 
prohibited activities, there were listed in Schedule 3 of the draft Foreign Investment Regulations 
2002.  In response to a Member who noted that prohibited activities included "Export, import or 
production of any products prohibited under the La ws of Tonga", he referred to the "Import 
prohibition" and "export prohibition"  sections of the Report.  Unless an activity was designated as 
restricted, reserved, or prohibited, there was no fore ign participation limitations, in law or in practice, 
for foreign investors wishing to invest into Tonga ; foreign investment registration certificates were 
issued automatically except where a business activity was a prohibited activity, a restricted activity or 
a reserved activity that did not meet the conditions a pplicable to that activity.  In reply to questions 
from Members, he confirmed that there was no minimum amount of inv estment for a foreign investor 
to be issued with a foreign investment registrati on certificate.  He noted that there was no direct 
connection between the Foreign Investment Act and the IDI Act.  The Foreign Investment Act 
provided for a registration mechanism for foreign in vestment while the IDI Act was a fiscal incentive 
package for investment.  
22. The representative of Tonga confirmed that since enactment no benefits granted under the 
Industrial Development Incentives Act had been or w ould be made contingent, in law or in fact, on 
export performance, import substitution or local content requirements.  Such criteria contained in the 
Industrial Development Incentives Act had never been a pplied in practice.  He further confirmed that 
the IDI Act would be suspended on 1 July 2006 a nd subsequently repealed once customs duties would WT/ACC/SPEC/TON/4/Rev.4 
Page 8  
 
 have been reduced to the single rate of 15 per cent.   All the benefits provided for in the IDI Act would 
thereby be eliminated.  He confirmed that the new Foreign Investment Act would provide no such 
benefits.  The Working Party to ok note of these commitments.  
23. The representative of Tonga stated that Tonga w ould [also] be prepared to enter Protocol 
commitments to abide by the relevant WTO provi sions, including Article 3 of the Agreement on 
Subsidies and Countervailing Measures and the Agre ement on Trade-Related Investment Measures, 
and to ensure that its laws implement these commit ments.  For the texts of these commitments, see the 
sections below dealing with these subjects. 
- State Ownership and Privatization 
24. The representative of Tonga said that a large number of services, infrastructure, and 
commercial activities had traditionally been government -funded.  In 1998, his Government retained a 
stake, either through equity or loans, in  26 enterprises, including public utilities.   
25. His Government aimed at rationalisation of public sector activities, including through 
privatization.  A Cabinet Sub-Committee had been es tablished to plan the restructuring of government 
commercial activities, and a Public Enterprise Unit to  develop a programme of privatization.  Since 
1998, his Government had corporatized the Port Authority and the Tonga Telecommunication 
Commission, i.e. established these Government-o wned entities as legally independent entities and 
made them subject to the requirements of the Compani es Act, and privatized the Royal Beer Co.  Ltd.  
Postal services would be corporatized once the de bts of Tonga Post have been paid off.  The 
Government Store, which used to supply the pub lic and private sector with hardware and other 
products had ceased operations in 1999, except for the disposal of goods undergoing processing.  A 
list of enterprises with State ownership as per 30 June 2002, including information on their activities 
and market position, and the percentage of Govern ment ownership, is provi ded in Table 2 and in 
paragraph 26 below.  He expected the privatizati on programme to be completed over a period of five 
to ten years.  The Tongan Government would only maintain or make new in vestment in companies 
that provided significant social and economic services that the private sector could not reasonably provide and where monopoly was likely to prevail.   He confirmed that Tonga maintained no 
restrictions on foreign participation in the priva tisation programme, that no special privileges were 
granted to public enterprises, that no restrictions  prevented private firms from entering sectors where 
they would compete with the very few government  owned firms that were currently sole service 
providers, e.g. in the distribution of cooking gas (Home Gas), and that the establishment of competing 
firms was welcome.   WT/ACC/SPEC/TON/4/Rev.4 
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 26. The representative of Tonga added that all Stat e-owned enterprises and enterprises with State 
participation at this time were services providers, and that his Government no longer owned shares in 
any manufacturing facility in Tonga.  Tonga Cor poration managed Tonga's landholdings in American 
Samoa and Hawaii.  Tonga Investments Ltd. was a holding company established in 1971 to manage businesses carried out by its subsidiaries - Frisco Hardware Ltd., Homegas Ltd. and Primary Produce 
Export Ltd.  Frisco sold hardware and constructi on materials - mostly imported goods - in competition 
with private enterprises.  Primary Produce Limite d was essentially a shell company established to 
collect debts, and would be wound up as soon as possible.  Tonga Timber Limited supplied 
coconut/timber milling and hardware.  Sea Star Fishing Co. Ltd. was one of a number of deep sea fishing operations in this market.  The Government of Tonga had been negotiating to sell its shares in 
this company.  Leiola Duty Free operated Tonga's duty free shops.  The Government had not granted 
a monopoly, but there were at present no competitors in the market.  Air Pacific Limited was Fiji's 
national airline, providing regional airline services in  competition with other suppliers in the market.  
Hawaiian Air was another regional airline.  Roya l Tonga Airlines was Tonga's national airline and 
competed with Air New Zealand, Polynesian Air lines and Air Pacific (the other main airlines 
servicing similar routes).  Pacific Forum Line Limi ted, a regional shipping company based in Fiji, 
provided regional freight and charter services, and Sh ipping Corporation of Polynesia Ltd. provided 
domestic and international passenger and cargo charte r services.  Westpac Bank of Tonga competed 
with three other banks currently present in Tonga, and the Tonga Development Bank provided 
development and business advisory banking services.  International Dateline Hotel was one of many 
such tourist hotels in Tonga's market.  While eith er fully or partially government-owned, with the 
exception of Leiola Duty Free, none of the enterpri ses listed above still in ope ration were granted any 
special rights or privileges nor a sanctioned monopoly in their line of business.  Generally, they competed with other suppliers in the market.   
27. Tonga's public utilities included the Tonga Wa ter Board, established under the 1978 Water 
Board Act, Cap. 92, and responsible for the supp ly of water in the main populated areas; and the 
Tonga Broadcasting Commission, established under the Broadcasting Commission Act, Cap. 100, 
which operated public radio services.  Private sector representatives participated in the Board of 
Directors of these enterprises.  Home Gas, a subsid iary of Tonga Investment Limited, was the sole 
distributor of cooking gas in Tonga.  Electricity was now provided by a private enterprise and the Government had corporatized its telecommunicati ons provider, which now competed with another 
supplier in the market. 
28. Asked about the percentage of Tonga's GDP generated by State-owned enterprises, the 
representative of Tonga said that Tonga's GDP figures did not differentiate between State-owned and WT/ACC/SPEC/TON/4/Rev.4 
Page 10  
 
 non-State-owned firms.  In March 2004, the value of assets of the Public Enterprise Division of the 
Ministry of Finance had amounted to TOP 186 mi llion and net government investment, including 
loans, to TOP 107 million.    
- Pricing Policies  
29. The representative of Tonga said that Tonga a pplied price control on basic necessities to 
protect consumers, in particular low income fam ilies.  Maximum prices were set for these goods to 
prevent wholesale and retail suppliers from taking advantage of local monopoly conditions resulting 
from the small size of the economy.  Commodities cu rrently subject to price control are listed in 
Table 3.  None of these products, except for bread, were produced locally.  He confirmed that the 
Home Gas Company distributed one of the liquid petroleum products mentioned in Table 3.  However, it did not produce liquid petroleum products and the price for its services was not regulated.  
It had been set up to ensure that Tonga's very sm all market was supplied regularly.    Prices for 
services were determined freely by market forces .  As noted in the previous paragraph, the 
establishment of competing firms was welcome.  
30. The legal basis for Tonga's price controls was the 1988 Price and Wage Control Act, 
Cap. 113.  Controls were enforced by the Comp etent Authority Committee, established within the 
Ministry of Labour, Commerce, and Industry, and chaired by the Minister.  Other members of the Committee included the Minister of Finance, Secr etary of Labour, Commerce and Industry, Deputy 
Secretary of Commerce, and three representatives  of the private sector.  The Committee met on a 
monthly basis and was responsible for setting maxi mum prices, monitoring the prices of controlled 
goods and services, monitoring minimum wages, a nd carrying out controls , including on-site 
inspections at traders' premises.  The Committee could request traders to submit oral or written 
information on prices, wages and working hours and, in case of violation, to prohibit the sale of the 
incriminated goods until prices had been modified.   
31. Responding to specific questions, the representative of Tonga said that controls were carried 
out at the point of sale, and not at the border, as the primary purpose of the price controls was to 
protect the interests of consumers.  He confirme d that Tonga's price controls did not affect the 
valuation of goods for customs purposes.  Tonga's price control mechanisms  were enforced as 
maximum mark-up percentages, i.e. a percentage  over landed cost for the wholesale trade and a 
percentage over wholesale cost for retail trade in the goods concerned, except for standard size bread 
(454 grams) and petroleum products.  In the latte r cases, the Committee dete rmined the sales prices 
for these goods.  He provided detailed informati on on the mark-up calculations in Annex A of 
document WT/ACC/TON/5.  Price controls had recently been eliminated on motor vehicles,  WT/ACC/SPEC/TON/4/Rev.4 
 Page 11 
 
 
 motorcycles and motor vehicle spare parts.  He a dded that his Government had no plans to reduce the 
number of goods subject to price control, although some discussions had taken place on this matter.  
He confirmed that all products within the listed categories were subject to  price control without 
exception.  The price controls in principle applied equally to both domestically-produced and imported goods, although at the present time the only product under price control that was produced 
in Tonga was bread. 
32. In response to concerns of Members who noted that, according to Annex A of 
WT/ACC/TON/5, local agricultural and fish products were not subject to price control while imported 
products were covered by c ontrols, which would appear to be in consistent with the provisions of 
Article III of GATT 1994, the representative of Tonga said that an Order, which amended the Price 
and Wage Control Act 1988 and rem oved the reference to local agricultural and fish products not 
subject to price control from the Mark-Up Schedule,  had been approved by the Competent Authority 
on 2 May 2005.  The Order had come into force on 17 May 2005. 
33. The representative of Tonga confirmed that fro m the date of accession Tonga would apply its 
price control measures in a WTO-consistent fashion,  and take into account the interests of exporting 
WTO Members as provided for in Article III:9 of th e GATT 1994.  In this regard, an Order amending 
the Price and Wage Control Act 1988 had been i ssued, which removed the exemption of local 
agricultural and fish products from price control fro m the Mark-Up Schedule.  He further confirmed 
that any price controls applied to imports from the date of accession would also be applied to similar 
domestically-produced goods.   Tonga would also publish the list of  any goods and services subject to 
price controls in its Official Gazette.  The Working Party took note of these commitments.  
- Competition Policy 
34. The representative of Tonga said that Tonga  had no specific legislation addressing 
competition issues, and had no plans to introduce such  legislation.  The Protection Against Unfair 
Competition Act 2002 did not establish a competition policy; it provided protection against deceptive 
industrial and commercial practices, including da maging another's goodwill or reputation, creating 
confusion, misleading the public, and unfai r competition in case of secret information. 
35. In response to questions, the representative of Tonga noted that there was no WTO 
requirement for competition policy to be applied.  Tonga understood the impli cations of restrictive 
business practices to which reference had been made, such as price fixing and anti-competitive 
mergers and business acquisitions.  However, give n the structure and size of Tonga's domestic WT/ACC/SPEC/TON/4/Rev.4 
Page 12  
 
 market, these practices had not created problems that would warrant the utilization of Tonga's 
extremely limited resources.  
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES  
36. The representative of Tonga said that Tonga ha d become a sovereign and independent State 
within the British Commonwealth of Independent  States in 1970.  Tonga was a constitutional 
monarchy headed by His Majesty the King Taufa'ah au Tupou IV, who had acceded to the throne in 
1965.  The current Constitution had been promulga ted the same year.  The King chaired the Privy 
Council - comprising the Prime Minister, Ministers of the Crown and the two Governors of Ha'apai 
and Vava'u, all appointed by His Majesty – which a dvised and assisted His Majesty in his functions.  
The Cabinet, the second branch of the executive, was composed of the Ministers of the Crown and the 
Governors.  Cabinet Ministers held office until their retirement.   
37. Legislative powers were exercised by the Legislative Assembly, made up of Privy 
Councillors and Cabinet Ministers, sitting as nobles;  nine representatives of the nobles, elected by the nobles;  and nine representatives of the people elected  every three years by universal suffrage.  The 
Assembly was the only organ empowered to adopt laws  (Clause 55 of the Constitution).  Bills had to 
be passed three times by the majority of the Assembly members before being presented to His 
Majesty for Royal Assent, and became law upon publi cation.  The Governors we re responsible for the 
implementation of laws within their district.   
38. Judicial power was exercised by the Magistrates' Court, the Court of Appeal, the Supreme 
Court and, for land-related matte rs, the Land Court.  Judges were appointed by His Majesty in 
Council.  The Magistrates' Court was the lowest court, dealing with criminal and civil cases for which the sanctions foreseen by the law would not exceed TOP 1,000 – or three years imprisonment in the case of criminal charges.  The Land Court was the supreme court in charge of land related cases, including hereditary estate taxes and town allotment mortgages.  Tonga's present judicial system did 
not provide for specialized administrative or commer cial courts.  The highest court was the Court of 
Appeal. 
39. Administrative decisions could be reviewed, in  first instance, by the Supreme Court in 
accordance with the Supreme Court Act, Cap. 10.  Su preme Court decisions could be appealed to the 
Court of Appeal pursuant to the Court of Appeal Ac t, provided appeal had been permitted by the first 
instance judge, the appeal had been lodged within 42 days from the date of judgement, and the grounds for appeal had been clearly laid down.  Th e Court of Appeal was composed of three judges, 
including the Chief Justice.  As the Court of Appeal  was the highest court in Tonga, only decisions of  WT/ACC/SPEC/TON/4/Rev.4 
 Page 13 
 
 
 the Court of Appeal pertaining to nobles titles and he reditary estates could be further appealed to the 
Privy Council.   
40. According to Section 11 of the Commissioner for Public Relations Act 2001, foreign and 
domestic importers had the right to appeal any ad ministrative action relating to matters subject to 
WTO provisions, e.g. customs classification and valu ation, tariff application, licensing, TBT, SPS, 
and TRIPS, to an independent body – the Commiss ioner for Public Relations.  The Commissioner was 
appointed by His Majesty in Council for five years, but was independent from the Executive.  He was 
neither under the responsibility of nor accountable to  the Executive.  The Commissioner's office was 
not appointed by the Executive.   The Commissioner could only formulate recommendations.  
Pursuant to Section 11, the Commissioner could,  upon a complaint or on his own initiative, 
investigate any administrative decision or recomme ndation made, and any administrative act done or 
omitted by any department or organization to wh ich the Act applied; any officer, including the 
Minister and Governor; and any employee or memb er of any such department or organization 
affecting any person in its pe rsonal capacity, and formulate r ecommendations to the relevant 
government bodies.  Recommendations made by the Co mmissioner could be appealed to the Supreme 
Court.  No case had been appealed to date.  When recommendations by the Commissioner were not 
followed by action within a reasonable period of time, the Commissioner could send a copy of the 
recommendations to the Prime Minister who should tabl e it in the Privy Council.  He considered this 
situation to be in full conformity with relevant  WTO obligations, including Article X:3(b) of the 
GATT 1994. 
41. The representative of Tonga confirmed that from the date of its accession, Tonga would 
establish or designate tribunals or procedures for th e prompt review of all administrative actions 
relating to the implementation of laws, regulations, judicial decisi ons and administrative rulings of 
general application referred to in Article X:I of  the GATT 1994 and Article VI of the GATS.  The 
tribunals or procedures would also include actio ns relating to the implementation of national 
treatment, conformity assessment, the regulation, control, supply or promotion of a service, including the grant or denial of a licence to provide a servi ce and other matters.  Th e tribunals or procedures 
responsible for such reviews woul d be impartial and independent of the agency entrusted with 
administrative enforcement and shall not have any subs tantial interest in the outcome of the matter.  
The review procedure would include the opportunity for appeal, without penalty, by individuals and enterprises affected by any administrative action subject  to review.  If the initial right of appeal was to 
an administrative body, there should be the opportunity  to choose to appeal the decision to a judicial 
body.  Notice of the decision on appeal should be given to the appellant and the reasons for such a 
decision provided in writing.  The Work ing Party took note of these commitments.    WT/ACC/SPEC/TON/4/Rev.4 
Page 14  
 
 42. Policies related to foreign trade were formulat ed and implemented by the Ministry of Labour, 
Commerce and Industry, in cooperation with the Mini stries of Finance; Police; Health; Agriculture 
and Food; and Fisheries.  His Government had established a Trade Coordination Committee chaired 
by the Minister of Labour, Commerce and Industry to coordinate the work of the various government 
entities.  Border control fell under the competence  of the Minister of Finance, who was also 
responsible for customs duties, and taxes and exci ses, as well as the issuance of import licenses for 
some products.  Import licenses for restricted products were issued by the Minister of Police and the 
Minister of Finance.  The Minister of Foreign Affa irs was in charge of immigration, and granted entry 
and resident permits.  The Minister of Agricultu re and Food, the Minister for Fisheries and the 
Minister for Health regulated matters of public h ealth, quarantine and phytosanitary measures related 
to importation and exportation.  Th e formulation and implementation of policies affecting trade in 
services involved the Tonga Visitors Bureau, Tonga Telecommunications Commission, Tonga 
Electric Power Board, the Ministries of Finance, Ci vil Aviation, Education, Justice, and Ports and 
Marines.  While trading regulations were set out  in laws and regulations, residual discretionary 
powers could also be exercised by the competent Minister when required.   
43. The private sector could influence the legisla tive process through consultations held with the 
Ministries through associations such as the Tong a Chamber of Commerce, the Small Business 
Association, the Tonga Tourist Association, the Society of Accountants, the Tonga Business and Professional Women's Federation Inc, and the Law Societ y.  In the reform of trade legislation, the 
Ministry of Labour, Commerce and Industry c onsulted with the private sector via its 
Government/Private Sector Consultative Committee. 
44. The representative of Tonga acknowledged that implementing legislati on would have to be 
adopted in a number of areas to ensure compliance with WTO regulations.  He presented an overview 
of legislative action resulting from the WTO accession process in document WT/ACC/TON/7, noting 
that adequate and timely technical assistance woul d be needed to help Tonga in implementing these 
measures.  He confirmed the readiness of his Govern ment to work with the Working Party to help 
identify any further legislative deficiencies. 
45. Concerning the procedures to be followed for the ratification of Tonga's Protocol of 
Accession, he said that the A ccession Package would be submitted to the Privy Council for 
ratification, i.e. approval, by the Minister for Labour, Commerce and Industri es, who was responsible 
for overseeing the accession process to the WTO.  Ratification did not require approval by the Legislative Assembly.  After approval by the Pr ivy Council, WTO provisions would not supersede 
domestic legislation; they would ha ve to be integrated into domestic  legislation through amendments.   WT/ACC/SPEC/TON/4/Rev.4 
 Page 15 
 
 
 In the event of a conflict between WTO provision s and domestic laws and regulations, the latter 
would apply.  
46. The representative of Tonga confirmed that s ub-central entities had no autonomous authority 
over measures covered by WTO provisions.  He confirmed that the provisions of the WTO Agreement, including Tonga's Protocol, would be applied uniformly throughout its customs territory 
and other territories under Tonga's control, any speci al economic zones, and ot her areas wh ere special 
regimes for tariffs, taxes and regulations are establishe d.  He added that when apprised of a situation 
where WTO provisions were not being applied or were applied in a non-uniform manner, central 
authorities would act to enforce WTO provisions wit hout requiring affected parties to petition through 
the courts.  The Working Party took note of these commitments. 
IV. POLICIES AFFECTING TRADE IN GOODS  
- Trading Rights 
47. The representative of Tonga said that the Licenses Act, Cap. 47, required any natural or legal 
person carrying out a business activity to take out a licence and pay an annual fee.  The schedule 
covered a wide range of commercial activities, not n ecessarily linked to external trade.  The decision 
to issue a licence was not discretionary or subject to specific criteria, but rather a simple "pay-and-
serve" process.   
48. He added that a new Business Licence Act would repeal the Licenses Act Cap. 47, and 
introduce a simple, transparent procedure for the issuance of business licenses.  The new legislation 
aimed at bringing Tonga's rules in this area into lin e with best international practice and the rules of 
the WTO, i.e. Articles VIII:1(a), XI:1 and III: 2 and 4 of the GATT 1994.  The new Act required a 
licence to be issued automatically to any business or person planning to undertake business in Tonga 
(whether wholesale, retail, export, or import), provi ded the proposed activity was not prohibited; the 
applicant was 18 years of age or older; in case of pa rtnerships, that all partners were at least 18 years 
of age; and - for foreign investors - possession of a valid foreign investment registration certificate.  
Applications had to be submitte d for each business activity listed in schedule 3 of the Act.  
Implementing Regulations had been submitted to the Cabinet for approval, and were expected to be 
implemented by December 2005.  Pursuant to the draft regulations, business licenses would be 
delivered automatically within seven days.  In case of  refusal, the applicant would have to be advised 
in writing of the grounds for refusing the application.  Licence fees would be based only on the cost of services rendered (verification and processing of app lications) and would be levied once a year (see 
Table 4).  Any holder of a valid business licence c ould engage in the activity for which the licence WT/ACC/SPEC/TON/4/Rev.4 
Page 16  
 
 had been granted for one year without restric tion.  He confirmed that under the new Foreign 
Investment Act, foreign firms seeking to be the impor ter of record would be required to have a foreign 
investment registration certificate prior to obtain ing the business licence for importation from the one-
stop shop of the Customs Department.  Details on the Foreign Investment Act 2002 are contained in 
the "Investment Regime" section of this report (paragraph 21).  
49. In response to the concern of a Member re garding the current absence of regulations 
implementing the Business Licence Act, which might po ssibly include disguised restrictions on trade, 
the representative of Tonga maintained that th e Business Licence Act provided for simple and 
transparent procedures, of a non-discriminatory nature  and therefore applied equally to nationals and 
foreigners, for the issuance of business licenses.  He  stressed that the implementing regulations would 
not include hidden trade restrictions.  A copy of the Regulations had been forwarded to the Working 
Party.  The Business Licence Act would come into effect upon implementation of Regulations, i.e. by 
December 2005.  
50. The representative of Tonga confirmed that from the date of accession, Tonga would ensure 
that its laws and regulations rela ting to the right to trade in goods and all fees, charges and taxes 
levied on such rights would be in full conf ormity with its WTO obligations, including 
Articles VIII:1(a), XI:1 and III:2 and 4 of the GA TT 1994 and that it would implement such laws and 
regulations in full conformity with these oblig ations.  The Working Party took note if this 
commitment. 
A. IMPORT REGULATION  
- Customs Tariff 
51. Noting that Tonga initially applied the Standa rd International Trade Classification (SITC), 
and that Tonga's Parliament had rejected proposed  changes to Tonga's classification system, some 
Members urged Tonga to implement a customs classi fication system in line with the international 
standard (the Harmonized System).  Trade tax es being an important component of government 
revenue, Tonga was also encouraged to take  steps to diversify its revenue base.   
52. The representative of Tonga replied that Tonga was now implementing the 4-digit level of the 
Harmonized System.  The Customs database was bei ng upgraded to be made  consistent with the 
6-digit level of the Harmonized System.  The Pers onal Computer (PC) Trade database developed by 
Statistics NZ, which was based on the 6-digit level of the Harmonized System, was being introduced.  
The database, which would be used to process custom s data and collect trade statistics, was expected  WT/ACC/SPEC/TON/4/Rev.4 
 Page 17 
 
 
 to be operational by December 2005.  Tonga levied  customs duties in acco rdance with the Customs 
and Excise Act, Cap.67.  It accorded tariff pref erences to members of the Pacific Island Countries 
Trade Agreement (PICTA).  Imports from other countri es were subject to a single set of tariff rates.  
Import duties were mostly in the 0-30 per cent range , but higher rates were applied on motor vehicles, 
vans and trucks (45 per cent);  pe troleum (35 per cent);  and beer, spirits, tobacco and cigarettes (rates 
ranging from 150 to 330 per cent ad valorem  or specific duty amounts, if higher).  Rates on tobacco 
had been increased recently for health reas ons and now ranged between 187.5 per cent and 
525 per cent ( ad valorem  or specific duty amount, whichever was higher).  The weighted average 
level of customs duties had amounted to 18.5 per cent in 1995. 
53. He added that a series of taxation reforms, incl uding the introduction of a single customs rate, 
had been launched.  The single customs rate would be introduced after the PC Trade has been put in 
place.  A single rate of 15 per cent would be in troduced no later than 1 January 2007.  Tonga's 
customs tariff would be adjusted accordingly by amending the Customs and Excise Act, Cap. 67.  
No exceptions to the single rate customs duty were  foreseen, as exceptions would defy the logic of 
introducing such a system.  The introduction of a single rate customs tariff would not only allow for 
more streamlined customs procedures and a more administratively feasible customs system, but 
should also improve duty collection and allow for far more accurate recording of imports into Tonga.  
- Other duties and charges  
54. The representative of Tonga said that, in add ition to customs duties, Tonga levied a 
20 per cent ad valorem  Port and Services Tax in accordance with the Port and Services Tax Act 
(Cap.71).  The tax applied to all imported goods ex cept those fully or partially exempt under the 
Industrial Development Incentives Act.  Among the items  exempt from the Port and Services tax were 
essential goods such as educational, scientific and cu ltural books, documents and materials; fertilizers; 
insecticides, pesticides and fungicid es for agricultural use; agricultu ral machinery, implements and 
tools; timber milling machinery; and stock feed and seeds. 
55. Some Members stated that the Port and Services Tax did not appear to meet the requirement 
of Article VIII of the GATT 1994, and requested that  it be eliminated in the context of Tonga's 
accession to the WTO.  Questions were also raised  about the WTO-consistency of Tonga's wharfage 
dues. 
56. The representative of Tonga acknowledged that  the Port and Services Tax should be 
considered an "other duty or charge" within the meaning of Article II of the GATT 1994, and recalled 
that Tonga had offered to bind its Other Duties a nd Charges at zero during the negotiations on market WT/ACC/SPEC/TON/4/Rev.4 
Page 18  
 
 access for goods.  He noted that the Port and Servic es Tax had been eliminated on 1 April 2005 when 
the Consumption Tax had been introduced.  As for th e wharfage and berthage fees, and fees for the 
issuance of import licenses, these were fees for services rendered.  These fees and charges are 
examined in the relevant section below.    
57. The representative of Tonga confirmed that from the date of accession other duties and 
charges within the meaning of Article II.1(b) of  the GATT 1994 would be applied in accordance with 
WTO provisions and that Tonga would not introduce any new other duties and charges.  He further 
confirmed that other duties and charges within the meaning of Article II.1(b) of the GATT 1994 
would be bound at zero in Tonga's Goods Sche dule.  The Working Party took note of these 
commitments. 
- Tariff rate quotas, tariff exemptions 
58. The representative of Tonga said that Tonga di d not apply tariff rate quotas on any product, 
and had no intention to introduce such quotas. 
59. Tariff exemptions were granted according to th e Customs and Excise Act.  The coverage of 
the exemptions required a legal basis and could not be extended administratively.  Goods subject to 
duty exemption were goods for the use of the reig ning Sovereign, the Government of Tonga, or 
accredited diplomatic representatives and technical assistance officials; personal effects and accompanied luggage of passengers (within specified limits); ground equipment, fuel and lubricants 
for air services; educational, scientific and cultural articles; charitable gifts; marine life-saving 
equipment; patterns, samples, advertising ma tter and documents; religious goods; and trophies, 
medals and photographs.  A more detailed descripti on of such goods (mostly not by HS number) was 
provided in document WT/ACC/TON/4, pp. 22-25.  The coverage of the import duty exemptions and 
exemptions from Port and Services Tax were not iden tical.  The potential benefits provided for in the 
Industrial Development Incentives (IDI) Act, de scribed under the heading "Investment Regime" 
above, included exemption from customs duties on im ported capital goods for up to two years as well 
as suspension of duty on imported raw materials a nd components.  He noted, however, that the IDI 
Act would be suspended on 1 July  2006 and subsequently repealed  after reduction of the single 
customs duty rate to 15 per cent.  The revocation of  the Act would eliminate all the benefits granted 
under the Act. 
60. The representative of Tonga confirmed that upon Tonga's accession to the WTO, any tariff 
quotas and tariff exemptions would only be implemented in confor mity with the relevant WTO  WT/ACC/SPEC/TON/4/Rev.4 
 Page 19 
 
 
 provisions including Article I of the GATT 1994 and the TRIMs Agreement.  The Working Party took 
note of this commitment.   
- Fees and charges for services rendered 
61. The representative of Tonga said that the fees charged by the Port Authority pursuant to 
Standing Order 1999 were set in relation to the cost of the services rendered by the Authority.  These 
fees included berthage, wharfage, mooring, slipway and boat lifter, and tug boat fees.  The Port 
authority had been established by the Port Authority Act 1998 as part of a reform package to put the 
management of the port on an efficient commercial ba sis.  The Port Authority administered the port at 
Tongatapu, and nearly 99 per cent of Tonga's trad e in goods passed through this port.  Fees charged 
by the Port Authority were set after consultation with the Port User Advisory Committee.  The scale 
of fees was also submitted to the Executive of th e South Pacific Board of Ports, composed of 
members from the Pacific Island Countries, Australi a and New Zealand.  Standing Order 1999 set out 
the fees charged by the Port Author ity itself, as well as the fees that could be charged by stevedoring 
companies operating on the wharf.   
62. Berthage fees applied to ships brought to th e berth and wharf space.  Berthage fees covered 
the operating costs and required return on investment  for navigation aids, towage, pilotage, mooring 
lines and provision of the wharf.  The fees depende d on the capacity of each vessel and the time spent 
in the berth.  The fees were calculated on the basis of the number of hours spent (cruise ships) or 
worked at the berth.  Wharfage fees were collected  when goods were discharged from or loaded into a 
vessel within the port.  The fees corresponded to the costs of maintaining the wharf, insurance policy, 
and interests on loans for upgrading and construction of wharf faciliti es.  Mooring fees were applied 
to local registered vessels and yachts and covered the costs of maintaining local wharves and other 
facilities.  Slipway and boat lifter fees were charged for the use of the slipway and boat lifter, and tug 
boat fees for the renting of a tug boat and other port equipments.  He provided detailed information on 
these fees in document WT/ACC/TON/11, pp. 10-13. 
63. Some Members reminded Tonga that GATT Article  VIII provided that all fees and charges be 
limited to the approximate cost of the services rende red, and not to constitute  an additional fiscal tax 
on imports.  As Tonga's wharfage fees, based on length  and/or internal space, did not appear directly 
related to the cost of any particular customs servi ce, Tonga was urged to bring its fee structure into 
conformity with the requirements of GATT Article VIII. 
64. In response, the representative of Tonga said that fees based on length and/or internal space 
were directly related to the wharf space occupied  and to the amount of cargo unloaded and therefore WT/ACC/SPEC/TON/4/Rev.4 
Page 20  
 
 to the cost of the service provided.  He also noted  that fees for the issuance of business licenses, dealt 
with in the section on trading rights, were fees fo r services rendered.  The protocol commitment in the 
following paragraph would therefore apply to th em.  He also provided detailed information on 
quarantine fees paid by exporters of agricultu ral products, which is reproduced in Table 5 . 
65. Under the new Business Licence Act 2002, the releva nt provisions of which were dealt with 
in the section on Trading Rights above (paragraph 48) , the fee for the issuance of a business licence 
authorizing importers to engage in the business of importing would be limited to the approximate cost 
of the services rendered. 
66. The representative of Tonga confirmed that all fees and charges, including those listed in 
paragraphs 48, 61 and 65 of this Re port, would be operated in confor mity with the relevant provisions 
of the WTO Agreement, in particular Articles VI II and X of GATT 1994.  From the date of accession, 
Tonga would not apply, introduce or reintroduce any fees and charges for services rendered that were 
applied to imports on an ad valorem basis.  Information regarding th e application and level of such 
fees and charges, revenues collected and their use,  would be provided to WTO Members on request.  
The Working Party took note  of these commitments.   
- Application of internal taxes to imports 
67. The representative of Tonga said that imported and domestically-produced beer (HS number 
2203.0010) was subject to an excise ta x of TOP 0.75 per litre or 20 per cent ad valorem , whichever 
was higher.  Beer was, for the time being, the only product on which excise duty was levied.   
68. Value added tax (VAT) had not been introduced in Tonga, but a sales tax of 5 per cent was 
levied on most goods and services.  Exempt from sales tax were goods and services sold to the reigning Sovereign or to the Government; goods sold among vendors or businesses for the purpose of 
further retailing, manufacturing or processing before  being sold to the public; local agriculture, 
livestock and fisheries products sold at local market s and farm gates by individual sellers; goods sold 
by street vendors such as handicrafts, woodcarvings,  clothing and peanuts; tic kets for international 
travel sold to patients upon approval and certificati on by the Minister of Health; building materials 
used in residential construction (exemption certificate to be issued by the Minister), all of which were 
imported;  and goods destined for exportation. 
69. Some Members noted that Tonga's sales tax ex emption on local agriculture, livestock and 
fisheries products, and goods sold among vendors and businesses, involved elements that might  WT/ACC/SPEC/TON/4/Rev.4 
 Page 21 
 
 
 discriminate against imports.  Tonga was invited to provide further clarification on how these 
exemptions would not conflict with the pr ovisions of Article III of the GATT 1994.   
70. The representative of Tonga replied that the sales tax exemption on local agriculture, 
livestock and fisheries products a pplied only to very small individual producers who sold their 
products locally.  Domestic products sold by larg e local firms were subject to sales tax.  Small 
producers had been exempted due to difficulties in  tax collection and the disproportionate costs 
involved in collecting relatively small amounts of sales tax.  In this respect, Tonga's practice did not 
differ from that of many Members of the WTO.  As to goods sold among vendors and businesses, registration with the Inland Revenue Department wa s required for vendors or businesses to qualify for 
a sales tax exemption.  He did not consider this requirement an obstacle to trade as the only purpose 
of the registration procedure was to administer the collection of revenue.  No further registration was 
required.  He confirmed that apart from the a bove-mentioned exemptions, all other customers and 
firms were subject to the sales tax.  The trade tu rnover threshold for firms,  farms, and individuals 
exempted from sales tax amounted to approximately TOP 1,000,000.  There were no data available on 
the percentage of firms exempted from the sales tax.   He added that Tonga's present sales tax regime 
had been terminated on 1 April 2005 as pa rt of the taxation reform programme. 
71. The taxation reform programme had been d esigned with the assistance of the Pacific 
Financial Technical Assistance Centre (PFTAC).  U nder the new system, taxes levied in Tonga would 
include a simplified individual income tax; a single ra te corporate income tax;  a single rate customs 
duty;  excise taxes on imports and domestically prod uced alcohol and tobacco products;  and a broad 
based consumption tax, the Consumption Tax.  The Consumption Tax had been introduced on 
1 April 2005 in replacement of the sales tax, fuel sales tax, and ports and services tax.  The rates of 
the Consumption Tax were 15 per cent and zero.  Th e 15 per cent rate applied to most imports of 
goods and services supplied in Tonga.  The main items to be zero rated were exports, international 
transport services, and basic provision of electricity and water for domestic consumption.  A complete 
list of zero rated and exempt items was provided in Table 6.   The Consumption Tax applied equally to 
imported and domestically produced goods.  Excise tax rates on imported a nd domestically produced 
alcohol and tobacco products would be identical a nd would take the form of specific duties, which 
would be collected at the import stage or at the bor der for imported products and at the point of sale 
(ex-factory) for domestic products.   
72. In reply to questions raised by Members, the representative of Tonga stated that, subject to a 
limited number of exceptions, the Consumption Tax would apply to all imports and sales by 
registered Consumption Tax payers.  The social  exemptions to the Consumption Tax included WT/ACC/SPEC/TON/4/Rev.4 
Page 22  
 
 medical, dental and nursing services; domestic public transport services; and education services, and 
the administrative exemptions included financial ser vices; some property transactions; and a personal 
baggage exemption for luggage accompanying passenge rs arriving by sea or air (limited to TOP 500 
(US$ 250)).  The planned registration thr eshold for the Consumption Tax was TOP 100,000 
(US$ 50,000).  However, businesses with an annual  turnover below the threshold could register 
voluntarily if they so wished.  Pursuant to Part III of Registration 6(6) of the Consumption Tax Act, 
any person who had failed to register would be treat ed as registered from the beginning of the first 
Consumption Tax period after which it had been oblig ed to apply for registration or as notified in 
writing by the Chief Commissioner.  He added that all firms exempted from the Consumption Tax were required to register under the Business Lice nses Act to carry out business legally in Tonga.  
73. The representative of Tonga confirmed that fro m the date of accession Tonga would apply its 
domestic taxes, including excise and consumption taxes, in full compliance with the relevant 
provisions of the WTO, including Articles I and III of the GATT 1994, in a non-discriminatory manner to imports from all WTO Members and to do mestically-produced goods.  The Working Party 
took note of this commitment. 
- Quantitative import restrictions, including  prohibitions, quotas and licensing systems 
74. The representative of Tonga said that Tonga  prohibited imports of certain items, and 
importation of some goods was restricted and required  a special licence.  The items affected by these 
provisions are enumerated in Tables 7(a) and 7(b) , respectively.  He added that Tonga had not 
established specific import quotas for any product, and had no plans to introduce such quotas.   
75. Some Members requested more information on the rationale behind the import prohibition on 
fireworks, Tonga's definition of indecent articles a nd seditious matter, the justification for the current 
restrictions on imported motor vehicles, brandy, wh isky and rum, eggs, and cabin and ships biscuits, 
and any plans to modify or remove these import restrictions.   
76. The representative of Tonga replied that the importation of fireworks and indecent articles, 
including pornography, was regulated for safety reasons  and to protect public morals.  The Minister of 
Police could authorize importation of fireworks.  Tonga did not manufacture its own fireworks.  
Indecent articles and seditious matter were define d in accordance with the usual discretionary 
definition.  Motor vehicles had been included on the "r estricted list" solely to monitor imports for road 
safety reasons.  Most of Tonga's imports were second-hand vehicles which could represent a danger 
on the roads.  Tonga had no domestic production of mo tor vehicles, motorcycles or motor scooters, or 
parts thereof, and licenses were issued freely by the Mi nister of Finance and, for left-hand vehicles, by  WT/ACC/SPEC/TON/4/Rev.4 
 Page 23 
 
 
 the Minister of Finance and the Minister of Police unless a vehicle was found to be obviously unsafe.  
Vehicles imported for commercial purposes were consid ered unsafe if they were more than 10 years 
old.  There was no restriction on the age of vehicles imported for private use.  The safety of imported 
vehicles was evaluated by the customs officer at the wharf.  Importers were required to comply with 
safety requirements for the goods to be released.  Impo rtation of eggs was monitored and restricted to 
protect local poultry farms.  Tonga restrict ed imports of spirits for health reasons . 
77. The representative of Tonga confirmed that T onga would remove its licensing requirements 
for eggs, cabin and ships biscuits, brandy, whisky, an d rum from the date of its accession to the WTO.  
The Working Party took note of this commitment. 
78. The representative of Tonga added that any pers on or firm wishing to import goods into 
Tonga needed an import licence, covering each i ndividual consignment.  Mixed consignments 
required separate licenses.  The li censes were issued by the Licensing Unit at the Ministry of Labour, 
Commerce and Industries according to the Licenses Act,  Cap. 47.  Except for the restrictions noted 
above, the licensing system was liberal, and procedures were simple and straightforward.  Incomplete 
applications, or failure to abide by established proce dures, might lead to rejection of an application.  
However, applications could be re-submitted and refusals could be appealed to the Minister for 
Labour, Commerce and Industries, or referred to the court system.   
79. Licenses were not transferable among importers, but  carried indefinite validity and no penalty 
applied to unused licenses.  The system had been revised to eliminate discriminatory treatment of 
foreigners, and import licenses were now granted au tomatically to Tongans and non-Tongans alike.  
A Trading Licence Screening Committee, which had been considering each application lodged by non-Tongans, had been abolished.  Although the licensing system facilitated the monitoring of 
imports and the collection of statistics, he acknowle dged that its principal purpose was to generate 
revenue for his Government.  In 1999, import li censes had raised more than TOP 200,000 (about 
US$ 100,000).   
80. Some Members reminded Tonga that Article  1:2 of the Agreement on Import Licensing 
Procedures stated that licensing procedures shoul d be administered in conformity with GATT 
provisions.  Article VIII of the GATT 1994 provided for all non-tariff import fees and charges to be 
limited in amount to the approximate cost of th e services rendered, and not to constitute a tax on 
imports or exports.  Moreover, the Agreemen t on Import Licensing Procedures required licensing 
systems to be operated in a transparent, predictabl e, fair and equitable manner, and it was noted that 
the private sector had expressed dissatisfaction with  Tonga's system of import (and export) licensing.  
Tonga was consequently urged to bring its licensing arrangements into conformity with the WTO.   WT/ACC/SPEC/TON/4/Rev.4 
Page 24  
 
 81. The representative of Tonga replied that his G overnment had reviewed the issues raised.  
Tonga needed to retain import licensing procedures  for monitoring and statistical purposes.  Taking 
into account the views of WTO Members, his Gove rnment had amended Tonga's licensing system.  
The Licenses Act, Cap. 47, and thereby the practice of licensing each consignment, would be repealed upon the entry into force of the Business Licence Act, i.e. upon adoption of its implementing regulations by December 2005 .  Under the new system, importers would have to obtain a business 
licence authorising them to engage in the busin ess of importation.  The new Act required import 
business licenses to be issued automatically within 7 days and limited licence fees to the cost of the 
services rendered (i.e. verification and processing of applications) as required by Article VIII of the 
GATT 1994 (see Table 4).  More detailed informatio n on Tonga's Business Licence Act is provided in 
the "Trading rights" section of th is Report, paragraphs 47 to 50.  
82. The representative of Tonga confirmed that, from the date of accession, Tonga would not 
introduce, re-introduce or apply quantitative restrict ions on imports, or other non-tariff measures such 
as licensing, quotas, prohibitions, bans and other restri ctions having equivalent effect that cannot be 
justified under the provisions of the WTO Agreemen t.  The legal authority of the Government of 
Tonga to restrict or prohibit importation of goods  into Tonga would be applied from the date of 
accession in conformity with the relevant requirements of the WTO, in particular Articles XI, XII, XIII, [XV], XVIII, XIX, XX, and XXI of the GAT T 1994, and the Agreements on Agriculture, the 
Application of Sanitary and Phytosanitary Measure s, Import Licensing Procedures, Safeguards, and 
Technical Barriers to Trade.  The Working Party took note of these commitments.   
- Customs valuation 
83. The representative of Tonga said that Tonga was using the Brussels Definition of Value 
(BDV) system for the purposes of customs valuation.  The present system, set out in the Customs and 
Excise Act (in Part II, sections 15 and 16), was not based on transaction value as experience had 
shown that invoices presented to customs in Tonga in some cases did not reflect the price actually 
paid or payable.   
84. In order to assist Tonga in evaluating the key areas where additional legislation and 
institutions might be necessary, a Member remind ed Tonga that transaction value as defined in 
Article 1 of the Agreement on the Implementation of  Article VII of the GATT 1994 was the preferred 
method of appraisement, followed by the transacti on value of identical merchandise, the transaction 
value of similar merchandise, the deductive value, co mputed value, and finally the fallback method.  
Tonga's current legislation did not appear to provide for any of these methods of valuation.  Article 7 
of the Agreement prohibited appraisals based on (i ) the selling price in the country of importation;  WT/ACC/SPEC/TON/4/Rev.4 
 Page 25 
 
 
 (ii) a system providing for the acceptance for cu stoms purposes of the higher of two alternative 
values; (iii) the price of goods on the domestic market of the country of exportation; (iv) the cost of 
production other than computed values having been de termined for identical or similar goods; (v) the 
price of goods for export to a country other than the country of importation; (vi) minimum customs values; or (vii) arbitrary or fictitious values.  Tonga 's legislation would also have to provide adequate 
protection for the treatment of confidential info rmation in accordance with Article 10 of the 
Agreement;  transparency provisions ensuring the pub lication of laws, regulations, judicial decisions 
and administrative rulings regarding the valuation of merchandise (Article  12); provisions granting 
importers the right to a written e xplanation of how judicial and administrative valuation decisions had 
been determined (Articles 11. 3 and 16); and bonded entry of me rchandise allowing importers to 
withdraw goods against sufficient surety or depos it to cover the ultimate payment of customs duties 
when the final determination of the cust oms value was being delayed (Article 13). 
85. The representative of Tonga recognised that T onga's present valuation rules did not conform 
to WTO requirements.  Tonga planned to introdu ce a new WTO-compatible system as soon as was 
practicable.  The Customs and Excise Amendment Act 2003, addressing the changes necessary to the 
valuation system, had been passed by Tonga's Parlia ment in October 2003.  The Act had entered into 
force on 3 May 2004.  However, the Customs a nd Excise Amendment Act 2003 did not fully comply 
with the requirements of the Customs Valuation Agre ement.  In particular, there was no authority for 
exclusion of genuine interest charges; important  definitions, such as "goods of the same class or 
kind", had been omitted; incorrect tests were applie d (180 days instead of 90 days); and the language 
used departed from that of the Agreement in a number of cases, leading to potential changes in 
meaning.  Consequently, a new Customs and Exci se Act 2005 incorporating all the requirements of 
the WTO Customs Valuation Agreement was being drafted.  The draft Act was expected to be submitted to Parliament and adopted in 2006.   
86. The representative of Tonga indicated that  the implementation of the WTO Customs 
Valuation Agreement represented a major challenge fo r his Government.  It had originally believed 
that the major problem for Tonga, in complying with WTO requirements, would be to implement Articles 1-6 of the WTO Customs Valuation Agreem ent correctly (i.e., use of transaction value and 
the hierarchy of alternative methods of valuation) .  As Tonga had begun to move towards compliance 
with these requirements, it had realized that the provisions of the Agreement were interrelated and 
that effective implementation of the requirements as a whole would take some time.  The Customs 
Department was not fully equipped with the approp riate facilities (databases, etc.) to implement the 
Agreement and customs officials needed to be trai ned.  To this end, Tonga requested a transition 
period to implement the Agreement on the Implemen tation of Article VII of the GATT 1994.  Tonga WT/ACC/SPEC/TON/4/Rev.4 
Page 26  
 
 was prepared to take a commitmen t to ensure that any changes made in its laws, regulations and 
practice during the transition period would not resu lt in a lesser degree of consistency with the 
provisions of the Agreement on Customs Valuation th an existed on the date of accession.  In this 
regard, the Government of Tonga requested that th e Working Party grant it a transitional period of 
approximately two years from the date of its ac cession to allow it to obtain and utilize technical 
assistance to assist in the progressive implementati on of the obligations of the Agreement, which 
would be implemented in full starting from 1 January 2008, as detailed in Table 8.   
87. During this period, Tonga would ensure that its  regulations under current legislation in place 
and additional legislation implemented during the transition concerning customs valuation would be 
applied on a non-discriminatory basis to all imports.  Further, Tonga would ensure that any changes made in its laws, regulations and practice during the transition period would not result in a lesser 
degree of consistency with the provisions of the Agreement on Customs Valuation than existed on the 
date of accession.  Tonga would progressively implement the Customs Valuation Agreement as 
detailed in Table 8.   Tonga would participate in the work of the Committee on Customs Valuation.  
He added that Tonga would seek out all available te chnical assistance to ensu re that its capacity to 
fully implement the Agreement upon expiration of the transition period is assured.  The new 
legislation would be in full conformity with rele vant WTO provisions.  A copy of the text of the 
proposed amendments would be subm itted for review by the Working Party, and it was expected that 
these amendments would be passed by Parliament in 2006.  In response to requests from delegations 
for more specificity, he proposed that Tonga would proceed to conform its customs regime with the 
requirements of the Agreement on the Implementati on of Article VII of the GATT 1994 in accordance 
with the action plan reproduced in Table 8, setting out details of the steps that still remained to be 
taken in order to achieve this objective and a timetable for each step. 
Table 8:  Action Plan for conformity with the 
 
Agreement on the Implementation of Article VII of the GATT 1994  
Action Deadline 
Working Party review of draft text of Bill Prior to accession 
Drafting of regulations for implementation of amended Customs and 
Excise Act Prior to accession 
Education program – Customs officials, related Tongan Government 
staff,  and Customs clients Commence November 2005 
Customs Specialist Valuation training Commence November 2005 
Development of Administrative Guidelines for Customs staff No later than 31 December 2005 
Articles 1, 8, 2, 3 and 7 plus associ ated Articles (i.e. Articles 9, 10, 12, 
13, 16 and 17) of the WTO Agreement:  implementation phase  No later than 31July 2006 
Article 11 of the WTO Agreement:  implementation (separate 
Parliamentary action) No later than 31 July 2006  
Parliamentary passage of Bill No later than 31 December 2006  WT/ACC/SPEC/TON/4/Rev.4 
 Page 27 
 
 
 Action Deadline 
Cabinet endorsement of amended Customs and Excise  Act Regulations No later than 31 December 2006 
Articles 5 and 6 of the WTO Agreement;  implemen tation phase No later than 31 December 2006  
Further education program and refresher training for Customs and 
related Tongan Government staff On-going 
Full implementation of the Agreement on the Implementation of the 
Article VII of the GATT 1994. No later than 1 January 2008 
 
88. The representative of Tonga confirmed that le gislation on the valuation of imports for 
customs and taxation purposes conforming to th e requirements of the WTO Agreement on the 
Implementation of Article VII of the GATT 1994 had b een drafted and was expected to be submitted 
to the Parliament for enactment in 2006.  Tonga  would apply fully the Agreement no later than 
[1 January 2008] according to the action plan in  Table 8.  During this period, the scope of 
implementation of other aspects of the Agreement and other measures as described in paragraphs 86 
and 87 would be applied by Tonga.  The Working Party took note of this commitment.   
- Rules of origin 
89. The representative of Tonga said that importe rs were required to provide a combined 
certificate and invoice for imported goods, including details regarding the country of origin.  These 
details were required for st atistical purposes only.   
90. A Member stated that Tonga should implemen t the Agreement on Rules of Origin - under 
which Tonga would have certain obligations includ ing in regard to the transparency of laws, 
regulations and practices regarding rules of origin - from the date of accession.  Tonga should abide 
by the transitional disciplines of Article 2 of th e Agreement from the date of accession and Tonga's 
laws should be amended to incorporate the requireme nts of Article 2(h) and Annex II, paragraph 3(d), 
i.e. that for non-preferential and preferential rules of  origin, respectively, the customs authority will 
provide upon the request of an exporter, importer or  any person with a justif iable cause an assessment 
of the origin of the import and outline the terms unde r which it will be provided, and that any request 
for such an assessment would be accepted even be fore trade in the goods concerned began.  Upon 
completion of the international work programme for the harmonisation of rules of origin, Article 3 of 
the Agreement would also apply to Tonga.   
91. A Member noted that Tonga had ratified the Pacific Island Countries Trade Agreement 
(PICTA), which established regional rules of origin .  A Rules of Origin Committee had been formed 
and would soon begin to implement the specific rule s of origin contained in PICTA, which complied 
with the WTO Agreement on Rules of Origin.  Th is Member consequently asked Tonga to confirm WT/ACC/SPEC/TON/4/Rev.4 
Page 28  
 
 that its preferential and non-preferential rules of origin would comply with the WTO Agreement on 
Rules of Origin upon accession. 
92. In reply, the representative of Tonga conf irmed that the PICTA provisions were its only 
preferential rules of origin and that Tonga had no  non-preferential rules of origin.  He added that 
Tonga would incorporate the provisions of the WT O Agreement on Rules of Origin into the new 
Customs and Excise Bill 2005 currently being drafted.  He expected Parliament to pass this legislation 
in 2006.   
93. The representative of Tonga confirmed that, from the date of accession, Tonga's preferential 
and non-preferential rules of origin would comply fully with the WTO Agreement on Rules of Origin, 
including the provisions of Article 2(h) and Annex II,  paragraph 3(d) of the Agreement, i.e., that for 
non-preferential and preferential rules of origin, respectively, the customs authority will accept 
requests from an exporter, importer or any person w ith a justifiable cause for an assessment of the 
origin of the import.  Tonga would also abide by  the relevant WTO provisions on transparency and 
the provision of information about its rules of orig in and their application.  The Working Party took 
note of this commitment.    
- Preshipment inspection 
94. The representative of Tonga said that that Tonga's legislation had no provision for pre-
shipment inspection.   
95. The representative of Tonga confirmed that if in the future Tonga engaged the services of a 
preshipment inspection enterprise or preshipment inspection requirements were introduced, it would 
be on a temporary basis and in conformity with the requirements of the Agreement on Preshipment 
Inspection.  Tonga would take full responsibility to ensure that such enterprises operating on its behalf 
complied with the provisions of WTO Agreements, including the Agreements on Customs Valuation, Import Licensing Procedures, and Technical Barrier s to Trade.  Provision would be made that 
decisions by such firms could be appealed by im porters in the same way as administrative decisions 
taken by the Government of Tonga.  Tonga would also give due consideration to the 
recommendations of the Working Party on Preshipment Inspection of 2 December 1997 and subsequent recommendations issued by that Worki ng Party.  The Working Party took note of these 
commitments.  WT/ACC/SPEC/TON/4/Rev.4 
 Page 29 
 
 
 - Anti-dumping, countervailing duties, safeguard regimes 
96. The representative of Tonga said that Tonga had no specific legislation providing for the 
imposition of anti-dumping, countervailing duty, or  safeguard measures, and had no plans to 
introduce such legislation.  In response to a Me mber's comment, he confirmed that Tonga did not 
intend to use tariff flexibility to address unfair or excessive imports.   
97. The representative of Tonga confirmed that  Tonga would not apply any anti-dumping, 
countervailing or safeguard measures until it had im plemented and notified appropriate laws in 
conformity with the provisions of the WTO Agreements on these matters.   Tonga would ensure the full conformity of any such legislation with th e relevant WTO provisions, including Article VI and 
XIX of the GATT 1994 and the Agreement on the Im plementation of Article VI, the Agreement on 
Subsidies and Countervailing Measures and the Agreem ent on Safeguards.  After such legislation was 
implemented and notified, Tonga would only appl y any anti-dumping duties, countervailing duties 
and safeguard measures in full c onformity with the relevant WTO provisions.  The Working Party 
took note of these commitments.    
B. EXPORT REGULATION  
- Customs tariffs, fees and charges for services rendered, application of internal taxes to 
exports 
98. The representative of Tonga said that Tonga did not levy export duty on any item.  Under the 
new Business Licence Act 2002, the relevant provisi ons of which are dealt with in the section on 
Trading Rights (paragraph 48), the fee for the issu ance of a business licence authorizing exporters to 
engage in the business of exporting would be limited to the approximate cost of the services rendered. 
99. The representative of Tonga confirmed that from the date of accession, Tonga would apply all 
fees and charges for services rendered to exports in  accordance with WTO Agreements, in particular 
Articles VIII:1(a), XI:1 and III:2 and 4 of the GAT T 1994.  The Working Pa rty took note of this 
commitment.  
- Export restrictions and export licensing  
100. The representative of Tonga said that Tonga prohi bited exportation of raw coral and specified 
Tongan cultural articles.  Certain other items were r estricted and needed speci al authorization to be 
exported.  Approval from the Director of Health was required for exportation of medical biological 
and organic products; chemicals; drugs including na rcotic and barbiturates;  poisons; and second-hand WT/ACC/SPEC/TON/4/Rev.4 
Page 30  
 
 clothing.  The Director of Agriculture authorized exports of veterinary biological and organic 
products; animals, birds, fish and reptiles; insect s and gastropods; plants and fungi; seeds; and trees 
and timber.  No quantitative restrictions applied to exports from Tonga, but - as noted above - a 
general export licensing procedure, applied on a consignment basis, was being enforced for revenue 
purposes.   
101. Asked to explain the export restrictions on agricu ltural products, he added that exports of rare 
and indigenous species (plants and animals) were restricted for environmental reasons.  Size and 
maturity, as well as requirements established in the country of importation, were determining factors 
in the exportation of some agricultural products.  Tonga subjected medical, biological and organic 
products to quarantine to prevent the spread of diseases, and narcotics-related drugs and chemicals 
were restricted.  He cited health reasons to jus tify Tonga's export restriction on second-hand clothing.  
He confirmed that the application and approva l procedures were identical for Tongans and non-
Tongans.  
102. The representative of Tonga said that under th e new Business Licence Act exporters were 
required to obtain a business licence authorising them  to engage in the business of exportation:  the 
procedures and conditions for obtaining this licence were the same as for importation. For details see 
paragraphs 48 and 81 above.  
103. The representative of Tonga stated that from th e date of accession, Tonga's applied laws and 
regulations regarding export restrictions would be in  conformity with the relevant provisions of the 
WTO, including Articles XI, XVII, XX and XXI of the GATT 1994.  The Working Party took note of 
this commitment.  
 
C. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS 
- Industrial policy, including subsidies 
104. The representative of Tonga said that his G overnment's industrial development policies 
included encouraging private sector development,  through the Industrial Development Incentive (IDI) 
Act; improving efficiency through skills training ; promoting export-oriented manufacturing;  
developing traditional and non-traditional agricultu ral products having poten tial for added value 
through processing, notably cassava, kava, vanilla  and pumpkins; and establishing TongaTrade as a 
centralised agricultural and commodity export prom otion wing of the Ministry of Labour, Commerce 
and Industries.   WT/ACC/SPEC/TON/4/Rev.4 
 Page 31 
 
 
 105. The representative of Tonga said that TongaTrad e had been established as a "search engine" 
for local producers exploring new potential mark ets overseas.  TongaTrade identified the markets 
through research and gap analysis, assisted and f acilitated the development of exporters' marketing 
skills, and facilitated the developmen t and implementation of market management plans for groups of 
products . 
106. The representative of Tonga added that Tonga  benefited from a number of export market 
development programmes and schem es administered elsewhere.  The Forum Secretariat's export 
market development programme financed marketi ng missions to Australia, New Zealand and Japan 
for companies in Tonga with export potential.  Th e programme was offered through the offices of the 
South Pacific Trade Commission in Sydney (Australia), Auckland (New Zealand) and Tokyo (Japan).  These offices also financed trade fairs and exhibitio ns to promote products from the Pacific Islands.  
The Forum Secretariat supported private sector deve lopment in Pacific Island Countries, and operated 
a marketing support fund directed towards export-orie nted industries.  In addition, the Commonwealth 
Secretariat had funded participation by Tongan comp anies in trade fairs and exhibitions and provided 
technical assistance to export-oriented industries in  Tonga.  The ACP-EU Centre for Development of 
Industry financed marketing studies and capital fo r joint ventures between European Communities' 
and Tongan enterprises, especially those with an  export orientation, and the European Commission, 
through the European Development Fund, had funded market studies for export-oriented industries in 
Tonga and assisted in the production of  promotion and marketing material.  
107. Export financing was available from the normal commercial banking system or through the 
Tonga Development Bank (TDB).  The TDB provi ded facilities including term loans - on purely 
commercial terms - for the production of commodities such  as squash, vanilla and root crops;  loans to 
cover costs such as freight, inputs (e.g. fertilizer and chemicals) and marketing; as well as loans to 
companies purchasing export commodities, such as vanilla .  Together with the Ministry of Agriculture 
and Forestry, the TDB administered an export diversification fund whereby the TDB provided loans 
to companies or registered societies for all matters  pertaining to the export of produce.  The fund had 
assisted in the development of squash exports in th e early 1990s.  All credits extended under this fund, 
in all TOP 1.05 million (US$ 525,000), had been full y repaid.  In addition, a Venture Capital Fund 
had been established to provide equity capital suppor t for the development of viable private sector 
projects.  Capital had only been pr ovided to successful co mpanies wishing to expand their activities.  
The facility had been available to any type of busin ess and not calculated in relation to exports, but 
priority had been given to projects promoting exports or import substitu tion, foreign exchange 
earnings, the creation of employment, training oppor tunities and the introduction of new skills.  The 
maximum amount invested in a single project had been TOP 50,000 (about US$ 25,000).  Only three WT/ACC/SPEC/TON/4/Rev.4 
Page 32  
 
 projects had been financed over a period of three years, and the Venture Capital Fund had now been 
terminated.  
108. The Tonga Reserve Bank had established an export guarantee scheme to guarantee loans from 
overseas sources.  However, this scheme had never b een used.  The Government of Tonga had, on an 
ad hoc basis, provided support to growers of s quash pumpkin against losses caused by drought and 
other natural disasters.  Support provided to squ ash pumpkins growers would be detailed in Tonga's 
Domestic Support Tables.  He stressed these measures had never involved any export price or similar 
guarantee.  
109. Tonga's Industrial Development Incentives Act provided for import duty exemptions for 
holders of a Development Licence in respect of impo rted semi-finished products and/or raw materials, 
including packaging materials, used in the pro cessing, manufacturing, or assembly of final products 
destined for re-exportation.  Importers holding a De velopment Licence were required to pay customs 
duties in their entirety upon importation of the go ods.  The duties were refunded at the time of 
exportation of the finished products upon presentation,  to the Controller of Customs, of sufficient 
evidence.  The system therefore corresponded to a duty drawback scheme.  However, in practice, 
goods imported for re-exportation were  exempted from customs duties at the initial port of clearance.  
He added that Tonga did not have a system to m onitor the re-exportation of goods.  He recalled the 
discussion that had taken place in the Working Pa rty on Tonga's investment regime and the 
commitment undertaken by Tonga to formally remove  any of the criteria under the IDI Act that were 
inconsistent with relevant WTO provisions (paragraph 22).  He conf irmed that the IDI Act would be 
suspended on 1 July 2006 and subsequently repealed  after reduction of the single customs duty rate to 
15 per cent.  Benefits granted under th e Act would thereby be eliminated. 
110. Some Members stated that some of the benef its granted to holders of Development Licenses 
issued in accordance with the Industrial Develo pment Incentives Act such as exemption from income 
tax for up to five years; exemption from withhol ding tax for the same period; accelerated depreciation 
of assets; customs duties exemptions on imported goods; and a 50 per cent exemption from the Port 
and Services Tax would - to the extent that these benefits were made  contingent on export 
performance or import substitution in law or in fa ct - appear to violate the WTO Agreement on 
Subsidies and Countervailing Measures.  Tonga was thus urged to amend the Industrial Development 
Incentives Act . 
111. The representative of Tonga recalled the discussi on that had taken place in the Working Party 
on Tonga's investment regime and in particular  the commitment made by Tonga to repeal the 
Industrial Development Incentives Act (paragraph 22) .  He confirmed once again that the Foreign  WT/ACC/SPEC/TON/4/Rev.4 
 Page 33 
 
 
 Investment Act did not provide benefits conti ngent on export performance , import substitution or 
local content requirements . 
112. The representative of Tonga confirmed that from the date of accession  his Government would 
not maintain subsidies which met the definition of  a prohibited subsidy, within the meaning of 
Article 3 of the Agreement on Subsidies and Counter vailing Measures, and did not seek transitions to 
provide for the elimination of all such measures.  He further stated that Tonga would not introduce 
such prohibited subsidies in the future, and woul d apply export promotion measures in conformity 
with WTO requirements.  The representative of To nga further confirmed that as from the date of 
accession Tonga's laws would administer any su bsidy programs provided by his Government in 
conformity with the Agreement on Subsidies a nd Countervailing Measures and that all necessary 
information on notifiable programs would be notified to the Committee on Subsidies and 
Countervailing Measures according to Article 25 of the Agreement upon entry into force of Tonga's 
Protocol of Accession.  The Working Party took note of these commitments. 
- Technical barriers to trade, sa nitary and phytosanitary measures 
113. Some Members stated that Tonga would need  to implement fully the WTO Agreement on 
Technical Barriers to Trade as of the date of WTO accession, and requested detailed information on 
Tonga's infrastructure relating to the development a nd application of standards, technical regulations 
and conformity assessment procedures, including policies or procedures relating to the use of international standards and transparency.  Tonga was reminded that the WTO TBT Agreement did not 
require Tonga to implement standards in any area, but any standards and conformity assessment 
systems introduced in the future would need to be consistent with WTO requirements. 
114. The representative of Tonga said that Tonga had no specific Standardization Act or technical 
regulations in place.  The Public Health Act 1992, which empowered the Minister for Health to make 
regulations in relation to food standards, had so fa r not been used for this purpose.  Thus, Tonga had 
not adopted any technical regulations, standards or conformity assessment procedures to date, and had 
no plans to do so.  The Consumer Protection Act 2000 did refer to the implementation of approved 
standards, including labelling requirements, to protect consumers, but no standards had been 
established.  Foreign goods entering Tonga were acco rdingly not subject to any particular standards-
related procedures or requirements.  As to the est ablishment of a TBT Enquiry Point, the WTO Desk 
at the Ministry of Labour, Commerce and Industries would serve this function. 
115. In response to questions raised, the representative of Tonga restated that Tonga had not 
adopted any technical regulations, standards or  conformity assessment procedures to date, and WT/ACC/SPEC/TON/4/Rev.4 
Page 34  
 
 currently had no plans to do so.  Tonga had circulated a note providing information on the way in 
which it would implement the transparency provi sions of the TBT Agreement (WT/ACC/TON/14).  
Tonga had already nominated an enquiry point, being the WTO Desk at the Ministry of Labour, 
Commerce and Industries.  This was operational a nd could be contacted at: National TBT Notification 
Authority and Enquiry Point, Address:  
Ministry of Labour, Commerce and Industries,  
P.O. Box 110,  Nuku'alofa,  Tonga.  Phone:  +(676) 23688,  
Fax:  +(676) 25410,  
Email:  secretary@mlci.gov.to. 
116. The representative of Tonga confirmed that if, in  the future, technical regulations or standards 
and conformity assessment procedures were to be introduced, Tonga would neither adopt nor 
implement these regulations, standards or pr ocedures until it had implemented and notified 
appropriate legislation in conformity with the Ag reement on Technical Barriers to Trade.  Tonga 
would ensure the full conformity of any such legislation with the Agreement on Technical Barriers to 
Trade.  Any standards, technical regulations, a nd conformity assessment procedures adopted would be 
developed and applied in conformity with the provisions of the Agreement, including publication 
prior to implementation to allow interested par ties the opportunity for review and comment as 
provided for in the Agreement.  Prior to accession,  Tonga would prepare regulations specifying the 
publication to be used for the publication of any proposed measures, the procedure to be used for 
taking comments into account, etc.  Any such meas ures would be applied on a non-discriminatory 
basis, i.e. providing for national treatment and MF N treatment to all imports.  Regulations would be 
introduced to ensure that its National TBT Notif ication Authority and Enquiry Point would be 
operational as from the date of its accession.  Tonga would also provide relevant government officials 
with training to ensure that, from the date of  accession, they were fully conversant with the 
requirements of the TBT Agreement.  The Wo rking Party took note of these commitments. 
117. The representative of Tonga said that the Quaran tine and Quality Management Division of the 
Ministry of Agriculture and Food and the Ministry of Health were responsib le for Tonga's sanitary 
and phytosanitary measures relating to foreign trad e in animals, plants and related products.  The 
principal pieces of SPS-related legislation were the Plant Quarantine Act (Cap 127) 1988 together 
with the Amendments to that Act and its associat ed Regulations 1995 and Fee Regulations 1991 and 
1992; the Animal Diseases Act (Cap 146) 1978 and the Amendments to that Act; and the Public 
Health Act 1992 and the Amendments to that Act.  The Quarantine Act Cap. 77, gave the Director of  WT/ACC/SPEC/TON/4/Rev.4 
 Page 35 
 
 
 Health powers to impose quarantine restrictions for the protection of public health.  He further noted 
that three new Acts had been passed by the Legi slative Assembly in 2002, namely the Animal 
Diseases (Amendment) Act 2002, the Agricultural Co mmodities Export Act 2002, and the Pesticides 
Act 2002 which had been notified to the WTO in WT/ACC/TON/12/Add.3.  FAO and South Pacific 
Commission consultants had assisted in the drafting of this legislation, which should be in conformity 
with international requirements. T onga's legislation did not refer specifically to scientific evidence, 
but Tonga's regulations were, in fact, based on sci entific principles.  The representative of Tonga 
confirmed that Tonga had the capability of conducti ng its own risk assessments.  Import regulations 
required a code of conduct for imports and the re lease of imported goods, including initiation of pest 
risk analysis or pest risk assessment.  The c ode of conduct basically entailed that all import 
requirements and restrictions were always aligned with international standards as documented in the 
Tonga Quarantine Manual 1998, and the import policies and procedures always recognised the 
technical basis of decision making in accordance with the SPS agreements, the OIE guidelines, the 
IPPC International Standards for Phytosanitary Measures (ISPM), especially the ISPM No.1, No. 2 
and No. 11, and other international guidelines.  T onga had no measures establishing tolerances for the 
use of additives or contaminants. 
118. Asked to what extent Tonga's standards aligne d with relevant international standards, the 
representative of Tonga added that Tonga based its  SPS measures on international standards to the 
extent possible.  Tonga was a member of the Codex Alimentarius Commission, the Asia Pacific Plant 
Protection Commission (APPPC) and the Pacific Plan t Protection Organization (PPPO), but not yet a 
contracting party to the International Office of Ep izootics (OIE) and the International Plant Protection 
Convention (IPPC).  Tonga also received assistance from regional organisations, in particular the 
Secretariat of the PPPO and, on the animal side, th e Secretariat of the Pacific Community.  The Plant 
Quarantine Act and its Amendments were aligned w ith international standards such as those of the 
FAO (Food Agriculture Organisation) and the IPPC .  The Pacific Plant Protection Organisation 
operated actively to set standards fitting to Pacific requirements.  Such standards were submitted to 
the member countries (Forum Island Countries incl uding New Zealand and Australia) for funding and 
implementation.  In addition, the PPPO reviewed an d drafted standards regulations of any member.  
The PPPO met every three years and was chaired by  Tonga.  Tonga used FAO and OIE standards as a 
basis for its own standards relating to animals a nd animal products.  Regarding the principle of 
equivalence, Tonga recognized different measures ach ieving the same level of protection, and based 
its regulations in this respect on those of Australia and New Zealand.   
119.  Importation was only prohibited when necessary to protect human, animal or plant life and 
health.  A list of products prohibited in accordance with the Plant Quarantine Act and in the Animal WT/ACC/SPEC/TON/4/Rev.4 
Page 36  
 
 Diseases Act is reproduced in Table 9.  He stressed that importation of the items listed in Table 9 was 
not prohibited per se , but that the pest risk analysis system used by Tonga required those applying for 
import permits to provide technical and biological data to the Ministry of Agriculture and Food 
indicating that the species were free of the regulat ed quarantine pest concern or, if an effective 
treatment was available, import perm its would be issued with additi onal quarantine requirements.  In 
response to a Member who felt that it would be necessary to amend the relevant legislation to clarify 
the fact that "prohibited" products were actually only subject to "restriction", i.e. import permits, the 
representative of Tonga replied that, in his view, th ere was no need to revise the legislation as several 
sections of the Plant Quarantine Act 1998 and Pl ant Quarantine Regulations 1995 provided an 
explanation of the term "prohibited". 
120. Some Members requested more detailed informati on and specific legislative references to be 
able to evaluate Tonga's SPS regime and its cons istency with the WTO Agreement on the Application 
of Sanitary and Phytosanitary Measures.  A Member noted that Tonga's regime did not appear to be 
consistent with the SPS Agreement on the issue of transparency.  Tonga would need to have 
notification procedures in place so that its trading pa rtners could be made aware of changes in Tonga's 
quarantine measures, for example, quarantine arrangements against foot and mouth disease.  
Concerning quarantine measures against foot and mo uth disease, the representative of Tonga clarified 
that Tonga had taken precautionary measures by not allowing importation of animals or animal 
products from foot and mouth disease infected countries and regions.  Tonga screened high risk 
vessels coming from infected countries, and scr eened air passengers arriving from infected 
destinations. 
121. The representative of Tonga confirmed that Tonga  had the technical infrastructure in place 
required to implement the SPS Agreement.  He provided notes on the implementation and administration of the SPS Agreement, circulated in document WT/ACC/TON/9/Rev.1.  Tonga's SPS 
Enquiry Point and Notification Authority will be operated by one and the same body within the 
Ministry of Agriculture and Food (MAF) called th e National SPS Notification Authority and Enquiry 
Point.  The National SPS Notification Authority and Enquiry Point was operational and was headed 
by the Director, MAF. It could be contacted at: 
Ministry of Agriculture and Food  
National SPS Notification Authority and Enquiry Point 
P.O. Box 14,  Nuku'alofa,  Kingdom of Tonga Phone:  +(676) 23038/23402 
Fax:  +(676) 23093/24271/24922 
Email:  hfaanunu@maf.gov.to
, maf-qqmd@kalianet.to   WT/ACC/SPEC/TON/4/Rev.4 
 Page 37 
 
 
  
The authority was staffed by one official and five working committee members comprising technical 
advisors drawn from relevant divisions of the MAF.  The Enquiry Point would provide answers to all 
reasonable questions from interested Members as we ll as undertake the role of providing relevant 
documents, in accordance with Annex B of the SPS Agreement.  The Notification Authority will be 
responsible for notifying changes in Tonga's sanitary  or phytosanitary measures, in accordance with 
the notification procedures of Annex B of the SPS Agreement.  The Director was responsible for 
ensuring that Tonga's transparency obligations under the Agreement were met on an ongoing basis, 
including making notifications to the WTO and ma intaining publications and procedures required by 
the Agreement. The representative of Tonga note d that the staff of the National SPS Notification 
Authority and Enquiry Point would be guided by the WTO Secretariat Handbook on "how to apply the transparency provisions of the SPS Agreem ent of September 2002".  He added that Tonga 
intended to provide additional traini ng to responsible government officials to ensure that they were 
fully conversant with the requireme nts of the SPS Agreement upon accession. 
122. The representative of Tonga also stated that he  believed that Tonga ha d the ability to apply 
the provisions of the SPS Agreement and that Tonga's existing legislation provided an adequate basis 
for the application of the Agreement.  Tonga woul d seek technical assistance to ensure that it had the 
capacity to implement the SPS Agreement correctly on an ongoing basis.  The representative of 
Tonga indicated that it was prepared to accept the obligations of the WTO Agreement on Sanitary and 
Phytosanitary Measures from the date of accession without any transitional period.  
123. The representative of Tonga confirmed that Tonga would observe the requirements of the 
Agreement on Sanitary and Phytosanitary Measures from the date of accession.  The representative of 
Tonga confirmed that his government had already est ablished an enquiry point in the Ministry of 
Agriculture, Forestry and Food.  The Director of that Ministry was responsible for ensuring that 
Tonga's transparency obligations under the Agreem ent on Sanitary and Phytosanitary (SPS) Measures 
were met on an ongoing basis, including making no tifications to the WTO, and maintaining the 
publications and procedures required by the Agreement,  including publication with sufficient time for 
public comment prior to enactment.  Tonga woul d specify clearly the manner for publishing any 
proposed SPS measures (as defined by Annex A of the SPS Agreement) and the Government body / 
bodies responsible for developing and applying su ch measures.  Tonga ad ministered its existing 
requirements on imports for sanitary and phytosanita ry purposes listed in Table 9 based on principles 
of pest risk analysis and the international standa rds of Codex Alimentarius , IPPC, FAO and OIE, and 
these existing requirements would be notified to the WTO Committee on Sanitary and Phytosanitary 
Measures upon accession.  Any SPS standards, tec hnical regulations, and conformity assessment WT/ACC/SPEC/TON/4/Rev.4 
Page 38  
 
 procedures adopted after accession would be developed and applied in conformity with the provisions 
of the Agreement, including publication prior to implementation to allow interested parties the 
opportunity for review and comment as provided for in the Agreement.  Tonga would review its 
existing requirements in light of its obligations under the Agreement.  Existing or new measures 
would be applied on a non-discriminatory basis, i.e. providing for national treatment and MFN 
treatment to all imports.  The representative of Tonga also confirmed that Tonga would apply the 
Agreement from the date of accession without recourse to any transition period.  He also confirmed 
that Tonga would provide relevant government official s with training to ensure that, from the date of 
accession, they were fully conversant with the re quirements of the SPS Agreement.  The Working 
Party took note of these commitments.  
 
- Trade-related investment measures 
124. The representative of Tonga said that, other than the measures set out in the Industrial 
Development Incentives Act (1978) in relation to  the Development Licence programme, Tonga had 
no specific measures related to investment in trad e-related businesses.  These measures were, in his 
view, not inconsistent with the WTO Agreement on Trade-Related Investment Measures, and Tonga 
therefore did not intend to notify any measures under the Agreement. 
125. Having reviewed the Industrial Development Incen tives Act, some Members considered that 
the Act referred to import substitution, export pe rformance or local content criteria which would 
constitute trade-related investment measures.  It was noted that, even though these provisions did not 
appear to be applied in practice, the possibility to deny or revoke an industry's licence if export 
requirements were not met qualified as a TRIM.  Members sought a commitment that the Industrial 
Development Incentives Act would be amended, and th at the revised Act and associated practices and 
decision-making procedures would be consistent w ith the WTO, including the TRIMs Agreement. 
126. The representative of Tonga recalled the discussi on that had taken place in the Working Party 
on Tonga's investment regime and in particular  the commitment made by Tonga to repeal the 
Industrial Development Incentives Act (paragraph 22).  The Foreign Investment Act aimed at 
regulating foreign investment.  The Act had been passed by Parliament and would enter into force 
upon finalization of the regulations.  The representative of Tonga stated that, in his view, the Foreign 
Investment Act was consistent with trade -related investment measures under the GATT 1994. 
127. The representative of Tonga said that Tonga w ould not maintain any measures inconsistent 
with the TRIMs Agreement, that Tonga's laws wo uld implement this commitment, and that Tonga  WT/ACC/SPEC/TON/4/Rev.4 
 Page 39 
 
 
 would apply the TRIMs Agreement from the date  of accession without recourse to any transition 
period.  The Working Party took note of this commitment.   
- State-trading entities 
128. Noting that the Government of Tonga had ha d a stake in 26 enterprises in 1998, some 
Members requested Tonga to provide informati on on any state trading enterprises operating under 
exclusive or special privileges in relation to impor ts or exports.  Specific questions were raised 
concerning the activities of Tonga Investments Ltd., Frisco, Primary Produce Limited, Royal Beer Co. 
Ltd., Leiloa Duty Free Shops (Tonga) Ltd., Sea Star Fishing Co. Ltd, Tonga Timber Ltd., and the Government Supplies Department. 
129.  The representative of Tonga replied that a description of the status and operations of 
enterprises wholly and partially owned by the Govern ment of Tonga could be found in paragraphs 25 
to 27 of this report.  None of the enterprises lis ted enjoyed a government monopoly in their activities.  
A privatization paper had been endorsed by the Ca binet, identifying Leiola Duty Free as a candidate 
for privatization in 2003/04.  In his view, Tonga ma intained no State-trading enterprises as defined by 
GATT Article XVII and the Understanding on the In terpretation of Article XVII of the GATT 1994. 
130. The representative of Tonga confirmed that Tonga would apply its laws and regulations 
governing the trading activities of any State-owned enterprises and State-owned or other enterprises 
with special or exclusive privileges and would act in full conformity with the provisions of the WTO 
Agreement, in particular Article XVII of the GATT 1994 and the Understand ing on that Article and 
Article VIII of the GATS.  Tonga would notif y any enterprise falling within the scope of 
Article XVII.  The Working Party took note of these commitments. 
- Free zones, special economic areas 
131. The representative of Tonga said that Tonga had no designated free zones or free economic 
zones. 
132. The representative of Tonga said that any fr ee zones or special economic areas which it 
established would be fully subject to the coverage of  its commitments in its Protocol of Accession to 
the WTO Agreement and that Tonga would ensure en forcement of its WTO obligations in those zones 
or areas.  In addition, goods produced in any such  zones or areas under tax and tariff provisions that 
exempt imports and imported inputs  from tariffs and certain taxes w ould be subject to normal customs 
formalities when entering the rest of Tonga, includ ing the application of tariffs and taxes.  The 
Working Party took note of these commitments. WT/ACC/SPEC/TON/4/Rev.4 
Page 40  
 
 - Government procurement 
133. The representative of Tonga said that no specifi c procedures applied to goods and services 
purchased within Tonga.  He confirmed that local  suppliers did not benefit from any preferential 
margin in government procurement.  His govern ment had appointed agents in Australia and 
New Zealand to handle procurement of goods and services to be obtained outside Tonga. 
134. Procurement of supplies was organized through public tender, open to all local and overseas 
suppliers.  All bids were evaluated at the closi ng date of the Tender, and the lowest-price bidder 
would be awarded the contract or order.  A speci fic form ("Overseas Requisition") would be prepared 
for winning bids from overseas.  The form was endorsed by Treasury and approved by the Prime Minister before being sent to the Government Agen t in the country concerned.  The Overseas Agent 
would place the order with the supplier, arrange tran sportation, verify specification expedites etc., pay 
the supplier and bill the Government of Tonga.  
135. Asked whether Tonga intended to initiate negotiations for accession to the Agreement on 
Government Procurement, the representative of Tonga  noted that this plurilateral agreement had not 
been drawn up with the situation of very small deve loping countries, such as Tonga, in mind.  Few, if 
any, Tongan government contracts would be covere d due to the value thresholds applied under the 
Agreement.  Moreover, large contracts were of ten implemented in the context of economic aid 
programmes, which would be cove red by the procurement rules of the organisations concerned. 
- Agricultural policies 
136. The representative of Tonga said that the polic ies of his Government regarding trade in 
agricultural products did not differ significantly from  those applicable to trade in general.  The 
establishment of TongaTrade and the facilities offe red by the Tonga Development Bank were aimed 
at encouraging the development and diversificati on of agricultural and commodity exports.  He 
stressed that Tonga had not introduced any price support or export subsidy measures.  He confirmed 
that expenditures for infrastructural  facilities required for th e facilitation of export were limited to the 
provision or construction of capital works only, and di d not constitute subsidies to inputs or operating 
costs.  The fees paid by exporters for these types of facilities were commensurate to the costs of the 
services rendered.   
137. The policies of his Government were geared  towards diversifying the agricultural sector 
through strengthening and developing infrastructural  and support mechanisms such as the introduction  WT/ACC/SPEC/TON/4/Rev.4 
 Page 41 
 
 
 of new crop varieties, market development, new quarantine and new me thods of treatment for 
produce, and to provide continuous assistance to farmers.   
138. The representative of Tonga provided informa tion on domestic support and export subsidies 
in agriculture for the period 1996/97 to 1998/99 in document WT/ACC/SPEC/TON/3 and 
Revisions 1, 2 and 3.  He noted that all support recorded during this period qualified as "Green Box" 
measures exempt from the reduction commitment.  His Government provided a number of general 
service measures, mainly through the Ministry of Agri culture and Forestry, in part financed by donor 
countries and agencies.  The figures provided in th e supporting tables reflected the Government of 
Tonga's financial contribution to these measures. 
139. Tonga's commitments on agricultural tariffs a nd on domestic support and export subsidies for 
agricultural products are contained in the Sc hedule of Concessions and Commitments on Goods 
(document WT/ACC/TON/[  ]/Add.1) annexed to Tonga's Protocol of Accession to the WTO. 
- Trade in civil aircraft 
140. A Member noted that Tonga exempted ground equipment and technical supplies required for 
use at airports in connection with air services from customs duty, and asked whether Tonga would 
consider binding its customs duties and other revenue charges on civil ai rcraft and parts at zero in its 
Schedule of Concessions and Commitments on Goods. 
141. The representative of Tonga confirmed that, pr ior to 1 April 2005, ground equipment and 
technical supplies for use at airports in connecti on with air services were exempt from customs duties, 
but not from the 20 per cent Port and Services Ta x.  Under the new taxation regime, aircraft and 
aircraft parts for both domestic and international airlines were s ubject to the Consumption Tax.  
However, in the case of international airlines, the tax was refunded upon departure of the aircraft from 
Tonga.  As for the tariff rate to be applied to aircraft  and aircraft parts, it was still to be finalized.  He 
added that the tariff on aircraft and parts would not  have a protective effect as Tonga had no domestic 
production of these goods.   
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 
- GENERAL  
142. The representative of Tonga provided information on the implementation of the WTO 
Agreement on Trade-Related Aspects of Intell ectual Property Rights (TRIPS) in document 
WT/ACC/TON/6. WT/ACC/SPEC/TON/4/Rev.4 
Page 42  
 
 - Intellectual Property Authorities 
143. Authorities responsible for policy formulation and implementation included the Intellectual 
Property and Company Registration (IPCR) Office, a ccountable for the implementation of intellectual 
property legislation;  the Hon. Minister of Labour , Commerce and Industries, the Minister responsible 
for the Industrial Property Act 1994, the Copyright Act 2002, the Protection of Geographical Indications Act 2002, the Protection of Layout-Designs  (Topographies) of Integrated Circuits Act 
2002, and the Unfair Competition Act 2002; and the Supreme Court, responsible for settling 
intellectual property disputes.  All intellectual propert y regulations had to be approved by the Cabinet. 
- Intellectual property legislation 
144. The representative of Tonga said Tonga would amend its intellectual property legislation to 
ensure consistency with WTO intellectual property ru les and obligations.  The main pieces of Tonga's 
current intellectual property regime were the Industrial Property Act 1994, the Protection of 
Geographical Indications Act 2002, the Protection of  Layout-Designs (Topographies) of Integrated 
Circuit Act 2002, the Copyright Act 2002, and the Protection of Unfair Competition Act 2002.  The 
Industrial Property Act had been implemented since 1 February 2000, the Copyright Act had been 
enacted and was expected to be implemented by  1 July 2006, and regulations implementing the 
Protection of Geographical Indications Act, th e Protection of Layout-Designs (Topographies) of 
Integrated Circuits Act, and the Unfair Competiti on Act had been endorsed by Cabinet and submitted 
to the Law Reform Committee.  
145. Some Members were concerned that several TRIPS requirements, in particular the most-
favoured nation and national treatment provisions of the TRIPS Agreement, had not been included in 
Tonga's legislation.  The representative of Tonga  acknowledged that Tonga's current intellectual 
property regime did not conform fully to WTO requirements.  Further work would be needed to bring its legislation into conformity w ith WTO rules and obligations.  He accordingly requested that Tonga 
be granted a transitional period permitting Tonga to  complete this process after its accession to the 
WTO.  Technical assistance would be required to help  introduce the necessary legislative changes.     
- Participation in international intellectual property agreements 
146. The representative of Tonga said that Tonga ha d become member of the World Intellectual 
Property Organisation on 14 June 2001, and had been a party to the Paris Convention for the 
Protection of Industrial Property and the Berne Conv ention for the Protection of Literary and Artistic 
Works as of the same date.  These two conventions were self-executing under Tonga's legal regime.   WT/ACC/SPEC/TON/4/Rev.4 
 Page 43 
 
 
 His Government was considering membership in th e Patent Cooperation Treaty, the Madrid Protocol 
and Agreements, and the Hague Agreement.  His Government and was seeking more information on 
the Geneva Phonogram Convention, the WIPO Copyright Treaty, the WIPO Performance and 
Phonogram Treaty and the 1961 Rome Convention.   
- SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING PROCEDURES 
FOR THE ACQUISITION AN D MAINTENANCE OF INTELLECTUAL PROPERTY 
RIGHTS 
- Copyright and related rights 
147. The representative of Tonga said that the Copyright Act of 1985, revised in 1987 and 1988, 
had provided some protection to literary and dramat ic works.  However, the Act was not entirely 
compliant with the TRIPS Agreement, and its entr y into force had been delayed due to lack of 
implementing copyright regulations.  The Act requi red revision to provide protection for computer 
programmes as literary works under the Berne Conventi on 1971; databases by copyright; rental rights 
for owners of rights in films, sound recordings, phonograms and computer programmes; protection to 
broadcasting organizations to control the use of th e broadcast signals for a minimum of 20 years; and 
to protect performers from unauthorized recording and broadcasting of live performances. 
148. He added that Parliament had passed a new law - the Copyright Act 2002 – to ensure 
conformity with the TRIPS Agreement.  The Act,  which would be implemented by 1 July 2006, 
repealed the existing copyright legislation.   
- Trademarks, including service marks 
149. The representative of Tonga said that tradem arks were protected in accordance with the 
Industrial Property Act 1994, Part V and VI.  Prot ection for well known trademarks or service marks  
was provided for in Part V, Section 26 (2) (e) of the Act.  He noted that some  provisions of the TRIPS 
Agreement, notably Articles 15.4 (nature of the go ods and services), 17 (exceptions) and 20 (special 
requirements), had not been included in Tonga's exis ting legislation, but would be covered in the new 
legislation and regulations that would be introduced to ensure full conformity with the requirements 
of the WTO TRIPS Agreement.  Amendments to the Industrial Property Act 1994 had been endorsed 
by the Cabinet and submitted to the Law Reform Committee. WT/ACC/SPEC/TON/4/Rev.4 
Page 44  
 
 - Geographical indications, including appellations of origin 
150. The representative of Tonga said that geogra phical indications were protected under the 
Protection of Geographical Indications Act 2002.  Th e Act, was in his view, in full compliance with 
the requirements of the TRIPS Agreement.  Impl ementing regulations had been endorsed by the 
Cabinet and submitted to the Law Reform Committee. 
- Industrial designs 
151. The representative of Tonga said that industr ial designs, including textile designs, were 
protected under the Industrial Property Act 1994 (Part IV) and the Intellectual Property Regulations 1998.  Amendments to the Industr ial Property Act 1994 had been endorsed by the 
Cabinet and submitted to the Law Reform Committee. 
- Patents 
152. The representative of Tonga said that the scope of patentability, the rights conferred by a 
patent and the criteria under which non-voluntary licenses were granted, were laid down in the 
Industrial Property Act 1994 and in the Industrial Property Regulations  1998.  The Act had been in 
force since 1 February 2000.  The relevant provision s of the Act and regulations were, in his view, in 
compliance with the requirements of the TRIPS Agreement.  Tonga was not yet a party to the Patent 
Cooperation Treaty, but was considering membership. 
153. The Intellectual Property and Company Registra tion (IPCR) Office acted as Tonga's Patent 
Office.  Patent holders from third countries coul d apply for registration in accordance with the 
Industrial Property Act 1994.  The Law afforded patent protection for any invention, whether a 
product or process, in any field of technology if it was new, involved an inventive step, and was industrially applicable.  Applications for patents we re to be made using Form 1, prescribed in the 
Industrial Property Act 1994, and submitted to the IP CR Office.  Tonga had an agreement with IP 
Australia for it to conduct technical examinations of inventions and to provide search reports as to the 
patentability of inventions.  Patent terms of up to  20 years from the filing date were available. 
- Plant variety protection 
154. The representative of Tonga said that plant vari eties were currently not protected under any 
legislation in Tonga.  However, a Plant Variety, Seed and Seedlings Bill was being drafted with the 
assistance of UPOV.  WT/ACC/SPEC/TON/4/Rev.4 
 Page 45 
 
 
 - Layout designs of integrated circuits 
155. The representative of Tonga said that protection of layout designs of integrated circuits was 
provided for in the Protection of Layout-Designs (Topographies) of Integrated Circuit Act 2002.  
Regulations implementing the Layout  Designs Act had been endorsed by the Cabinet and submitted to 
the Law Reform Committee.  The relevant provisions of the Act and regulations were, in his view, in 
full compliance with the requirements of the TRIPS Agreement. 
- Requirements of undisclosed information,  including trade secrets and test data 
156. The representative of Tonga said that Tonga unfair commercial use of undisclosed data was 
protected in accordance with Section 9 of the Protection Against Unfair Commercial Act 2002.  
Pursuant to this Act, any act or practice, in th e course of industrial or commercial activities, that 
resulted in the disclosure, acquisition, or use of secr et information without the consent of the person 
lawfully in control of that information (the rightful holder) and in a manner contrary to honest 
commercial practices constituted an act of unfair co mpetition.  Information was considered secret if 
(i) it was not generally known among or readily accessib le to persons within the circles that normally 
dealt with that kind of information, (ii) had a commercial value because it was secret, and 
(iii) the rightful holder had taken reasonable steps to keep it secret.  Secret tests or other data 
submitted to a competent authority for marketing a pproval of pharmaceutical or agricultural chemical 
products using new chemical substa nces were protected against disclosure, except where necessary to 
protect the public or where steps had been taken to ensure that the data were protected against unfair 
commercial use.  The term of protection was determ ined by the court upon application, taking into 
account the nature of the tests or data and the e fforts and expenditure involved, but should not be 
inferior to five years, except in exceptional circumst ances.  Prior to issuance of marketing approval of 
any pharmaceutical and agricultural chemicals pr oducts, the relevant Ministries in Tonga would 
determine the existence of a patent covering a product for which an application for marketing 
approval had been filed by a party other than the pa tentee, and must not approve such application for 
marketing approval until the date of the expiration of such patent.   
- MEASURES TO CONTROL ABUSE OF INTELLECTUAL PROPERTY RIGHTS 
157. The representative of Tonga said that measures to  control the abuse of intellectual property 
rights were included in the Industrial Property Act 1994 and the Protection of Unfair Competition 
Act 2002.  However, Tonga's legislation would need to  be amended to ensure that such measures were 
in line with TRIPS requirements.  Amendments  to the Industrial Property Act 1994 and an 
Enforcement and Border Measures Bill had been en dorsed by the Cabinet and submitted to the Law WT/ACC/SPEC/TON/4/Rev.4 
Page 46  
 
 Reform Committee.  He added that his Governme nt had launched a limited scale public awareness 
programme on intellectual property regulations and the IPCR Office was organizing training for 
customs officials.  Further training would include police forces. 
158. Complaints concerning intellectual property matte rs could be lodged with the IPCR Office.  
Decisions of the IPCR could be appealed to a court. 
- ENFORCEMENT 
159. The representative of Tonga indicated that Tonga would need technical assistance to complete 
the necessary legislative changes to implement the TRIPS Agreement and to ensure that the 
Agreement's provisions were being observed, includi ng the introduction of provisions addressing civil 
judicial procedures and remedies, provisional m easures, administrative procedures and remedies, 
special border measures, and criminal procedures,  as well as to carry out additional steps to 
implement and enforce the TRIPS Agreement, e.g. the training of personnel and the development of 
infrastructure.  In answer to questions raised, he stated that pirated goods were sold in Tonga although 
the majority of the public did not recognize them as such.  His Government was introducing programmes to raise the awareness of intellectual property rights. 
160. The representative of Tonga said that Tonga had enacted new legislation in recent years that 
provided for WTO-consistent rules for the protection of intellectual property in several areas, including the Copyright Act 2002, the Protection of Geographical Indications Act 2002, and the 
Protection of Layout Designs (Topographies) of Inte grated Circuit Act 2002.  Section 6(1)(f) of the 
Copyright Act 2002 prohibited the importation of copi es of copyright works without the permission of 
the right holder.  However, importation of such goods was allowed for personal use under Section 15 
of the Act.  He acknowledged that further work would be needed in other areas to implement new 
legislation to bring Tonga's intellectual property re gime into conformity with the WTO Agreement on 
TRIPS.  Existing legislation and regulations, covering Patents, Indus trial Property, Trademarks and 
services marks would need amendment.  Amendmen ts to the Industrial Property Act 1994, as well as 
draft regulations for the Geographical Indicati on Act 2002 and the Protection of Layout Designs 
(Topographies) of Integrated Circuits Act 2002, ha d been endorsed by the Cabinet and submitted to 
the Law Reform Committee for verification before submission to the Parliament.  All these texts 
would be circulated to the Working Party for review  prior to the conclusion of the negotiations.  The 
Government of Tonga intended to enact these ame ndments and implement the relevant additional 
regulations by 31 December 2006.    WT/ACC/SPEC/TON/4/Rev.4 
 Page 47 
 
 
 161. In addition, an Enforcement of Intellectual Property Rights including Border Measure Bill, 
known as the Enforcement Bill, had been drafted.  The draft provided measures to remedy or prevent 
the violation of intellectual property rights.  It em powered the Minister to establish a cooperative body 
composed of officials from the Customs and Trade Department, the Police, and Intellectual Property 
to carry out enforcement of intellectual property rights.  The Enforcement  Bill did not impose any 
criminal penalties for the infringement of intellectual property rights.  It did not stipulate any specific 
civil penalties, but it established procedures and measures to be followed by the Court and the 
Customs Department in the event of infringement  or imminent infringement actions.  Measures and 
remedies to be ordered by the Court included injunc tions to prevent further infringement or imminent 
infringement, provisional measures to prevent likel y irreparable harm of imminent infringement, 
damages, compensation, the obligation for the infr inger to relay information to the right holder 
regarding the counterfeit or pirated goods, destru ction of the pirated copyright goods and/or 
counterfeit trademark goods, and any other remedy provided for in Tongan law.  Pursuant to the 
Section on "Border Measures by the Customs Departme nt" of the Bill, Customs had the authority to 
suspend clearance of counterfeit trademark goods a nd pirated copyright goods (i) upon order of the 
Court or (ii) upon the Customs Department's own initiative (as a temporary measure to enable the 
right holder to apply to the cour t to suspend customs clearance).  The Bill had been endorsed by the 
Cabinet and submitted to the Law Reform Committee.  
162. Asked about criminal and civil penalties for in fringement of intellectual property rights, the 
representative of Tonga said that infringement of owners' rights was punishable by a fine of 
TOP 5,000 and/or five years imprisonment pursuan t to Section 43(4) of the Industrial Property 
Act 1994.   All complaints regarding intellectual proper ty infringements should be lodged with the 
Supreme Court, except in the case of opposition to th e registration of marks, which should be lodged 
with the IPCR Office.  Responding to questions, he reminded the Working Party of the extreme 
smallness of Tonga's economy, which limited the ga ins of right holders in upholding their rights, and 
thus their inclination to pursue violations of their rights in Tonga.   
163. At present key Ministries lacked expertise about the obligations created under the TRIPS 
Agreement.  Tonga recognized that cooperation with other Forum Group countries in the area of 
intellectual property protection would be useful, a nd membership of the Patent Cooperation Treaty, 
the Madrid Protocol and the Hague Agreement would facilitate compliance with the TRIPS Agreement.  Tonga intended to acced e to these treaties by 1 January 2007.   Tonga was a party to both 
the Paris and Berne Conventions.  Care had been taken to ensure that all intellectual property 
legislation was in line with the provisions of th ese Conventions.  The provisions, particularly those 
relating to national treatment, priority and protected properties were fully enforced. WT/ACC/SPEC/TON/4/Rev.4 
Page 48  
 
 164. The representative of Tonga thanked the Working Party for its recognition that technical 
assistance would be required and the governments con cerned for the technical assistance that they had 
already provided.  For the reasons given above, the Government of Tonga requested that the Working 
Party grant a transitional period to [30 June 2008] fr om the date of its accession, to obtain technical 
assistance and equip the Government to fully implemen t the obligations of the TRIPS Agreement.  He 
confirmed that, if such a transitional period were granted, Articles 3, 4 and 5 of the Agreement, 
providing for, inter alia , national treatment and MFN treatment  under current legislation in place 
would apply, and Tonga would ensure that any cha nges made in its laws, regulations and practice in 
this period would not result in a lesser degree of  consistency with the provisions of the TRIPS 
Agreement that existed on the date of accession.  In addition, Tonga would not grant patents, 
trademarks, or copyrights, or marketing approva ls for pharmaceutical or agricultural chemicals 
inconsistent with the provisions  of the TRIPS Agreement.  [ Proposal by Tonga:  He further confirmed 
that, during the transition period, Tonga would impl ement the provisions of Article 39.3 to protect 
against unfair commercial use of undisclosed test or  other data submitted in support of applications 
for marketing approval of pharmaceutical or of agricultural chemical products which utilize new 
chemical entities and the provision of Articles 70. 8 and 70.9 to provide “pipeline” protection and 
exclusive marketing rights.]  
165. The representative of Tonga also stated that, should a transition be granted, existing rates of 
infringement would not in his view increase signi ficantly over this transition period and that any 
infringement of intellectual property rights would be addressed immediately in cooperation and with 
assistance from affected right holders.  [ Proposal by a Member : He further confirmed that, during the 
transition period, Tonga would protect against unfair commercial use of undisclosed test or other data 
submitted in support of applications for marketin g approval of pharmaceutical or of agricultural 
chemical products which utilize new chemical entit ies, by providing that no person other than the 
person who submitted such data may, without the permission of the latte r person, rely on such data in 
support of an application for pro duct approval for a period of at least five years from the date on 
which Tonga granted marketing approval to the pers on that produced the data.  Prior to the issuance 
of marketing approval of any pharmaceutical an d agricultural chemical products, the relevant 
Ministries in Tonga will determine the existenc e of a patent covering a product for which an 
application for marketing approval had been filed by a party other than the patentee, and will not 
approve such application for marketing approval until the date of the expiration of such patent.]  He 
added that Tonga would seek out all available tec hnical assistance to ensure that its capacity to 
enforce fully its TRIPS-consistent legal regime upon expiration of the transition period is assured.  In 
response to requests from delegations for more sp ecificity, the representative of Tonga presented an  WT/ACC/SPEC/TON/4/Rev.4 
 Page 49 
 
 
 Action Plan setting out details of the steps that still remained to be taken in order to achieve this 
objective and a timetable for each step (Table 10).   
Table 10:  Action Plan for conformity with the TRIPS Agreement  
Action Deadline 
Drafting of amendments to existing legislations to address 
deficiencies vis-à-vis  the WTO Agreement on TRIPS as 
identified in response to WT/ACC/9, specifically: 
 - Industrial Property Act 1994; 
- Copyright Act 2002. Prior to accession 
 
Copyright Act 2002 has been enacted. 
 Amendments to Industrial Property Act 
2004 have been endorsed by the Cabinet 
and submitted to the Law Reform 
Committee for verification. 
Circulation of draft legislation addressing remaining 
deficiencies vis-à-vis the WTO TRIPS Agreement in Tonga's intellectual property rights regime.  Prior to accession 
Drafting of new legislations, covering: 
 
- protection of undisclosed information and trade secrets; - plant variety protection; and 
- general and enforcement obligations under the TRIPS 
Agreement. Protection of undisclosed information and 
trade secrets is provided for by section 9 of 
the Protection Against Unfair Competition Act 2002 
  
[Plant variety protection legislation will be drafted no later than 31 December 2006] 
 
Parliamentary passage of new legislations and amendments to 
existing legislations. [No later than 31 December 2006] 
 
Drafting  and implementation of regulations for Intellectual Property legislations, specifically: 
 
- Geographical Indications Act 2002; - Protection of Layout Designs (Topographies) of 
Integrated   Circuits Act 2002; and 
- new legislations required, as detailed above. Regulations for the Geographical 
Indications Act 2002 and the Protection of 
Layout Designs (Topographies) of 
Integrated Circuits Act 2002 have been endorsed by Cabinet and submitted to the 
Law Reform Committee. 
 
[No later than 31 December 2007] 
Development of manuals and operating procedures [No later than 30 June 2007] 
Appointment of staff [No later than 30 June 2007] 
Training of key IP personnel [N o later than 31 December 2007] 
Training for users (development of information brochure and 
training program) [No later than 30 June 2008] 
Full implementation of the Agreement on Trade-Related 
Aspects of Intellectual Property Rights. [No later than 30 June 2008] 
 
 
166. The representative of Tonga confirmed that Tonga would apply the Agreement on Trade-
Related Aspects of Intellectual Property Rights no later than 30 June 2008 according to the Action 
Plan in Table 10 with the understanding that durin g this period protection for intellectual property 
rights listed in paragraphs 164 and 165 would be ap plied in Tonga.  The Working Party took note of 
this commitment.   WT/ACC/SPEC/TON/4/Rev.4 
Page 50  
 
 VI. POLICIES AFFECTING TRADE IN SERVICES 
167. The representative of Tonga said that services account ed for more than 50 per cent of Tonga's 
GDP.  While the Ministry of Labour, Commerce and Industry – which would serve as Tonga's 
services enquiry point - was responsible for formulating polici es related to services sectors, there was 
no comprehensive policy and individual services sector s were regulated independently.  Overall, the 
regulatory structure was very simple.  The Licen sing Act, Cap 47, which covered most services, 
required services providers to hold a licence obtained against payment of an annual fee (detailed 
information on the fee structure was provided in  document WT/ACC/TON/3, pages 29-31).  Tonga's 
legislation contained no specific provisions regula ting monopolies, safeguard measures, international 
payments, or government procurement of services.  A 25 per cent local participation requirement for 
access to foreign service suppliers in retail, constr uction, and tourism services needing no special 
equipment and skills, which had been implemente d for economic development purposes, had been 
abolished. 
168. He added that Tonga applied fully the most-fa voured-nation principle to trade in services, 
including in the recognition of professional qualif ications.  He considered Tonga's laws and 
regulations on certification for foreign qualification in compliance with the provisions of the General 
Agreement on Trade in Services (GATS).  Tonga ha d no national qualification standards of its own, 
but accepted qualifications from any recognized fo reign institution.  In the case of medical 
practitioners, the Director of Hea lth applied the standards of Aust ralia, Canada, New Zealand, the 
United Kingdom, and the United States, in accordance with the Medical Registration Act, Cap 75.  
Requests were dealt with case-by-case when rec ognition of foreign professional qualifications 
involved countries not explicitly mentioned in the relevant legislation. 
169. Legal services were regulated by the 1989 Law Practitioners Ac t.  The Act required any legal 
practitioner to be included in the Roll of Law Practit ioners held by the Supreme Court, to possess a 
practising certificate, and be a member of the T onga Law Society.  Membership in the Tonga Law 
Society required documented professional knowledge and experience in common law jurisdiction, 
minimum three character references, and an expressed intent to practice law in Tonga.  However, the 
legal practitioner did not need to reside in To nga.  Appearance before Tonga's Supreme Court 
required a diploma in law from the University of South Pacific or at least a Bachelor's degree in law 
from a recognised university.  Foreign lawyers were  subject to the same rules as domestic legal 
practitioners.  The representative of Tonga confir med that foreign legal firms and lawyers were 
allowed to provide consultati ons on legislation other than that of their home state.   WT/ACC/SPEC/TON/4/Rev.4 
 Page 51 
 
 
 170. Financial services were regulated by the 1991 Fi nancial Institutions Ac t and regulations, the 
National Reserve Bank Act, the Tonga Development Bank Act, the Westpac Bank of Tonga Act, the 
Foreign Exchange Control Act and regulations, and the Money Laundering and Proceeds of Crime 
Act.  Licenses were delivered by the Ministry of  Finance based on inquiries by the National Reserve 
Bank of Tonga, which supervised the activities of banks, and approval of the Privy Council.  The annual licence fee amounted to TOP 3,000.  Financia l services licenses were not subject to numerical 
or geographical limitations.  In 1998, three commerc ial banks were operating in Tonga in addition to 
the Tonga Development Bank, providing banking services such as deposits, loans, and local and 
international money transfer.  He confirmed that  financial institutions were allowed to provide 
financial information and advisory services.  Tonga allowed the establishment of new foreign 
commercial banks, merchant banks a nd other financial services companies both in the form of wholly-
owned subsidiaries or direct branches.  In add ition, Tonga permitted the establishment, including 
through direct branches, of new foreign life and no n-life insurance compani es, insurance brokers and 
agencies, and insurance underwriting and manageme nt companies servicing the domestic market.  
Financial services could also be provided by authorized foreign exchange dealers.  
171. Tonga's telecommunications market had been  opened up following the adoption of the 
Communications Act 2000.  The Tonga Communicat ions Corporation (TCC), a government-owned 
entity, was an integrated provider of networ k infrastructure and comm unications services but 
competed with a second full service provider.  Both  companies provided domestic and international 
calling services, as well at internet services.   
172. Under the 2000 Communication Act, any person or  company wishing to deliver domestic or 
international communication services, including televisi on, radio, internet, and mobile phone services, 
could apply for a licence.  Licenses were delivered by the Privy Council under conditions set out by 
the Council, including (i) the approval by the Tonga Telecommunication Commission of the technical 
operating details of the service, (ii) sufficient f unds to establish and maintain such a service, and 
(iii) payment of an annual licence fee (TOP 5,000 in 2000).  In addition, with a view to monitoring developments in the telecommunication sector and en suring fair competition, approval by the Cabinet 
was also required.  A licence was granted for five years and could be renewed every two years 
thereafter.  The transfer of a licence was subject to the approval of the Privy Council.  Licenses could 
be revoked in case of non-payment of the licence f ee, and lapsed after 12 months of non-use.  The 
licence holder was expected to exercise "self-censo rship" in respect of cultural sensitivities.   
173. As to accountancy services, licenses were deliv ered by the Ministry of Labour, Commerce 
and Industry.  Approval from the Tonga Society of Accountants was not needed, and no market WT/ACC/SPEC/TON/4/Rev.4 
Page 52  
 
 access restrictions were imposed on foreign accountan ts and foreign accounting firms to practice in 
Tonga.  Education services had been opened to fore ign providers, and several  religious institutions 
had established secondary schools.  Other academic in stitutions, such as the University of the South 
Pacific Extension Centre, provided degree-level courses.   
174. Specific regulations applied to  shipping and electricity-related services.  Shipping licenses 
had to be endorsed by the Ministry of Marine and Ports, and the Tonga Electric Power Boards verified 
qualifications and services to be provided before i ssuing licenses for electricity-related services.  The 
representative of Tonga confirmed that no specific requirements applied to practice engineering, 
computing and architectural services in Tonga,  except possession of a licence delivered by the 
Ministry of Labour, Commerce and Industry.  Licenses were delivered upon presentation of a certificate from any recognized university, irrespectiv e of the country, and a reference document from 
the former employer in the same business activity (optional).  
175. Tonga's commitments on services are contained in  the Schedule of Specific Commitments in 
Services (document WT/ACC/TON/[...]/Add.2) anne xed to Tonga's Protocol of Accession to the 
WTO. 
- Publication of information on trade 
176. The representative of Tonga said that all laws and regulations affecting trade were published 
in the Tongan Government Gazette.  Copies of specifi c laws and regulations could be purchased from 
the Government Printing Department.  Information on laws and regulations relating to trade was also 
available, free of charge, from the Trade Policy Unit at the Ministry of Labour, Commerce and 
Industries.  An investment promotion website, which would be the official website of the Ministry of 
Labour, Commerce and Industries, was in the process of being established by the Industries Division of the Ministry of Labour, Commerce and Industry.  [ Tonga proposes the following text as an 
alternative to the proposal in the next paragraph : Tonga was receiving technical assistance on this 
matter from the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank 
Group.  Tonga intended the website to be dedicated  to the publication of all regulations and other 
measures pertaining to or affecting trade in goods , services and TRIPS, where possible prior to 
enactment.  This website would be updated on a regul ar basis and would be readily available to WTO 
Members, individuals and enterprises.  Tonga in tended, where possible, to provide a reasonable 
period, e.g. no less than 30 days, for comment to the appropriate authorities of Tonga before the regulations and other measures pe rtaining to or affecting trade in goods, services and TRIPS were 
implemented, except for those laws, regulations a nd other measures involving national emergency or  WT/ACC/SPEC/TON/4/Rev.4 
 Page 53 
 
 
 security, or for which the publication would impede law enforcement.  Tonga intended to implement 
this facility as soon as possible so that it c ould test how its plans work in practice.]  
177. The representative of Tonga confirmed that, from the date of Tonga's accession, Tonga would 
fulfil the transparency requirements set out in Article X of the GATT 1994, Article III of the GATS 
and other WTO Agreements including those re quiring prior comment and publication.  Tonga 
confirmed that all regulations and other measures pertaining to or affecting trade in goods, services 
and TRIPS, except for laws, regulations and othe r measures involving national emergency or security, 
or for which publication would impede law enforcement, would be published [ Language proposed by  
a Member : and within two years from the date of accession posted on the website described in 
paragraph 176 for comment prior to enactment].  He further confirmed that all laws, regulations, 
rulings, including administrative rulings of general application, decrees or other measures related to 
trade in goods would be published in the Official Gaze tte, and that no law, regulation, etc. relating to 
trade in goods, services and TRIPS would become eff ective prior to such publication.  The publication 
of such laws, regulations and other measures of ge neral application would include the effective date 
of these measures and list, where appropriate and po ssible, the products and services affected by the 
particular measure, identified for customs purposes by  appropriate tariff line and classification.  The 
Working Party took note of these commitments.   
- Notifications 
178. The representative of Tonga said that at the lat est upon entry into force of the Protocol of 
Accession, Tonga would submit all initial notifica tions required by any Agreement constituting part 
of the WTO Agreement.  As new legislation im plementing the provisions of WTO Agreements was 
enacted, revised notifications would be provided.  Any regulations subsequently enacted by Tonga 
which gave effect to the laws enacted to impl ement any Agreement constituting part of the WTO 
Agreement would also conform to the requirements of that Agreement.  The Working Party took note 
of these commitments. 
VII. TRADE AGREEMENTS 
179. The representative of Tonga said that Tonga was a member of the South Pacific Forum, a 
political grouping of independent and self-governing States in the South Pacific.  The South Pacific 
Forum had been established in 1971 to develop a co llective response to regional issues.  Tonga was 
also a party to the South Pacific Regiona l Trade and Economic Co-operation Agreement 
(SPARTECA), signed in July 1980.  The SPARTECA Agreement was a preferential non-reciprocal trade agreement whereby Australia and New Ze aland extended duty free and unrestricted or WT/ACC/SPEC/TON/4/Rev.4 
Page 54  
 
 concessional access for virtually all products or iginating in the Forum Island members, 
i.e. Cook Islands, the Federated Stat es of Micronesia, Fiji, Kiribati,  Marshall Islands , Nauru, Niue, 
Papua New Guinea, Solomon Islands , Tonga, Tuvalu, Vanuatu and Western Samoa.  The Agreement 
included provisions for general economic, commerc ial and technical co-operation and safeguard 
provisions against product dumping.  He confirme d that Tonga did not provide any duty-free or 
concessional access to products originating in Austra lia and New Zealand under this Agreement.   
180. He added that Tonga granted preferences to members of the Pacific Island Countries Trade 
Agreement (PICTA), ratified by Tonga in 2001.  The PICTA provided for progressive phasing out of 
tariffs between Forum Island countries by 2010, as pa rt of the establishment of a Pacific regional free 
trade area in goods.  The first tariff cut took place upon entry into force of the Agreement in April 2003.  Tonga also participated in the Pacific Agreement on Closer Economic Relations 
(PACER), which had entered in to force on 3 October 2002.  Members of the PACER included 
Pacific Forum Island Countries, Australia, and New Zealand.  Although the PACER was not a free trade agreement, it set a timetable for regional free trade negotiations with Australia and New 
Zealand.   
181. Tonga and Fiji had signed a bilateral trade agre ement in 1995, aimed at facilitating the free 
flow of agricultural products.  The Agreement wa s non-reciprocal, having been formulated shortly 
after a bilateral quarantine protocol had been estab lished for 20 agricultural items imported into Fiji 
from Tonga.  A joint committee met bi-annually to discuss matters of mutual trade interest.   
182. He added that Tonga had participated in th e Regional Long-Term Sugar Agreement, running 
from 1995-1998.  Under this Agreement, Fiji had s upplied agreed quantities of sugar to Kiribati, 
Solomon Islands, Tonga, Tuvalu and Western Samoa at pre-determined prices.  The Agreement had 
been administered by the Forum S ecretariat, located in Suva (Fiji) .  Tonga's entitlement had been 
allocated among private firms based on their requests without any form of price subsidy.   
183. Tonga had also signed and ratified the Cotonou Agreement between the European 
Communities (EC) and 70 countries in Africa, the Ca ribbean and the Pacific (ACP), whereby the EC 
extended non-reciprocal trade preferences to the AC P States.  Preliminary negotiations with the EU 
on the establishment of an economic pa rtnership agreement had commenced.  
184. The representative of Tonga stated that his Gove rnment would observe the provisions of the 
WTO, including Article XXIV of the GATT 1994 and Ar ticle V of the GATS in its trade agreements, 
and would ensure that the provisions of these WT O Agreements for notification, consultation and 
other requirements concerning preferential trading systems, free trade areas and customs unions of  WT/ACC/SPEC/TON/4/Rev.4 
 Page 55 
 
 
 which Tonga was a member were met from the da te of accession.  The Working Party took note of 
these commitments.   
CONCLUSIONS 
185. The Working Party took note of the explanati ons and statements of Tonga concerning its 
foreign trade regime, as reflected in this Report.  The Working Party took note of the commitments 
given by Tonga in relation to certa in specific matters which are reproduced in paragraphs 14, 22, 33, 
41, 46, 50, 57, 60, 66, 73, 77, 82, 88, 93, 95, 97, 99, 103, 112, 116, 123, 127, 130, 132, 166, [177], 
178, and 184 of this Report.  The Working Party took note that these commitments had been incorporated in paragraph 2 of the Protocol of Accession of Tonga to the WTO. 
186. Having carried out the examination of the foreign trade regime of Tonga and in the light of 
the explanations, commitments and concessions ma de by the representative of Tonga, the Working 
Party reached the conclusion that Tonga be invited to accede to the Marrakesh Agreement 
Establishing the WTO under the provisions of Article  XII.  For this purpose, the Working Party has 
prepared the draft Decision and Protocol of Accessi on reproduced in the Appendix to this Report, and 
takes note of Tonga's Schedule of Concessions and Commitments on Goods (document 
WT/ACC/TON/../Add.1) and its Schedule of Sp ecific Commitments on Services (document 
WT/ACC/TON/../Add.2) that are annexed to the draft Protocol.  It is proposed that these texts be 
adopted by the [General Council] [Ministerial C onference] when it adopts the Report.  When the 
Decision is adopted, the Protocol of Accession would be open for acceptance by Tonga which would 
become a Member thirty days after it accepts the sa id Protocol.  The Working Party agreed, therefore, 
that it had completed its work concerning the negotiations for the accession of Tonga to the 
Marrakesh Agreement Establishing the WTO.   
  
 WT/ACC/SPEC/TON/4/Rev.4 
Page 56 ANNEX 1  
Table 1: Number of Investment Projects Having Been Gr anted a Development Licence fo r the Years 1999 to 2003 (US$)  
 
1999 2000 2001 2002 2003 TOTAL 
1999-2003  
SECTOR No. of  
Project Project 
Cost No. of  
Project Project 
Cost No. of 
Project Project 
Cost No. of 
Project Project 
Cost No. of 
Project Project 
Cost NO. COST 
Manufacturing 16 1,106,860  20 26,055,001 20  12,085,177 10  4,324,348 22  8,173,851 88 51,745,237  
Tourism Prime 
Facility 23 4,647,097  20  3,468,780 23  19,742,596 7  3,504,845 10  3,130,440 83 34,493,758  
Engineering 7 246,400  7  235,600    5  656,450 4 637,450 23 1,775,900  
Commercial 
Farming 8 7,978,485  6  250,950 7  663,800 4  316,500  
5 436,999 30 9,646,734  
Commercial 
Fishing 8 12,207,650  6  3,958,858 6  7,067,130 3  7,438,000 3  4,913,500 26 35,585,138  
TOTAL 62 26,186,492  59  33,969,189 56  39,558,703 29  16,240,143 44  17,292,240 250 133,246,767  
    WT/ACC/SPEC/TON/4/Rev.4 
   Page 57  
 
 Table 2:  Enterprises with Government Ownership in Mid-2002
 
Organization Activity/Market Position Approximate 
share of the 
domestic market 
(%) Percentage of 
Government 
Ownership 
Air Pacific Limited Fiji's nationa l airline; provides regional 
airline services; comp etes with the other 
market suppliers. 11 <5 
Westpac Bank of Tonga Commercial bank; competes with 3 other 
banks in Tonga. 32 4 
Export Produce 
Treatment Services Ltd. Manages the hot air treatment plant at the 
airport. 100 20 
Hawaiian Air Hawaii's national airline. Ceased 
operations in 
Tonga <5 
International Dateline 
Hotel Holds 49% of the shares of the company 
that owns Tonga's biggest hotel;  competes with other accommodation facilities in 
Tonga. N/A 
 51 
Leiola Duty Free Operates Tonga's duty free shops;  has a 
monopoly position;  likely to be privatised 
in 2003-2004. 100 60 
Pacific Forum Line 
Limited Regional shipping company based in Fiji;  
provides regional freight and charter 
services. 20 
 Approx. 5 
Royal Tongan Airlines Tonga's national airline;  competes with Air 
New Zealand, Polynesi an Airlines and Air 
Pacific (other main ai rlines that service 
similar routes). 38 
 99 
Sea Star Fishing Co. Ltd Deep sea fishing company;  competes with 
many other firms;  Tonga's Government is 
considering divesting itself from this company. 30 
 70 
Shipping Corporation of 
Polynesia Ltd Provides domestic and international  
passenger and cargo charter services;  many 
domestic competitors in this market. 20 100 
Tonga Development 
Bank Provides development and business 
advisory banking services. 32 100 
Tonga Investment Ltd Holding/investment company set up in 
1991 to manage the activities of its 
subsidiaries (Frisco, Home Gas, and Primary Produce Limited);  likely to be 
privatised in 2003-2004. 
 
Frisco:  Hardware and building materials 
supplier;  mainly sells imported products;  no exclusive or special rights or privileges;  
competes with other private firms. 
 Home Gas:  Sole distributor of cooking and 
heating gas in Tonga;  no exclusive or 
special rights or privileges.  
Primary Produce Ltd.:  No longer in 
operation;  should be wound up.  
 
  
 
 
20 
  
 
 
100 
 
  
N/A 99 WT/ACC/SPEC/TON/4/Rev.4 
Page 58  
 
 Organization Activity/Market Position Approximate 
share of the 
domestic market 
(%) Percentage of 
Government 
Ownership 
Tonga Telecommunications 
International Ltd Provides both local and international 
telecommunications services;  competes 
with private enterprises;   no special rights 
or privileges. 70 100 
Tonga Timber Limited Coconut/timber milling and hardware 
supplier;  competes with other suppliers;  
no exclusive or special rights or privileges. 20 99 
Tonga Corporation Manages Tonga's landholdings in America, 
Samoa and Hawaii. N/A 100 
  WT/ACC/SPEC/TON/4/Rev.4 
 Page 59 
 
 
 Table 3:  Products Subject to Price Control  
Tariff Line Item Commodity 
11.02 Flour 
1701.0000 Sugar 
0405.0000 Butter 
15.17 Margarine 
0402.1000 Baby Milk 
0902.0000 Tea 
1006.0000 Rice 
0901.0000 Coffee 
1801.0000 Cocoa 
15.01 – 1516.0000 Edible Oils of all types 
15.01 Cheese and Dripping 
2501.0000 Salt 
19.01 Infant Food Preparations 
2710.0020 White Benzene 
2710.0070 All Lubricant Oils 
3808.1000 Insecticides 
3808.3000 Herbicides 
3808.2000 Fungicides 
3101.0000 – 3105.0000 All chemicals and fertilisers for agricultural use 
27.10 Liquid petroleum products  
2710.0010 Motor Spirit 
2710.0040 Kerosene 
not available Diesel 
1905.1010 Bread of standard size 
 WT/ACC/SPEC/TON/4/Rev.4 
Page 60  
 
 Table 4: Business Licence Fees
 
(Schedule Two of the Business Licence Act 2002)  
Item Activity Fee (TOP) Due date 
1. Application for Business Licence 75.00 Upon application 
2. Application for Renewal of Business Licence 65.00 Upon application 
3. Amendment of Business Licence 30.00 Upon application 
4. Inspection of Business Licence Register 10.00 Prior to inspection 
5. Copying of Business Licence Register 10.00 Upon application for copy  WT/ACC/SPEC/TON/4/Rev.4 
 Page 61 
 
 
 Table 5:  Quarantine Fees Levied on Exports of Agricultural Goods  
Activity Fee (TOP) 
FUMIGATION 
Small Chamber  (1.1 m3) 10.00 
All other fumigation chambers including sheet fumigation. 7.75 per m3 or part thereof  
(maximum of TOP 130.00 per container and/or chamber). 
HEAT STERILISATION 
Sterilisation of goods by heat in an oven 7.75 per 0.2m3 or part thereof  
(maximum of TOP 130.00 per container and /or 
chamber) 
WASTE DISPOSAL 
Disposal/incineration of quarantineable material e.g. war ships  0.40 per hour or part thereof. 
STEAM CLEANING 
Per consignment 15.00 per hour or part thereof. 
COLD STORAGE 
Cool room/refrigerator 0.02 per kg per 24 hours or part thereof 
Freezer 0.04 per kg for the first 24 hours and  
0.02 per kg per 24 hours or part thereof, thereafter. 
INSPECTION AND CLEARANCE: 
EXAMINATION FOR IMPORT OR EXPORT 
Documentation (Certificates and permits) 4.00 
Examination of a container system unit 2.00 
Examination of motor vehicle 4.00 
Examination of goods at airports for issuing of a 
Phytosanitary Certificate (Max. 15 mins) 2.00 
Examination of goods, other than at an airport for the 
issuing of a Phytosanitary Certificate (Max. 30 mins) 4.00 
AIRCRAFT CLEARANCE 
Light Aircraft 50.00 
Narrow-bodied aircraft (untreated) 80.00 
Narrow-bodied aircra ft (treated) 50.00 
Wide-bodied aircraft (untreated) 120.00 
Wide-bodied aircraft (treated) 60.00 
SHIP CLEARANCE 
Vessel of more than 25 metres in length 50.00 
Vessel of 25 metres or less in length 20.00 
POST-ENTRY QUARANTINE 
Bench space per month (per 0.5 m3 or part thereof) 7.75 
Potting Material, chemicals and other related expenses At cost 
OVERTIME 
For aircraft and passenger cl earance at Airports;   
       Weekdays 4.00 per hour 
       Weekends & Public Holidays 5.00 per hour 
Other than aircraft and passenger cl earance at Airports 2.00 per hour 
MISCELLANEOUS FEES 
Hire of forklift and driver 25.00 per hour 
Any other activity not specified in these Regulations 4.00 per officer per half hour  
or part thereof including travelling time 
Source:  Adapted from Tonga Government's Gazette Supplement Extraordinary, No.7, 24 Friday 1997, "The 
Plant Quarantine Fees Regulation 1997".  WT/ACC/SPEC/TON/4/Rev.4 
Page 62  
 
 Table 6: Consumption Tax exemptions and Zero Rates
  
Supplies exempt from the 
Consumption Tax  a) Medical prescriptions, dental nursing or health services; 
b) Educational services; 
c) Financial services; 
d) Public transport services; 
e) Lease of land for residential purposes. 
Taxable supplies subject to a zero 
rate of Consumption Tax a) An export of goods; 
b) An export of services supplied for use outside of Tonga; 
c) A supply of international transport of goods or passenger services 
from a place outside Tonga to another place or if the transport or part of the transport is across the territory of Tonga; 
d) The supply of goods as part of the transfer or part or whole of a 
business as a going concern by a registered person to another registered person provided that the supplier and recipient have: 
(i) agreed in writing that part or whole of the business is supplied as 
a going concern; and (ii) notified the Chief Commissioner, in writing, of the details of the transf er, at the date of the transfer on 
which consumption tax has been credited as input tax. 
e) Supplies of goods and services by a supplier in Tonga to His 
Majesty to King; 
f) Electricity supplied by a su pplier for commercial use. 
g) Electricity supplied by any supplier for domestic purposes; 
h) The first 20 cubic meters of water per month supplied by any 
supplier for domestic purposes; 
i) Insecticides, pesticides and fungicides for use in agriculture; 
j) Agricultural machinery and implements, including hand tools and 
timber milling machinery; 
k) Agricultural seeds and fertilizers; 
l) Stock feed; 
m) Live poultry; 
n) Live bovine animals; 
o) Live swine; 
p) Packaging material for use in agriculture. 
Imports exempt from the 
Consumption Tax a) Imports which are supplied in Tonga and are an exempt supply 
under 1; 
b) Imports not exceeding TOP 500 in value accompanying a person 
arriving in Tonga; 
c) Imports by diplomats according to law. 
d) Insecticides, pesticides and fungicides for use in agriculture; 
e) Agricultural machinery and implements, including hand tools and 
timber milling machinery; 
f) Agricultural seeds and fertilizers; 
g) Stock feed; 
h) Live poultry; 
i) Live bovine animals; 
j) Live swine; 
k) Packaging material for use in agriculture.  WT/ACC/SPEC/TON/4/Rev.4 
 Page 63 
 
 
 Table 7(a):  Goods Prohibited from Importation into Tonga  
1.  Counterfeit coin, currency notes or stamps. 
2.  Indecent articles (obscene books, paintings, dr awings, cards, lithographic or other engravings, 
photographs, prints, films or other indecent products or articles except for private purposes) [Schedule II, Part 1 (Section 35) PROHIBITED AND RESTRICTED IMPORTS] 
3.  Goods bearing the royal Arms of the Kingdom of Tonga, unless importers holds his Majesty's authority. 
4.  Goods bearing any trade name or trade mark being or claiming to be the name or trade mark registered 
under the Registration of United Kingdom Trade Mark Act. 
5.  Fireworks, unless given permission by Minister of Police. 
6.  All books and any written or printed matter, sounds and visual recordings of which import is prohibited 
by copyright law*. 
7.  All books and any written or printed matter and so und and visual recordings which advocate violence, 
lawlessness or disorder. 
8.  All toxic or hazardous wastes. 
9.  Goods the importation of which is prohibited by any other law in force in the Kingdom. 
10.  Goods the importation of which is restricted by any other law in force in the Kingdom except in 
accordance with such law.  
* Cover both counterfeit goods and copyright piracy. WT/ACC/SPEC/TON/4/Rev.4 
Page 64  
 
 Table 7(b):  Goods Requiring a Special Import Licence
 
HS 
Number Description Permission required & Ministry involved Application 
Fee (TOP) 
93.03 Firearms and ammunition  Licence issued by the Minister of Police 10.00 
3602.000 Explosives of all kinds including 
fuses and detonators  Licence issued by the Minister of Police NIL 
9304.0000 Noxious, stupefying or tear gas in 
any form and all weapons and 
instruments or appliances for firing or using such gas containers or 
cartridges for such weapons or other 
instruments or appliances  Written permission of the Minister of Police NIL 
2208.3010 Brandy and whisky  Certified to the satisfaction of the Collector 
of Customs that it has been matured in 
wood for three years* NIL 
2208.4010 Rum  Certified to the satisfaction of the Collector 
of Customs that it has been matured in wood for two years* NIL 
87.04 
87.11 Motor vehicles, motor cycles and 
motor scooters  Licence issued by the Minister of Finance 
and the Minister of Poli ce (for public safety 
purposes and records keeping)   NIL 
87.04 Left hand drive motor vehicles  Licence issued by the Minister of Police 
(for public safety purposes and records 
keeping)  NIL 
4007.0010 Eggs  Licence issued by the Minister of Finance* NIL  
1905.9010 Cabin and ships biscuits  Licence issued by the Minister of Finance * NIL 
 Goods the importation of which is 
restricted by any other law in force in 
the Kingdom except in accordance 
with such law.   
 *  Tonga is prepared to remove its licensing requirements for eggs, cabin and ships biscuits, brandy and 
whisky, and rum as at the date of its accession to the WTO. 
  WT/ACC/SPEC/TON/4/Rev.4 
 Page 65 
 
 
 Table 9:  Import Prohibitions Relating to Animals, Plants and Related Products  
 
Plant 
Name Plants, including living plants and products of plants, 
prohibited 
Banana, Abaca, other Musaceae Heliconi aceae Plants, corns and cut flowers 
All Beans of the species Ph aseolus All except seed 
Cassava (Manihol esculenta Grantz) All except tissue cultures 
Citrus All except fruit and s eeds. Fruit from areas where 
citrus canker (Xanthomonas Campestris p.v. citri, (Hasee) Dye) Occurs.  All of 
Murraya spp. 
All palms including coconut All except seednuts and pollen from areas approved by 
the Minister 
Cacao and host plants of Cacao swollen shoot All except seed from Asia Pacific Region 
Coffe (Coffea spp.) All propag ating material except seed 
Maize (Zea mays L) All except seed 
Peanut (Arachis hypogaea L) All except seed 
Potato (Solanum tuberosum L) All except  tubers, true seed and tissue cultures 
Sorghum (Sorghum spp) All except seed 
Rubber (Hevea spp) All 
Taro and edible aroids (Alocasia spp, Colocasia spp, 
Xanthosoma spp nd Cyrtosperma spp) All except propagating ma terial, seed and tissue 
cultures 
Tomato  
(Lycopersicon esculenum Miller) All except fruit and seed 
Orchidaceae All except ti ssue cultures and seedlings in Sterile 
flasks. 
Animal 
Prohibition 
on 
importation or liberation 
of certain 
animals (1) No person shall import or introduce into the Kingdom without prior approval of His 
Majesty's Cabinet any animal or carcass of the species listed below: 
(a) any snake of an y species whatever; 
(b) any venomous reptile, or any living stage of any venomous amphibian, venomous 
fish or venomous invertebrate; 
(c) any monkey of any species;  (d) any member of the squirrel species; 
(e) any red fox or silver fox; 
(f) any musquash (or muskrat); (g) any hamster; 
(h) any mongoose; 
(i) any coypu (or nutria); (j) any mink; 
(k) any rabbit; 
(l) any hare; (m) any deer; 
(n) any opossum; 
(o) any other animal that is likely to become a nu isance or to cause injury or damage. 
(2) No person shall without prior approval of Cabinet import or introduce into the Kingdom 
the egg, semen or carcass of any animal speci fied in subsection (1) of this section. 
Source :  The Plant Quarantine Act and the Animal Diseases Act, Second Schedule, Regulation 31. WT/ACC/SPEC/TON/4/Rev.4 
Page 66  
 
 ANNEX 2 
Laws, Regulations and Other Information Provided to the Working Party by Tonga
 
- Income Tax Bill 2004 
- Industrial Development Incentive Act 1978 (Cap. 48) and Amendments 1990, 1992; 
- Act No. 11 of 4 October 1982 To Amend th e Industrial Development Incentives Act 1978; 
- Foreign Investment Act 2001; 
- Foreign Investment Act 2002; 
- Order to Amend the Prices of Goods and Wages Control Act 1998; 
- Act No. 3 of 8 September 1947 (as amended, 1950, 1956 and 1984) To Make Provision For 
Controlling the Prices of Goods and Services and Wage Rates; 
- Protection Against Unfair Competition Act, 2001; 
- Chapter 27 of the Companies Act of 1988; 
- The Registration of Business Names Bill 1995 - A rrangement of Sections and Registration of 
Business Names Act, 2001; 
- Business Licence Act of 2002; 
- Business Licence Regulations 2002 of 2005; 
- Act No. 20 of 2 November 1993 To Amend the Licenses Act; 
- Licence (Amendment) Act 1995 (Cap. 47); 
- Drafting Guidelines for Amendments to the Licenses Act Cap. 47; 
- Application for Licence to Import Goods; 
- Act No. 29 of 16 October 1987 To Amend the Intoxicating Liquor Act;  
- Draft Customs and Excise Act 2005, dated 21 October 2005; 
- A Bill for An Act to Amend the Customs and Excise Act (The Customs and Excise 
(Amendment) Act 2003); 
- The Customs and Excise (Amendment) Act No. 25 of 10 November 1999 – Tonga 
Harmonized Customs Tariff and Excise Schedule; 
- Customs and Excise Bill 2004 of July 2004; 
- Customs and Excise Amendment Act 2003 of 4 September 2003; 
- Customs and Excise Act 1998 (Cap. 67) and Amendments; 
- Customs and Excise Act (1983) Part I:  Imports – Classification and Tariff; 
- Act No. 3 of 24 June 1992 to Amend the Customs Duty and Excise Act (Cap. 67); 
- Act No. 6 of 6 July 1927 (as amended, 1950, 1963, 1964, 1974, 1997 and 1988) To Impose 
Stamp Duties; 
- Ports Authority (Overseas Vessels Tariff Fees) Standing Order 1999; 
- Act to Repeal the Port and Services Tax Act of 24 November 2003; 
- Port and Service Tax Act 1988 (Cap. 71); 
- Act No. 22 of 23 October 1990 To Am end the Port and Service Tax Act; 
- Act No. 11 of 1 September 1981 To Amend the Wharves Act; 
- Wharves Act 1992 (Cap. 138) and Amendments 1997, 1998; 
- List of Products subject to Wharfage Tax (conf erred by Sections 5 and 16 of the Wharves Act 
1992 (Cap. 138); 
- Schedule of Duty Free and Ports & Services Tax Free Goods; 
- Acts Nos. 6 of 3 November 1964 and 3 of 1985 To Impose a Tax Upon Fuel Imported into 
the Kingdom and Sold by the Importer; 
- Act No. 3 of 1 July 1986 To Impose a Tax Upon Retail Sales of All Goods and Services in the 
Kingdom of Tonga; 
- Consumption Tax Regulations 2005; 
- Information on Implementation and Administra tion of the Customs Valuation Agreement; 
- Agricultural Commodities Export Act of 2001, Section 4 – The Agricultural Commodities 
Export (General) Regulations 2001;  WT/ACC/SPEC/TON/4/Rev.4 
 Page 67 
 
 
 - Draft Bill for an Agricultural Commodities Export Act; 
- Public Health Act 1992 and Amendments; 
- Animal Diseases Act of 1978, Section 13 – The Animals (Importation) Regulations 2001; 
- Animal Diseases Act 1988 (Cap 146); 
- Draft Bill for an Act to Amend the Animal Diseases Act 1978; 
- Pesticides Act of 2001, Section 22 – The Pesticides Regulations; 
- Pesticides – information and application form s for licenses, registration and user permits; 
- Draft Bill for a Pesticides Act; 
- Act No. 18 of 15 April 1928 (as amended, 1986 and 1988) Relating to Quarantine; 
- Plant Quarantine Act (Cap. 127) 1988; 
- Information on State Trading; 
- Act No. 10 of 30 September 1987 to Amend the Copyright Act of 1985; 
- Copyright Act 1988 (Cap. 121) and Amendments; 
- Draft Law on Copyright and Related Rights; 
- Copyright Act 2001; 
- Copyright Act 2002;  
- Industrial Property Act 1994 (Cap. 19); 
- Industrial Property Regulation 1998; 
- Act No. 19 of 9 November 1994 To Provide For the Registration and Protection of Patents, 
Utility Model Certificates, Industr ial Designs and Trade Marks; 
- Draft Regulations for Geographical Indications Act 2002; 
- Protection of Geographical Indications Act 2001; 
- Draft Regulations for Layout-Designs (Topograp hies) of Integrated Circuits Act 2002; 
- Protection of Layout Designs (Topographies) of Integrated Circuit Act 2001; 
- Law on the Enforcement of Intellectual Property Rights Including Border Measures of 2004; 
- Act No. 21 of 18 October 1989 To Provide Fo r Law Practitioners;  For Their Professional 
Conduct and Discipline;  For The Establishment of the Tonga Law Society and For 
Connected Purposes; 
- Act No. 16 of 15 August 1991 To Require Th e Registration Before Practice of Medical, 
Dental, Nursing, Midwifery and Other Health Professions in Tonga; 
- Act No. 13 of 7 August 1984 To Amend the Tonga Telecommunications Act, 1983; 
- Act No. 15 of 21 September 1989 To Regulate Broadcasting and Matters Related Thereto; 
- Act No. 22 of 30 October 1991 To Regulate th e Licensing and Supervision of Financial 
Institutions in Tonga and For Purposes Connected Therewith; 
- Act No. 15 of 15 August 1991 To Provide For a Comprehensive Health Service For Tonga; 
- Act No. 29 of 2 November 1992 To Deal with Public Health Services in Tonga; 
- Act No. 9 of 24 October 1949 (as amended, 1950, 1951, 1956, 1957, 1960, 1962, 1974, 1975, 
1981, 1983 and 1988) To Provide For the Estab lishment of the Tonga Electric Power Board 
For the Production, Control and Distribution of Electric Power Throughout the Kingdom and For Related Purposes; 
- Water Board Act (Section 28) Water Suppl y (Amendment) Regulations 1992 (Tonga 
Government Gazette Supplement Extrao rdinary No. 5 of 5 June 1992;   
- Act No. 19 of 5 July 1977 (as amended, 19 79, 1980 and 1990) To Control and Regulate 
Tourism by the Establishment of an Advisory Board and by the Introduction of a System of 
Licensing of Tourist Facilities and Matters Relative Thereto;  and 
- Act No. 16 of 31 March 1970 To Make Better Provision For the Control of Immigration. 
 
 WT/ACC/SPEC/TON/4/Rev.4 
Page 68  
 
 [Draft Decision 
ACCESSION OF THE KINGDOM OF TONGA 
Decision of […] 
 [The General Council], [The Ministerial Conference]  Having regard to  paragraph 2 of Article XII and paragr aph 1 of Article IX of the Marrakesh 
Agreement Establishing the World Trade Organizati on (the "WTO Agreement"), and the Decision-
Making Procedures under Articles IX and XII of th e Marrakesh Agreement Establishing the World 
Trade Organization agreed by the General Council (WT/L/93); 
 [ Conducting  the functions of the Ministerial Conference in the interval between meetings 
pursuant to paragraph 2 of Article IV of the WTO Agreement;] 
 Taking note  of the application of the Kingdom of Tonga for accession to the Marrakesh 
Agreement Establishing the World Trad e Organization dated 9 December 1994; 
 Noting  the results of the negotiations directed toward the establishment of the terms of 
accession of the Kingdom of Tonga to the WTO Agreement and having prepared a Draft Protocol on 
the Accession of the Kingdom of Tonga; 
 Decides  as follows: 
 The Kingdom of Tonga may accede to the WTO Agreement on the terms and conditions set 
out in the Draft Protocol annexed to this Decision.  WT/ACC/SPEC/TON/4/Rev.4 
 Page 69 
 
 
 DRAFT PROTOCOL 
ON THE ACCESSION OF THE KINGDOM OF TONGA 
Preamble  
 The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to Article XII 
of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement"), and the Kingdom of Tonga,  
 Taking note of the Report of the Working Party on the Accession of the Kingdom of Tonga to 
the WTO Agreement reproduced in document WT/ACC/TON/[…], dated […] (hereinafter referred to as the "Working Party Report"), 
 Having regard to the results of  the negotiations on the accession of the Kingdom of Tonga to the 
WTO Agreement,  
 Agree as follows: 
PART I -  GENERAL 
1. Upon entry into force of this Protocol pursua nt to paragraph 8, the Kingdom of Tonga accedes 
to the WTO Agreement pursuant to  Article XII of that Agreement and thereby becomes a Member of 
the WTO.  
2. The WTO Agreement to which the Kingdom of Tonga accedes shall be the WTO Agreement, 
including the Explanatory Notes to that Agreement, as  rectified, amended or ot herwise modified by such 
legal instruments as may have entered into force before the date of entry into force of this Protocol.  This 
Protocol, which shall include the commitments referr ed to in paragraph [185] of the Working Party 
Report, shall be an integral part of the WTO Agreement. 
3. Except as otherwise provided for in para graph [185] of the Working Party Report, those 
obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be 
implemented over a period of time starting with the entry into force of that Agreement shall be 
implemented by the Kingdom of Tonga as if it had accepted that Agreement on the date of its entry into force. 
4. The Kingdom of Tonga may maintain a measure in consistent with paragr aph 1 of Article II of 
the GATS provided that such a measure was recorded in  the list of Article II Exemptions annexed to this 
Protocol and meets the conditions of the A nnex to the GATS on Article II Exemptions. 
PART II - SCHEDULES 
5. The Schedules reproduced in Annex I to th is Protocol shall become the Schedule of 
Concessions and Commitm ents annexed to the General Agr eement on Tariffs and Trade 1994 
(hereinafter referred to as the "GATT 1994") and the Schedule of Specific Co mmitments annexed to the 
General Agreement on Trade in Services (hereinafter referred to as "GATS") relating to the Kingdom of 
Tonga.  The staging of the concessi ons and commitments listed in th e Schedules shall be implemented 
as specified in the relevant pa rts of the respective Schedules. WT/ACC/SPEC/TON/4/Rev.4 
Page 70  
 
 6. For the purpose of the reference in paragraph 6( a) of Article II of the GATT 1994 to the date of 
that Agreement, the applicable date in respect of the Schedules of Conc essions and Commitments 
annexed to this Protocol shall be the date  of entry into force of this Protocol. 
PART III - FINAL PROVISIONS 
7. This Protocol shall be open for acceptance, by  signature or otherwise, by the Kingdom of Tonga 
until […]. 
8. This Protocol shall enter into force on the thirtieth day following the day upon which it shall 
have been accepted by the Kingdom of Tonga.  
9. This Protocol shall be deposited with the Director-General of the WTO.  The Director-General 
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance by 
the Kingdom of Tonga thereto pursuant to paragrap h 9 to each Member of the WTO and to the 
Kingdom of Tonga.   
 This Protocol shall be register ed in accordance with the provisi ons of Article 102 of the Charter 
of the United Nations.   
 Done at […] this […] day of […] in a single c opy in the English, French and Spanish languages, 
each text being authentic, except that a Schedule anne xed hereto may specify that it its authentic in only 
one of these languages.  WT/ACC/SPEC/TON/4/Rev.4 
 Page 71 
 
 
 ANNEX I 
SCHEDULE […] – KINGDOM OF TONGA 
Authentic only in the … language. 
(Circulated in document WT/ACC/TON/…/Add.1) 
_______________ 
SCHEDULE OF SPECIFIC COMMITMENTS ON SERVICES 
LIST OF ARTICLE II EXEMPTIONS 
Authentic only in the … language. 
(Circulated in document WT/ACC/TON/…/Add.2) ]  
__________