WT/TPR/S/215 Trade Policy Review 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW  
1. Solomon Islands has been a Member of the WTO since July 1996;  it is a non-resident 
Member and the only LDC Member in the Pacific.  Solomon Islands' authorities have limited interest 
in the multilateral trading system.  Solomon Islands  faces major resource and capacity constraints in 
participating in the negotiations and the regular  work of the WTO;  it has made only three 
notifications since the WTO entered into force.  It benefits from WTO trade-related technical 
assistance, and from support for trade capacity buildin g by multilateral agencies and bilateral donors.  
It is also a beneficiary of the Enhanced Integr ated Framework.  Solom on Islands, ne vertheless, 
continues to lack a formal framewo rk to formulate trade policy, whic h is done on an ad hoc basis.  
The authorities consider capacity building in the area of trade negotiations to be a priority. 
2. Solomon Islands is a party to several regi onal trade and economic cooperation arrangements 
in the Pacific.  It receives unilateral preferentia l market access granted by the developed Members of 
the WTO, through GSP and other programmes for LDCs .  It is taking part in the Pacific ACP-EC 
Economic Partnership Ag reement negotiations. 
3. Since its last Trade Policy Review in 1998, So lomon Islands has liberalized and simplified its 
foreign investment regime.  A new Foreign Inv estment Act was adopted in 2005, simplifying the 
registration procedure for foreign investment by replacing a lenghty approval process.  The number of 
activities reserved for domestic investors has fallen to 14 from 54.  The reserved activities are mostly 
related to the small-scale supply of goods and ser vices to the domestic market.  However, poorly 
defined property rights and political instability, compounded by provincial business licensing 
requirements, remain key obstacles in attracting foreign direct investment into the country. 
4. Political instability and weak institutions have unde rmined the capacity of Solomon Islands to 
formulate and implement trade and other economic  policies, and have undermined its economic 
performance (see Chapter I).  Solomon Islands e xperienced serious civil unrest during 1999-02, 
leading the Government to request the interventi on of the Regional Assistance Mission (RAMSI) in 
2003 to restore law and order.  Constitutional and other reforms are under c onsideration to enhance 
political stablility and governance. 
(2) GENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  
5. Solomon Islands gained political independen ce from the United Kingdom in 1978.  Since its 
last Review, there has not been any change in the form of government.  Solomon Islands continues to 
be a constitutional monarchy with the British Sovere ign, represented by a Governor-General, as the 
Head of State.  The executive fo llows a Westminster-style system led by the Prime Minister who is 
chosen from and by the Parliament. 
6. The judicial system in Solomon Islands is based on English Common Law.  The Court of 
Appeal, consisting of three judges, is the final level of judiciary.  Below the Court of Appeal is the 
High Court followed by magistrate and local courts.  Decisions (judgements) by the court of appeal 
are upheld in the High Court and magistrate courts.  Both the High Court and magistrate courts deal 
with civil and criminal cases.  Local courts are pr imarily responsible for handling matters of land.  
There is also a statutory trade dispute panel. 
7. Solomon Islands has a unicameral parliament.  The National Parliament, empowered by the 
Constitution, is the law making body of the country .  Once a bill is passed by the Parliament, it Solomon Islands WT/TPR/S/215 
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requires the assent of the Governor-General to become a law (Acts of Parliament).  Gazette 
notification is required for any law to enter into operation. 
8. The Constitution of 1978 is Solo mon Islands' supreme law.  Any law that is not consistent 
with the Constitution is void to the extent of its in consistency.  International agreements must be 
incorporated into domestic law to have effect a nd to be invoked before the national courts.  WTO 
provisions may not, therefore, be invoked directly before national courts, but only to the extent that 
they have been incorporated into domestic legi slation.  International treaties and conventions, 
including multilateral and regional trade agreements are the responsibility of the Ministry of Foreign 
Affairs and External Trade, under the supervision of  the Office of the Prime Minister and Cabinet. 
9. Since 1998, the number of seats in the Parliament has increased from 47 to 50;  this implies 
that Solomon Islands is divided into 50 single-memb er constituencies.  General elections are held at 
least every four years, on the basis of universal adult suffrage.1  The last election was held in 2006.  
Since there are no established political parties, as su ch, the Government has been characterized by 
fragile short-lived coalitions;  and changes in the Prime Ministership have become frequent. 
10. Solomon Islands has nine provinces: Central;  Choiseul (Lauru);  Guadalcanal;  Isabel;  
Makira;  Malaita;  Rennell and Bellona;  Temotu;  and Western;  and the separate administrative 
center of Honiara.  Each province is governed by  an elected provincial assembly.  Provinces have 
limited taxation powers, and rely heavily on grants  from national government.  The balance of power 
between provinces and national government was one of the sources of civil unrest during 1999-02.  
This, combined with weak government institu tions and poor governance, undermined business 
confidence and economic performance during th e period under review (see Chapter I). 
11. Solomon Islands underwent a period of serious civil unrest from 1999 to 2002.  During that 
period, infrastructure was badly damaged.  A number of government facilities were destroyed.  At the 
request of the then Prime Minister, the Australia n-led Regional Assistance Mission (RAMSI) arrived 
in Solomon Islands in 2003 to restore law and order.   Since then, there has been gradual improvement 
in the political and economic situation.  However,  political stability and sustainable growth remain 
daunting challenges for the Government.  A Constitu tional Reform Unit, under the Office of the 
Prime Minister and Cabinet, was established to examine the possibility of establishing a federal system with more powers and authority delegated to the provinces.  The Unit is yet to make a 
recommendation to the Government (January 2009). 
(3) T
RADE POLICY FORMULATION AND IMPLEMENTATION  
12. Solomon Islands continues to lack a formal trade policy framework.  International trade 
matters fall within the responsibility of the Ministry  of Foreign Affairs and External Trade.  Trade 
policies are formulated on an ad hoc basis, often through inter-ministerial consultations.  While the 
ultimate policy decision is vested with the Cabine t, trade policies have not received the required 
attention in the country's ove rall development strategies. 
13. A Trade Facilitation Committee, with repr esentations from various agencies of the 
Government, has not met in several years.  Inst ead, the Integrated Framework National Steering 
Committee (IFNSC), which was established in 2 007 following the launch of the Integrated 
Framework (section (6) below), has de facto  become the body to oversee trade policy matters.  The 
Solomon Islands Chamber of Commerce and Industr y (SICCI) is the link for the Government to 
                                                      
1 Parliament can be dissolved at any time by a resolu tion supported by the votes of an absolute majority 
of the members of the Parliament.  A general election is required within four months of every dissolution of Parliament. WT/TPR/S/215 Trade Policy Review 
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interact with the private sector.  The Chamber remains active in assisting the Government in 
formulating policies.  It has participated  regularly in the national IFNSC meetings. 
14. Solomon Islands holds the view that regional inte gration is vital for its incorporation into the 
world economy.  It also endorses the approach th at economic and trade cooperation arrangements 
with its developed trading partners  should build on the regional integr ation initiatives.  On the other 
hand, the authorities state that benefits from the mu ltilateral trading system are limited.  The market 
access gains from WTO negotiations are considered to  be minimal, as most of its exports already 
receive duty-free access either on an MFN basi s or under regional and unilateral preference 
programmes.  While the authorities are aware of Solomon Islands' WTO obligations, the lack of 
institutional capacity has prevented them from fully implementing its WTO commitments. 
15. The Government attaches importance to capacity  building for trade negotiation.  The Policy 
Translation and Implementation Framework document adopted in February 2008 underlines the need 
to strengthen technical capacity of officials to engage actively in trade negotiations.  The Medium 
Term Fiscal Strategy and the Me dium Term Development Strategy (MTDS) outline the Government's 
development priorities from 2008 to 2010. 
(4) FOREIGN INVESTMENT REGIME  
16. Solomon Islands has liberalized and simplified its  foreign investment regime since its last 
Review.  The Government recognizes that FDI can make an important contribution to accelerating economic development.  The policy goals outlined  in the Policy Translation and Implementation 
Framework document underline the need for creating a sound investment climate in the country.  The 
strategies to achieve this include improving company laws, eliminating all business licence 
regulations, improving the business registration proce dure, and further reviewing the Investment Act 
to improve investment approvals. 
17. At present, the Government has neither an inv estment promotion agency nor a one-stop-shop 
facility for foreign investors;  it has undertaken a number of studies to appraise the merits of establishing such an agency. 
18. The previous Foreign Investment Act and regulations could not create a favourable 
environment for FDI:  the procedures for approval we re lenghty and lacked transparency;  and the list 
of activities reserved for nationals was long.  My riad licences and permits were also required, 
especially to ensure that there was no encroachment into activities reserved for Solomon Islanders. 
19. A review of foreign investment legislation w ith a view to facilitating and encouraging FDI, 
resulted in the adoption of a new Foreign Investment Act in 2005.  New foreign investment 
regulations became operational with the entry into  force of the Foreign Investment Act in 2006. 
20. A significant change under the new Act was the abolition of the Foreign Investment Board, 
which had been the approval body for foreign inv estment proposals, under the chairmanship of the 
Prime Minister.  The 2005 Act provides for a registra tion system under a Registrar.  The Registrar is 
the ex-officio Director of the Investment Division of the Ministry of Commerce, Industries, Labour 
and Immigration, and is accountable to the Minister in charge of this Ministry.   
21. The Registrar issues a certificate of registrati on upon application by a foreign investor, and 
monitors compliance by the foreign investor with the Act and regulations.
2  The Registrar is also 
                                                      
2 A certificate of registration may be issued for more  than one investment activity.  A foreign investor 
may hold more than one certificate of registration at any given time.  Solomon Islands WT/TPR/S/215 
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mandated to review the reserved list and advise th e Government on activities that should be included 
in the reserve list.  The Registrar sends a monthly no tification to the Minister of all foreign investment 
activity registered during the month. 
22. Another important change under the Foreign Inv estment Act 2005 is the streamlining of the 
procedures for regulation of foreign investment.  Fo r instance, the Registrar is required to issue a 
certificate of registration within five days of r eceipt of the application by a foreign investor.  The 
Registrar may cancel a certificate of registration on certain grounds, including where a foreign investor has not commenced an investment activity within 12 months of receiving the certification of 
registration.  The Registrar also has the authority to refuse or cancel a certificate of registration.   
23. The new regulations reduced the number of investment activities on the reserved list from 54 
to 14.  Cabinet approval is required to make any cha nges to the list.  The reserved list of investment 
activities, which is specified in Schedule 2 of th e Foreign Investment Regulations 2006, comprises:  
(i) cultivating plant crops exclusively for sale on th e domestic market;  (ii) timber milling operations 
producing not more than 2,500 cubic metres of sawn ti mber per year;  (iii) retail trading of household 
goods and services on premises of less than 200 squa re metres;  (iv) producing handicrafts and 
cultural artifacts;  (v) operating buses, taxis, and hire  car services;  (vi) farming of livestock for sale 
exclusively for the domestic market;  (vii) gatherin g of wild forest products for sale exclusively for 
the domestic market;  (viii) laundry services not part of hotels;  (ix) restaurants, cafes, and other eating 
and drinking business other than specialty business, operating within an area of less than 25 square 
metres;  (x) market vending and roadside stalls;  (xi) domestic help services;  (xii) static guarding 
services for offices and domestic dwellings with l ess than 20 employees;  (xiii) office and lawn 
cleaning services not associated with hotels;  and (xiv) customs clearing agents.  There are no 
maximum foreign ownership limits pe rtaining to foreign investment. 
24. The Investment Facilitation Committee, under the chairmanship of the Minister for 
Commerce, Industries, Labour and Immigration, was created under the 2005 legislation.  The other 
members of the Committee include: the Minister for Finance and Treasury;  the Governor of the 
Central Bank;  and the Permanent Secretary of the De partment responsible for administering the Act.  
The Committee's main functions are to make it easier for foreign investors to conduct their investment, and to review decisions of the Registra r in case of refusal or cancellation of a certificate 
of registration.  The Committee may also assist the foreign investor by liais ing with a government 
department, agency or officer to resolve issu es or disputes relating to the investment.   
25. Most land in Solomon Islands is held communa lly, which makes it difficult to establish clear 
title on land ownership.  Moreover,  foreign nationals and foreign-owned companies may not purchase 
land, but may lease it from government or land-hold ing groups.  Under the Medium Term Fiscal 
Strategy, 2008-13, the Government is commited to investigating arrangements for land ownership that 
maintain the rights of legitimate landowners while creating an environment conducive to investment 
in land-based assets.  It is also committed to co mpleting the land recording and registration process 
and investigating ways in which landowners can use land as an assest for investment and economic 
growth. 
26. Solomon Islands does not have any double taxa tion avoidance agreements.  Nor does it have 
any bilateral investment promotion and protection treaties.   
27. The foreign investment legislation provides fore ign investors with specified rights, including 
entitlement to repatriate dividends and profits.  No restrictions ar e placed on remittances of dividends, 
profits, and other earnings (net of tax) of non-resi dents.  Exchange control in Solomon Islands is WT/TPR/S/215 Trade Policy Review 
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regulated and administered by the Central Bank in  accordance with Exchange Control Act (1977) and 
policies.   
28. The Foreign Investment Act 2005 also provid es for compensation for compulsory acquisition 
of property.  Foreign investors also have the right to judicial review of the compensation fixed by the 
Government. 
29. Foreign investors are eligible for a number of incentives, mainly through the Ministry of 
Finance and Treasury (Chapter III(2)(iv), (3)(iii), a nd (4)(iii)).  However, provincial governments 
exercise considerable discretion in allowing FD I, including through provincial business licensing 
requirements (Chapter III(4)(i)).  This constraint  coupled with poorly defined property rights and 
political instability pose a serious challenge in attracting FDI into Solomon Islands. 
30. Solomon Islands is a member of the Internati onal Centre for the Settlement of Investment 
Disputes (ICSID)3;  investment disputes are thus subject to  the ICSID.  Solomon Islands is also a 
member of the Multilateral Investment Guarantee Agency (MIGA), and the World Association of 
Investment Promotion Agencies (WAIPA). 
(5) INTERNATIONAL RELATIONS  
(i) Participation in the WTO 
31. Solomon Islands became a Member of the WTO on 26 July 1996.4  I t  i s  t h e  o n l y  L D C  
Member of the WTO from th e Pacific Island countries.5  In the absence of a resident Mission in 
Geneva, the multilateral trade interests of Solomon Islands are represented and pursued by its Mission 
based in Brussels, with support from the Geneva Offi ce of the Pacific Island Forum Secretariat.   
32. Solomon Islands' authorities have stated that thei r interest in the multilateral trading system is 
limited.  The market access gains from WTO negotiations  are considered to be minimal as most of its 
exports already receive duty-free access either on an MFN basis or under regional and unilateral 
preference programmes.  The authorities are aware of Solomon Islands' WTO commitments but many of them remain to be implemented (see Chapter III).   WTO obligations require specific legislation to 
be given effect.   
33. Solomon Islands is one of the six LDC WTO Members that has bound 100% of its tariffs 
(see Chapter III(2)(iv)).  It undertook both horiz ontal and sector-specific commitments under the 
GATS, but is yet to submit an initial services offer in the context of the DDA negotiations.  In this 
regard, the Ministerial Declaration adopted in Hong Kong (2005) acknowledged that LDCs are not 
expected to undertake any new commitments in the DDA negotiations.
6   
34. Solomon Islands is not a signatory to any of the WTO plurilateral trade agreements.  It has 
never invoked the dispute settlement provisions of th e WTO, no complaints have been brought against 
it, and it has not exercised its right to participate as a third party in any dispute.  Solomon Islands 
accords at least MFN treatment to all, including non-WTO, trading partners. 
                                                      
3 It signed the Convention in  1979, and acceded in 1981. 
4 It was a de facto  GATT contracting party after Independence in  1978, because of its past protectorate 
status with the United Kingdom. 
5 Four Pacific Island countries ar e Members of the WTO:  Fiji, Pa pua New Guinea, Solomon Islands, 
and Tonga;  Samoa and Vanuatu, which are al so LDCs are in the accession process. 
6 WTO document WT/MIN(05)/DEC, 22 December 2005. Solomon Islands WT/TPR/S/215 
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35. Since the establishment of the WTO, Solomon Islands has made only three notifications, 
including joint notifications:  under the Agreement on Sanitary and Phytosanitary Measures (SPS), the 
authorities notified Solomon Islands' enquiry point7;  under the provisions of the Enabling Clause, 
Solomon Islands, jointly with Fiji, Papua New Guinea, and Tonga, notified the Pacific Island 
Countries Trade Agreement (PICTA), in September 20088;  and Solomon Islands was a party to a 
notification made by Papua New Guinea in 1999 w ith regard to the Melanesian Spearhead Group 
(MSG) Trade Agreement.9 
36. While not an active participant in the DDA negotiations, Solomon Is lands is one of the 
proponents of the Work Programme on Small Econom ies, and has joined other small, vulnerable 
economies (SVEs) in co-sponsoring a number of pr oposals in the negotiations.  In the rules 
negotiations, Solomon Islands has co-sponsored two SVEs submissions seeki ng appropriate special 
and differential treatment in any disciplines on fisheries subsidies.10  In the trade facilitation 
negotiations, Solomon Islands has co-sponsored a pro posal that seeks to allow SVEs that are members 
of a customs union or RTA to establish enquiry points at the regional level.11 
(ii) Participation in regional a nd other trade arrangements 
(a) Regional agreements in force 
37. Solomon Islands does not have, nor is it negotiatin g, any bilateral trade agreements.  It is, 
however, party to several regional trade and economic  cooperation arrangements:  the Pacific Islands 
Forum, the Pacific Agreement on Closer Economic Relations, the South Pacific Regional Trade and 
Economic Cooperation Agreement, the Melanesi an Spearhead Group Trade Agreement and the 
Pacific Island Countries Trade Agreement;  only the la tter two contain specific provisions to liberalize 
trade flows. 
Pacific Islands Forum 
38. Solomon Islands is a member of the Pacific Is lands Forum (PIF), formerly the South Pacific 
Forum.  The Forum, founded in 1971, is the political and economic policy organiza tion in the Pacific;  
it comprises 16 independent and self-governing states.12  Forum leaders meet annually;  at the most 
recent Forum, in August 2008, the parties reiterated  the priority they give to trade and economic 
integration processes, and the importance of an ambitious and successful conclusion of the Doha 
Development Round as soon as possible.  The Forum tr ade ministers also meet on a regular basis. 
39. Regional cooperation and integra tion efforts by Forum members are pursued on the basis of 
the Pacific Plan, which is revised periodically refl ecting the decisions of Forum leaders.  Regional 
initiatives for the first three years of the Plan (2006-08), included:  (i) expansion of the market for 
trade in goods;  (ii) integration of trade in servi ces, including temporary movement of labour into the 
                                                      
7 WTO document G/SPS/ENQ/12, 4 July 2001. 
8 WTO document WT/COMTD/N/29, 17 September 2008. 
9 WTO document WT/COMTD/N/9, 7 October 1999. 
10 WTO documents TN/RL/GEN/57/Rev.2, 13 September 2005;  and TN/RL/W/210/Rev.2, 
22 June 2007. 
11 WTO document TN/TF/W/129/Rev.1, 21 July 2006. 
12 Australia, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, New Zealand, Niue, 
Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and 
Vanuatu.  New Caledonia and French Polynesia were gr anted associate membership in 2006.  Current Forum 
Observers include Tokelau (2005), Wallis and Futuna  (2006), the Commonwealth (2006), and the Asian 
Development Bank (ADB).  Timor Le ste is a special Observer (2002). WT/TPR/S/215 Trade Policy Review 
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PICTA and the EPA;  (iii) effective implementa tion of the Regional Trade Facilitation Programme 
(section (6) below);  and (iv) investigation of  the potential impact of expanding PACER into a 
comprehensive framework for trade (including  services) and economic cooperation.  The PIF per se  
does not provide for the granting of trade preferen ces, but two regional integration processes which do 
provide for such preferences, namely PICTA a nd PACER (see below), were initiated under the 
auspices of the PIF. 
MSG Trade Agreement 
40. Solomon Islands (with Papua New Guinea a nd Vanuatu) is one of the three founding 
members of the Melanesian Spear head Group (MSG) Trade Agreement, which entered into force in 
July 1993.  Fiji ratified the Agreement in Apr il 1998, and since 2006 has been providing duty-free 
access to all goods originating from MSG countr ies except those expressly excluded in the 
Agreement.13  The Agreement initially covered duty-free entry of a few products from each member: 
meat and tuna from Papua New Guinea, beef and tea from Solomon Islands, and canned tuna and tea 
from Vanuatu.  Over the years, the coverage has gr own to over 180 tariff lines.  However, due to 
pressure from domestic industries, tensions in th e Group have led to import bans on each others 
products.  The MSG Trade Agreement was revised in  October 2005 to adopt a negative list approach 
to liberalization of trade in goods.  The rules of or igin under the agreement are considered to be less 
onerous than those of PICTA.  A further revision of the agreement is being considered to include 
trade in services and labour mobility provisions. 
SPARTECA 
41. Solomon Islands takes part in the South P acific Regional Trade and Economic Cooperation 
Agreement, which entered into effect for most Fo rum Island countries (FICs) in 1981.  SPARTECA is 
a non-reciprocal trade agreement under which Austra lia and New Zealand offe r concessional market 
access for products from the 14 FICs.14  The agreement also includes provisions for general economic, 
commercial and technical cooperation, and safeguard  provisions relating to dumped and subsidized 
goods and suspension of obligations.  Between 1981 and the late 1990s Australia and New Zealand 
progressively introduced duty-free and unrestricted access to a wide range of products from FICs;  
since the late 1990s, they have been providing dut y-free and unrestricted access to all FIC products.  
To qualify for concessional access, goods  must meet the rules of origin  set out in SPARTECA.  
However, these are considered complex and the FICs have asked for them to be reviewed, in order to 
improve market access to Australia and New Zealand.15 
PICTA 
42. Solomon Islands is a party to the Pacific Is land Countries Trade Agreement, which entered 
into force on 13 April 2003 after six FICs ratified the agreement.16  Solomon Islands ratified the 
Agreement on 02 June 2003.  PICTA seeks to gra dually establish a free-trade area among the fourteen 
                                                      
13 These include Chapter 22 – beverages, spirits and vinegar, all products except items described in HS 
Tariff code 2201, 2202, and 2209;  Chapter 24 – tob acco and manufactured tobacco substitutes; Chapter 27 – 
mineral fuels, mineral oils and products of their distilla tion; bituminous mineral waxes; and cane sugar HS Code 
1701.1100. 
14 Cook Islands, Fiji, Federated States of Micrones ia, Kiribati, Marshall Islands, Nauru, Niue, Palau, 
Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu, and Western Samoa. 
15 In general, they require at least 50% of the product's total factory cost to be from the SPARTECA 
parties. 
16 Cook Islands, Fiji, Nauru, Niue, Samoa, and Tonga. Solomon Islands WT/TPR/S/215 
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FICs;  six have so far passed necessary legislation to commence trading under PICTA.17  The PICTA 
covers trade in goods, but excludes trade in alcohol  and tobacco products.  The agreement stipulates a 
timeframe for progressive phasing out of tariffs.18  It also allows for a reserve list of excepted imports, 
which are subject to longer time-frame for tariff elimin ation.  The small island states as defined in the 
agreement, as well as LDCs, enjoy additi onal flexibility in phasing out of tariffs.19  Due to 
autonomous tariff liberalization, Solomon Islands is ahead of other parties in lowering import tariffs.  
Negotiations to expand PICTA to cover trade in ser vices and temporary moveme nt of natural persons 
are expected to be completed towards the end of 2009.  Studies are also being conducted on the 
possibility of including government procurement in PICTA and the creation of a Pacific Single 
Market and Economy to promote deeper integration. 
PACER 
43. Solomon Islands is a member of the Pacific Agreement on Closer Economic Relations.  The 
agreement, which entered into force in 2002, is a framework agreement for the gradual integration of 
the FICs economies.20  It does not contain substantive trade liberalization provisions;  rather it is 
intended to provide "stepping stones" to allow the FI Cs to gradually become part of a single regional 
market.  However, the PACER provides for the esta blishment of reciprocal free-trade arrangements 
between the FICs and Australia a nd New Zealand by 2011.  The agreement also stipulates that if any 
FIC commences formal negotiations for free-tr ade arrangements with a developed non-Forum 
country, then the FIC must offer to undertake cons ultations with Australia and New Zealand with a 
view to commencement of negotiation of free-tr ade arrangements ("PACER plus" negotiations).  
Because of this "third-party MFN clause", it is lik ely that the conclusion of  EPAs between the PACP 
countries and the EC will initiate reciprocal free-tr ade agreements between FICs and Australia and 
New Zealand before 2011.  The Pacific Island Forum Tr ade Ministers' meeting in July 2008 instructed 
its officials to formulate a detailed roadmap on "PAC ER Plus".  The PACER is expected to subsume 
SPARTECA once a Forum-wide free-trade agreement is in place.  
(b) Other trade arrangements 
44. Solomon Islands' trade relations with the EC are governed primarily by the ACP-EC Cotonou 
Agreement, signed on 23 June 2000 for a period of 20 years.21  The Cotonou Agreement builds upon 
three interlinked pillars: an enhanced political di mension;  economic and trade cooperation;  and 
development and finance cooperation.  Under th e economic and trade cooperation, ACP countries 
benefited from non-reciprocal trade pref erences during an interim period 2001-0722, following which 
the unilateral preferences were to be replaced by reciprocal Economic Partnership Agreements 
between the EC and the ACP countries on 1 January 2008.  Most Pacific ACP states were unable to meet this deadline.  However, Solomon Islands, as an LDC, is eligible for non-reciprocal duty-free 
and quota-free market access to the EC under the "Everything But Arms" initiative adopted in 2001. 
                                                     
 
17 Cook Islands, Fiji, Niue, Samoa, Solomon Islands, and Vanuatu 
18 All FICs are required to eliminate non-tariff ba rriers immediately.  For products to qualify under 
PICTA, they must meet 40% local-content criteria. 
19 The small island states include Cook Islands, Kiribati, Nauru, Niue, Palau, Republic of Marshall 
Islands and Tuvalu.  The LDCs are Solomon Islands, Kiribati, Samoa, and Vanuatu. 
20 At end 2007, Australia, New Zealand, Fiji, Cook Islands, Kiribati, Nauru, Niue, Papua New Guinea, 
Samoa, Solomon Islands, and Tonga had ratified the Agreement. 
21 The Cotonou Agreement replaces th e Lome Convention (1975-2000), a nd entered into force in 2003. 
22 The WTO Waiver for this Agreement expi red on 31 December 2007 (WTO document 
WT/MIN(01)/15, 14 November 2001). WT/TPR/S/215 Trade Policy Review 
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45. The Pacific ACP (PACP)-EC Economic Partne rship Agreement (EPA) negotiations were 
launched in September 2004, in line with the Cotonou Agreement and based on a joint road map 
adopted by the ACP Council of Ministers and the EC.23  Out of the 14 PACPs that are negotiating an 
EPA with the EC, only Fiji and Papua New Guinea had initialed Interim EPAs  by 31 December 2007.  
The Interim EPA provides duty-free and quota-fr ee access on all products except sugar and rice, 
which are subject to longer transitional periods.  Other benefits of the Interim EPA include improved 
sectoral rules of origin, especially for fishery products  (canned fish), agri-processing, and textiles.  All 
the PACPs are currently negotiating a comprehens ive EPA with the EC, which may be finalized 
during 2009 if all the issues of interest to both parties are resolved.  Th e authorities in Solomon 
Islands are of the view that the EPA should reflect  the differing circumstances and economic interests 
of all the PACPs.  Solomon Islands has also under scored the need for infant industry protection to 
survive in the competitive global trading environment.   
46. Solomon Islands is eligible for the Generalized System of Preferences (GSP) schemes of most 
developed Members of the WTO.  However, many ar e barely used, mostly due to the composition of 
its exports, which are MFN duty-free in some marklets or attract low MFN duties. 
(6) AID FOR TRADE AND TECHNICAL ASSISTANCE  
47. The Aid for Trade initiative was launched at the Hong Kong Ministerial Conference in 
December 2005, where Ministers agreed that Aid fo r Trade should aim to help developing countries, 
particularly LDCs, to build the supply-side capacity  and trade-related infrast ructure needed to help 
them to implement and benefit from WTO Agreemen ts and more broadly to expand their trade.24  
Since then the WTO, in collaboration with OECD , the World Bank, UNDP, UNIDO, ITC, and several 
regional development banks, has been strengthening the global monitoring of Aid for Trade, and in 
particular monitoring its implementation and impact .  The first global aid for trade review took place 
in November 2007.  Efforts have been intensified to identify the needs within recipient countries.  In 
this regard, a Partner Country Questionnaire on Aid fo r Trade has been developed and will need to be 
completed by beneficiary countries, including Solom on Islands.  The objectives of this questionnaire, 
inter alia , are to help governments better identify th e gaps between needs and actual support.  The 
responses to the questionnaires will feed into the next Global Review of Aid for Trade, to be held in 
the WTO in July 2009. 
48. According to the OECD DAC database, overall ODA disbursements to Solomon Islands have 
increased significantly since its last Review.  Solomon Islands received US$178 million in 2006, up 
from US$20 million in 1999.25  Moreover, all disbursements in 2006 were in the form of grants.  The 
OECD Creditor Reporting System (CRS) database is  being used to track proxies of aid-for-trade 
volumes.26  In this regard, ODA commitments to So lomon Islands increased from US$0.8 million in 
2002 to US$19 million in 2005, mostly in the categ ory of building productive capacity, followed by 
economic infrastructure.  The category of trade policy and regulations did not receive any ODA 
commitment during 2002-05. 
49. The 14 FICs are also in the process of identifyi ng and prioritizing thei r trade and development 
needs based on the six categories identified under the Aid for Trade initiative.  The final objective is 
                                                      
23 European Commission (2004). 
24 WT/AFT/1. 
25 OECD online information.  Viewed at:  http//:stats.oecd.org.  The low figure from the late 1990s to 
early 2000 might be attributed to the precariou s situation of the country due to civil unrest. 
26 The CRS are used to track "proxies" of aid-fo r-trade volumes based on the categories identified by 
the WTO Task Force on Aid for Trade.  These proxies ar e covered by the CRS under the headings:  trade policy 
and regulations;  economic infrastructu re (energy, transport & telecoms);   and building productive capacity. Solomon Islands WT/TPR/S/215 
 Page 19 
 
 
to establish a Pacific Trade and Development F acility (PTDF) under which all donors, including 
WTO Members will be requested to contribute.  The PTDF will seek to ensure that resources are used 
to address PACPs' regional and national needs in an  effective and timely manner and with minimum 
duplication. 
50. Solomon Islands has also benefitted from a range of trade-related technical assistance 
activities from a number of sources.  It benefits  from the Pacific Regional Economic Integration 
Programme (PACREIP), an EU funded five-year programme.  This focuses on improving the capacity 
of PACP countries to identify their interests in the negotiations and to negotia te effectively in pursuit 
of those interests in the WTO.  This programme funds the Pacific Island Forum Secretariat in Geneva, 
which was established in March in 2004, enabling the PACP countries to participate in the WTO 
negotiations and to defend their interests in the ongoing negotiations under the DDA. 
51. Solomon Islands is also a beneficiary of the Regional Trade Facilitation Programme (RTFP), 
designed for the Forum Island Countries and funded by  Australia and New Zealand.  This programme, 
which comprises a customs component, a quarantine component, and a standards & conformance component, began in 2005 under the um brella of PACER and will continue for five years.  The RTFP 
is managed and coordinated by the Pacific Island Forum Secretariat.  
52. Between 1 January 1999 and 31 December 2008, Solomon Islands participated in 
130 technical assistance activities undertaken by the WTO Secretariat, including regional seminars 
and workshops, regional training courses, Geneva -based trade policy courses, and a few national 
training activities on specific topics.  These activities have covered a broad range of WTO subjects.  
The WTO Reference Center in Solomon Islands w as updated in 2004.  Solomon Islands has been a 
regular participant at the Geneva Weeks organized twice a year by the WTO Secretariat to brief non-
resident Members and observers on the negotiations and other WTO activities. 
53. Solomon Islands is a beneficiary of the Enha nced Integrated Framework (EIF) for trade-
related technical assistance.  The Government is  committed to the EIF, and has put in place the 
necessary institutional structure to faciliate the EI F process.  The National Implementation Unit (NIU) 
was set up with three full-time staff.  The Director of Trade at the Ministry of Foreign Affairs and 
External Trade acts as a focal point, while the EC  representative in Solomon Islands has assumed the 
role of Donor Facilitator.  The IF National Steer ing Committee (IFNSC) was established in late 2007 
and comprises representatives from government agen cies, private sector, and other stakeholders 
related to trade.  In practice, the national IFSC has become the body overseeing the country's 
international trade matters. 
54. The Diagnostic Trade Integration Study (DTIS), prepared under the EIF, was discussed at the 
national validation workshop held in December 2008.   In late January 2009, the DTIS was being 
finalized, reflecting the comments re ceived from the IF core agencies during the validation workshop.  
The DTIS, which helps the Government to integrate trade into its national development plans, should 
enable the Government of Solomon Islands to source aid for trade funding for the actions identified in 
the DTIS Action Matrix.  A number of government  agencies hope to benefit from the post-DTIS 
phase of the EIF.