Solomon Islands Free Trade Agreement

The government often consults with the private sector through the Chamber of Commerce, represented on the PSRC. There is no independent legal body that advises or reviews the government on trade-related policies, including the provision of customs and other aid to industry. The structural reform programme announced by the Government in October 1997 aims to steer the economy towards sustained economic growth, managed by the private sector. The reform programme focuses on economic reforms, including macroeconomic stabilization policies and microeconomic measures to increase productivity and competitiveness, as well as measures to redirect and mobilize resources from the public to the private sector. There is a clear need for external and internal financial balance, for an adequate monetary and fiscal policy aimed at achieving low inflation and interest rates, an increase in employment, a stable exchange rate and a reduction in the balance of payments deficit. Microeconomic reforms include trade and investment policies, tariffs and taxation, as well as sectoral policies focused on improving the transparency of investment policies; accelerate tariff reductions for goods and services traded between Forum Island countries; and review the guidelines for the adoption of tariffs. These trends are expected to continue during 1998 and 1999. The short- and medium-term outlook for Solomon Islands is not encouraging, given that the economy is heavily dependent on international trade with Asia and that the ongoing crisis in Asia will have a negative impact on Solomon Islands export demand and prices, as well as on economic growth in general. The promotion of free movement and the promotion of closer relations will remove or eliminate barriers to the exchange of goods and services between Solomon Islands and its main trading partners.

Enhanced cooperation is expected to generate benefits across borders, increase the competitiveness of Solomon Islands` goods and services, create business opportunities for Solomon Islands businesses and enable Solomon Islands to cross borders to live and work, to increase their knowledge and skills. While there are no production subsidies in Solomon Islands, tax incentives are granted to investment and production. In addition to the discretionary use of the benefits of commercial and excise duties, there are income tax deductions and other tax incentives, such as special depreciation and accelerated depreciation provisions. Many of these measures reflect national policies to attract export-oriented investment. These incentives, currently under consideration, continue to undermine the already narrow tax base. It is doubtful whether such incentives will be effective. One of the main tasks of the Department is to manage the various trade negotiations under discussion and the trade negotiations agreed at the regional and multilateral levels. The EU signed an interim EPA with Papua New Guinea and Fiji in 2009, the spokeswoman said, adding that the agreement was open to accession by other Pacific island states on the basis of a WTO-compliant market access offer. The Forum`s Trade Ministers` Meetings are the main decision-making body for the 18 member States of the Regional Trade and Investment Forum. .

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