Trade Policy for the Republic of the Marshall Islands.

The key objective of the Trade Policy is to enhance the participation of the private sector in the economy and promote export-led sustainable economic growth and self reliance with the ultimate objective of creating employment, alleviating hardship and raising the living standards of Marshallese citizens. The Trade Policy Framework is divided into ten Chapters. Chapter one gives the background including the rationale for a Trade Policy Framework, its vision and sets the context in which the Trade Policy Framework is being formulated. The Vision is defined as follows: To mainstream trade into the national development plan, create an environment conducive for trade and investment, secure Aid for Trade to build capacity on trade and address supply-side constraints and infrastructural services to enable the private sector to produce quality and competitive goods and services that can be traded globally, thereby enhancing the capacity of RMI to participate effectively in, and benefit from trade, and stimulate sustainable economic growth and development ; with the ultimate objective of achieving fiscal sustainability, creating employment, al leviating poverty and raising the standards of living for the Marshallese people.
Chapter two details how the RMI economy has been performing and what needs to be done to ensure that trade is fully mainstreamed into the national development plan to promote sustainable and inclusive economic growth and development. In particular, the Trade Policy provides some recommendations on what needs to be done to promote private sector development and exported economic growth. This is very important in light of the fact that economic growth is primarily driven by a large public sector, which depends heavily on declining Compact grants. The Trade Policy will also assist RMI to cope with changes in the global economy.
Chapter three deals with trade policy by sector and examines how the three priority sectors (agriculture, fisheries and tourism) have been performing and what needs to be done to improve trade in these sectors. It is clear that the fisheries sector as well as the tourism sector have potential for further growth, while the agricultural sector has a number of well-known challenges that need to be addressed. If these challenges are addressed, RMI will be able to increase production of agricultural products for the local market and export a few niche agricultural products such as value added coconut products, nin and pandanus products
Chapter four deals with RMI’s participation in international trade. According to available statistics, it is clear that RMI has a huge trade deficit and imports continue to increase while exports are still very small. The Trade Policy recommends a number of measures that could be taken to promote exports of goods and services. As mentioned in chapter three, fisheries and tourism have potential to boost exports and should be prioritized and supported. RMI also needs to improve its human resources, including vocational skills that are required to promote trade and turn the economy around. Improving vocational skills could also help RMI to fully utilize the preferential arrangement it has with the U.S. on labour mobility and to improve the flow of remittances to RMI.
Chapter five deals with the investment climate in RMI. Investment has been identified as a key sector that needs comprehensive reform in order for RMI to be able to produce goods and services that can be traded competitively. The Trade Policy makes it clear that without some bold reforms on relevant laws governing investment including immigration, labour, land and taxation laws, it will be very difficult for RMI to participate meaningfully and benefit from international trade and foreign direct report on the ease of doing business need to be reviewed carefully and implemented accordingly to improve the investment climate in RMI.
Chapter six highlights the importance of trade in services and what needs to be done for RMI to participate actively in trade in services. It also recommends RMI to take urgent measures to improve the efficiency and quality of services provided as this is critical to ensure competitiveness in the global economy. Services such as transportation, communications, education, business services, financial services, energy and health play a vital role in the production of goods and services for the local as well as the export market. The Government will work with all the stakeholders to provide the key infrastructure and undertake the necessary reforms in the services sector to enhance the capacity of the private sector to participate in trade in services. This will also contribute to reducing the cost of doing business in RMI and enable the private sector to produce goods and services that can be traded in a competitive manner. To this end, policies and laws dealing with services reforms including liberalization of trade in goods and services will be addressed simultaneously in order to maximize the benefits of reform and trade liberalization.
Chapter seven identifies some of the trade-related issues such as taxation, competition, Government procurement, intellectual property rights (especially traditional knowledge and biodiversity), corporate governance that need to be addressed in order to create a good business environment for trade and investment. The chapter also focuses on the need for RMI to ensure that trade is undertaken in a manner that does not undermine the environment. The issues pertaining to trade and environment, including climate change will also be taken into account. There is also a need for RMI to ensure that trade benefits the Marshallese people, including the vulnerable and disadvantaged groups such as women and unemployed youths.
Chapter eight is one of the most important sections dealing with ongoing trade negotiations and market access. It provides some recommendations and guidelines on what needs to be done in the various trade negotiations. In particular, RMI is urged to participate in regional integration through the Pacific Island Countries Trade Agreement (PICTA), which is now being extended to trade in services and labor mobility as directed by the Leaders under the Pacific Plan. The Trade Policy also recommends RMI to participate actively in the Economic Partnership Agreement (EPA) negotiations with the European Union (EU) and consider signing the comprehensive EPA to promote its fisheries exports to the EU.
Chapter nine deals with Aid for Trade. The Trade Policy identifies RMI’s national Aid for Trade needs and priorities that should be supported by the Government, donors and trading partners in order to ensure that trade promotes sustainable development in RMI. RMI will improve its coordination of donor funds and ensure that all the Aid for Trade into RMI is coordinated effectively and channelled towards the priorities identified in the Implementation Matrix.
Chapter ten provides key recommendations on how the Trade Policy should be implemented. The Government is urged to allocate funding to priority sectors identified in the Trade Policy, undertake the necessary reforms and work with trade and development partners to secure Aid for Trade to implement its Trade Policy Framework. This section identifies the agencies that are responsible for implementing the Trade Policy, the timeframe involved, the funding required and the annual progress reports for the Government to be able to assess whether the objectives of the Trade Policy are being achieved and what needs to be done to improve its implementation. T
The text consists of 10 Chapters as follows: Background and Introduction (1); The Macro-Economic Environment (2); Trade Policy by Sector (3); Participation of RMI in Merchandise Trade (4); The Marshall Islands Investment Regime (5); Participation of RMI in Trade in Services (6); Trade-Related Issues (7); Market Access and Trade Negotiations (8); Aid for Trade (9); Recommendations and Implementation (10).