Micronesia

Micronesia is a beneficiary of the Standard GSP. With a per capita income of $4,084 in 2023, the World Bank classifies Micronesia as a lower middle-income country. Total EU imports from Micronesia amounted to about €624,000 in 2023. Given the low export amounts, the country uses GSP preferences only to a very limited amount, and preferential imports in 2023 were less than €10,000.

What is the GSP?

The Standard GSP targets developing countries that are classified by the World Bank as lower or lower-middle income countries and which do not have equal preferential access to the EU market through any other arrangement. Standard GSP beneficiary countries can benefit from duty suspension for non-sensitive products as well as duty reductions for sensitive products across approximately 66% of all EU tariff lines.

At a glance: EU preferential imports from Standard GSP beneficiary countries (2023, € million)

group

0.1M (2023)

Population

account_balance

Federal Republic

Government

trending_up

0.8% (2023)

GDP Growth

equalizer

6.2% (2023)

Inflation

money

$ 0.5B (2023)

GDP

Facts about Micronesia's economy

Island Economy

Micronesia is a small island nation in the western pacific that consists of more than 600 islands. This fragmentation and the remote location pose significant challenges to the countries' economic and social development. Subsistence farming and fishing remains the main economic activity for the majority of the population.

Export Products

Micronesia's most dominant export products are fresh and frozen fish, including for example skipjack, tuna, anchovies, and different kinds of crustaceans.

Trade Partners

Micronesia's imports originate mainly from China and the US.

Economic Structure

The service sector (67% of GDP in 2023), mainly driven by government services such as the sale of fishing licenses, is an important source of income for the economy which is otherwise mainly driven by small-scale farming and fishing. The main agricultural products are taros, coconuts, bananas, and breadfruit.

Usage of GSP Preferences

Although about 87% of EU imports from Micronesia were eligible for duty reductions granted by the Standard GSP in 2023, Micronesia's utilisation rate stood at less than 2%.

Trade with the EU

Total trade with the EU amounted to €3 million in 2023.

Micronesia and the EU

Imports from Micronesia by product section (2023, € million)

Imports from Micronesia over time (€ million)

MICRONESIA AND THE EU GSP

Economic Impact

82%

Share of Micronesia's exports to the EU that were eligible for GSP preferences in 2023.

2%

Micronesia's preference utilisation rate in 2023.

18%

Share of zero-duty imports from Micronesia.

Preference utilisation and export diversification

EU imports from Micronesia (€ million)

Preference utilisation (%) vs. total eligible imports (in € million)

EU imports from Micronesia are small and thus vary considerably from year to year. Micronesia’s preference utilisation rate tends to be low, primarily in response to the limited exports to the EU overall. With preference eligible exports being at about €0.5 million and a utilisation rate of 3% in 2023, the value of preferential imports from Micronesia was below €10,000.

The largest product sections under the GSP (€ million, 2023)

The value of imports from Micronesia is minuscule. GSP preferential imports from Micronesia are limited to the import of fish and crustaceans. While overall EU imports from Micronesia diversified in the last decade, both on the product and the sectoral level, this trend is not reflected in the preferential imports. Fish and crustaceans are the only product group currently imported using preferential duties. About 90% of eligible imports in this section make use of preferential access to the EU market. Other imports from Micronesia include machinery and manufactures, however, currently no preferences are used for these sections. 100% of clothing and textile articles imported from Micronesia are eligibile for GSP preferences, yet the utilisation rate is 0%.

SUSTAINABLE DEVELOPMENT

Micronesia has ratified 2 of the 8 fundamental UN conventions on human rights but none of the core ILO conventions on labour standards. As a beneficiary of the Standard GSP, Micronesia's preferential access to the EU market is not conditional on the ratification of international conventions. In addition, Micronesia has ratified 6 conventions on environmental protection and 4 conventions that address good governance issues, including drug trafficking and corruption.

Core international conventions on human rights and labour standards

Ratified

Convention on the Elimination of All Forms of Discrimination Against Women (1981)
Convention on the Rights of the Child (1990)

Not Ratified

Convention on the Prevention and Punishment of the Crime of Genocide (1948)
International Convention on the Elimination of All Forms of Racial Discrimination (1969)
International Covenant on Civil and Political Rights (1976)
International Covenant on Economic Social and Cultural Rights (1976)
Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
Convention concerning Forced or Compulsory Labour, No 29 (1930)
Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
Convention concerning the Abolition of Forced Labour, No 105 (1957)
Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Additional Conventions

Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
Convention on Biological Diversity (1992)
The United Nations Framework Convention on Climate Change (1992)
Stockholm Convention on persistent Organic Pollutants (2001)
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
United Nations Single Convention on Narcotic Drugs (1961)
United Nations Convention on Psychotropic Substances (1971)
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
United Nations Convention against Corruption (2004)

EU-Micronesia Bilateral Development Cooperation

DG INTPA

Access all info about EU-Pacific Islands Countries relations on the International Partnerships website.