Micronesia is a beneficiary of the Standard GSP. With a per capita income of $4.140 (2022), the World Bank considers Micronesia a lower middle-income country. Total EU imports from Micronesia amounted to about €1,2 million in 2022. Although about 36% of imports are eligible for the reduced tariffs granted under the Standard GSP, only 3% of eligible imports took advantage of GSP preferences in 2022.
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.
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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.
Micronesia's most dominant export products are fresh and frozen fish, including for example skipjack, tuna, anchovies, and different kinds of crustaceans.
Micronesia's imports originate mainly from China and the US.
The service sector, (67%) mainly driven by government services such as the sale of fishing licenses, are 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.
Despite about 36% of overall EU imports are eligible for duty reductions granted by the Standard GSP, Micronesia's utilisation rate stands at 3% (2022).
Total trade with the EU amounted to € 3 million in 2022.
Less than 40% of Micronesia's exports to the EU is eligible for GSP preferences.
Micronesia's utilisation rate of GSP preferences was only 3% in 2022.
Micronesia’s preference utilisation rate has been fluctuating considerably since 2013. The country experienced a significant downturn of 70 percentage points between 2013 and 2016. After a high pick of 71% in 2019, Micronesia did not benefit from GSP preferences at all in 2020. In 2021 32% of imports made use of preferences, but in 2022 the utilisation rate went down again, to 3%.
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%.
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 European 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.
Access all info about EU-Pacific Islands Countries relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/pacific-islands-countries_en