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: GSP beneficiaries' preferential imports to the EU
114,16 K
Population
Federal Republic
Government
-0.80%
GDP Growth
4.10%
Inflation
$ 424,00 M
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, (66.81%) 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.
Usage of GSP Preferences
Micronesia did not make use of GSP trade preferences in 2020, despite about 44% of overall EU imports are eligible for duty reductions granted by the Standard GSP.
Trade with the EU
Total trade with the EU amounted to € 3 million in 2021.
Micronesia and the EU (2022)
Imports from Micronesia by product section
Imports from Micronesia over time (in € m)
MICRONESIA AND THE EU’s GSP
Economic Impact
36%
Less than 40% of Micronesia's exports to the EU is eligible for GSP preferences.
3%
Micronesia's utilisation rate of GSP preferences was only 3% in 2022.
Preference utilisation and export diversification
Micronesia's imports to the EU
Preference Utilisation vs. total eligible imports
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 largest product sections under the GSP
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 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.
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 Assistance
€ 14.2 million
Throughout the period 2014-2020, the EU assisted Micronesia with € 14.2 million in order to address consequences of climate change, support civil society and address poverty. More particularly, the EU supported Micronesia to strengthen the position of non-state actors in policy making, to implement economic reforms and the principles of the CEDAW conventions, and to enhance the supply of renewable energies.
Opportunities in Micronesia
- The World Bank's Pacific Regional Connectivity Project will connect Micronesia with its regional neighbours through a fiber network and will allow new and existing business to make use of the improved network and connectivity
Most recent events
| Date | Event |
|---|
Contact points
- Pohnpei Chamber of Commerce
- Delegation of the European Union for the Pacific responsible for Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Palau, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu as well as the four Overseas Countries and Territories in the Pacific
- Ministry of Trade, Co-operatives, Small and Medium Enterprises
By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.
By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.
By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.
By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.
Conversations