Vanuatu

Vanuatu graduated from Least Developed Country (LDC) status in December 2020, and accordingly moved from the Everything But Arms (EBA) arrangement to the Standard GSP in January 2025. Classified as a lower middle-income country by the World Bank, per-capita income stood at $3,515 in 2023. Total EU imports from Vanuatu amounted to €1.6 million in 2023. Of these, €83 thousand were eligible for EBA preferences (most other exports entered the EU without duties under the EU's normal tariff regime), and imports worth €10 thousand actually used the preferences.

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.

Vanuatu flag

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

group

0.3M (2023)

Population

account_balance
Parliamentary Republic

Government

trending_up

2.2% (2023)

GDP Growth

equalizer

11.2% (2023)

Inflation

money

$ 1.1B (2023)

GDP

Facts about Vanuatu's economy

Island Economy

Vanuatu is an island economy located in the Southern Pacific off the eastern coast of Australia. The in total 83 islands are mostly mountainous and part of the Pacific’s seismic strip which leaves the country particularly vulnerable to volcanic eruptions, earthquakes, and tsunamis.

Export Products

Vanuatu's main export articles originate from the ocean, including different types of frozen fish (tuna, skipjack, bonito, albacore, swordfish). Vanuatu also exports different types of plants mainly used in perfumery or pharmacy and cocoa beans.

Trade Partners

Vanuatu's most important trading partners in 2023 were Australia (24% of the country's total trade), Singapore (23%) and China (14%). The most important export markets in 2023 were Australia, Fiji and Chine, while Singapore and Australia were the most important suppliers.

Economic Structure

Vanuatu's economy is traditionally based on subsistence farming. The most important cash crops include copra, kava, beef, timber, and cocoa. Fishing additionally supports the livelihood of Vanuatu's population and builds a foundation for the country's trading activities. Furthermore, offshore financial services and tourism are important sources of foreign exchange.

Usage of EBA Preferences

Only a small share of EU imports from Vanuatu make use of EBA preferences (most export products can enter the EU market duty free under the normal tariff regime). The preference utilisation rate, which represents the ratio of preferential imports to GSP eligible imports, stood at 12% in 2023.

Trade with the EU

Total trade with the EU amounted to €8 million in 2023. With a share of 2% in Vanuatu's overall trade, the EU only plays a small role in the country's trade relations.

Vanuatu and the EU

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

Imports from Vanuatu over time (€ million)

VANUATU AND THE EU’s GSP

Economic Impact

16%

About 16% of Vanuatu's exports to the EU market are eligible for EBA preferences.

18.60%

Vanuatu currently has a comparatively low preference utilisation rate of 18.6%.

Preference utilisation and export diversification

Vanuatu's imports to the EU

Preference Utilisation vs. total eligible imports

Following the reform of the GSP in 2014, Vanuatu’s preference utilisation rate dropped significantly. This drop, however, was accompanied by a significant increase in eligible imports in 2015. Between 2017 and 2019 eligible imports showed a decreasing trend, but increased in 2020. EBA preferences are only used for less than 20% of eligible imports. The main imports originating from Vanuatu are imported using zero most-favoured-nation duties.

The largest product sections under EBA

In 2022, Vanuatu only used preferences for one product section, namely cereals, grains, seeds.Despite a number of other imports that are also eligible for EBA preferences, including for example machinery and appliances, minerals, base metals, and clothing, Vanuatu did not take advantage of its preferential access for these products.

SUSTAINABLE DEVELOPMENT

The preferential access to the EU market granted by the EBA scheme is not bound to the ratification of international conventions. Nonetheless, Vanuatu has ratified 4 out of 7 fundamental UN human rights conventions and all 8 ILO conventions on the protection of labour rights. Additionally, Vanuatu has ratified 7 conventions on the protection of the environment and 2 good governance conventions.

Core international conventions on human rights and labour standards

Ratified

  • International Covenant on Civil and Political Rights (1976)
  • Convention on the Elimination of All Forms of Discrimination Against Women (1981)
  • Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
  • Convention on the Rights of the Child (1990)
  • 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)

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 Economic Social and Cultural Rights (1976)

Additional Conventions

  • Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
  • 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 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
  • United Nations Convention against Corruption (2004)

EU-Vanuatu Bilateral Development Assistance

DG INTPA

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

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