Vanuatu

Vanuatu benefits from the EU's "Everything but Arms" (EBA) scheme for least developed countries. Vanuatu is considered a lower-middle income country according to the World Bank classification and graduated from the 'Least Developed Country' category in December 2020. The per-capita income currently stands at $ 3.650 (2022). Total imports from Vanuatu amounted to €860.000 in 2022. Preferential imports stood at € 25.000 in 2022.

What is the EBA?

The “Everything but Arms”(EBA) scheme is a permanent arrangement covering Least Developed Countries (LDC’s) as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products (7200 products in total) originating in LDC’s except for arms and ammunition. Different from the Standard GSP and GSP+, LDC’s are not excluded from the scheme if they benefit from other preferential arrangements.

Vanuatu flag

At a glance: EBA beneficiaries' preferential imports to the EU

group

326,74 K

Population

account_balance
Parliamentary Republic

Government

trending_up

1.80%

GDP Growth

equalizer

5.70%

Inflation

money

$ 1,06 M

GDP

82 -

Freedomhouse index

- -

ITUC Global Rights Index

36.9 ^

Environmental Performance Index

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 are Australia, Malaysia, and New Zealand. Together Australia and Malayisia account for almost 40% of overall trade. Most important export markets are Equador, Australia, and the Philippines, the EU and Australia.

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 about 3% of overall imports from Vanuatu make use of EBA preferences. The preference utilisation rate, which represents the ratio of preferential imports to GSP eligible imports currently stands at 18.6%.

Trade with the EU

Total trade with the EU amounted to € 17 million in 2022. With a share of4.3%, the EU only plays a minor part in Vanuatu's overall trade relations.

Vanuatu and the EU (2022)

Imports from Vanuatu by product section

Imports from Vanuatu over time (in € m)

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

Opportunities in Vanuatu

  • Recent investments in port infrastructure in Port Vila and Luganville, which now can cater standard and large-size containers
  • High demand for investments in the electricity and water utility sectors

Contact points