The South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA) is a nonreciprocal

trade agreement A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common tra ...

in which

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

and

New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...

offer duty-free and unrestricted access for specified products originating from the developing island member countries of the

Pacific Islands Forum The Pacific Islands Forum (PIF) is an inter-governmental organisation that aims to enhance cooperation among countries and territories of Oceania, including formation of a trade bloc and regional peacekeeping operations. It was founded in 197 ...

. The agreement was signed in 1980 in

Tarawa Tarawa is an atoll and the capital of the Republic of Kiribati,Kiribati
''

Kiribati Kiribati, officially the Republic of Kiribati, is an island country in the Micronesia subregion of Oceania in the central Pacific Ocean. Its permanent population is over 119,000 as of the 2020 census, and more than half live on Tarawa. The st ...

, and subject to Rules of Origin regulations, designed to address the unequal trade relationships between the two groups. The

textile Textile is an Hyponymy and hypernymy, umbrella term that includes various Fiber, fiber-based materials, including fibers, yarns, Staple (textiles)#Filament fiber, filaments, Thread (yarn), threads, and different types of #Fabric, fabric. ...

clothing Clothing (also known as clothes, garments, dress, apparel, or attire) is any item worn on a human human body, body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin s ...

and

footwear Footwear refers to garments worn on the feet, which typically serve the purpose of protective clothing, protection against adversities of the environment such as wear from rough ground; stability on slippery ground; and temperature. *Shoes and si ...

(TCF) industry has been a major beneficiary of SPARTECA through the preferential access to Australian and New Zealand markets. The agreement entered into force on 1 January 1981.

TCF in Fiji

The local

Fiji Fiji, officially the Republic of Fiji, is an island country in Melanesia, part of Oceania in the South Pacific Ocean. It lies about north-northeast of New Zealand. Fiji consists of an archipelago of more than 330 islands—of which about ...

textiles, clothing and footwear (TCF) industry has grown over the last 10 years and is now one of the major industries in Fiji. In 1997 the TCF industry accounted for 26% of Fiji’s total domestic

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...

s; it contributed to some 3.5% of

GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...

and provided employment for about 18,000 people that account for 16% of those in total paid employment. The rapid expansion of the Fiji TCF industry has been attributed to the removal of TCF

quota Quota may refer to: Economics * Import quota, a restriction on the quantity of goods that can be imported into a country * Market Sharing Quota, an economic system used in Canadian agriculture * Milk quota, a quota on milk production in Europe * ...

s by the

Australian Government The Australian Government, also known as the Commonwealth Government or simply as the federal government, is the national executive government of Australia, a federal parliamentary constitutional monarchy. The executive consists of the pr ...

in 1987 which allowed quota free and duty-free access under SPARTECA, the introduction of the Tax Free Factory/Zone (TFF/TFZ) Scheme in 1988 and the Australian Import Credit Scheme (ICS).

Australian ICS

The Australian ICS commenced in July 1991 as part of a larger package of tariff and other industrial reforms in Australia. It was introduced as a temporary measure to encourage Australian TCF exports and terminated on 30 June 2000, except in the case of Fiji, where an extension had been granted to October 2000.

Details of SPARTECA

Given the Australian and Fiji Governments’ commitment to developing a

WTO The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...

-friendly arrangement in place of the ICS, the SPARTECA (TCF Provisions) Scheme was developed. SPARTECA (TCF) provisions concept complements the existing SPARTECA treaty and provides for a change in the way local area content (LAC) is calculated for TCF products (goods) entering Australia from Forum Island Countries (FICs). Under the existing SPARTECA arrangements, goods can enter Australia duty free where the Allowable Factory Cost is greater than or equal to 50% of the total ex-factory cost of

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer ...

the goods. These arrangements continue to stand. The SPARTECA (TCF provisions) Scheme enables companies to utilise excess local area content (ELAC) from certain SPARTECA qualifying TCF goods to help meet the 50% content requirement in otherwise non-qualifying Eligible Goods. ELAC is only derived where a product’s LAC exceeds 70%. Similarly, ELAC can only be used where a product’s LAC is greater than 35%, and where there is a last process of manufacture performed in the FIC. The duration of the S-TCF Scheme is from March 1, 2001 to December 31, 2004.

Member Countries

References

{{Reflist Economy of Oceania Trade blocs Treaties concluded in 1980 Commercial treaties Treaties of Australia Treaties of the Cook Islands Treaties of Fiji Treaties of the Marshall Islands Treaties of the Federated States of Micronesia Treaties of Nauru Treaties of New Zealand Treaties of Papua New Guinea Treaties of Samoa Treaties of the Solomon Islands Treaties of Tonga Treaties of Tuvalu Treaties of Vanuatu Treaties of Kiribati Treaties of Niue Treaties entered into force in 1981 1980 in Kiribati Pacific Islands Forum treaties

TCF in Fiji

Australian ICS

Details of SPARTECA

Member Countries

See also

References