TRADE POLICY REVIEW

REPORT BY THE SECRETARIAT

Solomon Islands

Revision

This report, prepared for the Fourth Trade Policy Review of Solomon Islands, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Solomon Islands on its trade policies and practices.

Any technical questions arising from this report may be addressed to Katie Waters (+41 22 739 5067) and Michael Kolie (+41 22 739 5931).

Document _WT/TPR/G/465 contains the policy statement submitted by Solomon Islands.

Note: This report was drafted in English.

CONTENTS

SUMMARY...................................................................................................................... 6

1 ECONOMIC ENVIRONMENT..................................................................................... 10

1.1 Main features of the economy................................................................................... 10

1.2 Recent economic developments................................................................................ 11

1.3 Developments in trade and investment..................................................................... 15

1.3.1 Trends and patterns in merchandise and services trade......................................... 15

1.3.2 Trends and patterns in FDI.................................................................................... 18

2 TRADE AND INVESTMENT REGIMES....................................................................... 19

2.1 General framework................................................................................................... 19

2.2 Trade policy formulation and objectives.................................................................... 20

2.3 Trade agreements and arrangements....................................................................... 20

2.3.1 WTO..................................................................................................................... 20

2.3.2 Regional and preferential agreements.................................................................... 21

2.3.2.1 Regional trade agreements (RTAs)...................................................................... 21

2.3.2.1.1 EU-Pacific States Interim EPA.......................................................................... 22

2.3.2.1.2 United Kingdom-Pacific States Interim EPA...................................................... 22

2.3.2.1.3 PACER Plus...................................................................................................... 22

2.3.2.1.4 Melanesian Spearhead Group Trade Agreement............................................... 24

2.3.2.1.5 Pacific Island Country Trade Agreement (PICTA).............................................. 24

2.3.2.2 Preferential trade agreements (PTAs)................................................................. 24

2.3.3 Other agreements and arrangements.................................................................... 25

2.4 Investment regime................................................................................................... 25

3 TRADE POLICIES AND PRACTICES BY MEASURE.................................................. 29

3.1 Measures directly affecting imports........................................................................... 29

3.1.1 Customs procedures, valuation, and requirements................................................. 29

3.1.2 Rules of origin....................................................................................................... 31

3.1.3 Tariffs................................................................................................................... 32

3.1.3.1 Applied MFN tariffs............................................................................................. 32

3.1.3.2 Tariff bindings.................................................................................................... 34

3.1.3.3 Tariff exemptions and concessions...................................................................... 36

3.1.3.4 Tariff preferences............................................................................................... 37

3.1.4 Other charges affecting imports............................................................................. 38

3.1.5 Import prohibitions, restrictions, and licensing....................................................... 38

3.1.5.1 Import prohibitions and restrictions.................................................................... 38

3.1.5.1.1 Import licensing.............................................................................................. 39

3.1.6 Anti-dumping, countervailing, and safeguard measures......................................... 40

3.2 Measures directly affecting exports........................................................................... 40

3.2.1 Customs procedures and requirements.................................................................. 40

3.2.2 Taxes, charges, and levies..................................................................................... 41

3.2.3 Export prohibitions, restrictions, and licensing....................................................... 43

3.2.4 Export support and promotion............................................................................... 44

3.2.5 Export finance, insurance, and guarantees............................................................. 44

3.3 Measures affecting production and trade................................................................... 44

3.3.1 Taxation and Incentives........................................................................................ 44

3.3.1.1 Taxation............................................................................................................. 44

3.3.1.2 Incentives.......................................................................................................... 45

3.3.2 Standards and other technical requirements.......................................................... 47

3.3.2.1 Standards.......................................................................................................... 47

3.3.2.2 Technical regulations and conformity assessment............................................... 47

3.3.2.3 Labelling and packaging requirements................................................................ 48

3.3.3 Sanitary and phytosanitary requirements............................................................... 48

3.3.4 Competition policy and price controls..................................................................... 51

3.3.4.1 Price controls..................................................................................................... 51

3.3.4.2 Competition policy.............................................................................................. 51

3.3.5 State trading and state-owned enterprises............................................................. 52

3.3.6 Government procurement...................................................................................... 54

3.3.7 Intellectual property rights.................................................................................... 55

4 TRADE POLICIES BY SECTOR.................................................................................. 57

4.1 Agriculture, forestry, and fisheries............................................................................ 57

4.1.1 Overview............................................................................................................... 57

4.1.2 Agriculture............................................................................................................ 58

4.1.3 Fisheries............................................................................................................... 60

4.1.4 Forestry................................................................................................................ 61

4.2 Mining and energy.................................................................................................... 63

4.2.1 Mining................................................................................................................... 63

4.2.2 Energy.................................................................................................................. 65

4.2.2.1 Overview............................................................................................................ 65

4.2.2.2 Electricity........................................................................................................... 66

4.3 Manufacturing.......................................................................................................... 67

4.4 Services................................................................................................................... 67

4.4.1 Financial services.................................................................................................. 67

4.4.1.1 Overview............................................................................................................ 67

4.4.1.2 Banking.............................................................................................................. 69

4.4.1.3 Credit unions...................................................................................................... 69

4.4.1.4 Insurance........................................................................................................... 69

4.4.2 Telecommunications.............................................................................................. 70

4.4.2.1 Market structure and regulation.......................................................................... 70

4.4.2.2 Digital economy................................................................................................. 71

4.4.3 Transport.............................................................................................................. 72

4.4.3.1 Overview............................................................................................................ 72

4.4.3.2 Air transport and airports................................................................................... 72

4.4.3.3 Maritime transport and ports.............................................................................. 73

4.4.4 Tourism................................................................................................................ 74

5 APPENDIX TABLES.................................................................................................. 76

CHARTS

Chart 1.1 Merchandise trade by main product categories, 2016 and 2022........... 16

Chart 1.2 Direction of merchandise trade, 2016 and 2022................................... 17

Chart 3.1 Customs clearance, 2016-mid-2024.................................................... 30

Chart 3.2 Import and export duties, 2016-23...................................................... 34

Chart 3.3 Revenue forgone from statutory and non-statutory customs duty exemptions, 2016-23......................................................................................... 37

TABLES

Table 1.1 GDP by economic activities, 2016-22................................................... 10

Table 1.2 Selected macroeconomic indicators, 2016-23...................................... 12

Table 1.3 Balance of payments, 2016-23............................................................ 14

Table 1.4 Composition of trade in services, 2016-23........................................... 17

Table 2.1 Notifications to the WTO, 1 January 2016–7 May 2024........................ 21

Table 2.2 Reserved activities under the Foreign Investment Regulations 2020..... 26

Table 3.1 Preferential rules of origin requirements, 2024.................................... 31

Table 3.2 Structure of applied MFN tariff, 2015 and 2024.................................... 32

Table 3.3 MFN applied tariff summary by WTO product category and HS section, 2024 33

Table 3.4 Tariff lines for which applied rates exceed bound rates, 2024............... 35

Table 3.5 Tariff lines for which applied rates may exceed bound rates, 2024....... 36

Table 3.6 Export duty rates, 2023...................................................................... 41

Table 3.7 Export duty rates for round logs, 2023................................................ 42

Table 3.8 Tax revenue, 2018-23......................................................................... 45

Table 3.9 SOE balance sheet, 2016-23............................................................... 53

Table 3.10 Procurement methods, 2024.............................................................. 55

Table 4.1 Trade in agriculture by main products, 2018-22................................... 58

Table 4.2 Energy produced, 2017-22.................................................................. 66

Table 4.3 Financial system assets, 2017-23........................................................ 68

Table 4.4 Financial stability indicators, 2018-23.................................................. 69

Table 4.5 Key ICT indicators, 2010, 2020, and 2021........................................... 70

APPENDIX TABLES

Table A1.1 Merchandise exports by destination, 2016-22.................................... 76

Table A1. 2 Merchandise imports by origin, 2016-22........................................... 77

Table A1. 3 Merchandise exports by HS section and major HS chapter/heading, 2016‑22............................................................................................................. 78

Table A1. 4 Merchandise imports by HS section and major HS chapter/heading, 2016‑22............................................................................................................. 79

Table A3.1 Non-ad valorem rates and corresponding AVEs, 2024........................ 80

Table A3. 2 Non-ad valorem rates and corresponding AVEs, 2024....................... 83