South Pacific Regional Trade and Economic Co-operation Agreement
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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 tr ...
in which Australia and
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
offer duty-free and unrestricted access for specified products originating from the developing island member countries of the Pacific Islands Forum. The agreement was signed in 1980 in
Tarawa Tarawa is an atoll and the capital of the Republic of Kiribati,Kiribati
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Kiribati Kiribati (), officially the Republic of Kiribati ( gil, ibaberikiKiribati),Kiribati
''The Wor ...
, and subject to
Rules of Origin Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tari ...
regulations, designed to address the unequal trade relationships between the two groups. The
textile Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...
s,
clothing Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin sheets of materials and natural ...
and footwear (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 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 an ...
s; it contributed to some 3.5% of
GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
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 trade restriction on the quantity of goods imported into a country * Market Sharing Quota, an economic system used in Canadian agriculture * Milk quota, a quota on milk production in Europe * Indi ...
s by the
Australian Government The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Government ...
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 that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and e ...
-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 secondary sector of the economy. The term may refer to ...
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


See also

*
Melanesian Spearhead Group The Melanesian Spearhead Group (MSG) is an intergovernmental organization, composed of the four Melanesian states of Fiji, Papua New Guinea, Solomon Islands and Vanuatu, and the Kanak and Socialist National Liberation Front of New Caledonia. I ...
* North American Free Trade Agreement *
South Asian Association for Regional Cooperation The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia. Its member states are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan ...
*
Pacific Agreement on Closer Economic Relations The Pacific Agreement on Closer Economic Relations (PACER) is an umbrella agreement between members of the Pacific Islands Forum (the Forum Island Countries plus Australia and New Zealand) which provides a framework for the future development of ...
*
Trans-Pacific Strategic Economic Partnership The Trans-Pacific Strategic Economic Partnership Agreement (TPSEP), also known as P4, is a trade agreement between four Pacific Rim countries concerning a variety of matters of economic policy. The agreement was signed by Brunei, Chile, Singapor ...
(P4)


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