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WT/TPR/S/409/Rev.1 1 June 2021 (21-4525) Page WT/TPR/S/409/Rev.1 1 June 2021 (21-4525) Page: 1/99 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT TONGA Revision This report, prepared for the second Trade Policy Review of Tonga, 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 Tonga on its trade policies and practices. Any technical questions arising from this report may be addressed to Mr Sergios Stamnas (phone: 022 739 5382); Mr Rosen Marinov (phone: 022 739 6391); and Ms Ana Cristina Molina (phone: 022 739 6060). Document WT/TPR/G/409 contains the policy statement submitted by Tonga. Note: This report was drafted in English. WT/TPR/S/409/Rev.1 • Tonga - 2 - CONTENTS SUMMARY ........................................................................................................................ 7 1 ECONOMIC ENVIRONMENT ........................................................................................ 11 1.1 Main Features of the Economy .....................................................................................11 1.2 Recent Economic Developments ...................................................................................13 1.2.1 Overview ................................................................................................................13 1.2.2 Monetary and exchange rate policy ............................................................................15 1.2.3 Fiscal policy ............................................................................................................15 1.2.4 Balance of payments ................................................................................................16 1.3 Developments in Trade and Investment ........................................................................17 1.3.1 Trends and patterns in merchandise and services trade ................................................17 1.3.2 Trends and patterns in FDI .......................................................................................20 2 TRADE AND INVESTMENT REGIMES........................................................................... 21 2.1 General Framework ....................................................................................................21 2.2 Trade Policy Formulation and Objectives ........................................................................22 2.2.1 Trade policy formulation ...........................................................................................22 2.2.1.1 Executive branches of government ..........................................................................22 2.2.1.2 Advisory bodies ....................................................................................................23 2.2.2 Trade and related policy objectives ............................................................................23 2.2.3 Trade laws and regulations .......................................................................................24 2.2.4 Transparency ..........................................................................................................24 2.3 Trade Agreements and Arrangements ...........................................................................25 2.3.1 WTO ......................................................................................................................25 2.3.1.1 Features ..............................................................................................................25 2.3.1.2 Trade-related technical assistance ...........................................................................26 2.3.1.3 Notifications .........................................................................................................26 2.3.2 Regional and preferential agreements ........................................................................26 2.3.3 Other agreements and arrangements .........................................................................30 2.4 Investment Regime ....................................................................................................30 2.4.1 Regulatory and institutional framework ......................................................................31 2.4.2 Restricted activities ..................................................................................................31 2.4.3 Registration and approval .........................................................................................33 2.4.4 Investment promotion ..............................................................................................34 2.4.5 Dispute settlement ...................................................................................................35 2.4.6 Investment treaty developments ...............................................................................35 3 TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 36 3.1 Measures Directly Affecting Imports ..............................................................................36 3.1.1 Customs procedures, valuation, and requirements .......................................................36 3.1.2 Rules of origin .........................................................................................................37 3.1.3 Tariffs ....................................................................................................................38 WT/TPR/S/409/Rev.1 • Tonga - 3 - 3.1.4 Other charges affecting imports .................................................................................41 3.1.5 Duty and tax concessions .........................................................................................41 3.1.6 Import prohibitions, restrictions, and licensing ............................................................42 3.1.7 Anti-dumping, countervailing, and safeguard measures ................................................42 3.1.8 Other measures affecting imports ..............................................................................42 3.2 Measures Directly Affecting Exports ..............................................................................42 3.2.1 Customs procedures and requirements .......................................................................42 3.2.2 Taxes, charges, and levies ........................................................................................43 3.2.3 Export prohibitions, restrictions, and licensing .............................................................43 3.2.4 Export support and promotion ...................................................................................43 3.2.5 Export finance, insurance, and guarantees ..................................................................43 3.3 Measures Affecting Production and Trade .......................................................................43 3.3.1 Incentives ...............................................................................................................43 3.3.1.1 Taxation and fiscal incentives .................................................................................44 3.3.1.2 Support programmes.............................................................................................49 3.3.2 Standards and other technical requirements ...............................................................51 3.3.3 Sanitary and phytosanitary requirements ....................................................................51 3.3.4 Competition policy ...................................................................................................54 3.3.5 Price controls ..........................................................................................................54 3.3.6 State trading, state-owned enterprises, and privatization .............................................55 3.3.7 Government procurement .........................................................................................58 3.3.7.1 Legal and institutional framework ...........................................................................59 3.3.7.2 Procurement procedures ........................................................................................60 3.3.8 Intellectual property rights ........................................................................................61 4 TRADE POLICIES BY SECTOR ..................................................................................... 65 4.1 Agriculture, Forestry, and Fisheries ...............................................................................65 4.1.1 Agriculture ..............................................................................................................65 4.1.1.1 Features ..............................................................................................................65 4.1.1.2 Policy and institutional framework ...........................................................................66 4.1.1.3 Regulatory framework ...........................................................................................67 4.1.1.4 Border measures ..................................................................................................68 4.1.1.5 Domestic support ..................................................................................................69 4.1.2 Fisheries .................................................................................................................70
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