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DTIS 2016 GOVERNMENT of TUVALU December 2016

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DTIS 2016 GOVERNMENT of TUVALU December 2016 TUVALU DIAGNOSTIC TRADE INTEGRATION STUDY 2016 UPDATE OF THE DIAGNOSTIC TRADE INTEGRATION STUDY DTIS 2016 MINISTRY OF FOREIGN AFFAIRS, TRADE, TOURISM, ENVIRONMENT AND LABOUR GOVERNMENT OF TUVALU December 2016 1 TUVALU DIAGNOSTIC TRADE INTEGRATION STUDY 2016 Table of Contents Table of Contents .................................................................................................................................. 2 Foreword from the Government of Tuvalu ........................................................................................ 4 Preface .................................................................................................................................................... 5 Acronyms ............................................................................................................................................... 7 Executive summary ............................................................................................................................. 11 Note on the process of the Tuvalu DTIS Update 2016 ..................................................................... 15 Introduction ......................................................................................................................................... 17 Chapter 1: Macroeconomic and Institutional Environment / Trade Policy / Trade Agreements and Regional Integration .................................................................................................................... 19 A. Background ............................................................................................................................ 19 B. Policy coherence and trade mainstreaming ............................................................................ 19 C. Economic performances and SDGs ........................................................................................ 21 D. Trade Reforms and Trade Performances ................................................................................ 31 E. Market Access and regional integration ................................................................................. 32 F. Conclusion, the way forward and recommendations .............................................................. 35 Chapter 2: Business Climate, Investment and Private Sector Development................................. 37 A. Background ............................................................................................................................ 37 B. Policy Coherence .................................................................................................................... 37 C. Situational Analysis & Implementation of 2010 Tuvalu DTIS Recommendations ............... 37 D. Access to Finance ................................................................................................................... 39 E. Land ........................................................................................................................................ 41 F. Labour Force ........................................................................................................................... 42 G. Tuvalu National Private Sector Organisation (TNPSO) ........................................................ 42 H. Institutional Investors and States Owned Enterprises (SOEs) ............................................... 44 I. Investment Facilitation & Promotion ..................................................................................... 45 J. Tuvalu National Council of Women (TNCW) ....................................................................... 47 K. Conclusion and Way Forward ................................................................................................ 47 Chapter 3: Transport, Trade Facilitation and Connectivity .......................................................... 49 A. Introduction ............................................................................................................................ 49 B. Context and justification ........................................................................................................ 50 C. Tuvalu DTIS 2010 implementation ........................................................................................ 53 D. Situational analysis ................................................................................................................. 55 E. The way forward, recommendations and priority actions ...................................................... 63 Chapter 4: Linkage between Trade and Climate Change ............................................................... 67 A. Context and justification ........................................................................................................ 67 B. Climate change and its impacts on the environment in Tuvalu ............................................. 69 C. Fisheries and climate change .................................................................................................. 77 D. Tourism and climate change .................................................................................................. 84 E. Agriculture and climate change .............................................................................................. 86 Chapter 5: Sectoral Trade: Agriculture, Fisheries, Tourism and Labour Mobility .................... 90 A. Agriculture ............................................................................................................................. 90 B. Fisheries.................................................................................................................................. 95 C. Tourism ................................................................................................................................ 102 D. Labour Mobility ................................................................................................................... 108 2 TUVALU DIAGNOSTIC TRADE INTEGRATION STUDY 2016 E. Recommendations and the way forward .............................................................................. 112 Chapter 6: Emerging Prospects - Blue Economy/Oceans Economy and Deep Seabed Minerals ............................................................................................................................................................. 114 A. Introduction .......................................................................................................................... 114 B. Context and Justification ...................................................................................................... 115 C. A Brief Regional Overview of Deep Seabed Minerals ........................................................ 123 D. Polymetallic Manganese Nodules: Global Metal Market Issues.......................................... 128 E. The way forward and recommendations .............................................................................. 131 Pillar 3: Action Matrix ..................................................................................................................... 132 Bibliography ...................................................................................................................................... 138 Annex: Partnerships and development partners involved in trade sectors in Tuvalu ............... 143 3 TUVALU DIAGNOSTIC TRADE INTEGRATION STUDY 2016 Foreword from the Government of Tuvalu 4 TUVALU DIAGNOSTIC TRADE INTEGRATION STUDY 2016 Preface Tuvalu is both an LDC and Small Island Developing State (SIDS) in the Pacific Ocean, comprising nine islands with a total population of 10,823. Tuvalu faces challenges of insularity, remoteness and smallness leading to major trade constraints in terms of supply capacity, global and regional market access and trade competitiveness. In order to respond to these challenges and in partnership with its development partners, the Government of Tuvalu has embarked on major reforms embodied in the National Development Plan Te Kakeega and in the setting up of the institutional framework with sectoral policies (including the 2016 Tuvalu Trade Policy Framework) aimed at promoting trade development in a sustainable and inclusive manner. In 2007, the Government of Tuvalu joined the Enhanced Integrated Framework (EIF). The EIF is a multi-stakeholder initiative aimed at: (i) assisting LDCs in mainstreaming trade as a vehicle for economic growth and poverty reduction into their national development plans; and (ii) assisting in the coordinated delivery of trade-related technical assistance to meet the trade capacity gaps identified by LDCs. The purpose of the DTIS was to identify key constraints to Tuvalu’s integration into the regional and the global trading economy. Under the EIF umbrella, Tuvalu obtained its first ever Diagnostic Trade Integration Study (DTIS) in 2010, as the first step of the EIF process. The DTIS was formulated, with an implementation timeframe of 5 years, to provide the analytical basis for setting priorities related to trade development. In such a context, five years after the implementation of the 2010 DTIS, UNDP was requested to assist the Government of Tuvalu in conducting an Update, in coordination with EIF agencies and interested donors. The DTIS Update (DTIS 2016) objective is to evaluate progress made since 2010 and assess the level of implementation of 2010 DTIS Action Matrix recommendations. The DTIS 2016 also highlights new trade
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