Subregional trade and economic integration in among Micronesian countries: the FSM ratifies the Treaty establishing the Micronesian Trade and Economic Community
Press Release #1610-02
On September 23, 2016, the 19th Congress of the FSM voted for the ratification of the Treaty establishing the MTEC and the Protocol on the Conference Structure, Secretariat, and Financial Matters of the MTEC, which were signed on September 3, 2014 by the Presidents of the Federated States Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. The vote by FSM Lawmakers came after satisfactory completion of public hearings in all the four States led by Congressman David Panuelo, Chairman of FSM Congress Committee on Resources and Development and Members of the Committee, through which hundreds of stakeholders from all level of the FSM society were educated and given the opportunity to comment and raise concerns on the MTEC Treaty.
Commenting on the ratification of the Treaty by the FSM, H.E. Peter M. Christian, President of the FSM, indicated that this was a reaffirmation by the Government of the FSM of its strong belief in cooperation and integration as a smart and strategic approach through which Micronesian Countries, which are all Small Island States and are remote from major international markets, can address their most common pressing trade needs and economic challenges with a view to foster their integration in the global economy and to achieve long-term sustainable economic development in a rapid changing global environment.
The MTEC Treaty, which formalizes the long-standing historic, cultural, and economic ties between the three founding Members, is opened to other Micronesian Countries and Territories (Republic of Kiribati and Republic of Nauru, Commonwealth of Northern Mariana Islands, and Guam). It envisions liberalization of trade and investment as well as harmonization of labor policies among Member States and the creation of a sub-regional market of approximately 500.000 consumers, which will enable the private sector to achieve the economies of scale, foster subregional investment and the creation regional value chains, and enhance their competitiveness; leading to job creation, income generation, and contributing to improving the overall welfare of Micronesian People.
Secretary Marion Henry, who currently heads the MTEC Interim Secretariat, congratulated the FSM for ratifying the MTEC Treaty. He noted that this was a very important step, given that the FSM became the second country to ratify the Treaty, following the Republic of the Marshall Islands in February 2015. Now that two of the three founding Member States have ratified the MTEC Treaty, it will enter into force in the coming days as provided by the Treaty. This will allow Member States to start discussion on eliminating tariff and non tariff barriers on their trade, removing restriction on subregional investments as well as movement of labour among the Member States; and we expect this to be the main topic of the 8th MTEC Officials and Ministers’ Meeting scheduled for October 12-14, 2016 in Koror, Republic of Palau.
Secretary Marion Henry also thanked the Hub & Spokes II Programme funded by the European Union, the ACP Secretariat, the Commonwealth Secretariat, and l’Organisation Internationale de la Francophonie for the technical assistance provided to the FSM during this ratification process, in particular the trade advisory services provided during the public hearings in the four States and the continued administrative assistance to the MTEC Interim Secretariat.
He also recalled the technical assistance received from the Economic and Social Commission for Asia and the Pacific and the Pacific Islands Forum Secretariat for the development and the signing of the MTEC Treaty in 2014; and concluded that such support and that of other development partners will be crucial as MTEC Member States move forward towards fostering their participation in regional integration under the New Pacific Framework for Regionalism and their integration in the global economy.
For more information on the ratification of the treaty establishing the Micronesian Trade and Economic Community, please contact the Interim Secretariat (FSM Department of Resources and Development), at telephone number (691) 320-5133.