Federated States of Micronesia: Trade Profile
For several years the country’s trade policy objective has been to establish international economic relations for the development of foreign trade, especially with the support of the United States. In fact, trade is important to Micronesia’s economy, and the value of foreign trade equals 94% of GDP (World Bank, 2023). Almost the entirety of exports is composed by fish and seafood products 97% in 2021. The most recent imports of Micronesia are led by poultry meat (5.1%), broadcasting equipment (3.17%), other prepared meat (3.15%), cars (3.14%), processed Fish with 2,85%, and rice with 2.74% (OEC, 2023).
The main export destinations of Micronesia are Thailand (80.8% of total exports in 2021), China (8.98%), Japan (4.47%) and the Philippines with 3.99% (OEC, 2023). The top import origins are the United States (33.6% of all imports in 2021, China (16%), Japan (11.4%) and Chinese Taipe (6.87%). Micronesia has easy access by air and sea to major foreign markets such as the Pacific Coast of the United States, New Zealand, Australia, and Guam which is a real advantage for the development of foreign trade.
Micronesia imports more than it exports, resulting in a chronic trade deficit, a situation that should continue in the following years. Both imports and exports have been growing steadily until 2020 even though they remain low. In 2021, according to WTO data, the country exported USD 71 million of goods and imported USD 197 million, resulting in a negative trade balance of USD 126 million. In general, custom duties are relatively low (with an average of 2.2%, excluding luxury goods), but overall trade freedom is limited by non-tariff barriers and poor trade infrastructure. All exports of products, as well as re-exports of imported products, are tax free.
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 183 | 198 | 194 | 206 | 197 |
| Exports of Goods (million USD) | 46 | 47 | 49 | 50 | 71 |
| Imports of Services (million USD) | 92 | 82 | 84 | 63 | 0 |
| Exports of Services (million USD) | 54 | 84 | 86 | 39 | 0 |
| Foreign Trade (in % of GDP) | 101 | 101 | 105 | 89 | 94 |
| Imports of Goods and Services (in % of GDP) | 71 | 65 | 73 | 65 | 70 |
| Exports of Goods and Services (in % of GDP) | 30 | 35 | 31 | 24 | 24 |
Source: WTO – World Trade Organisation ; World Bank - Latest available data.
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Signatory to 'South Pacific Regional Trade Economic Cooperation Agreement (SPARTECA)'
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Latest Update: September 2023
