ABSTRACT
This chapter investigates the extent of trade for Pacific island economies with emerging Asian countries. It attempts to investigate the changing pattern of trade flows of Pacific island countries (PIC) and the influence of Asian trade. Regional trade agreements (RTA) have become the present buzz tone of the world economy as the primary step to move towards greater integration. The least developed countries (LDCs) exhibit very high trade costs. Bangladesh, the best-performing LDC among those included in the database, has trade costs about twice as high as those of developed countries. Pacific Island Countries Trade Agreements (PICTA) establishes a free trade area in goods among the fourteen Forum Island Countries (FICs). The agreement was signed in 2001 and entered into force in 2006. The Melanesian Spearhead Group (MSG), another platform, was formed as a reciprocal free trade agreement among fourteen Pacific islands, including Fiji, Papua New Guinea (PNG), Solomon Islands and Vanuatu.
