Palau: Trade Profile
Palau is open to foreign trade with merchandise trade representing 66% of the GDP in 2020 (World Bank, 2022). One of the characteristics of Palauan economy is the high dependency on imports of good and services. The main imported goods are led by Refined Petroleum (13.3% of all imports), boat propellers (4.25%), Iron structures (4.03%) and cars (3.1%). The country mainly exports computers (37.1% of all exports in 2021), scrapped vessels (15.1%), Recreational Boats (11.7%) and Scrap Iron with 9.32% (OEC, 2023).
Palau's main clients are Japan (34.2% of total exports in 2021), Chinese Taipei (15.8%), Turkey (15.5%) and Italy (11.7%), while the main suppliers are China (33.7%), the USA (21%), South Korea (12%) and Japan with 8.3% (OEC, 2023). Palau is a member of the Pacific Island Countries Trade Agreement (PICTA).
Without natural resources, the archipelago has a large structural trade deficit, which is expected to persist in the coming years. According to 2023 WTO data, Palau exported just 2 million USD in goods and imported 156 million USD of goods in 2021, resulting in a negative trade balance for goods of 132 million USD taken services into account. The country wishes to facilitate international trade. Customs duties are relatively low (with the exception of alcohol and cigarettes) and there are few non-tariff trade barriers in the country. However, the lack of skilled labour force, the absence of financial regulations and bureaucratic delays are limitations to the development of trade in the country.
| Foreign Trade Indicators | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 176 | 193 | 149 | 156 | 210 |
| Exports of Goods (million USD) | 4 | 4 | 7 | 2 | 3 |
| Imports of Services (million USD) | 63 | 63 | 55 | 48 | 48 |
| Exports of Services (million USD) | 111 | 98 | 49 | 10 | 18 |
| Trade Balance (million USD) | -138 | -141 | -150 | -127 | -156 |
Source: WTO – World Trade Organisation ; World Bank - Latest available data.
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Latest Update: November 2023
