Palau: Trade Profile

Foreign Trade in Figures

Palau is open to foreign trade, which represents roughly 66% of the GDP (World Bank, latest data available). Palau's export base and production capacity are limited, rendering it highly susceptible to external shocks. The main imported goods are refined petroleum (21.1%), special-purpose ships (15.1%), recreational boats (6.5%), iron structures (2.5%), and electric batteries (2.2%). The country mainly exports recreational boats (29.5%), computers (24.2%), passenger and cargo ships (15.6%), office machine parts (8.0%), and scrap iron (5.7% - data OEC 2022).

Palau's main suppliers are China (70.2%), the United States (27.3%), South Korea (26.3%), Japan (16.4%), and Italy (11.5%); whereas the main clients are Greece (27.2%), Japan (26.3%), France (17.7%), Chinese Taipei (7.8%), and the United States (7.0% - data OEC 2022). 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. However, the lack of skilled labor force, the absence of financial regulations, and bureaucratic delays are limitations to the development of trade in the country.

Without natural resources, the archipelago has a large structural trade deficit, which is expected to persist in the coming years. According to WTO data, Palau exported just USD 3 million in goods and imported USD 210 million of goods in 2022. Concerning services, exports stood at USD 18 million against 48 million in imports.

Foreign Trade Indicators	2019	2020	2021	2022	2023
Imports of Goods (million USD)	193	149	156	207	242
Exports of Goods (million USD)	4	7	2	3	2
Imports of Services (million USD)	63	55	48	48	n/a
Exports of Services (million USD)	98	49	10	18	n/a
Imports of Goods and Services (Annual % Change)	1	-0	-20	8	-5
Exports of Goods and Services (Annual % Change)	-12	-43	-74	119	76
Trade Balance (million USD)	-141	-150	-127	-156	n/a
Foreign Trade (in % of GDP)	115	107	81	88	n/a
Imports of Goods and Services (in % of GDP)	77	84	74	74	n/a
Exports of Goods and Services (in % of GDP)	38	24	7	13	n/a

Source: WTO – World Trade Organisation ; World Bank - Latest available data.

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Trade Compliance

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