RELATIONS WITH THE EU
The European Union and the Republic of Palau
The Republic of Palau is a Micronesian Pacific island country. The relationship between the European Union and Palau is governed by the EU-ACP Cotonou Partnership Agreement, which will soon be replaced by a successor Agreement. Palau and the EU work together on a number of common values, interests and challenges, such as climate change, oceans and human rights, which they address in bilateral Political Dialogues, at various ACP-EU policy dialogues, and at global multilateral levels.
Political Relations
Political Relations Between the EU and Palau
Palau consists of an archipelago of 340 islands and a population of approximately 19,000.
Palau participates in policy dialogues within the ACP-EU institutions from senior officials to parliamentary and ministerial levels. The EU also cooperates closely with Palau to ensure our shared commitment to universal values and human rights principles are upheld at the international level.
The EU and Palau hold local Political Dialogues to address common interests and challenges, such as climate change, oceans, human rights, development cooperation, economic and trade cooperation. The last Political Dialogue took place in April 2018.
Palau and the EU are engaged in the Pacific region through the Pacific Islands Forum (PIF) and Pacific Community (SPC). The Organisation of African, Caribbean, and Pacific States (OACPS) coordinates the ACP-EU policy dialogues.
The EU and Palau apply a short-stay Visa Waiver Agreement, to encourage people-to-people contacts, boost tourism and invigorate business.
Palau has been supported by the EU and its Member States through the Team Europe response to the COVID-19 pandemic.
Economic Relations
Economic Relations between the EU and Palau
Palau is a Small Island Developing State (SIDS), categorised as a High Income Country. The economy is mainly driven by the tourism sector which accounts for 40% of GDP, but has been severely impacted by the COVID-19 pandemic. Palau is also reliant on grants received through its Compact of Free Association with the United States.
Palau’s main exports are fish products, and machinery and transport form the main trading items from the EU to Palau.
Palau does not currently benefit from a beneficial trade regime with the EU.
As part of the Pacific ACP group, Palau can accede to the EU-Pacific Economic Partnership Agreement (EPA), currently applied between the EU and Fiji, Papua New Guinea and Samoa and Solomon Islands. The EPA would give all Palau’s products duty-free, quota-free access to the EU market — the world’s largest single market.
Development Cooperation
The European Union’s Development Cooperation with Palau
Between 2014-2020, the European Union has supported a wide range of cooperation projects that has benefitted Palau’s sustainable and self-sufficient energy supply, mainly through renewables and energy efficiency.