According to allcitypopulation, Tonga is an archipelago located in the South Pacific Ocean, situated about two-thirds of the way from Hawaii to New Zealand. It is made up of 176 islands, 36 of which are inhabited. The main island, Tongatapu, is home to the capital city of Nuku’alofa and 70% of Tonga’s population. It has a land area of 747 km2 and a coastline of 419 km. The islands have a tropical climate with temperatures ranging from 21–32 °C throughout the year. According to Petwithsupplies, the capital city of Tonga is Nuku’alofa with a population of 23,221 (2016 Census).
The economy of Tonga is heavily dependent on aid from other countries and remittances from citizens living abroad. Agriculture accounts for about 40% of GDP, with squash, coconuts, vanilla beans and bananas as the main exports. Fishing and tourism are also important contributors to the economy; however, due to its isolated location, most goods must be imported at a high cost. Subsistence farming is still practiced in many areas while small-scale industry dominates manufacturing. The government has implemented several economic reforms since 2006 in order to reduce poverty levels and attract foreign investment but these efforts have been hampered by political instability in recent years.
Foreign Trade of Tonga
Tonga has a small foreign trade sector due to its isolated location in the South Pacific. Its main exports are squash, coconuts, vanilla beans and bananas, while its imports consist of mostly manufactured goods such as machinery, chemicals and food products. In 2018, Tonga’s total exports were valued at $93 million and imports at $213 million. The top export destinations are New Zealand (30%), Australia (19%) and Fiji (18%). Major import sources are New Zealand (29%), Australia (24%) and China (17%).
The government of Tonga is currently striving to increase the country’s export capacity by encouraging investment in agricultural production and processing. It has also implemented several initiatives to reduce the cost of importing goods by improving infrastructure and logistics systems. To promote foreign trade, Tonga has signed free trade agreements with countries such as New Zealand, Australia and China which allow for duty-free access of goods between these countries.
In order to encourage more foreign investment in Tonga, the government has implemented a series of incentives such as tax exemptions for investors, grants for research & development projects and subsidies for new businesses. It is also working to develop closer economic ties with other Pacific Island countries through regional organizations such as the Pacific Islands Forum.
Major Trading Partners of Tonga
Tonga’s major trading partners are New Zealand, Australia, China, Japan and the United States. In 2018, these five countries accounted for 80% of Tonga’s total exports and 73% of its imports.
New Zealand is Tonga’s largest export partner and the main source of manufactured goods such as machinery and vehicles. It is also the largest source of foreign direct investment in Tonga, with a number of New Zealand companies setting up operations in the country. The two countries have a free trade agreement which allows for duty-free access of goods between them.
Australia is another important trading partner for Tonga, with exports mainly consisting of squash and coconuts. Australia is also an important source of imports such as food products, chemicals and machinery. The two countries are part of a free trade agreement which allows for duty-free access to certain goods between them.
China is an important source of imports for Tonga including manufactured goods such as electronics and clothing. In 2018, China was the fourth-largest export destination for Tongan squash, coconuts and bananas. The two countries have signed a free trade agreement which allows for duty-free access to certain goods between them.
Japan is an important trading partner for Tonga with exports mainly consisting of squash, coconuts and bananas while imports consist mostly of food products and chemicals. The two countries have signed a free trade agreement which allows for duty-free access to certain goods between them.
The United States is an important trading partner for Tonga with exports mainly consisting of squash, coconuts and bananas while imports consist mostly of food products and chemicals. The US also provides development assistance to help reduce poverty levels in the country through initiatives such as the Millennium Challenge Corporation Compact Program (MCCP).
Major Imports and Exports of Tonga
Tonga’s major imports consist of manufactured goods such as machinery, vehicles, food products and chemicals. The main imported manufactured goods include electronic items, clothing, motor vehicles and parts, machinery and equipment. Food products are also imported including grains, vegetables, fruits and fish. Chemicals are imported for use in the agricultural sector as well as for industrial purposes.
Tonga’s major exports consist of squash, coconuts and bananas. Squash is the country’s primary export crop while coconuts are exported in large quantities to New Zealand, Australia and China. Bananas are exported mainly to Japan and the United States. Other exports include fish products such as canned tuna which is exported to Japan, Korea and the US; taro which is exported to Australia; kava which is exported to Europe; copra which is exported to India; and handicrafts which are exported mainly to New Zealand.
In 2018, Tonga’s total exports were valued at $265 million with squash being its main export crop accounting for $86 million or 32%. Coconut exports were valued at $45 million or 17% while banana exports were valued at $25 million or 9%. Fish products accounted for 6% of total exports while handicrafts accounted for 4%.
Tonga’s total imports were valued at $422 million in 2018 with machinery accounting for the largest share of imports at 25%. Motor vehicles and parts accounted for 17%, food products 12%, chemicals 8%, electronic items 7%, clothing 6% and other miscellaneous items 25%.