Preliminary Discussions on Pacific Trade Agreement

Hon Phil Goff
Minister of Trade

12 June 2007
Media statement

Preliminary Discussions on Pacific Trade Agreement

New Zealand and Australia are seeking discussions with Pacific Island countries on how to progress a free trade agreement involving member states of the Pacific Islands Forum, says Trade Minister Phil Goff.

"Forum Trade Ministers are scheduled to hold their annual meeting in Vanuatu in early August and we have asked the Forum Secretariat to convene preliminary exploratory consultations on how we should move forward to remove barriers to trade within the region", Mr Goff said.

"Under the Pacific Agreement on Closer Economic Relations (PACER) signed in 2002, Pacific countries agreed on the need to cooperate to foster economic growth, investment and employment in the region.

"Last year at the Forum Trade Ministers' Meeting we moved the process forward by commissioning a joint study to investigate the potential impacts of a closer economic relationship, and to analyse what Pacific Island countries need to build capacity, promote trade and create sustainable economies.

"The Forum Island countries will shortly conclude an Economic Partnership Agreement with the European Union. Under the PACER Agreement (Article 6(3)), those negotiations bring about consultations with Australia and New Zealand with respect to our own trading arrangements.

"This ensures that New Zealand, which already allows tariff-free entry to goods produced in the Pacific Islands, is not disadvantaged by preferential access to Pacific markets being given to European countries.

"Any movement towards a Free Trade Agreement in the Pacific will, however, be measured rather than rapid.

"The process for liberalising trade would need to be phased to take into account capacity constraints. A strong focus would be on providing assistance to developing economies to build their capacity to take advantage of any new trading arrangements.

"Trade is currently strongly in New Zealand's and Australia's favour reflecting the smallness of Pacific Island economies. This is partly balanced by services such as tourism and remittances back to the Islands.

"New Zealand's recent announcement of its Recognised Seasonal Employer Policy will assist Pacific countries greatly. It is an example of how regional integration can work to mutual advantage," Mr Goff said.

"New Zealand's aim is to develop an economic and trade policy that works to strengthen our development assistance policies and promote stability and prosperity.

"In the face of other regional trading entities such as the European Union, ASEAN and the North American Free Trade Agreement, it makes sense for the Pacific Islands Forum countries to examine how we can work more closely together for our common benefit", Mr Goff said.

ENDS