PRESS RELEASE 24/05/09GH

Is The Pacific Ready To Negotiate?

Representatives of SIG met with officials from Australia, New Zealand, and other Pacific island countries in Port Vila last week to discuss a possible free trade agreement between the countries, known as ‘PACER Plus’.

Australia has stated that it would like to launch negotiations as early as August this year.

‘A free-trade agreement with Australia and New Zealand could bring real benefits,’ said Heinz Vaekesa, Director of Trade in Solomon Islands and leader of the SIG delegation to Port Vila. ‘For instance, Australia and New Zealand have indicated that they will consider allowing the Pacific greater access to their labour markets.

This could mean better paid jobs for Solomon Islanders, as we have seen under the RSE scheme. Under the RSE scheme, hundreds of Solomon Islanders travel to New Zealand each year to work on farms and in orchards for up to seven months.

However, the two sides remain divided on several crucial details, including the design and funding of an organization to support and advise the Pacific island countries during the negotiations.

Australia and New Zealand have offered limited funding, but have demanded in exchange that the office not receive further funding from any other donors.

“The office of the Chief Trade Advisor (OCTA) will be extremely important to us, not just during negotiations, but in helping us to get ready,’ Vaekesa added. ‘If PACER Plus is going to be successful, we need to involve a wide range of people and organizations from the outset, so that the agreement — if we sign one — reflects the needs and views of the country. We want to start with detailed consultations here in Honiara, but we’ll need support from an OCTA to do that”.

Many free-trade agreements signed in recent years have come under criticism for failing to take into account the views of the private sector, civil society groups and the public.

They are controversial because they typically create costs such as job losses, as well as including benefits such as new opportunities for export and lower prices.

“Successful negotiation means securing an agreement that will really benefit the country, and having a plan in place to minimize the negative impact. But that’s not possible unless there is a real dialogue between government and the people that will be affected by the deal,’ Vaekesa explained.

Pacific island countries have proposed that national consultations be held in each country before negotiations start.

However, given capacity constraints in most Pacific island countries, such consultations would need support from a regional organization.

The OCTA was designed to meet this need, but Australia and New Zealand have refused to fund the full office, so that there would not be enough staff to support national consultations — only to give advice during later negotiations.

“Every country has limited funds,’ acknowledged Vaekesa, ‘including Australia and New Zealand. We understand why they cannot provide all of the support that we need. However, we don’t understand why they won’t allow us to receive it from other donors. That is the reason that we will need to accept support from other donors. We have spoken to several agencies who understand the constraints we face and have shown interest in supporting us. Why won’t Australia and New Zealand let them? We hope that Australia and New Zealand will support this idea rather than opposing it”.

In the Paris Declaration on Aid Effectiveness, donors from across the world endorsed various principles that defined good practice in providing aid to ‘partner countries’ (recipients) such as the Pacific island countries.

Amongst the principles it describes are ‘ownership’ — allowing partner countries to take the lead in developing and implementing projects, and ‘harmonization’ — including multiple donors in single projects rather than forcing each donor to provide aid through different channels.

“The Paris Principles are very important for a country like Solomon Islands,’ Vaekesa insisted. “I believe they capture how aid should be delivered, but we all realize that there is a lot of work to be done before aid is really delivered in that way”.

Ends