Take the pace out of PACER:
Take the pace out of PACER: Trade ministers to set the framework for Pacific negotiations.
Trade officials are assembling in Brisbane today to kick off negotiations on a new Pacific trade agreement. Ministers will follow later in the week. This is a crucial meeting which will test whether Australia and New Zealand are prepared to listen to the Pacific’s needs and aspirations, or whether they will push an inappropriate model of development on the Pacific.
Even before they have started, trade negotiations between the Pacific Island countries, and Australia and New Zealand, have been controversial. In August, two days before the Pacific Islands Forum, the heads of state of the 14 Pacific nations were adamant in saying that they were not ready to negotiate and that Fiji needed to be included. But by the time the Forum meeting had ended, they had done a complete about turn and agreed to start negotiations, and to exclude Fiji from full participation. There is no doubt that Australia and New Zealand can get their way in the Pacific, but at what price?
Barry Coates, Executive Director of Oxfam New Zealand, says, “The Pacific’s development future is on the table in these negotiations. A rigid free trade agreement could severely impact government revenue and jobs, and exacerbate the growing levels of poverty and ill-health. This is the time to challenge existing frameworks and explore alternatives which will allow a more flexible set of polῩcies to enaῢle the Pacific to grow new industries, add value to its resources and diversify its economies.
Oxfam’s report ‘PACER Plus and its Alternatives’ suggests that taking a standard approach to trade negotiations could be hugely damaging for the region’s fragile economies. A key risk is the loss of government revenue from tariff reductions that could see Tonga losing 19 per cent of government income from a free trade agreement with Auῳtralia anῤ New Zealand, Vanuatu 18 per ce΅t, Kiribati 15 per cent, and Samoa 12 per cent. For many of these countries, the projected loss of goveῲnment revenue is more than their total health or education budgets.
“What is needed,” says Coates, “is an economic co-operation agreement, with the Pacific’s development at its core. New Zealand and Australia have talked the talk on making this a development agreement, they now need to walk the walk. The first step should be a proper consultation period involving business and civil society. There ΅eeds to be objeΰtive research ΰonducted into the types of trade and other economic polῩcies that would benefit the Pacific. A rush to start negotiations without this preparation could cause irreparable damage to the Islands economies and their development prospects. There is a lot at stake for the people of the Pacific, says Coῡtes.
“A good start would be to remove the barriers that make it difficult for Pacific businesses to export. New Zealand enjoys a massive trade surplus with the Pacific – around 4:1. Surely we should act now to boost Pacific exports and build trust, rather than waiting to use changes to policies like rules of origin and biosecurity procῥdures as bargaining chips in the negotiations.
“Pacific leaders are in the best position to know what type of agreement will suit their development priorities,” says Coates. “Australian and New Zealand ministers will need to come to the meeting with open ears and minds, prepared to put their promises into practice.”