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Ministers Urged Caution on Services and Investment

Ministers Urged Caution on Services and Investment Negotiations


Trade Ministers from the Pacific Island Countries have been cautioned over the dangers of liberalising trade in services and investment. Ministers are considering such a proposal under the current meeting on the regional free trade agreement known as PACER-Plus.

Adam Wolfenden from the Pacific Network on Globalisation commented that “any binding commitments on services and investment will limit the policy space that the Pacific has to define and determine for itself how it wants to pursue its own development.”

“Opening up the Pacific to be more attractive to foreign investors wont in and of itself result in greater investment. Investors make decisions based on a number of factors, trade liberalisation isn't necessarily high on that list, so the Pacific must not forfeit its right to regulate in its self-interest for the hope of greater investment inflows,” continued Mr Wolfenden.

Trade in services and investment aims to limit the level and type of government regulation around service delivery and investment. This can take the form of removing the requirements that foreign investment or service providers employ locals, use domestically produced goods, or be governed by a majority of local board members. It also impacts the ability that governments would have to provide specific support to nurture and develop emerging local industries.

Fiu Mataese Elisara, Executive Director of O le Siosiomaga Society Inc (OLSSI), stated that “undertaking negotiations on services and investment will see Samoa asked to open up even more of its industries. We are yet to see what the impacts of World Trade Organization membership are but here we are already considering going further”.

The consideration of expanding the scope of negotiations under PACER-Plus comes after comments from Papua New Guinean Trade Minister Richard Maru stating that PNG was interested in PACER-Plus and considered in lop-sided in favour of Australia and New Zealand, a position that had sympathy from Solomon Islands Prime Minister Lilo.

“Lowering the requirements for investors from Australia and New Zealand will result in an even more lop-sided agreement in their favour. By limiting the ability of governments to use domestic regulation and determine the conditions upon investment, the Pacific is undermining their ability to ensure that Islanders get the most benefit possible from any foreign investment,” concluded Mr Wolfenden.


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