PACER Plus le­gal text fi­nalised but have we been strong armed by Aust, NZ?

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The le­gal text of the ‘Pa­cific Agree­ment on Closer Eco­nomic Re­la­tions (PACER) Plus’ agree­ment has been con­cluded by the Pa­cific Is­lands Fo­rum Min­is­ters re­spon­si­ble for Trade. The agree­ment is said to be aimed at cre­at­ing jobs, rais­ing stan­dards of liv­ing and en­cour­ag­ing sus­tain­able devel­op­ment in the Pa­cific. Talks had be­gan in 2009 and since ne­go­ti­a­tions have been on­go­ing. There has been much com­ments made by Aus­tralia and New Zealand re­gard­ing this. The ques­tion which arises now is have the Pa­cific Is­land coun­tries, in par­tic­u­lar Fiji, got what we wanted or have they been strong-armed by the two re­gional pow­er­houses.

Fiji had been lob­by­ing for a legally bind­ing com­mit­ment on labour mo­bil­ity. Whilst labour mo­bil­ity has been in­cluded, it is out­side the le­gal frame­work of PACER Plus. Sounds good right? Not en­tirely be­cause be­ing placed out­side the le­gal frame­work means it can be with­drawn at any point in time.

Fiji used to be a part of the Aus­tralia and New Zealand labour mo­bil­ity scheme es­tab­lished ear­lier but got kicked out af­ter the events of 2006 which saw rapidly de­te­ri­o­rat­ing po­lit­i­cal re­la­tion­ship be­tween the coun­tries. Thus, there is al­ready a prece­dence of coun­tries be­ing kicked out if there is po­lit­i­cal in­sta­bil­ity. What is the guar­an­tee if the re­la­tion­ship be­tween the coun­tries is not good in the fu­ture, Fiji isn’t kicked out again. Per­haps this was the rea­son Fiji was push­ing for a legally-bind­ing com­mit­ment from Aus­tralia and New Zealand.

Other crit­i­cal fac­tors

The gen­eral feel­ing is Fiji has lost out in a num­ber of ways es­pe­cially with two cru­cial is­sues that were re­main­ing to­wards the end. Aus­tralia and New Zealand are be­lieved to have in­cluded the Most Favoured Na­tion pro­vi­sion in the le­gal text. The pro­vi­sion will en­sure if Fo­rum Is­land Coun­tries have fu­ture trade agree­ments with third par­ties, then they are to ex­tend the same ben­e­fits and priv­i­leges to Aus­tralia and New Zealand.

Fiji, to­gether with other Pa­cific is­lands, is un­der­stood to have op­posed this. Mean­while, the other pro­vi­sion which is be­lieved to have had a dis­ap­point­ing out­come was the in­fant in­dus­try clause.

Fiji, to­gether with Fo­rum Is­land Coun­tries, pushed for an op­er­a­tive, im­ple­mentable in­fant in­dus­try pro­vi­sion which was per­ma­nent and was ap­plied till the du­ra­tion of the agree­ment. This was left out.

Com­mit­ments

The mar­ket ac­cess com­mit­ments that Fiji or any of the Fo­rum Is­land coun­tries un­der­take to re­duce the tar­iff un­der PACER Plus, will be legally-bind­ing un­der the trade agree­ment. Whilst Aus­tralia and New Zealand might ar­gue that they will bind their tar­iff rate at zero thus also mak­ing mar­ket ac­cess com­mit­ment, this is al­ready the case un­der SPARTECA. SPARTECA rather is the South Pa­cific Re­gional Trade and Eco­nomic Co-op­er­a­tion Agree­ment.

It is a non-re­cip­ro­cal trade agree­ment in which Aus­tralia and New Zealand of­fer duty-free and un­re­stricted ac­cess for spec­i­fied prod­ucts orig­i­nat­ing from the de­vel­op­ing mem­bers of the Pa­cific Is­lands Fo­rum.

De­ci­sions

It has been agreed that mem­bers would work to­wards fi­nal­is­ing the PACER Plus mar­ket ac­cess ne­go­ti­a­tions with a view to com­plet­ing them by end of this Oc­to­ber. The PACER Plus agree­ment is ex­pected to be signed by end of this year. But ques­tions re­main.

TWIT­TER

Fiji was rep­re­sented at the PACER Plus meet­ing in Christchurch by Min­is­ter for In­dus­try, Trade and Tourism, Faiyaz Sid­diq Koya (seated third left next to NZ Min­is­ter for Trade, Todd McLay (fourth left), who so far has not com­mented on the is­sue.

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