PACER Plus legal text finalised but have we been strong armed by Aust, NZ?
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 Not entirely because being placed outside the legal framework means it can be withdrawn at any point in time.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.
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.
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.
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.