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Pacific Islands

Free Trade negotiations underway in Nadi

Nuku'alofa, Tonga

By Finau Fonua

Trade ministers and officials from 16 Pacific countries including Tonga will begin negotiations on a proposed regional free trade agreement known as PACER-Plus (Pacific Agreement on Closer Economy Relations) tomorrow, December 11, in Nadi, Fiji.

This will be the seventh round of meetings since negotiations on PACER-Plus first started in 2009.

PACER-Plus is a proposed regional free trade agreement between 14 Pacific Island states and Australia and New Zealand. The objective according to Pacific Island Forum Secretariat, is to provide “…economic cooperation between Australia, New Zealand and the Forum Island Countries (FICs) to foster improved economic growth, investment and employment in the Pacific region.”

The Australian Government stated that “(PACER) Plus negotiations offer an opportunity to help Pacific Islands Forum countries benefit from enhanced regional trade and economic integration.”

All 16 states are unanimous in the establishment of a free trade agreement but are still debating proposed arrangements. For example, popular proposals supported among Pacific Island States are the exclusion of international student fees for Pacific Island nationals studying in Australia and New Zealand and easier labour mobility to Australia and New Zealand.

Views from some non-state organisations however, are more cautious. Oxfam for example has expressed its concerns that a free trade agreement would disadvantage local businesses in small Pacific Island countries.

 Oxfam stated in its 2009 review of PACER-Plus “The most obvious concern is that governments are not allowed to favour their own companies over foreign ones. This means that fledgling PIC services companies will be required to compete with foreign companies on an ostensibly level playing field. This is likely to prove very difficult for many, as they have not had the advantage of being sheltered from foreign competition in their early stages, nor have they had access to large markets, government support or access to low cost finance. The challenge for small domestic companies is exacerbated by the difficulty of regulating international companies to ensure that they do not use practices such as predatory pricing to force local competitors out of business.”

Non-State actors will have their say on PACER-Plus as part of the meetings in Nadi, with the “Fourth NSAs Dialogue” being held on December 12.

The 16 countries participating in the PACER-Plus Negotiations are

  1. Australia
  2. New Zealand
  3. Tonga
  4. Fiji
  5. Federated States of Micronesia
  6. Kiribati
  7. Nauru
  8. Niue
  9. Palau
  10. Papua New Guinea
  11. Republic of Marshall Islands
  12. Samoa
  13. Solomon Islands
  14. Cook Islands
  15. Tuvalu
  16. Vanuatu