A two-day private sector consultation is being held this week on March 17-18 in Nuku'alofa, to discuss the potential implications of the Regional Pacer Plus Agreement (PACER Plus) on Tonga’s private sector.

The implications were identified as a result of consultations held with key representatives from the agriculture, manufacturing, fisheries and tourism sectors. The selected individuals were asked what the PACER Plus Agreement would mean for them, the challenges and constraints faced by them and what trade processes or policy changes are required to make it work in the short and long term.

Although some sectors are better prepared than others, one of the key findings is that inadequate human and financial resources across the government and private sectors needs to be addressed in order for PACER Plus to be fully utilized.

Recommendations for the short term include the development of trade policies and export promotion strategies; having the government and private sectors working together to fully understand the agreement and how it will benefit them; and further negotiation on export conditions with Australia and New Zealand.

Background

Pacific Islands countries are limited in size and have difficulty in achieving the economies of scale to be able to complete in international markets. The Pacific Agreement on Closer Economic Relations (PACER Plus) was developed as a trade agreement between Pacific Island Countries and Australia and New Zealand. It aims to create jobs, raise standards of living and encourage sustainable economic development in the Pacific region by making it easier for these countries to trade.

The PACER Plus agreement covers sanitary and phytosanitary measures, technical barriers to trade, customs procedures, rules of origin, trade in goods, trade in services, investment, economic and development co-operation, and labour mobility.

From the agreement, Pacific Island Countries are encouraged to adopt policies, which should create an environment for trade and investment to flourish in the region.

PACER Plus negotiations are expected to be finalized by mid 2016.

Previous consultations were hosted by Tonga's Ministry of Foreign Affairs and Trade and the Tonga Chamber of Commerce and Industry with representatives from the private sector and the Office of the Chief Trade Adviser (OCTA). The preparation of the report was an initiative of the Tonga Chamber of Commerce and Industry.