PACERPLUS consultations underway in Tonga [1]
Wednesday, June 12, 2019 - 21:30. Updated on Thursday, June 13, 2019 - 11:02.
A handful of church leaders and groups attended a public consultation session on the PACER-Plus Agreement on 10 June at the Wesleyan Church Moulten Hall, in Nuku’alofa.
PACER-Plus promotes a free trade agreement between Australia, New Zealand and the Pacific countries.
The consultations are being held in Tongatapu this week by Heiloni Latu and Taniela Sila from the Ministry of Revenue and Customs, to explain the agreement and to give members of the public a chance to voice their opinions and ideas.
During the consultation concerns were raised that the PACER-Plus agreement would have a negative impact on the economy, and that some areas of the agreement were not clear. Others said more dialogue is needed before Tonga ratifies PACER-Plus later this year.
Concerns
One of the concerns raised at the consultation is the loss of import tax revenue collected by the Tongan Government under PACER-Plus and how they would cope without this income.
Heiloni said although the agreement would allow more goods to be imported with no import tax, consumption tax that is already in place will still apply to these goods.
Other concerns raised include the possibility of the Tongan Government increasing taxes to offset the import tax lost under the agreement, local businesses closing as foreign businesses could take over (e.g major supermarket chains), and higher unemployment rate.
One church member suggested if Tonga is to export goods under the agrement, quality control is needed. Tongan goods such as coconut oil production will need to improve to meet international standards and be competitive.
This includes food such as root crops that could sell at major supermarket chains in New Zealand and Australia.
Another suggested the agreement should protect local businesses and include youth development.
Members of the public also spoke about the Rules of Origin of goods, where parts imported from other countries could be assembled in Tonga and labelled as 'Made in Tonga'. Some also spoke about the Labour Mobility Scheme with New Zealand and Australia which is not under the PACER-Plus agreement.
Public consultations were held in Ha’apai last week and the team will head to Vava’u next week.
Heiloni said after consultations are held, a report on the results will be submitted to Cabinet.
In 2017, the PACER-Plus Development and Trade Agreement was signed in Nuku’alofa by Australia, Cook Islands, Kiribati, Nauru, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. The Pacific Island countries have not yet ratified it. Two of the biggest Pacific economies, Fiji and Papua New Guinea, have not signed the agreement.