PANG | 23 October 2018
Analysis on trade deal shows Pacific losing out
The concerns held by Pacific communities and some Pacific island governments about the regional free trade agreement known as PACER-Plus are well founded according to new analysis released today by the Pacific Network on Globalisation (PANG).
The release of the comprehensive analysis and accompanying briefs examines the impacts of PACER-Plus in relation to the Trade in Goods as well as the Services and Investment components of the agreement.
“Over the years we have seen many experts detail the problematic nature of PACER-Plus and how it was being constructed to Australia and New Zealand’s benefit. These warnings, including from an Australian Parliamentary inquiry have been ignored and now we have a binding agreement that won’t address the real economic issues the Pacific Islands have and instead will burden them further with cuts in government revenue and the reduced ability to regulate,” continued Mr Wolfenden.
The analysis states that the Trade in Goods chapter requires Pacific Island Countries to make extensive cuts in their import taxes with Solomon Islands, Samoa, and Vanuatu expected to lose USD$13million, USD$12.5million and USD$7.5million respectively. In addition to this the safeguard mechanisms and infant industry provisions are too weak to be of any practical use to Pacific Island Countries who need to protect their industries that are being hurt by increased imports under PACER-Plus.
“PACER-Plus does little to help boost the exports of Pacific Island Countries yet it is burdening them with a whole raft of legally binding commitments with meaningless safeguards. This is not development by any definition,” stated Mr Wolfenden.
The Trade in Services and Investment chapters represent a serious restriction on the ability of Pacific Island Countries to regulate and ensure that investment that comes in has its benefits maximised.
“Under PACER-Plus, Pacific Island governments will have a reduced ability to regulate their service industries and investments. Instead the investors will be given greater rights to challenge any policies or regulations that they deem to be unfair. PICs are signing up to a framework that many nations are walking away from in favour of something that better balances the rights of governments and investors,” added Mr Wolfenden.
PACER-Plus was signed by Australia, New Zealand, and 9 Pacific Island Countries in 2017. Fiji, Papua New Guinea, Palau, Republic of Marshall Islands and the Federated States of Micronesia all have not signed on. Access to Australia’s recently launched Pacific Labour Scheme is linked to progress on PACER-Plus.
“PACER-Plus has always been about the interests of the Canberra and Wellington, Australia’s cynical move in tying the labour scheme to their market access into Pacific economies is yet further proof. There are very real and serious implications of this agreement that countries need to factor in to their ratification processes before making any final decision,” concluded Mr Wolfenden.
A Brief Analysis of Trade in Services and Investment under Pacific Agreement on Closer Economic Relations Plus (PACER-Plus)
A Brief Analysis of Trade in Goods under Pacific Agreement on Closer Economic Relations Plus (PACER-Plus)
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