Pacific Island nations seek closer economic partnership with New Zealand and Australia

Forum Island Countries have decided it is now time to move beyond their existing SPARTECA agreement with Australia and New Zealand, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton said they wanted to advance towards a more comprehensive framework for trade and economic cooperation, as provided for under PACER.

This emerged from the review of PACER initiated at a meeting in Nadi of Forum trade ministers, attended by Mr Sutton and Parliamentary Private Secretary Winnie Laban.

Mr Sutton said the Forum nations wanted to be part of the action, and to foster economic growth, investment, and employment.

Mr Sutton briefed his colleagues on the disappointingly slow progress in the WTO Doha Development Round, in contrast to the range of bilateral and regional agreements which New Zealand has been progressing with partners across the Asia-Pacific region. He told them in particular of the wide-ranging provisions of the strategic Closer Economic Partnership recently concluded with Thailand.

“Previously, they were cautious about getting in too deep, but now they can see things passing them by. They need to leverage off the growth that is happening all around them.”

Pacific Island countries had been warned by NGOs to be wary of being dragged into the neo-liberal agenda, but are now beginning to see beyond that rhetoric.

SPARTECA, the South Pacific Regional Trade and Economic Cooperation Agreement, is the non-reciprocal agreement dating back to 1981 which provides for duty-free access of Pacific Island goods into the Australian and New Zealand markets. PACER, the Pacific Agreement on Closer Economic Relations, which came into force in 2002, provides for eventual negotiations on reciprocal free trade.

The Forum trade ministers called for a joint study of the potential impact of a region-wide CEP. They also requested a gap analysis of their needs in respect of capacity building, trade promotion, and structural reform. This is to take into account a study on their progress with fiscal reform, which is to go before economic ministers who will meet soon in Tuvalu. The work will also bear in mind the progress island countries are making in their negotiation of an Economic Partnership Agreement with the European Union.

Trade officials will get back together once the studies are completed, to make recommendations to ministers.

Some countries were concerned that the development of a comprehensive framework might take too long. They won agreement, as an interim measure, to the convening of informal consultations to review the rules of origin under SPARTECA.

The trade ministers called for the effective implementation of the Regional Trade Facilitation Programme under PACER to ensure Pacific Island countries can participate meaningfully in regional trade. This programme covers facilitation work in the area of customs, quarantine, and standards and conformance. The ministers described it as a conduit for greater economic integration as called for under the Pacific Plan.

The meeting was attended by all the independent nations in the South Pacific as well as Minister Didier Leroux of New Caledonia, who emphasised the territory’s interest in joining the process, initially through association with the trade agreement joining the independent nations of the Pacific, PICTA (Pacific Island Countries Trade Agreement). New Caledonia’s Congress recently authorised the opening of negotiations. Forum ministers had invited both French and United States territories in the Pacific to consider joining PICTA and PACER.

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