Proceed with caution
Negotiations about trade deals are nothing new. It’s the stuff that’s keeping the global economy ticking over with deals being signed left right and centre by different parties.
In the Pacific, we are not immune. Away from our bilateral dealings with donor countries and global organisations, our government officials who are sometimes supported by representatives of the private sector are tasked to represent us in negotiations on different matters.
By and large, these negotiations are quite complex. The issues involved are specialised areas requiring specialised expertise so that in the eyes of an ordinary citizen, it’s easy to get lost.
The undeniable truth however is although the discussions are often complex, complicated and behind closed doors, the end result will always be manifested publically. It is reflected in the every day lives of ordinary people through the cost of living, opportunities for development, social behavior as well as economic prospects.
This is why it pays not to be totally ignorant of the negotiations going on around us – even if we understand very little about them.
In Apia this week, a key trade deal for the Pacific has been on the discussion table. The government has been taking the lead in a number of public consultations on Upolu and Savai’i to raise awareness about the controversial Pacific Agreement on Closer Economic Relations (P.A.C.E.R) Plus.
The deal, designed to “stimulate economic growth and job creation by reducing trade costs of exporting goods and services; an opportunity to attract foreign investment; an opportunity to access cheaper goods for consumers and local producers” is being negotiated between Australia, New Zealand and the Pacific countries.
Another interesting element to the negotiations is looking at ways to improve the seasonal worker programmes in Australia and New Zealand.
On the face of it – and strictly judging from the official spin - P.A.C.E.R Plus is a positive for the Pacific. It promises brighter economic prospects for citizens whose ability to generate income are severely restricted by issues of transportation, location and size.
But not everyone is sold on the idea. Papua New Guinea and Fiji for example have withdrawn. Vanuatu, we understand, is considering following P.N.G and Fiji’s example.
Away from government level, there are very strong opponents of the agreement among the civil societies; many of them have been extremely vocal in warning the Pacific representatives.
Their objections seem to have found renewed vigour in a recently commissioned report titled “Defending Pacific Ways of Life: A Peoples Social Impact Assessment of PACER-Plus” by the Pacific Network on Globalisation (P.A.N.G). The report warned that P.A.C.E.R-Plus as it currently stands will have “negative impacts on health outcomes in the Pacific, would threaten the right to food security and sovereignty, undermine the ability of Pacific governments to regulate to balance commercial interest and social, environmental obligations and commitments, and have a disproportionate impact on women.”
The report warned “there should be no decision on P.A.C.E.R-Plus until there has been a fully-funded and independent social impact assessment.”
For Samoa, Ole Siosiomaga Society Incorporated referred to a recent interview by Dr. Kessie where he indicated that one of the most contentious issue is modification of tariffs, which in his view is not a big issue.
“However as it currently stands the projected revenue loss from the removal of import taxes from PACER-Plus found that Pacific Island countries are set to lose more than USD$200 million per year,” Ole Siosiomaga Society warns.
“For Samoa, we would be looking at an annual revenue loss of between USD$11-14 million, or almost 40% of the health budget for 2016. These cuts will severely impact how the government provides essential services such as health and continue the fight against Non-Communicable Diseases.”
And that’s not all.
“The wide ranging coverage of P.A.C.E.R-Plus will mean that the scope of government intervention (like regulations, licensing etc) will be impacted.
“P.A.C.E.R-Plus contains ineffectual protections on the right of governments to regulate. The token gestures attempting to support that right are undermined by their requirements to have any regulation subject to the primacy of commitments in P.A.C.E.R-Plus. The definition of public services is too weak and any proposal to change a countries commitments in case the liberalisation has gone wrong is a highly problematic process.
“Samoa wants to attract more foreign investment but P.A.C.E.R-Plus goes against these aims to do that by restricting what the government can and cannot do. Sadly the loss of room for Samoa to ensure that the benefits of any investment are maximised or best serves Samoa are compounded by the fact that there is little credible evidence to suggest that an agreement like P.A.C.E.R-Plus would actually contribute to more investors coming in.
“Given that there is a lot at stake it makes sense to know as much as possible about what impacts P.A.C.E.R-Plus will have on everyone and our environment. Yet, such assessments are yet to be done to a level that matches the need.”
Now these are not isolated views. These views are shared right across the Pacific by members of the civil society who have been actively campaigning against the deal.
Take Rachael Le Mesurier, Executive Director of Oxfam New Zealand, for example.
“The Pacific is unique for its number of small island developing states and it is hard to see how a free trade agreement can be a fair trade agreement if small countries, with populations of a hundred thousand or less, are up against New Zealand, Australia and the W.T.O powers,” she said.
“Whilst the negotiators have gone some way to speak to these concerns the substance remains, that there are very real doubts as to whether P.A.C.E.R-Plus will provide fair benefit for those living in the Island nations.”
The views are even shared by Papua New Guinea’s Oro Governor, Gary Juffa, who says the Pacific island countries cannot afford to commit to P.A.C.E.R-Plus without fully understanding the impacts.
“P.A.C.E.R-Plus is similar to any other free trade agreement, and there are a lot of risks that Pacific Island countries will be opening up their economies to, without adequate safeguards or protections.”
There are a lot more objections but we will stop here.
The point is obviously very simple.
It’s understandable why the governments are engaging in such trade talks. We are small economies and we definitely cannot foot it alone in the bigger scheme of things.
But in looking at running with the big boys so to speak, our governments need to be alert. The word for all the negotiators today is to proceed with caution. What you decide today we will reap tomorrow. What do you think?
Have a wonderful weekend Samoa, God bless!