Will the ‘Samoan Way’ be replaced by the ‘P.A.C.E.R.-Plus Way’?
If Samoa, and other Pacific governments, are serious about assessing the impacts of P.A.C.E.R-Plus and genuinely consulting then they must follow Vanuatu’s decision and the signing ceremony must be postponed. The threats to Samoa are real and all Samoans should have the time to understand what is at stake and have a say in their economic future” – P.A.N.G.
Next week in Tonga there will be a signing ceremony for the regional trade agreement known as P.A.C.E.R.-Plus, an agreement that has been called the most significant for the Pacific this decade. Any deal of this significance needs to be opened up to the fullest of independent scrutiny, especially when that deal involves limiting what future Samoan governments can and cannot do to support Samoan driven development.
P.A.C.E.R.-Plus has been described as a ‘net loss’ by Papua New Guinea.
The Solomon Islands government forecast that any modest increase in exports under the agreement would be overwhelmed by imports from Australia and New Zealand.
Fiji remains outside the agreement with concerns about its ability to protect its domestic industries. Vanuatu has decided to not sign P.A.C.E.R.-Plus and instead undertaken an assessment to determine what the impacts will be before any decision.
Meanwhile New Zealand has loudly boasted about the benefits that P.A.C.E.R.-Plus will bring to its exporters, not to mention the millions they will save.
What exactly does P.A.C.E.R.-Plus mean for Samoa?
If you ask the proponents like the Office of the Chief Trade Advisor (O.C.T.A.) and the Ministry of Foreign Affairs and Trade, P.A.C.E.R.-Plus is described as a development agreement that will help the Pacific boost growth and build economies.
This will include better export opportunities for Samoan producers, increased foreign investment, extra aid money to help Samoa take advantage of the agreement, and improved labour mobility arrangements for Samoan workers looking to work in Australia and New Zealand.
It is worth having a closer look at these supposed ‘benefits’.
Firstly it’s important to note that none of the supposed benefits actually require P.A.C.E.R.-Plus. Australia and New Zealand can increase their aid and labour mobility programmes whenever they want and Samoa can change its investment laws when it chooses too.
Samoa already enjoys duty-free access to Australia and New Zealand, P.A.C.E.R.-Plus will not improve that in any way.
The aid money promised to help Samoan exporters meet quarantine standards is most welcomed but it is unclear why Australia and New Zealand insist P.A.C.E.R.-Plus is required for that.
Instead Samoa will be reducing 85% of its import duties, duties that protect local producers and contribute approximately US$11 million to the Samoan government budget.
While Samoa may have 25 years to make the cuts, the majority will most likely happen in the first 10 years raising a number of concerns about how that revenue will be made up with the potential raising of the V.A.G.S.T. being one option. If you factor in the inadequate safeguards for Samoan producers and you have an agreement that opens up greater export opportunities for Australia and New Zealand.
Under P.A.C.E.R.-Plus Samoa will be making binding further legal commitments on how it will give better treatment foreign investors or service providers. It is argued that these binding commitments will give investors confidence and encourage their investment in Samoa, the problem is that studies have shown that investors rarely look at agreements like P.A.C.E.R.-Plus when making decision on where their money goes. In addition to this Samoa will be granting greater rights to foreign investors than local ones and losing the ability to determine how investment will best benefit all Samoans.
P.A.C.E.R.-Plus will also jeopardise the ability of Samoan governments to regulate in the interests of Samoans. The commitments in P.A.C.E.R.-Plus override any of the nice language that says that Samoa can still regulate in its interest. In fact the same ‘exceptions’ to regulate have been overturned 96% of the time when they have been used in the World Trade Organization (W.T.O).
The ‘Samoan Way’ might soon have to give way to the ‘P.A.C.E.R.-Plus Way’.
The ‘Development Assistance’ component in P.A.C.E.R.-Plus was a key demand of the Pacific countries during the negotiations. This assistance is in two parts, one to help Samoa implement its commitments under P.A.C.E.R.-Plus and the other to help Samoa take advantage of the agreement. Both cases need Australia and New Zealand agreement to decide how the money is spent and currently only last for the first five years of P.A.C.E.R.-Plus.
The other key area of interest to Pacific countries such as Samoa in P.A.C.E.R.-Plus was ‘labour mobility’. The Pacific initially demanded a binding outcome on this to ensure that one of the few areas of possible benefit for the Pacific was locked in.
Instead it has been included in P.A.C.E.R.-Plus in a non-binding manner, in fact the main outcome is the promise of an annual meeting to discuss labour mobility issues. This is going ahead without the mandated voice of unions, those best positioned to support the rights of those workers participating in the seasonal labour schemes in Australia and New Zealand.
Despite the increase in sectors and numbers available from both Australia and New Zealand in their labour schemes, the fact that they are employer driven means that any benefits to the Pacific rely on the economic circumstances in those countries.
Even as the benefits seem likely to deliver little to Samoa, the costs appear substantial. The 2016 report Defending Pacific ways of life: A Peoples Social Impact Assessment of P.A.C.E.R.-Plus found that P.A.C.E.R.-Plus will put handcuffs on governments, hindering the ability of Pacific governments to balance commercial interests with regulatory sovereignty and social rights, fails to provide sufficient safeguards, lacks the flexibilities afforded to least developed and developing countries, will have negative health impacts, and will undermine the right to food.
The recent release of the legal text and market access schedules for P.A.C.E.R.-Plus is welcomed but it came less than two weeks away from the signing of the agreement.
If Samoa, and other Pacific governments, are serious about assessing the impacts of P.A.C.E.R.-Plus and genuinely consulting then they must follow Vanuatu’s decision and the signing ceremony must be postponed. The threats to Samoa are real and all Samoans should have the time to understand what is at stake and have a say in their economic future.