Ministry breaks silence, confirms P.A.C.E.R Plus ratification

Samoa's Government has broken its silence on the legal status of a controversial regional free trade agreement and finally confirmed that it ratified the P.A.C.E.R Plus agreement more than a month ago.

In a media statement late on Friday, the Ministry of Foreign Affairs and Trade (M.F.A.T.) confirmed that the Government passed the Pacific Agreement on Closer Economic Relations Plus (P.A.C.E.R. Plus) into law on June 28. 

 (P.A.C.E.R) Plus has now been ratified by three of its signatories: New Zealand, Australia and Samoa. 

It will take force shortly after a further five signatories ratify the agreement.

Australia, New Zealand and nine Pacific Island countries, including Samoa signed the agreement in Nukualofa, Tonga in June last year and were given two years to prepare before ratifying P.A.C.E.R. Plus.  

“In the lead up to Samoa’s ratification, the National Working Committee on Trade Arrangements (N.W.C.T.A), had discussed and endorsed developments in P.A.C.E.R Plus and other trade arrangements,” the release states.

The N.W.C.T.A includes representatives from government industries and peak bodies representing non-government organisations, the manufacturing industry and business. 

“Work continues to prepare for the implementation of the agreement through the PACER Plus Readiness Package,” the M.F.A.T. media release states.

Despite the Government declining to make a public statement on the issue before Friday, New Zealand's Trade Minister issued a statement welcoming Samoa's ratification more than a week ago.

An M.F.A.T. spokeswoman said that the Government notified other signatories of the agreement in July during the Pacific Games.

The agreement followed two decades of negotiation and it covers goods, services and investment, and replaces a previous one-way agreement, which gave the Pacific Islands duty and quota-free access to Australia and New Zealand.

PACER Plus “obliges Pacific island members to reduce import tariffs over time and to liberalise incoming services trade and investments,” according to the United Nations, who are supporting countries to ratify the agreement.

Cabinet approved the ratification on the May 8, having passed the Customs Tariff Amendment Act 2019, which legislated Samoa’s use of the international trade coding system called the HS 2017.

HS 2017 is the latest Harmonized Commodity Description and Coding System, which  has approximately 5,300 product descriptions used to standardise the way exporters describe their products.

Later, Cabinet will consider the Custom Amendment Regulations 2019 and the Customs (Rules of Origin for P.A.C.E.R Plus) Order 2019, two more provisions required to ratify the agreement.

The Ministry of Customs and Revenue said it is working on capacity building with customs, and the International Monetary Fund’s Pacific Financial Technical Assistance Centre (P.F.T.A.C) will come to Samoa to talk revenue policy and planning. 

“A national stakeholders’ workshop on customs provisions and rules of origin is planned to take place in the next few months.

“Tariffs in the eight regional non-LDC developing country signatories must fall to zero by 25 years after 2017, the date of entry into force of the agreement, with most tariff reductions taking place in the first 10 years.”

The schedule is slower for the Solomon Islands, Tuvalu and Kiribati who among the signatories are the three least developed countries. 

The Executive Director for Ole Siosiomaga Samoa Society Incorporated criticised the Samoa Government when New Zealand hailed its apparent ratification.

“This is not a good decision indeed for Samoa," said Fiu Mataese Elisara who added the agreement would “come back to haunt the Government".

“The loss of national policy space and sovereignty to take decisions to recover after natural and economic disasters made worse by strict rules on subsidies will tie future Samoan governments to less[er] response actions,” Fiu said.

Papua New Guinea and Fiji, the two largest Pacific Island economies who are involved in negotiations have not ratified the agreement and are in ongoing discussions with Australia and New Zealand.

Fiji is undergoing an assessment of the agreement. In May, Attorney General Aiyaz Sayed-Khaiyum said he is still concerned about the loss of tariffs revenue on products.

“Any Australia and New Zealand product that comes into Fiji, will be allowed duty-free,” he said.

“We do export to Australia and New Zealand, but the balance of trade is not that high, it’s not in our favour, so obviously out tariff revenue will completely go. 

“So the revenue collection for the government will completely go, this government, next government, 20 years’ time.”

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