An Australian academic has cautioned Pacific Island governments of the impact of their decision to sign up to the PACER Plus trade agreement with Australia and New Zealand.

University of Sydney’s Dr Patricia Ranald, who is also linked to the Australian Fair Trade and Investment Network, said four separate parliamentary inquiries on foot in Australia into its diplomatic, defence and trade relationships with the Pacific Islands points to Canberra being worried about the deterioration of its ties.

She said a 2018 parliamentary committee inquiry report “noted the absence of any independent study of PACER Plus economic impacts” and its impact on island nations’ economies.

“In 2018 an unusually critical Parliamentary Committee Inquiry Report with a majority of Australian government members noted the absence of any independent study of PACER Plus economic impacts.  The report acknowledged potential negative impacts on small and vulnerable Pacific Island economies,” Dr Ranald said in a statement.

The refusal by the region’s largest economies Fiji and Papua New Guinea (PNG) to sign up the trade agreement, according to the academic, spells problems for the Australian government.

“This shows that the government is worried by the deterioration in its relationships with the Pacific, which is symbolised by the fact that Fiji and PNG have not signed the PACER Plus trade agreement with Australia and New Zealand since it was completed in 2018 and that only three Pacific Island countries have so far ratified it.”

Samoa became the first Pacific Islands nation to ratify the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) in July last year, joining proponents New Zealand and Australia. The agreement needs at least eight signatories in order for its ratification to take effect.

Dr Ranald said during the nine years of negotiating the agreement, island nations continued to emphasise that their focus is climate change and not trade agreements.

“The Australian government has failed to address climate change issues in a way that is meaningful for the Pacific, which has damaged the relationship. This has created the context for China and others to compete for influence, which now appears to be the Australian government’s main concern,” she added.

With most of the Pacific nations possessing economies that revolve around farming and fishing, Dr Ranald said the challenges that they could potentially face include the loss of revenue from import tariffs, which can translate to cuts in essential services.

“The World Bank has said these factors can prevent these economies from developing new industries and employment to offset the impacts of increased import competition. The (2018) report warned that loss of government tariff revenue could also result in cuts to essential government services in areas like health and education.”

It is understood PACER Plus was on the agenda when the Australian Minister for Trade, Tourism and Investment Simon Birmingham attended the Forum Trade Ministers Meeting in Fiji last month. 

However, Dr Ranald criticised the agreement, saying the Australian government has still not acknowledged the “flaws” in it and added that Mr Birmingham continues to pressure island governments to sign up.

“But the government has not so far acknowledged these flaws in the deal. Trade Minister Birmingham has still been pressuring more Pacific Island governments to sign and ratify PACER Plus. We can only hope that the multiple parliamentary inquiries will provide an opportunity for the government to actually listen and understand the real needs and priorities of the Pacific.”