PACER Plus trade deal now in force

The trade agreement PACER Plus which Samoa is a party to with eight other nations is now in force effective 13 December 2020.

The other parties to the agreement include Australia, Cook Islands, Kiribati, Niue, Solomon Islands, Tonga and New Zealand.

New Zealand’s Minister for Trade and Export Growth, Phil Twyford, welcomed the entry into force of the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) in a statement released from New Zealand.

“PACER Plus will be instrumental in supporting Pacific economies to rebuild from the devastating impacts of COVID-19,” he said.

“The agreement provides opportunities for goods and services produced in the region to be sold within the Pacific and globally, thereby using trade as an engine of economic growth and sustainable development.”

The New Zealand government said the agreement shows its commitment to the Blue Pacific as it commits 20 per cent of its aid programme for trade activities in the region.

According to the New Zealand government, this support will provide opportunities to build capacity, enhance infrastructure and improve the ability of countries to benefit from trade opportunities such as those made possible through PACER Plus.

But the regional trade agreement has had its critics during the negotiation stages with the Suva-based Pacific Network on Globalisation (PANG) questioning the rationale of small island economies signing up to a deal led by Australia and New Zealand, which would ultimately make their fragile economies more vulnerable.

PANG Trade Justice Campaigner, Adam Wolfenden, last month published a critical analysis of the PACER Plus on the Australian National University’s Development Policy Blog and argued that the trade agreement will leave the signatory island economies more vulnerable and will force them to also give preferential treatment that they give to others to Australia and New Zealand.

“PACER Plus also requires the PIC economies to be open to foreign investment and to prioritise the needs of investors over other concerns, thereby explicitly limiting the role of government to regulate the economy,” Mr Wolfenden writes.

“In PACER Plus there are broad clauses that require the Pacific to pass on any better treatment they give to a third-party to Australia and New Zealand as well. 

“This will impact the current Post-Cotonou negotiations between the Pacific islands and Europe, which are set to be concluded at the end of the year.”

Mr Wolfenden urged the Pacific signatory states (except Australia and New Zealand) to “be wary of the timelines for reviews of commitments within agreement” and pointed to the non-binding development assistance which he said will only run for five years.

“This is important, as it will come after the other reviews within three years of the commitments in goods, services and investment. 

“The latter two reviews are explicitly ‘to progressively liberalise’ the already extensive market access (with some ‘appropriate flexibility’ for developing countries). 

“One imagines that the PICs will once again have to trade off market access to secure donor funding.”

Describing the agreement as a “squandered opportunity” for Pacific Island states, Mr Wolfenden said the regional trade agreement should have focused on assisting island exporters meet Australian and New Zealand quarantine standards.

“The focus should be on assisting PIC exporters to meet quarantine standards in Australia and New Zealand, supporting the emergence of new PIC industries, promoting the diversification of PIC economies and ensuring that the traditional systems and cultural practices in the Pacific aren’t displaced by Western-style investments. None of this requires PACER Plus to be in force.”

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