More Consultation Needed On PACER-Plus

Mary Swire, Tax-News.com, Hong Kong

22 October 2010

A meeting of a wide range of stakeholders, including ministers, non-government organizations and businesses, has decided that much more regional consultation will be required on the proposed PACER Plus free trade agreement (FTA).

PACER Plus is the framework for a new regional trade and economic integration agreement between Australia, New Zealand and 13 other Pacific islands. It is intended to foster greater intra-regional trade opportunities by proceeding with the implementation of key regional trade agreements and, in particular, working to allow for the free movement of goods and services.

The recent meeting, chaired by Kaliopate Tavola, a former Fijian Minister for Foreign Affairs, decided that PACER Plus needed to be related to the different development needs of each island. It was advised that any future agreement should be implemented in stages so as to protect each island’s particular economic circumstances.

There have been concerns that the only beneficiaries of such an FTA would be Australia and New Zealand, given their large trade imbalances with, and the lack of industry in, the other islands. In particular, it has been pointed out that a standard FTA with Australia and New Zealand would see the other islands losing a large slice of government income currently obtained from their high import tariffs.

The recent meeting therefore called for more and continuing consultation with the islands during the preparatory phase and while formal negotiations were being held. Tavola has also said that, if a full regional FTA was found not to be possible in the future, trade agreements on a sub-regional (without two or three of the islands in the agreement) or, even, bilateral basis, should be explored.