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Pacific Countries Sign PACER Plus Deal

by Mary Swire, Tax-news.com, Hong Kong

14 June 2017


Australia, New Zealand, and eight Pacific island countries have signed the Pacific Agreement on Closer Economic Relations (PACER Plus), a free trade agreement covering goods, services, and investment.

Negotiations on PACER Plus began in 2009 and were concluded in April 2017. The agreement was signed in Tonga on June 14, 2017.

The agreement will remove barriers to trade, including tariffs, at a pace that takes into account the varied levels of development among participants.

Australia and New Zealand will jointly provide AUD7.7m (USD5.8m) to help participants make the legal changes necessary for implementation of the agreement, including the modernization of customs and clearance systems to facilitate trade. A further AUD25.5m in development assistance will be made once the agreement is ratified, to help the island countries take full advantage of the agreement.

In a joint statement, Australia's Trade Minister, Steve Ciobo, and his Assistant Minister, Keith Pitt, said: "PACER Plus is unique in that it is both a trade and a development agreement. It has the potential to reshape the economic fundamentals of the Pacific region by creating new opportunities for trade and investment in our neighbourhood."

New Zealand Trade Minister Todd McClay commented: "This is a landmark moment for the economic future of the Pacific. PACER Plus will help sustainably develop the countries involved through trade and help raise the standard of living for their people."

He added: "PACER Plus also benefits New Zealand businesses by establishing a common set of trading rules covering goods, services, and investment. These rules will reduce tariffs and red tape for New Zealand exporters and investors as well as future-proof competitive access for our companies."

The agreement will gradually eliminate tariffs on 84 percent of New Zealand exports to participating countries, and secure most-favored-nation treatment on 100 percent of New Zealand goods exports to participants. Tariffs will be eliminated over extended timeframes of 25 or 35 years. Timeframes for least developed countries will depend on the date they graduate from least developed country status.

The agreement also contains a number of WTO disciplines, including non-discrimination and most-favored-nation obligations for internal taxation and regulation, including for the eight PACER Plus parties that are not members of the WTO.

The signatories to PACER Plus are: Australia, Cook Islands, Micronesia, Kiribati, Nauru, New Zealand, Niue, Palau, Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.

TAGS: Nauru | tax | investment | business | free trade agreement (FTA) | Tonga | tariffs | Australia | Cook Islands | Kiribati | Marshall Islands | Niue | Samoa | Vanuatu | agreements | New Zealand | Palau | regulation | trade | Solomon Islands | Tuvalu | services

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