Pacer Plus:New Zealand and Australian exploitation in the Pacific

Byron Clark
The Spark July 2009

New Zealand and Australian trade ministers met with their Pacific counterparts in Samoa to negotiate an “enhanced version” of the Pacific Agreement on Closer Economic Relations (PACER) dubbed “PACER Plus”. The negotiations have been controversial for two reasons, one is the exclusion of Fiji, which New Zealand and Australia currently have sanctions against. Fiji has been officially suspended from the Pacific Forum but not from PACER, which is a separate treaty.
The other reason is the likely possibility of increased exploitation of the Pacific by the regional powers. As Solomon Islands opposition leader Manasseh Sogavare told the Solomon Star News;

“As far as Solomon Islands is concerned, the arrangement would amount to opening up one-way traffic of trade benefits from here to Australia and New Zealand, which in any case is already in favour of these countries without the PLACER-PLUS arrangement”

At the 2008 Pacific Islands Forum Leader’s Meeting, Pacific trade officials were mandated to prepare a roadmap for possible trade negotiations. The draft roadmap, prepared earlier this year, had actual negotiations beginning in 2013. Australia and New Zealand however have been pushing for agreement to begin negotiations much earlier. Trade ministers from 13 Pacific countries were invited to a meeting in Auckland in May to convince them to press ahead with negotiations. Notably absent from this meeting was lead spokesperson for the Pacific islands on PACER-Plus discussions, Solomon Islands Minister for Foreign Affairs and External Trade William Haomae, and Trade Ministers from the Pacific’s biggest economies, Papua New Guinea and, of course, Fiji.
According to Maureen Penjueli, Coordinator of the Pacific Network on Globalisation (PANG), the proposed timetable “is all about the political priorities of the Australian government in particular. It certainly has nothing to do with the development needs of the Pacific”

Pacific NGOs including trade unions support the delaying of PACER Plus. Mele Amanaki, Chairperson of the South Pacific and Oceanic Council of Trade Unions told a public meeting in Sydney that not only should formal negotiations for PACER Plus not start before 2013, but due to the global financial crisis, they may need to be pushed out even further. A recent AusAid commissioned report published by the Institute for International Trade at the University of Adelaide suggested PACER Plus would result in a 30 per cent increase in trade in the region. The report failed to indicate however that the vast majority of that increase will be in favour of Australian and NZ exporters. In contrast, Waden Narsey from the University of the South Pacific is predicting that 80 per cent of Pacific manufacturing could close down under PACER Plus, leading to unemployment for thousands of workers, including in countries which lack state welfare to assist the unemployed.
These facts make the comments made by New Zealand trade minister Tim Groser to Radio New Zealand International quite ironic;

“We actually want to then provide them with economic development assistance to take advantage of a common market if we can establish that and actually start to create some export jobs in these countries.”

Writing in Matangi Tonga Adam Wolfenden commented that PACER Plus was less about economic development and “more about getting Australian and New Zealand services to invest in the Pacific.” Wolfenden goes on to say;

“If the development interest of the Pacific is at the heart of the intentions of Australia and New Zealand, like they continually say it is, why must it look like a free trade agreement? The global economic crisis as well as others like the food and climate crisis have shown the failure of the free market. The Pacific so far has been somewhat slow to embrace the neo-liberal ideology and given the global crises it would seem like the time to start exploring other options.”