Page 26 - Islands Business January 2021

Trade Trade
THE UNFINISHED BUSINESS

OF PACER PLUS

By Wadan Narsey Then there is an uncomfortable “elephant in the room” for
FIC signatories to PACER Plus: what happened to the FIC unity
Despite the regional agreement PACER Plus coming into ef- promised by PICTA?
fect on 13 December 2020, serious weaknesses are still being But first, a reminder of what independent FIC advisers have
pointed out, as in the influential ANU publication Develop- been recommending for PACER Plus for more than fifteen
ment Policy Blog (DPB 25 and 26 Nov. 2020), clearly reminding years.
governments of Forum Island Countries (FICs) there is much
unfinished business. Pacific views
While Jim Redden, a regular external adviser to DFAT, gave As early as 2003, I had warned FICs that PACER Plus might
the expected thumbs up for the agreement, Adam Wolfenden, not only lead to serious revenue losses for some FICs, but that
a Trade Justice Campaigner for the Pacific Network on Glo- Australia and NZ saw PACER Plus as a mechanism to avoid be-
balisation warned about the dire consequences for FICs. ing excluded by FIC concessions to third parties like the EU (A
Wesley Morgan, a Research Fellow with the Pacific Hub at negotiating framework for EPA negotiations with the EU and
the Griffith Asia Institute pointed not only to the weaknesses fiscal reform issues for Pacific ACP countries. Report for the
but also the need for Australia and NZ to do more especially Forum Secretariat. 2003).
through enhanced access for FIC labor to Australian and NZ A year later, my article in Pacific Economic Bulletin (“PICTA,
markets. PACER and EPAs: weaknesses in Pacific island countries’ trade
No doubt worried by the persisting criticisms, Alex Hawke policies” (Vol.19 No 3. 2004) predated many of Wolfenden’s
(then Australia’s Minister for International Development and criticisms as well as Morgan’s constructive recommendations.
the Pacific) again reiterated all the potential benefits (DPB 15 Better alternatives to crude integration for FICs were further
Dec. 2020) but failed to address the criticisms. spelt out in Pacific Futures and Fiji Islands Business.
Unfortunately, Development Policy Blog did not present any It is a pity that such Pacific views are missing from the
opposing views from the governments of PNG and Fiji. current Australian debate in the DPB, suggesting that Islands
It is a pity also that Pacific Island expert voices who used Business can be a debating platform for critical regional is-
to be heard before on the pros and cons of PACER Plus are sues.
somewhat absent from the current debate.
In 2018 DPB had published an excellent article by Island The pro-PACER views of Redden
Business correspondent Nic Maclellan which not only high- Jim Redden gave the “official line” arguments for PACER
lighted the criticisms by PNG and Fiji, but more importantly, Plus, that it would help FICs to “modernise and harmonise
Australian Parliamentary reservations about PACER Plus and trade systems, reduce the costs of trade, build the capacity
the apparent absence of independent advice to the Australian of Pacific businesses to increase market access and value add,
Government, while leadership at Forum Secretariat itself has and generally boost to intra-regional trade ... through more
been questioned. harmonised customs systems, improved border and document
There is little doubt that Australia and NZ ought to be seri- compliance and a reduction in cargo and freight rates” etc.
ously examining their own positions on PACER Plus for two But critics reiterate that merely improving markets for
political and geostrategic reasons. goods and services is not going to lead to any significant
First, PNG and Fiji, the two economic giants critically improvement to investment and growth rates of GDPs of most
needed for PACER Plus to be credible, have refused to sign on FICs.
the dotted line and are unlikely to do so, despite the official On the contrary, the alleged benefit of “increased move-
line Australian optimism. ment of skilled and semi-skilled professionals” may be
Second, Australia’s current deepening crisis with China sug- strongly disadvantageous for the FICs even if, as claimed by
gests that China is now even more likely to counter Australian Redden, PACER Plus “only facilitates temporary access”.
(and US) influences on the FICs and have some success given While Redden admits that while the special ‘Arrangement
the widespread political instability in some FICs. on Labour Mobility’ for lower-skilled labour “did not go as
On the plus side, the COVID pandemic has highlighted the far as I would have liked in terms of special access for Pacific
most important benefit that Pacific countries wanted formally Islanders” he strangely asserts that FICs which ratify PACER
embedded in the PACER Plus agreement: the strengthening of Plus “will gain from first mover advantages on market access
labor mobility provisions for Pacific Island seasonal labor. and concessional arrangements, such as access to any new
COVID also suggests a strange new window of opportunity or enhanced labour mobility schemes”. But he paradoxically
for FICs: that it is some State Governments and the Northern also admits that non-signatories such as Fiji and PNG have
Territory, rather than the federal government that have been also benefited from participation in Pacific temporary migra-
proactive in facilitating the use of Pacific Island labor to save tion programs created or expanded during PACER Plus nego-
some of this season’s harvests. tiations, clearly proving that these benefits did not require

26 Islands Business, January 2021