The Pacific Network on Globalisation (PANG) has called on Australia to rethink its current approach to trade and investment with the Pacific Islands and instead promote genuine avenues for development.
In a recent submission to the Australian Parliamentary Joint Standing Committee on Foreign Affairs, Defence and Trade, PANG cautioned that pursuing the regional free trade agreement known as the Pacific Agreement on Closer Economic Relations (PACER) Plus, will undermine Pacific development and Australia’s relationship with the region.
“Through PACER-Plus, Australia is pushing an agreement that benefits Australian exporters and investors and will only serve to reinforce the widely held view that Australia’s attitude to the Pacific is one of self-interest” commented PANG’s Coordinator, Maureen Penjueli.
The PACER-Plus agreement was widely rejected by Pacific civil society organisations, unions, academics, and churches, with many concerned about the lack of independent assessment and consultation.
“PACER-Plus was sold as a development agreement to the Pacific, yet it consistently passed up opportunities to adopt more development-friendly conditions, instead Australia’s onerous demands and conditions combined with the lack of flexibilities for Pacific Island countries has resulted in the single largest failed attempt at regional integration,” added Penjueli.
PACER-Plus is a free trade agreement that was signed in 2017 but is yet to enter into force. Papua New Guinea, Fiji, Palau, Republic of Marshall Islands and the Federated States of Micronesia representing more than 80 percent of the Pacific’s economies did not sign the deal.
Fiji’s has stated that PACER Plus will be detrimental to many of Fijian industries as it requires removal of import taxes on over 80 percent of Fiji’s trade and will result in the liberalisation of sectors, where Australian and New Zealand industries are more competitive, have economies of scale and are more powerful than Fijian industries.
PANG’s Inquiry submission highlighted the asymmetry in the relationship between the Pacific Islands and Australia, where as the largest aid donor to the region, Australia has leveraged that position to promote its commercial interests at the expense of the Pacific Islands development aspirations.
“The Pacific Islands have stated their need for binding development assistance to address the supply-side constraints that they face for development, yet an outcome like PACER-Plus will see crucial aid money diverted from more beneficial projects into ensuring compliance with the agreement, effectively ensuring that Australia’s market access to the Pacific is implemented” stated Penjueli.
“COVID19 has again demonstrated the strength and resilience of traditional Pacific systems such as customary land tenure systems, yet these systems are seen as barriers to trade under agreements like PACER-Plus. Australia can genuinely help trade and investment in the Pacific without undermining the policy and regulatory space of the Pacific Islands to determine their own development” concluded Penjueli.
The Australian Parliamentary Committee is examining the conditions necessary to activate greater trade and investment with the Pacific Islands that can benefit Australia and the Pacific. It has invited a range of experts to appear and give evidence before it.