Transcript
BARRY COATES: The PACER agreement dates back, in its original form, to 2001, and all the way along and particularly since it was renamed as PACER PLUS, there was an intention that this be an agreement for the benefit of the Pacific. And those promises were made. However from what we see in this final form it appears that there are very few benefits for the Pacific. The Pacific has ended up taking on most of the obligations of a very traditional free trade agreement but without the benefits. And so this kind of free trade agreement does lock the Pacific Islands into a particular form of development that is being questioned by many developing countries.
DON WISEMAN: When you say the Pacific countries get few of the benefits, what is it they are missing out on.
BC: Well originally they asked for a number of things. They asked for a forward commitment in terms of seasonal work, so that there would be commitments on the numbers of workers that would be able to go Australia and New Zealand to work in horticulture. However that remains something that is decided by Australia and New Zealand from year to year, as we understand from the final agreement. The Pacific also wanted real flexibility on some of the rules on trade. Remembering that many of the Pacific countries are not members of the World Trade Organisation - they haven't been bound by WTO agreements, so essentially this would be the first time that they are. So they need flexibility, particularly the small countries, in order to be able to meet what are sometimes the very onerous requirements of these WTO rules. The third thing the Pacific has been asking for is a substantial amount of foreign assistance in order to overcome the obstacles to them exporting. They already have access to Australia and New Zealand's markets for some products, obviously not for tropical fruit and vegetables and kava to Australia, but for other products. And what they really lack is the ability to produce and export to the required standard, so there is some funding for the future but it is really a small amount of money compared to the types of assistance really required for 12 Pacific nations.
DW: Well in New Zealand's case it's $NZ55 million dollars over five years, spread among 12 countries. It is very much a drop in the ocean, isn't it? It won't go far in terms of setting up an environment where the island countries can better prepare themselves to export?
BC: That's right and what we have found in the past when there have been these kinds of programmes that go under t he name of aid for trade, they are usually decided on by the donor countries, by Australia and New Zealand, rather than by the country that is really looking for the assistance. So in the past they haven't necessarily been very effective in terms of building capacity in the Pacific to improve their export performance in the long term.
DW: Now this is a deal that is part of the Pacific Islands Forum. Two key island members in the grouping, Fiji and Papua New Guinea, are not in the deal. What does that make of the deal?
BC: I think this is the major problem for this agreement because the Pacific Islands themselves have an agreement already for trade in amongst the Pacific countries, called PICTA - the Pacific Islands Countries Trade Agreement - and PICTA is a way to build solidarity amongst the Pacific Island countries. Now suddenly we have got a new agreement parachuted in over the top of that where the two major Pacific economies are not part of it, and that really does undercut the other agreement and it undercuts the sense of regionalism for the Pacific that has been an aim of Pacific Island countries themselves for a number of decades but also an aim for Australia and New Zealand. They have put a lot of their aid programmes in the past to promote regionalism but now they have signed a trade deal that misses out on the two major countries. And I think it stands to potentially drive a wedge between the Pacific and I think it is a very unhealthy dynamic to have for Pacific solidarity.
DW: New Zealand and Australia already have a hell of a lot of trade with Pacific countries - or they sell a lot to the Pacific countries, not the other way round, so why have they behaved in such a hard headed way over this?
BC: I think the initial rhetoric was there should be benefit for the Pacific. I used to be head of OXFAM in the old days before I became an MP and we prepared a report called 'PACER Plus And Its Alternatives' and the alternatives were all about the ways that the Pacific could benefit from PACER Plus. And one of the ways that I think we should be doing that is treating this as an economic co-operation agreement, not a usual free trade agreement. If it was an economic co-operation agreement then we could talk about how can we make rugby, for example, work better for the Pacific than it does at the moment, where the Pacific ships its players over to Australia and New Zealand who gain most of the benefit. So there would be a much wider scope for, say, the ways the Pacific can benefit. But what Australia and New Zealand have done is they have kept on bringing the focus back to a very narrow framework of these free trade agreements and these free trade agreements are typically defined in terms that will help the major exporting countries but not help so much the smaller developing countries and certainly not small island states. So I think that has been a major problem that Australia and New Zealand have not been prepared to open and say, 'What we really need is an economic co-operation agreement that would provide substantial benefits for the Pacific'.
