Trade deal to help diversify the economy

Friday February 28, 2020 Written by Published in Economy
Dockworkers unload containers from the freighter Olomana at the weekend. Customs are being promised more support as part of a regional trade deal. 20022715 Dockworkers unload containers from the freighter Olomana at the weekend. Customs are being promised more support as part of a regional trade deal. 20022715

PACER-Plus regional agreement guarantees Australian and NZ financial support for our customs and quarantine agencies, says government. 

 

Cook Islands will be endorsing a regional free trade agreement despite opposition from anti-globalisation activists.

An analysis prepared by the Pacific Network on Globalisation says Pacific Islands countries are taking on disproportionate binding commitments, in exchange for false promises of benefits.

Deputy Prime Minister Mark Brownconfirmed the country would ratifying the Pacific Agreement on Closer Economic Relations (PACER-Plus) before the end of June.

A minimum of eight countries are needed to ratify, in order to activate the agreement that aims to deepen trade and investment liberalisation in the broader Pacific.

Cook Islands will be joining Australia, New Zealand, Samoa and Kiribati who have already completed their ratification of PACER-Plus. Two of the region’s biggest economies, Papua New Guinea and Fiji, have refused to join.

Pacific Network on Globalisation analysis examines the technical details and promises of the two arrangements included in PACER-Plus: The Arrangement on Labour Mobility, and the Development and Economic Cooperation Arrangement.

Australia-based Adam Wolfenden, the network’s trade justice campaigner, said PACER-Plus offered little by way of actual benefit for Pacific island countries.

“Australia and New Zealand have offered nothing binding and what is included amounts merely to no extra aid money and an annual meeting, all in exchange for binding market access to the Pacific.

“So bad was the deal, that an Australian Parliamentary Committee recommended that some of the development assistance go towards monitoring the anticipated negative impacts of the deal on government revenue, health and gender equality,” Wolfenden added.

“With the money already coming from existing aid budgets, Australia and New Zealand are effectively getting PACER-Plus for free. They also retain complete control over what the Pacific determines it needs for its development.” 

But Mark Brown said once the agreement came into force, the Pacific countries who had joined would receive immediate support from New Zealand and Australia.

“The first thing that will be in place will be access to the support from New Zealand and Australia to assist the Pacific island countries’ agencies such as their trade, customs and quarantine agencies to be up to speed with any requirement for compliance needed in terms of their inwards trade and also their outward trade,” Brown said.

It’s a “big deal for us”, he argued.

As PACER-Plus members, Cook Islands would have access to any market that both New Zealand and Australia had, for any of their products.

“For Pacific island countries that have signed the PACER-Plus, the benefit that we are looking at is that access into market. But mindful also each of the Pacific island countries have very different trade profiles.

“Some are very heavily into exports of primary produces, some are more into exports of secondary manufactured products and some like the Cook Islands have very little exports at all because a lot of our industries here are to do with services in tourism.

“For us, we see benefits right across the Pacific region and being able to I guess access those markets through agreements that larger countries like Australia and New Zealand have done on our behalf.”

With the Cook Islands graduating to high income status at the beginning of this year, Brown said agreements such as PACER-Plus were timely, helping to diversify the country’s economy.

“It’s important to us to grow the economy in order to fill some of the gaps that may be left by development funding that we had relied on in the past.

“For us diversification of the economy is very important. It’s currently tourism-based but we have a small financial sector that is important to us, we have fisheries, that’s important but also we have an emerging mineral sector in terms of our seabed minerals that the country is looking very, very seriously at this stage.” – with RNZ

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