The 14 countries participating will sign the agreement in Tonga in June.
Pacer Plus is expected to enhance the economic development of Pacific island countries through greater regional trade and economic integration with Australia and New Zealand.
The New Zealand trade minister, Todd McClay, said the deal included a NZ$55 million development package for Pacific island countries to increase their export capacity.
He said the successful conclusion of Pacer Plus negotiations was a landmark day for trade and the sustainable economic development of the Pacific.
“Pacer Plus is a unique trade and development agreement. It includes a development package of more than $55 million that will help raise standards of living, create employment opportunities and increase export capacity in Pacific island countries,” McClay said.
The agreement which was reached in Brisbane on Thursday by Pacific Island, New Zealand and Australian Trade Ministers includes tariff phase out periods which recognise the vulnerable nature of many Pacific economies and the strong relationship they share with Australia and New Zealand.
“This is a significant achievement. After eight years of negotiations, we can now focus on implementing an agreement which future-proofs our access whilst helping develop their export economies,” McClay said.
“The agreement will also create a common set of trading rules covering goods, services and investment in support of economic growth. These rules will help reduce tariffs and red tape for exporters and investors, which will increase the attractiveness of the region for trade and investment.”
While parties to the agreement already had duty free access for exports to Australia and New Zealand, McClay said the deal allowed Pacific island countries to gradually phase out tariffs on imports in recognition of the vulnerable nature of their economies.
Critics of Pacer Plus said the deal would deprive tariff revenue from Pacific island countries for essential services.
But McClay said the deal was as much about development as it was about trade.
Notably absent from the conclusion of negotiations were representatives from Papua New Guinea and Fiji, after both countries pulled out of the agreement.
The deal includes an expedited process for countries who are members of the Pacific Islands Forum to join.
Australian trade minister Steven Ciobo said the agreement aimed to balance trade and development goals across the region.
Solomon Islands Trade Minister Milner Tozaka said the agreement would benefit his and other Pacific nations, and praised Australia and New Zealand for their leadership in reaching a deal.
“Australia and New Zealand are not only going to help us in implementing the agreement, but we are so pleased that they are also going to help us in modernising our trade-related infrastructure and enhance our productive capacity,” he said.
The 14 countries participating in Pacer Plus are New Zealand, Australia, Cook Islands, Federated States of Micronesia, Nauru, Kiribati, Niue, Palau, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.