Forum Island Countries Respond to Distorted Views on PACER PLUS

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In our capacities as the Lead Spokespersons for the Forum Islands Countries (FICs)  on PACER Plus, we would like to state in no uncertain terms that the Pacific Network on Globalisation (PANG) does not speak for the FICs and that we do not share their lopsided and inaccurate views on the PACER Plus negotiations or the conclusions contained in their Social Impact Assessment, which apparently was carried out on the basis of outdated negotiating texts and without access to the Parties’ draft commitments on trade in goods, trade in services and investment.  It is obvious that such a study cannot be taken seriously.  Without such vital information, how could it have possibly made an assessment of an Agreement yet to be concluded and implemented?


We welcome the engagement of Non-State actors (NSAs) in the negotiating process as evidenced by the recent Sixth NSA Dialogue Workshop which took place on 10-11 June 2016 in Nadi, Fiji.  Such discussions were welcomed by the participants as yet another opportunity to clarify the misconceptions about PACER Plus.  What is not welcome is propaganda from an NGO that refuses to participate in the NSA Dialogue yet spreads false information which distorts the reality and seeks to undermine the positions of the FICs in the negotiations.  It is highly unfortunate and regrettable that PANG takes the view that the negotiators of the FICs are ignorant and are being railroaded by Australia and New Zealand into accepting their positions in the negotiations.  We would like to assure PANG and other NSAs that is not the case and that we are in full control of the negotiations and that we have been able to effectively advance our interests with invaluable support from the Office of the Chief Trade Adviser.


In Trade in Goods, whereas Australia and New Zealand have undertaken a legal commitment to continue providing duty-free, quota-free treatment to all products originating from the FICs upon the entry into force of the PACER Plus Agreement, the FICs do not have to extend the same treatment to goods originating from these two countries.  In fact, most of us have excluded our sensitive products from liberalisation. In selecting the excluded products, we took into consideration products which generate a lot of revenue for our governments, the need to protect our infant industries from competition and the need to safeguard the health of our citizens.  Furthermore, we have between 25 and 35 years to eliminate our tariffs.  This generous time-frame exceeds the WTO standard of 10 years.


The Trade in Goods Chapter also contains several special and differential treatment provisions in favour of the FICs.  We have the ability to modify or withdraw our tariff commitments by offering, as a way of compensation, lower duties on agreed products of the affected countries.  We will have access to a transitional safeguard measure which would enable us to temporarily increase our tariffs to deal with import surges where they threaten to cause or cause serious injury to our domestic industries. We will also have access to an ‘infant’ industry clause which would enable us to increase our tariffs whenever required to protect our infant industries.


It is clear from the foregoing that allegations that the PACER Plus will lead to a deterioration of the health of Pacific people, undermine our food security, the demise of our infant industries and create significant job losses are incorrect and unfounded.


With respect to Trade in Services and Investment, contrary to the trend in using a negative list to schedule commitments in trade agreements worldwide, the Parties in the PACER Plus negotiations have agreed to use a positive list to schedule our commitments.  This essentially means that each FIC is free to choose the sectors in which it wants to give commitments and also place limitations on the commitments assumed by them.  In the Schedules of Commitments, most FICs made it clear that foreigners can only lease but not own land. In fact, Australia and New Zealand did not request the FICs to undertake commitments on land. A number of FICs retained their right to screen all foreign investment proposals before granting approvals.  Some FICs also placed restrictions relating, inter alia, on the equity participation of foreigners in the committed sectors and required foreign companies to enter into joint ventures in some selected sectors.  It should also be pointed out that the Investment Chapter does not have an investor-state dispute settlement mechanism which enables foreign investors to sue countries before international tribunals.  All disputes between investors and host states have to be settled before domestic courts and tribunals.


The right of the Parties to regulate and to introduce new regulations in the national interest is also expressly recognised in the Agreement.  The current PACER Plus provision is identical to the provisions in Pacific Island Countries Trade Agreement and the Melanesian Spearhead Group Trade Agreement.  This shows that allegations that the FICs will lose the right to regulate under PACER Plus are baseless and without merit.  In addition, the right of the FICs to take measures to protect the environment is also expressly recognised under PACER Plus.  Our countries are marginalised in world trade and without adequate foreign direct investment in the key sectors of our economies, we will continue to operate in the periphery of the global economy.  The PACER Plus Agreement would assist our countries to attract foreign direct investment and facilitate our greater participation in the global economy.


The FICs can potentially earn several hundreds of millions of dollars from the seasonal work programmes of Australia and New Zealand.  It will be recalled that Australia removed the cap under its Seasonal Work Programme in June 2015 and extended the scheme to the entire agricultural sector and to the accommodation sector in selected locations.  New Zealand has increased the cap under the Recognised Seasonal Employer scheme twice in the last two years from 8000 to 9500 and has introduced pilot initiatives in the construction and fisheries sectors.


Australia and New Zealand have also committed to provide financial and technical assistance to the FICs not only to assist with our implementation of the PACER Plus but also to address our infrastructural and other challenges which have impeded our efforts to increase and diversify our exports and play a greater role in the international trading system. We have been working with Australia and New Zealand to identify our trade-related priorities which would be funded by them.


We believe that PACER Plus is a trade and development agreement that puts the interests of the FICs at its core. We affirm our faith in trade as an engine of economic growth and prosperity and we consider PACER Plus as an important building block for us to realise our goal of deeper regional integration with the view of achieving robust economic growth and sustainable development.


Mr. Joseph Ma’ahanua – Lead Spokesperson for the FICs on PACER Plus

Mrs. Tessie Lambourne – Deputy Lead Spokesperson for the FICs on PACER Plus

Mr. Kulu Bloomfield – Deputy Lead Spokesperson for the FICs on PACER Plus