The economic vulnerability of small island states has largely been attributed to their inherent characteristics and problems which include: physical isolation and distance from main markets; minimal share of world trade; low productivity and insufficient supply; inability to diversify production; high transport and transit costs; difficulties in attracting foreign investment; and low competitiveness.
International trade has increasingly been recognised as an underpinning determinant of economic growth and developments in the Pacific region.
The first Pacific Agreement on Closer Economic Relations (PACER) was opened for signature on 18 August 2001 and entered into force on 3 October 2003. In June 2009, Pacific Forum Trade Ministers agreed to the establishment of the Office of the Chief Trade Adviser (OCTA) and in August 2009 the Pacific Forum Leaders welcomed the decision to establish the OCTA.
Leaders also agreed to recommendations from Forum Trade Ministers to commence PACER Plus negotiations to develop a more comprehensive framework of trade and economic cooperation with Australia and New Zealand.
This project will build the institutional capacity of OCTA and secure its sustained ability to provide trade support, capacity building and coordination to the Pacific Forum Island Countries (FICs) in their PACER Plus negotiations.
This project has contributed to greater consensus forming around national and regional strategies and negotiating positions in relation to PACER Plus, and measurable progress has been made towards a completed agreement of closer economic relations between FICs, and Australia and New Zealand. Most recently the 14th PACER Plus Intercessional meeting was successfully conducted and concluded.
One of the PACER Plus objectives is to create a regional economic environment that will enable FICs to achieve robust economic growth and sustainable development, and enhance their participation in international trade. Considerable progress has been made in the negotiations to date, with parties concluding negotiations on legal texts on: Customs Procedures (Trade Facilitation), Trade in Services, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Initial Provisions, Final Provisions and Transparency, Institutional Provisions, Development Assistance, Investment, and Labour mobility.
The PACER Plus Agreement represents a critical step towards integration into the multilateral trading system. Ultimately, citizens of PIF countries can be expected to benefit from improved economic growth, investment and employment opportunities, resulting from closer relations with Australia and New Zealand.
Economic and legal analytical research was provided to guide trade policy positions in FICs in relation to the PACER Plus Agreement on closer economic relations between FICs, and Australia and New Zealand. This included more than 170 analytical reports, feeding in and out of PACER Plus Trade Officials’ Meetings. This also includes Article-by-Article analyses of the various chapters of PACER Plus to identify, inter-alia, commitments, specific actions for fulfilment, primary and secondary institutions responsible, resource requirements, available resources and existing gaps that need to be addressed to enable the PICs to implement their commitments. Additionally, recent in-depth analytical work has been completed on Labour Market Liberalisation Experiences in Selected FTAs: Drawing Parallels with PACER Plus.
National negotiating teams from 14 Commonwealth FICs benefited from expert advice, direct training and technical support on effective formulation and negotiation of trade policy, and tools and strategies for regional negotiations. Training and capacity building on the process of undertaking trade negotiations, trade policy research and analysis, has also been delivered through OCTA's Forum Island Country (FIC) Attachment Program, which has most recently hosted Trade Officials from Tonga, Tuvalu and Vanuatu.
National-level consultations have been undertaken though the project, most recently in Nauru, Samoa, Papua New Guinea, Tonga to undertake an assessment of implementation assistance and broader trade and investment-related assistance needs. Recent pan-regional consultations on sectoral issues attached to Telecommunications, Labour Mobility, Declaration of Origin (DO) and Certificate of Origin (CO), have also helped broaden consensus and ready stakeholders for these key areas of the Agreement. The project has also helped the OCTA to engage with FICs stakeholders and Non-State Actors for the purposes of raising awareness and keeping them abreast of the developments in the PACER Plus negotiations. Most recently a brochure on ‘PACER Plus: Benefits for Pacific Island countries’, has been produced outlining key aspects of the negotiation.
In the projects final year, the CFTC experts are working to support the OCTA define and progress plans for the (prospective) PACER Plus Implementation processes.
Finally, the project acknowledges cross cutting issues such as gender, youth and environment which require significant attention to FICs development aspirations. For example FICs are characterised by young and rapidly growing populations, but the domestic labour markets are not growing fast enough to absorb new entrants, who are in most cases, disadvantaged low-skilled or semi-skilled youths and woman, especially women, having to compete in an already saturated labour market. Issues of environmental protection and reliance on infinite resources such as fish for exports are also of considerable concern to FICs. Project activities are therefore designed to address cross cutting issues both explicitly and implicitly.