Advancing regional integration

Writing about the future of the Pacific Islands Forum (PIF) in this magazine last month, I concluded: “Economic union will come in due course when we deepen regional integration, specifically regional economic integration,” and added that “some structures that will bring this about have been created through our efforts at regional cooperation via the establishments of committees.” I then named the various committees and the private sector body involved.

Pacific Islands Forum Secretary General, Dame Meg Taylor, enlightened us on how to progress with regional integration when she spoke as an Observer at the Asia-Pacific Economic Cooperation (APEC) meeting in Port Moresby on 15 November 2018. She said: “In the Pacific we take a more expansive view of regional integration that extends beyond simple economic or market integration…….Indeed, our approach to integration is unique – the catalyst being Forum Leaders endorsement in 2017 of the Blue Pacific narrative as the core driver of collective regional action in the Pacific. Grounded in the strength of our collective will, the Blue Pacific narrative emphasises action as one ocean continent, based on our shared ocean identity, geography and resources.”

The above statement is loaded and somewhat pedantic. This article unpacks the various issues and forges a way forward on how we can effectively implement and achieve our own resolutions.

The economic union I wrote about is still very much in the mix, judging from Dame Meg’s statement. Economic union comprises a common market. The Forum’s regional integration proceeds beyond market integration, the Secretary General said. I did however write that such market integration is yet to be fully formed in the region.

Moving forward from here does not necessarily mean that we ignore the deficiencies of the past. PIF needs to re-visit its market integration agenda and implement relevant reparations to strengthen its integration bases before it builds further on it. What is needed is that all planned reparatory and foundational structural work directed at future regional integration is carried out on the basis of its Blue Pacific narrative.

As far as PIF’s Free Trade Agreements (FTAs) are concerned – the Pacific Island Countries Trade Agreement (PICTA) for the Forum Island Countries (FICs) and the Pacific Agreement on Closer Economic Relations (PACER) Plus for all members including Australia and New Zealand, the Blue Pacific narrative requires our ‘collective action’; and this should be directed at addressing the still outstanding ratification and implementation of these agreements. Essentially, this is action taken together by members to enable them to implement the agreements and trade freely amongst themselves, and more; enabling an individual member and the group to benefit from regional economic integration.

In terms of PICTA – its Trading in Goods agreement is currently being implemented by less than half of the FICs. Negotiations on its supplementary agreements in Services and Investment are still a work in progress; and this has been ongoing since 2001 when PICTA was first signed and 2004 when FICs Leaders endorsed extension of the PICTA to include Services and Investment.

Such lethargy needs addressing. Clearly, a boost of collective adrenalin from the Blue Pacific narrative is needed here to reinforce and rejuvenate the ‘collective will’ and ‘collective action’ in order to ‘recapture the collective potential’ of the economic integration we all aspire to achieve under Pacific regionalism.

PACER Plus, on the other hand, has proved divisive already. Fiji and Papua New Guinea have pulled out of the agreement. Others may do so in due course. This, clearly, is a blight against the Blue Pacific’s ‘one ocean continent’ approach. Further, it is a blight against ‘collective action’. This is a recipe for reduction in the collective benefit to all.

What is the Forum going to do to bring about the unity it desperately promotes? What specific actions will it take to enable the Blue Pacific narrative to boost and drive the unity it needs given the divide that has already emerged?

What are Australia and New Zealand— the Forum’s developed countries and OECD members, going to do in the same spirit of unity? Will they, in the spirit of give and take, and teamwork, return to the trade negotiations to inject much-needed pragmatic concessions and/or an array of special and differential treatments that may have been sidelined previously?

Implementation of these agreements will require all FICs to readily abolish trade barriers, and other barriers relating to movements of capital and personnel that exist amongst us. We may be further persuaded to consider establishing relevant institutions from pooling of our resources aimed at regionalising specific activities for economic integration. This is the regional integration we all seek.

It will require also, at the national levels, the enabling environment re-enforced with concomitant laws and regulations aimed at achieving sustainability of procedures and benefits under these agreements. Such regulatory and legal requirements are provided for under the Framework for Pacific Regionalism.

The sustainability being sought is the essence of the Blue Pacific narrative. Further, it is the essence of green policies that is fundamental in any land-based development. I tweeted recently: “Lest we forget, protecting our Blue Pacific, our Livelihood and our Home obliges us to guarantee green policy on land in every sector of life. Any shade of colour other than green will eventually tarnish the land that feeds us and will muddy the blueness
of our ocean.”

Such pragmatism will bring immediate benefits through utilising the various trade preferences built into these agreements; and economic development consistent with regional aspirations—our collective will—are likely to be facilitated. This will advance the Leaders’ vision of a region of social inclusion and prosperity. It will underline Blue Pacific’s ‘collective regional action’, grounded in our ‘collective will.’

Furthermore, a Common External Tariff (CET), envisaged by our early Leaders, resonates unity amongst PIF members and underscores our efforts at creating a ‘one ocean continent’, based on our ‘shared ocean identity’ and ‘geography.’ There are options in its application. If configured under PICTA, for example, then FICs need to consider Australia and New Zealand’s special positions as major trading partners whose preferential treatment is ensured under PACER Plus. If CET is configured under PACER Plus, then caution is called for. The issue can be somewhat complex given Australia and New Zealand’s numerous FTAs with other regions
and major global trading partners.