I wrote: ‘Re-Negotiated PACER Plus for Post-Covid-19 Pacific Regionalism’ for the July 2020 Island Business issue. This was pitched particularly at strengthening Pacific regionalism (Pacific Islands Forum) as a means of a counterweight to what had appeared at the time as increasing threats to globalism. Moreover, strong regionalism is an effective collective means to multilateralism for PIF members, especially for the Forum Island Countries.
I opted for re-negotiating PACER Plus for three reasons. Firstly, the trade agreement was not being implemented at the time: its ratification target had not been reached. Secondly, Fiji was still engaged in its bilateral negotiations with Australia and New Zealand (ANZ), in the margins, in the hope of improving certain provisions of the then-agreed texts. Thirdly, I was and still am convinced that the agreement is likely to strengthen desired economic integration in the region. This would be so especially if it was to be extended to include the two biggest Melanesian traders of Fiji and Papua New Guinea.
I suggested then some ideas that could be considered for re-negotiating some provisions of the agreement that could convince the two Melanesian traders to sign onto the agreement.
Twelve months on, the situation has changed somewhat. COVID-19 still rages on. And the main threat to globalism seemed to have vanished together with the Trump administration in the US. Even the anti-globalism rhetoric of the Australian government has cooled. Stephen Dziedzic of ABC wrote last July: “The PM’s ‘negative globalism’ speech seems to have rapidly receding into the distance in the era of COVID-19. Australian Ambassador to the UN Mitch Fifield says while the Organization is ‘far from perfect’ it is nonetheless ‘indispensable’”.
Furthermore, PACER Plus itself has been ratified sufficiently to trigger the implementation phase. A PACER Plus Implementation Unit (PPIU) has been established and is operating out of Samoa. The Head of the Unit also doubles as Trade and Development Adviser who reports to the PACER Plus Joint Committee (PPJC).
Moreover, Fiji’s bilateral negotiations with Australia and New Zealand seem to have run out of steam.
The above events, preceding my July 2020 article, may appear to invalidate the argument for re-negotiating PACER Plus. Such invalidation is only partial. The third reason I proffered above: the need to strengthen regional economic integration, is as critical as ever in Pacific regionalism, particularly as a post-COVID-19 incentive. PICs still need strong, integrated and effective regionalism to aid their multilateral interventions. Anti-globalism may have faded. But its resurgence cannot be just wished away.
Strong Pacific regionalism is essentially the aspiration of PIF’s ‘Blue Pacific’ approach and the raison d’ȇtre of the proposed 2050 Strategy.
Regional economic integration therefore needs to be stepped up. Foundational regional leaders envisaged it way back in 1971. The history of Pacific regionalism is littered with trade and economic agreements – SPARTECA, PARTA, PACER, PICTA, PACER Plus, iEPA, cEPA (yet to be fully negotiated). There could have been a SPARTECA II in the late 1980s had Fiji’s proposal been backed by others. Regional planners must be constantly wringing their hands wondering where they have gone wrong in regional economic and in advanced regional integration.
PACER Plus now holds the key for more concerted regional economic integration and even for more advanced regional integration. Its re-negotiation, as proposed above, is still valid. The Prime Ministers of Australia and New Zealand, in a Joint Statement of 31 May, after their meeting in Queenstown, have given the green light. They acknowledged that PACER Plus is more than just a free trade agreement (FTA). Its full title is PACER Plus Trade and Development Agreement. They looked forward to “more PICs joining the agreement in order to realise its benefits of enhanced economic integration and inclusive growth.”
It can be assumed that the invitation to more PICs joining the agreement was directed with an eye especially to the two big Melanesian traders of Fiji and Papua New Guinea. This makes sense. The two traders’ contribution to regional economic integration and to more advanced integration can be quite substantial on the strength of their respective national trade. Such an inclusive approach on the part of the signatories of PACER Plus, especially sanctioned by Australia and New Zealand, is likely to be the crucial contributory factor to the integrated regional economic picture envisaged by the early regional leaders.
The choice of a renegotiated PACER Plus to invite Fiji and PNG aboard is a moot point. It can be argued that if Fiji and PNG want to sign onto the agreement, they can do so on the strength of the agreement as is. However, in the context of regional economic development and growth of PICs especially their specific disadvantages, any legal argument can be swayed by persuasive development polemics on equity, equality trade justice and morality.
Moreover, any opportunity to re-look at existing agreed texts for the purpose of renegotiation is a means for self-development and enrichment. Re-negotiating PACER Plus, as I have advocated, is thus propitious. The Institute for International Trade in Adelaide, for instance, has recently undertaken a project to investigate the future of Special and Differential Treatment (SDT) in WTO. A positive result from such a survey can be an added basis for renegotiating PACER Plus.
Another opportunity for PACER Plus to take an inclusive approach is that in managing the implementation of the trade agreement, both the PPIU and PPJC can pursue a parallel monitoring and evaluation role when it comes to PICTA. Such a role can be expedient for PACER Plus for a number of reasons. Firstly, the majority of PICTA signatories are also signatories of PACER Plus. What is thus good for PICTA is also good for PACER Plus, and they can supplement and complement each other in advancing Intra-PICs and PICs-Australia/New Zealand trade. This is likely to motivate regional economic integration as never before.
Another good reason is that such an inclusive role is particularly evocative of Australia and New Zealand’s long-standing commitment to preferential treatment of PICs. Greg Fry writes in ‘International Cooperation in the South Pacific: From Regional Integration to Collective Diplomacy’: “This notion of ‘region’ specifically did not include the territories of Australia and New Zealand despite their membership of the organisation. This was based on the premise, accepted by Australia and New Zealand, that the cooperative process was there to serve ‘developing’, rather than ‘developed’, societies.”
Such cooperative process and the regional integration that it will engender is likely to be doubly powerful and transformative, in this case: it being driven by two trade agreements working in concert. The agreements’ respective foci, whilst different, will tend to produce results that are supplemental. These will precipitate unprecedented economic integration. This first phase of economic integration can quickly advance further to another stage where the integrated economies would be considering shared regional institutions that are geared to providing much needed and competitively priced trade services in the areas, for example, of trade finances and credit insurance.
A number of trade agreements have come and gone. Some are still tottering – seeking their efficacy. PACER Plus, on the other hand, is proceeding forward with determination. Its PPJC has the backing of its principal developed partners and their respective Prime Ministers. Should the Implementation Unit recommend adjustments to the agreement and its practical operationalisation as proposed above, it can be anticipated that PACER Plus is likely to be the prime mover that will take regional economic integration for Pacific regionalism to heights never before attained.
The author is a former Fijian Ambassador and Foreign Minister and runs his own consultancy company in Suva, Fiji.
