Photo: Rob Maccoll/AusAid Photo: Rob Maccoll/AusAid

A fair trade deal with our Pacific neighbours

Australia has a particular responsibility towards its neighbours in the South Pacific. These economies are vulnerable and constrained because of their distance from markets, their small internal markets and the danger of exploitation from unscrupulous investors.

Pacific Island governments are under pressure from international financial institutions, aid donors and others, to open up their markets to goods and services from overseas. Yet history shows that opening up national markets too quickly or in the wrong way can increase hardship and poverty.

If Australia is to be a good neighbour in the Pacific, it must use its aid and trade policies to help overcome this and to fight poverty in the region.

Pacific under pressure

Pacific Island governments have spent the last four years in extremely difficult trade negotiations to agree an Economic Partnership Agreement with the European Union. Not to be outdone by the Europeans, the Australian and New Zealand governments are now trying to initiate their own trade negotiations with the Pacific.

In 2001, Australia and New Zealand signed a Pacific Agreement on Closer Economic Relations (PACER) with the island nations of the Pacific Islands Forum. Now the two regional powers are gearing up for the expansion of this into a regional free trade agreement called ‘PACER Plus’.

Smaller Pacific island countries have little capacity to negotiate complex trade agreements. Undertaking simultaneous trade talks with the EU as well as with Australia/New Zealand would push this capacity beyond its limit.

The Australian Government should not rush the Pacific into negotiating a trade agreement. It is vitally important that they are allowed sufficient time for a full assessment of what a pro-development agreement would look like. This must be done before negotiations start and must include a comprehensive social, cultural and environmental assessment that includes the participation of the wider Pacific community.

A fair trade agreement

It’s vital that Australia supports a trading arrangement that will help Pacific nations make the most of their trading opportunities. The agreement should:

  • Support the Pacific in building small businesses
  • Strengthen community-based agriculture and fisheries
  • Improve transport and communications?
  • Educate Pacific people on how best to trade on fair terms with Australia and New Zealand

Australia and New Zealand are the Pacific Island countries’ largest trading partners, so any agreement will have a significant impact on their small and often fragile economies. It is vital that PACER-Plus negotiations do more than simply focus on the further opening of Pacific economies to imports from Australian and New Zealand. Instead, Australia must work with its Pacific neighbours to use trade as a tool for ending poverty.

What Oxfam is doing

Oxfam is talking with the Australian and New Zealand governments to ensure their negotiating positions support development rather than just pursuing commercial self-interest. We are also working with Pacific partners to research the impact of, and alternatives to, a potentially damaging free trade agreement.

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