Pacific civil society organisations say that local industries must be nurtured before the region embarks on more free trade agreements. Credit: Catherine Wilson/IPS

By Catherine Wilson
CANBERRA, Australia, Jun 3 2015 (IPS)

Fourteen Pacific Island Forum countries are currently locked in negotiations with their two largest economic neighbours, Australia and New Zealand, to forge a new regional free trade agreement called ‘PACER Plus’, which supporters believe will boost economic growth in the region.

With the Pacific Islands holding a tiny 0.05 percent share in world trade, Edwini Kessie, the Pacific Islands’ chief trade adviser, told IPS the pact could lead to their integration “in regional and global supply chains and enable them to enhance their participation in international trade.”

"PACER Plus is definitely not for Papua New Guinea. The destruction of people’s lives and resources of this country is the result of such agreements, which do not benefit our people." -- John Chitoa, coordinator of the Bismarck Ramu Group
PACER Plus talks follow the 2001 Pacific Agreement on Closer Economic Relations (PACER) between the same countries. It intends to go further than a standard trade agreement to include the movement of goods, services such as education and health, and investment with additional discussions about increased labour mobility and development assistance to small island states.

But the Fiji-based Pacific Network on Globalisation (PANG), along with 32 other civil society organisations from countries such as Papua New Guinea, Vanuatu and Samoa, are unconvinced by the spin and have launched a protest with the ‘Tabu PACER Plus’ campaign.

“PACER Plus is sold as a development agreement for the Pacific, but current proposals see the Pacific missing key flexibilities that apply to Least Developed Countries. This means that some of the smallest economies in the world will be expected to make the same levels of binding restrictions on how they can regulate as their bigger neighbours,” Maureen Penjueli, PANG’s coordinator, said in an April statement.

PANG claims the agreement will deliver more markets to the Australasian nations with little in return for developing island states, which presently have limited export commodities and under-developed local industries.

PACER Plus negotiations have been underway for seven years and are expected to conclude by mid-2016. But PANG is calling for Pacific Island leaders to end talks now.

“Leaked text [of the agreement] has confirmed a lot of our fears about what it will mean for Pacific communities […]. By not signing up to PACER Plus many of the Pacific countries will be able to develop their local industries the way Australia and New Zealand did, by protecting and nurturing them until they are able to compete on the global stage,” a PANG spokesperson told IPS.

There is a large trade imbalance in the region. In 2009-10, Australian imports from the Pacific Islands totaled 3.14 billion Australian dollars (2.3 billion U.S. dollars), but exports to the Pacific were nearly double at 5.7 billion Australian dollars (4.3 billion U.S. dollars).

The islands’ main exports are raw materials like timber, sugar, palm oil, fish, coffee, cocoa, and mineral resources from Melanesian countries, destined for Australasia, the United States, the European Union and Asian countries where profits are made from value-adding.

With limited manufacturing, most Pacific Island countries have high import dependencies reflected in substantial trade deficits.

In Tonga, a South Pacific archipelago nation comprised of 177 islands, exports of goods and services comprise 17 percent of gross domestic product (GDP) in contrast to imports at 63 percent, while exports from the Cook Islands totalled 4.2 million U.S. dollars in the September Quarter of last year, a fraction of its imports worth 23.4 million U.S. dollars.

“After more than a decade of trade liberalisation resulting in broad-ranging goods market access, most regional countries continue to run trade deficits as they have since Independence” and in a “woefully under-developed environment, new foreign competition will do little to generate growth,” reports the Pacific Institute of Public Policy (PIPP) in Vanuatu.

Pacific Islands have had duty free access to Australia and New Zealand since 1981 under the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA).

Competing equally in global trade is a challenge given the islands’ geographic isolation from main markets and lack of economies of scale in production exacerbated by insufficient infrastructure and small labour forces.

According to Kessie, “The focus should not be on trade deficits, but whether PACER Plus will overall improve the competitiveness of Pacific economies.”

However, it could take years before local industries are on a competitive standing with their larger neighbours. Even then the gap between the high cost of production in the Pacific and world prices for manufacturing and services is unlikely to narrow dramatically, predicts the World Bank.

Trade discussions aim to encourage more donor assistance from Australia and New Zealand to improve the Pacific’s productive capacity. Although this is less than assured, as neither Australasian country will be legally bound to promises of more aid or labour mobility, even though all parties will make binding commitments on market access for goods, services and investment.

Ultimately Pacific islanders see international pressure resulting in their economies opening up further to free trade before they are ready.

The consequences, according to activists, could be increased inequality if an influx of cheap imported goods crushes local enterprises and unemployment rises.

Loss of government revenue due to import tariff reductions could also potentially reach 110 million U.S. dollars across the region per year, PIPP reports, detrimentally affecting state resources and public services.

Lowering the regulation of foreign investors to increase the inflow of investment also has islanders concerned about threats to indigenous communities from potential loss of decision-making rights about land use and higher impunity for corporate human rights and environmental abuses.

“PACER Plus is definitely not for Papua New Guinea. The destruction of people’s lives and resources of this country is the result of such agreements, which do not benefit our people,” John Chitoa, coordinator of the Bismarck Ramu Group, a civil society organisation in the country’s Madang Province and member of the PANG coalition, told IPS.

Papua New Guinea has attracted the highest levels of direct foreign investment in the region, averaging more than 100 million U.S. dollars per year since 1970. Yet the proportion of the population living below the poverty line has risen from 29.5 percent in 1981 to 40 percent today and most people live without adequate basic services.

Larger volumes of imported processed foods, such as fatty meats, instant noodles, carbonated drinks and alcohol, could also put health outcomes at risk. Dietary habits are strongly linked with the current epidemic levels of Non-Communicable Diseases (NCDs), such as heart disease and diabetes, which account for 75 percent of all deaths in the Pacific.

Kessie responded that PACER Plus will allow “countries to impose strict health standards on imported food, provided they have scientific justification.”

However, Tabu PACER Plus campaigners say this is not enough and are calling for full social, cultural, environmental and human rights impact assessments of the agreement before negotiations go any further.

Edited by Kanya D’Almeida

Organisations in the Pacific Islands believe that achieving the post-2015 development goals depends on getting implementation right. Credit: Catherine Wilson/IPS

By Catherine Wilson
SYDNEY, Jan 19 2015 (IPS)

As the Millennium Development Goals (MDGs), a set of poverty-alleviation targets set by the United Nations, come to a close this year, countries around the world are taking stock of their successes and failures in tackling key developmental issues.

The Pacific Islands have made impressive progress in reducing child mortality, however, poverty or hardship, as it is termed in the region, and gender equality remain the biggest performance gaps.

“The main criticism of the MDGs was the lack of consultation, which resulted in a set of goals designed primarily to address the development priorities of sub-Saharan Africa and then applied to all developing countries." -- Derek Brien, executive director of the Pacific Institute of Public Policy (PIPP) in Vanuatu
Only two of fourteen Pacific Island Forum states, Cook Islands and Niue, are on track to achieve all eight goals.

Key development organisations in the region believe the new Post-2015 Sustainable Development Goals (SDGs) proposed by the United Nations are more on target to address the unique development challenges faced by small island developing states. But they emphasise that turning the objectives into reality demands the participation of developed countries and a focus on getting implementation right.

“The main criticism of the MDGs was the lack of consultation which resulted in a set of goals designed primarily to address the development priorities of sub-Saharan Africa and then applied to all developing countries,” Derek Brien, executive director of the Pacific Institute of Public Policy (PIPP) in Vanuatu, told IPS.

The tropical Pacific Ocean is home to 22 diverse island states and territories, which are scattered across 15 percent of the earth’s surface and collectively home to 10 million people. Most feature predominantly rural populations acutely exposed to extreme climate events and distant from main global markets. Lack of jobs growth in many countries is especially impacting the prospects for youth who make up more than half the region’s population.

Brien believes the ambitious set of seventeen SDGs, to be formally agreed during a United Nations summit in New York this September, have been developed with “much broader input and widespread consultation.”

“From a Pacific perspective, it is especially welcome to see new goals proposed on climate change, oceans and marine resources, inclusive economic growth, fostering peaceful inclusive societies and building capable responsive institutions that are based on the rule of law,” he elaborated.

Pacific Island states are surrounded by the largest ocean in the world, but inadequate fresh water sources, poor infrastructure and climate change are leaving some communities without enough water to meet basic needs. Credit: Catherine Wilson/IPS.

Most modern independent nation states emerged in the Oceania region relatively recently in the last 45 years. Thus, the PIPP argues that development progress also depends on continuing to build effective state institutions and leadership necessary for good governance and service provision. New global targets that promise to tackle bribery and corruption, and improve responsive justice systems, support these aspirations.

With 11 Pacific Island states still to achieve gender equality, post-2015 targets of eliminating violence against women and girls, early and forced marriages and addressing the equal right of women to own and control assets have been welcomed.

For instance, in Papua New, the largest Pacific island, violence occurs in two-thirds of families, and up to 86 percent of women in the country experience physical abuse during pregnancy, according to ChildFund Australia.

Experts say community justice programmes in Papua New Guinea’s vast village court system could reduce the high numbers of female and juvenile victims of abuse. Credit: Catherine Wilson/IPS

Pacific Island nations say empowering women is the key to addressing population growth across the region. Credit: Catherine Wilson/IPS

Customary landowners in the Solomon Islands and Papua New Guinea, both rainforest nations in the Southwest Pacific Islands, are suffering the environmental and social impacts of illegal logging. Credit: Catherine Wilson/IPS

Improvement is also hindered by entrenched stereotypes of female roles in the domestic sphere and labour discrimination. In most countries, the non-agricultural employment of women is less than 48 percent.

The major challenge for the region in the coming years will be tackling increasing hardship.

Inequality and exclusion is rising in the Pacific Islands due to a range of factors, including pressures placed on traditional subsistence livelihoods and social safety nets by the influence of the global cash and market-based economy, the United Nations Development Programme (UNDP) reported last year.

According to the World Bank, more than 20 percent of Pacific Islanders are unable to afford basic needs, while employment to population is a low 30-50 percent in Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Samoa, Tonga and Tuvalu.

Children sit outside an informal housing settlement in Vanuatu. Experts say a lack of economic opportunities is contributing to a wave of youth suicides in the Pacific Islands. Credit: Catherine Wilson/IPS

Many people in Freswota, Port Vila, capital of Vanuatu, have spent more than 30 years or most of their lifetimes in informal housing settlements. Credit: Catherine Wilson/IPS

In this community in Port Vila, capital of the Pacific Island state of Vanuatu, one toilet and water tap serves numerous families. Credit: Catherine Wilson/IPS

Rex Horoi, director of the Foundation of the Peoples of the South Pacific, a Fiji-based non-governmental organisation, agrees that the SDGs are relevant to the development needs of local communities, but he said that accomplishing them would demand innovative thinking.

For example, in considering the sustainable use of terrestrial and marine ecosystems, “you have marine biologists working separately and then you have biodiversity experts and environmentalists working separately. We have not evolved in terms of trying to solve human problems with an integrated approach to development,” Horoi claimed.

He called for tangible implementation plans, aligned with national development strategies, to accompany all goals, and more integrated partnerships between governments and stakeholders, such as civil society, the private sector and communities in making them a reality.

At the same time, delivering on the expanded post-2015 agenda will place considerable pressure on the limited resources of small-island developing states.

“Many small island countries struggle to deal with the multitude of international agreements, policy commitments and related reporting requirements. There is a pressing need to rationalise and integrate many of the parallel processes that collectively set the global agenda. The new agenda should seek to streamline these and not add to the bureaucratic burden,” Brien advocated.

PIPP believes industrialised countries must also be accountable for the new goals. The organisation highlights that “numerous transnational impacts from high income states are diverting and even curbing development opportunities in low income countries”, such as failure to reduce carbon emissions, overfishing by foreign fleets and tax avoidance by multinational resource extraction companies.

Brien believes that “rhetorically all the right noises are being made in this respect” with the United Nations promoting the SDGs as universally applicable to all countries.

“However, it remains unclear how this will transpire through implementation. There remains a ‘developing’ and ‘developed’ divide with perhaps still too much focus on this being an aid agenda rather than a development agenda,” he said.

Edited by Kanya D’Almeida