New trade agreement opens door for Pacific bubble and rule of law
A ground-breaking trade agreement that came into force on 13 December 2020 could open the door for a regional travel corridor between Australia, New Zealand and most Pacific Island countries, while reinforcing the importance of a rules-based trade order in the Pacific.
According to the University of Adelaide’s Professor Peter Draper, Executive Director of the Institute for International Trade (IIT) the Pacific Agreement on Closer Economic Relations (PACER) Plus trade and aid agreement is at last some good news on the Pacific trade front.
“The PACER Plus agreement cements the Australian government’s Pacific ‘step-up’ strategy and consolidates regional support among our Pacific neighbours for a rules-based trade agreement which is consistent with World Trade Organisation (WTO) regulations,” he said.
“Against the backdrop of the incoming Biden administration in the US which is likely to re-commit to a stronger role for America in support of the world trade body, and given China’s standing commitment to the WTO – to which it just donated US $500,000 in support of developing country accession – the regional Pacific agreement is a timely reminder of the commitment of countries globally to reduce protection in the spirit of open trade and investment cooperation.”
The PACER Plus agreement is a regional development-centred trade agreement. It is a comprehensive, binding, Free Trade Agreement (FTA) covering goods, services and investment between Australia, New Zealand and all Pacific nations who ratify it. Plus refers to its added features which include unique development as well as trade aspects. The Cook Islands has recently become the eighth country to ratify PACER Plus, joining Kiribati, New Zealand, Niue, Samoa, Solomon Islands, Tonga and Australia, bringing the trade agreement into force as of 13 December 2020. It has taken more than eight years of long and complex negotiations to ratify the agreement.
“The PACER Plus agreement cements the Australian government’s Pacific ‘step-up’ strategy and consolidates regional support among our Pacific neighbours for a rules-based trade agreement which is consistent with World Trade Organisation (WTO) regulations.”Professor Peter Draper
The agreement carries a number of specific positive opportunities for traders, farmers, educators and medical personnel to advance business and cooperation between member countries across the Pacific.
“PACER Plus includes measures to improve regional health standards,” said Professor Draper.
“The Pacific Island sanitary and quarantine capabilities will be upgraded which will help deal with the containment of animal and human diseases.
“Reduced tariffs on health products such as on personal protective equipment and medicines along with an increased circular flow of health professionals, will be timely in preventing further outbreaks of diseases such as COVID-19.”
Jim Redden is Pacific trade expert at the Institute for International Trade and Senior Lecturer and Visiting Fellow at the University of Adelaide.
“The trade agreement encourages the expansion of labour mobility schemes reinforcing the recent announcement by the Prime Minister to provide seasonal worker visas for Pacific Islanders. This is a welcome initiative as it allows seasonal labour from the Pacific to fill vital skill shortages on Australian farms which are crying out for support to pick crops. This will mean consumers will have more timely and cheaper produce in the shops,” he said.
“In addition, Pacific Islanders who find temporary work in Australia and NZ will provide vital income for low-income families as their wages are remitted back home.”
The trade agreement will also bring with it an increase in trade and tourism investment into the Pacific.
“A reduction in trade costs and improved regulatory climate for investment will help expand Australian exports to the region while the aid package will assist Pacific Island businesses to get their goods and services into Australian and NZ markets,” said Mr Redden.
“The revival of tourism is vital for Pacific nations – even though 10 Pacific nations are virus free, the global lockdowns have severely impacted the flow of tourists and derivative revenues. Australians could enjoy a relaxing break in some of the many stunning tropical islands, whilst helping to stimulate economic recovery.”
Jim Redden highlighted the importance of a Pacific bubble and the timeliness for the Morrison Government to work closely with states and regional Pacific partners.
“The Prime Minister needs to seek agreement on the parameters of a mutually beneficial Pacific travel bubble that would not only help farmers out of the present labour shortage crisis, but also open the door to additional gains associated with the trade agreement, including a number of ‘win-win’ scenarios for the region while underlining the importance of the rule of law and value of trade openness,” he said.
Professor Peter Draper and Jim Redden are available to give further expert comment about the PACER Plus trade and aid agreement.
Jim Redden, Senior Lecturer and Visiting Fellow, University of Adelaide. Mobile: +61 (0)414 257 446, Email: firstname.lastname@example.org
Professor Peter Draper, Executive Director, Institute for International Trade, University of Adelaide. Mobile: +61 (0)481 902 474, Email: email@example.com
Crispin Savage, Senior Communications and Media Adviser, University of Adelaide. Mobile: +61 (0)481 912 465, Email: firstname.lastname@example.org