Fiji Times

Trade deals spark warning

5 March 2008

The Pacific Network on Globalisation warned Pacific governments to be wary of viewing Pacific Island Countries Trade Agreement as "stepping stone" towards free trade deals with rich nations.

This follows Cabinet’s decision to approve the consolidated amendments to the PICTA.

PANG coordinator Roshni Sami said a regional trade agreement between the Forum Island Countries and a free trade agreement with developed country trading partners were two very different things.

"The Pacific is yet to gain experience with managing PICTA," said Ms Sami.

"Currently only Fiji and PNG are even implementing PICTA, yet already the European Union, Australia and NZ are all pounding on the door hoping to get better market access to the Pacific for their corporations, exports and investments.

"We are told again and again that free trade with rich nations will help the Pacific gain long term benefits, but this is far from proven. What we do know, is that free trade deals with these countries will dramatically reduce policy options for Pacific governments, and severely restrict the ability to foster local and regional businesses."

In a statement, interim Foreign Affairs Minister Ratu Epeli Nailatikau said PICTA was to liberalise trade with the aim of bringing economic and social benefits and improving the living standards of all the people of the Pacific region through gradual elimination of tariffs and other barriers to trade with clear rules and conditions of fair competition.

"PICTA is viewed by the FICs as a "stepping stone" towards their more complete integration into the international economy, an initial preparatory step towards more extensive liberalisation in the future that will hope to achieve greater long term benefits.

"PICTA will provide the FICs with experience in the negotiation and operation of a Free Trade Agreement, and it will help to create a common basis for the FICs’ negotiations with other trading partners."

Ratu Epeli said there were three sets of amendments to PICTA that were agreed to by the trade ministers of the parties to PICTA at the meetings held in July 2003, May 2005, and June 2006 respectively.

He said the amendments proposed in 2006 supersede and render obsolete some of the amendments proposed in 2003.

"The first amendment relates to provision of a time frame allowed for Parties to issue rulings on the Rules of Origin before actual importation from another Party," Ratu Epeli said.

"The second amendment ensures that beverages apart from spirits and vinegar such as mineral water, aerated water and sweetened juices are part of the trade liberalisation schedule.

"The third and last amendment deals with the adjustment of timelines which take into account that a number of import tariff lines will not reach zero until 2017 in some cases while for some other good not until 2021.

"These timelines will give the FICs time to adjust to tariff reductions through moderation of tax regime."

The statement said Ratu Epeli was expected to sign the Instrument of Acceptance for these amendments on behalf of government.