To misquote Mark Twain ‘reports of the death of developments in the international trade agenda have been greatly exaggerated’ with the recent announcement that Australia has successfully concluded negotiations with New Zealand and 12 Pacific Island countries in Brisbane to implement the Pacific Agreement on Closer Economic Relations Plus (PACER Plus).
Australia was a party to the original PACER for some time but the development of PACER Plus has taken longer than anticipated and most recently a prospective date for completion of negotiations of June 2016 did not come to fruition. However, these types of negotiations rarely run to an exact timetable and the announcement comes at a welcome time, even though the deal has been struck without Papua New Guinea (PNG) and Fiji who had earlier withdrawn from the negotiations due to their reservations on what economic benefits would actually be delivered to them. It is not clear whether the deal would allow for PNG and Fiji to join before the final agreement is entered into. Interestingly the absence of PNG and Fiji from the deal does not appear in the press release by our Trade Minister.
The specific details of the agreement have yet to be released ahead of signing in Tonga in June. However, according to the press release from the Minister of Trade:
“PACER Plus is a landmark agreement covering goods, services and investment. It will remove barriers to trade, including tariffs, increasing the flow of goods and investment in the region, generating growth, jobs and raising living standards. This agreement will drive economic growth and raise living standards in our region.”
While we await details, we look forward to some of the specifics in the ‘trade facilitation’ aspects including rules of origin, evidence as to origin and transhipment as well as any provisions on dispute resolution, labour mobility, development and mutual recognition of trusted trader status and commitments on education to assist in securing the benefits of implementation of the agreement.
Further, PACER Plus has a deeper significance as being part of the ‘aid for trade’ or ‘regional development agenda’, which is an important part of the global trade agenda where developed economies assist developing economies through these types of agreements. Again, as described in the press release:
“Closer economic integration of the region with larger economies such as Australia and New Zealand is essential for sustainable economic growth in the Pacific. In line with Australia’s Aid for Trade Strategy, Australia will support the implementation of the PACER Plus Agreement and continue to work to increase Pacific-wide trade, tourism and investment.”
This approach is also consistent with similar ideals behind the WTO Trade Facilitation Agreement which explicitly refers to ‘aid for trade’ as an important tool in wider global economic development and to assist in the growth of developing economies. Such an approach is also endorsed by Trade Policy Recommendations 4.0 recently released by the Export Council of Australia.