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PACER & PICTA

The Pacific Island Countries Trade Agreement (PICTA) is a free trade agreement on trade in goods among 14 members of the Pacific Islands Forum (Australia and New Zealand are excluded.) It was signed in 2001. Eleven countries — Cook Islands, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu — have so far ratified PICTA. As of 2008, PICTA was expanded to include Trade in Services (TiS), however since its signing in 2012 the TiS-Protocol has only been ratified by 4 signatories (Samoa, Tuvalu, Nauru, and Republic of the Marshall Islands), leaving it not yet in force. Given their recent membership to the Pacific Islands Forum New Caledonia and French Polynesia are able to accede to the agreement.

The Pacific Agreement on Closer Economic Relations or PACER is a framework agreement to deepen trade and investment liberalisation in the broader Pacific on a step by step basis. It was signed in 2001 and came into force in 2002. PACER includes Australia and New Zealand, and commits all members to begin negotiations towards a free trade agreement by 2011 at the latest. In August 2008, Simon Crean, Australia’s Trade Minister at the time, started advocating a “PACER-Plus” agreement, in lieu of the originally envisaged FTA, which signals the aggressiveness of Australia’s stance to achieve an agreement, particularly given the EU’s pending Economic Partnership Agreement (EPA) with the Pacific Island states. A number of officials and civil society critiques from the Pacific Islands have stated that the PACER deal is of little benefit to them, some pushing for greater labour mobility for Pacific Island workers to Australia and New Zealand. In June 2011, Fiji’s Attorney-General charged that PACER is only really benefitting the economically powerful in the region – Australia and New Zealand.

PACER-Plus built on the previous PACER framework agreement when negotiations began in 2009, before being concluded in 2017. It is a comprehensive free trade agreement, which requires a significant restructure of the Pacific countries’ economy but they are not getting anything in return.

Previously Australia and New Zealand had given non-reciprocal preferential access for Pacific Island Countries exports but PACER-Plus replaces that for the Parties involved, giving Australia and New Zealand preferential access into the Pacific Islands for goods, services and investment. Academics, legal scholars, and civil society organisations have criticised the agreement as having little practical benefit for the Pacific Islands due to the asymmetry of the commitments and economic relationship. As Papua New Guinea Minister Maru summed up the situation in 2017: “The trade is so lopsided and to their advantage... They take so much out of this country and yet they don’t want to talk about economic partnership with this country - a deal where we will get a far better deal.” PACER-Plus also contains non-enforceable arrangements on “Development Assistance” and “Labour Mobility”.

Despite the agreement, the absence of Fiji, Papua New Guinea, Palau, The Republic of the Marshall Islands and the Federated States of Micronesia leaves over 85% of the Pacific Islands economy outside of PACER-Plus. PACER-Plus came into force on December 13, 2020 with initial members to the agreement being Australia, New Zealand, Tonga, Samoa, Solomon Islands, Niue, Kiribati, and the Cook Islands. Nauru, Tuvalu and Vanuatu have signed the agreement but are yet to ratify.

Read the text of the agreement here

Contributed by the Pacific Network on Globalisation (PANG)

last update: April 2021
Photo: Tabu PACER Plus/Facebook


Vanuatu businesses unhappy with PACER signing
The private sector in Vanuatu has expressed surprise the government had reversed its position on the PACER PLUS trade deal despite opposition from the businesses affected.
Vanuatu signs up to PACER Plus
Vanuatu has signed up to PACER Plus trade deal in Samoa - three months after most regional countries agreed to the trade agreement.
PACER Plus countries prepare for trade deal ratification
With the signing process now concluded, PACER Plus will take effect 60 days after eight negotiating parties complete their domestic processes and have notified the depositary accordingly.
PNG firmly out of Pacer-Plus
Papua New Guinea is still realigning internal issues and is not ready to make commitments under Pacific Agreement on Closer Economic Relations Plus (Pacer-Plus) an official says.
Vanuatu parliament unites in opposition to PACER Plus
The Vanuatu opposition has congratulated the government for its decision not to sign the PACER Plus trade agreement.
PACER-Plus trade deal signed in Tonga
A region-wide free trade agreement has been signed in Tonga, with some notable absences.
Joey Tau: Can the MSG bloc walk out on the PACER-Plus trade deal?
PACER-Plus will have a serious impact on the ability for Solomon Islanders to determine for themselves their own development future.
Tonga’s PSA keen to delay signing Pacer Plus deal
The Tonga Public Service Association has called for a delay in the signing of the PACER Plus trade and development deal until the Pacific Islands Forum leaders’ summit in September.
PACER-Plus: Disappointment and lost opportunity
The PACER-Plus model of development is based on an increasingly questionable form of economics which naively imagines that national economies will adapt automatically to enhanced price signals from liberalised international markets from which ’distortions’ are removed.
Vanuatu sets PACER-Plus benchmark
The decision by Vanuatu not to sign PACER-Plus sets the benchmark for a how to progress on PACER-Plus ahead of the signing