Islands Business | Suva | May 2006
PACIFIC STATES WORK ON DEAL WITH EUROPE
Islands’ one plus four’ proposal thrashed out
One plus four looks like a simple mathematical equation. But Pacific trade negotiators will be quick to tell you that it is everything but simple.
It is the proposal islands countries are hoping will form part of their economic partnership agreement (EPA) with the European Union.
‘One plus four’ basically stands for one master agreement and four subsidiary agreements.
The idea, according to trade negotiators, was coined to reflect the varying needs of our islands states-from the larger economies of Papua New Guinea on one hand, to the microstates of Tuvalu, on the other.
“The four subsidiary agreements will cover things like services, goods, investments and fisheries,” explains Isikeli Mataitoga, chief executive of Fiji’s foreign ministry, who is one of the key advisers to the Pacific EPA negotiating team.
“We’ve put that to the Europeans and they’ve come back with their counterproposals and somewhere along the line we’ll need to find an accommodation.We hope that when we brief the ministers, that accommodation what we call the best alternative arrangement will be put to the ministers.”
The ministers meeting Mataitoga is referring to is the Forum Economic Ministers Meeting scheduled to be held in June in Honiara, Solomon Islands.
Mataitoga together with several of his counterparts in the Pacific, had been burning the midnight oil the past few months attempting to put into shape some sort of a proposal to be put before the ministers.
In March, in Suva, his team of officials met with their counterparts from the European Union, all of whom are members of the joint technical working group which was set up in a joint decision taken at a conference between the Pacific and the EU in Nadi in September 2004.
The need to get an agreement is crucial as the EPA needs to be signed and ratified by all parties in the EU and ACP countries by December 2007 for implementation on January 1, 2008.
One plus four proposal, according to Mataitoga, is reflective of the different trading capacity of islands in the Pacific. Some of these islands have little goods to trade with, thus the need to create subsidiary agreements.
Said Mataitoga: “In that context and in that process, we are now very well advanced in exploring some of the major areas that will be part of EPA.
“We are still discussing most of them, but narrowing them down, if you like, the differences that we have and beginning to focus more on how we should better address the particular concerns of Pacific ACP states who are probably a bit wary about joining a trade and goods agreement and whose resources are limited only to things like services and within services just tourism or fisheries.
“So yes, the progress has been good thus far and we need to report to the Pacific ACP Trade Ministers in June for some final decisions on the final architecture and also on the way to move forward.
“I think as soon as that decision is taken by the trade ministers we will definitely be in a position to say, this is the architecture we are going to go for and this is how it will reflect our concerns.”
After repeated rejections of the islands states proposal for a guest worker scheme by Australia and New Zealand, this issue is also being thrown into the Pacific’s proposed EPA with the EU, classified by negotiators on both sides as the “mode four” proposal.
“I think the position of the ACP Pacific states is much more clearer, what is much less clearer is the likely response we might get from the Europeans.
“And that is not because they are saying no, what their problem is on issues like labour mobility and more particularly semi-skilled labour mobility, is that a lot of the competencies on policy formulation is not at the level of the Commission.
“It is at the level of the EU member states because it concerns issues like immigration and security.
“Some of those issues the Commission does not have if you like the competence to deal with.
“But they acknowledge that as part of their commitment under the GATT agreement of the WTO they are suppose to look at, and one of these issues is mode 4 , and mode 4 is labour mobility.
“The initial indication is positive but they have also flagged the difficulty from their end, that they will also need to handle this at the level of the 25-member states.”
The Pacific’s outgoing chief EPA negotiator, Kaliopate Tavola hopes the idea is to complete negotiations with the EU by the end of 2006, and by the middle of 2007, they hope an agreement would be reached on a legal text.
The move to shape a Pacific position on the EPA negotiations comes as Europe begins negotiation on its next economic development fund programme now referred to as the 10th EDF.
Brussels is seemingly pleased with the way the Pacific had disbursed funds under the 9th EDF, prompting the EU to grant another 10 million Euros (F$20 million) to the regional pool.
European Commission director-general for Development, Stefano Manservisi told reporters in Suva last month that the dispensation of the next 10th EDF funds will be based on needs and performance.
“I have to say that on the basis of the present situation and in the application of the criteria, the Pacific region is receiving the highest rate of aid per capita from the EU because you are around 34 Euro per inhabitant, where for example Africa is 12 and the Caribbean 26,” Manservisi said.