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Some Pacific Island countries still not ready for free trade

Thursday: October 23, 2008

Some Pacific Island Countries Still Not Ready For Free Trade

By Pacific Magazine

Not all Pacific Islands countries are ready to open their doors to free trade under the Pacific Island Countries Trade Agreement (PICTA), according to the Pacific Islands ACP Trade Ministers’ Meeting that was held in Fiji this week.

The free trade agreement came into force in 2003 and five years on some countries they are still struggling to meet it. But the regional trade ministers in their meeting in Nadi, agreed that the delayed countries draw up a timeline of events that leads them up to entering into the agreement.

The meeting also agreed that a ministerial committee consisting of the Cook Islands, Federated States of Micronesia, Samoa and Vanuatu approach French and American territories within the context of PICTA. The free trade agreement, which would see tariffs either lowered or removed altogether, was one of the many issues discussed at the trade ministers’ meeting.

Discussions also included the possibility of Pacific Islanders accessing Guam’s employment market. According to the meeting’s outcomes document, consultations with relevant stakeholders and the US Secretary of State have taken place and a Memorandum Of Understanding, assuring Forum Island Countries access, has been drafted and exchanged with the US authorities. The Ministers have again tasked the Forum Secretariat to report back further developments, including a political strategy.

Some key positions taken by the trade ministers:

EPA negotiations: Continue to negotiate the EPA as a single region based on existing negotiating positions as agreed to in March 2008; endorsed the proposed arrangements for communicating electronically with the Secretariat and the region and the EC leading up to the next PACP-EC Joint Technical Working Group; expressed appreciation to Fiji for its support to the region in the EPA negotiations through its Embassy in Brussels; agreed that a comprehensive EPA might include provisions relating to intellectual property rights so long as the obligations did not go beyond those already contained in the Cotonou Agreement; the possibility of launching a PACP Ministerial Mission to selected European capitals to seek their support for the PACPS’ position on the EPA.

PACP-EU EPA legal text: Recognized the need to give the EC an indication of the number of Pacific ACP countries considering participation in the trade in goods component of the EPA prior to the next PACP-EC Joint Technical Working Group Meeting and noted that the Secretariat would be prepared to assist countries in the preparation of their offers; and agreed that the EC be informed that, for cumulation purposes in relation to satisfying Rules of Origin criteria under the EPA, the neighboring developing countries be Brunei, Cambodia, Chile, People’s Republic of China, India, Indonesia, Korea, Laos, Malaysia, Mexico, Peru, Philippines, Republic of China-Taiwan, Singapore, Thailand and Vietnam.

PICTA: Countries that have not yet announced their readiness to trade under PICTA provided an update of their implementation status:
 FSM has submitted to Congress the documents which would enable completion of the ratification process. It is hoped that there would be some movement on this document in the next parliamentary session before the end of 2008;
 Kiribati noted their gratitude for the TA provided by the Secretariat to support PICTA implementation, however there is a need to work further on domestic legislation and Kiribati will not be able to announce readiness to trade by 1 Jan 2009. PICTA implementation is likely to move forward during 2009;
 Tonga’s Cabinet has approved a policy direction to amend the Customs and Excise Management Act 2007 to accommodate its PICTA obligations. It is envisaged that the required amendments would be completed and tabled in the current session of the Legislature Assembly before it closes at the end of November;
 PNG noted their gratitude to the Secretariat for assistance. Cabinet papers are currently being prepared to implement the tariff code, headings and descriptions as required under PICTA and it is predicted that PNG will announce readiness to trade by December 2008 for trade in goods.
 Tuvalu has undertaken taxation reforms in order to comply with PICTA obligations and ratified PICTA in June 2008. From 1st July 2009 Tuvalu will reduce duties to 10% for all FICs. Tuvalu will announce its readiness to trade under PICTA by December 2008. Tuvalu emphasised that it is important for all countries to announce readiness to trade under PICTA.
 Nauru is unlikely to be able to announce readiness to trade by end 2008, and a revised estimate for completion would be end 2009. Their appreciation of the Secretariat’s support was noted. Nauru will notify the Secretariat of their acceptance of amendments to PICTA and potential arbitrators.

Ministers agreed that: (1) island countries yet to announce readiness to trade under PICTA reaffirm their commitment to the expeditious implementation of PICTA as presented at the meeting, including dispatching the instruments of acceptance of amendments to PICTA by Parties that have yet to do so, and finalising a time bound action plan and announcing readiness, including with a clear timetable for commencing trade under PICTA in line with the PACP Leaders’ decision; (2) directed the Secretariat to work towards holding a PICTA symposium in 2009; (3) agreed to establish a Ministerial committee comprising representatives from Cook Islands, Federated States of Micronesia, Samoa and Vanuatu in order to pursue the strengthening of relations with French and US territories within the context of PICTA.

PICTA Trade in service (TIS) and Temporary Movement of Natural Person (TMNP): (i) FICs should negotiate a revised architecture for a comprehensive PICTA which includes the current trade in goods agreement and the proposed services and TMNP agreement and which permits the FICs to add further economic aspects in future if and when the FICs consider appropriate. The new agreement would ultimately replace the original PICTA and would ensure that trade under PICTA is not disrupted; (ii) the comprehensive PICTA should incorporate a dispute settlement mechanism which incorporates the key features of the WTO dispute settlement mechanism as well as the dispute settlement mechanism provisions negotiated by the PACPs with the EU; (iii) for the Temporary Movement of Natural Persons, the benefits of commitments made on it under the comprehensive PICTA should be extended to nationals of FICs, regardless of whether or not the nationals are resident in a FIC; (iv) nationals and persons with rights of permanent residence in a FIC who are not resident in a FIC should be entitled to benefit from specific commitments in services made under PICTA TIS; (v) the FICs do not seek to differentiate between each occupation in specifying the shortest maximum stay and agree that, if some differentiation is considered appropriate, differentiation should only be between unskilled, semi-skilled, and skilled or professional workers; (ix) the Secretariat facilitate a detailed assessment of the possible introduction of a two-tier approach for PICTA TMNP whereby recognised professionals would be allowed to move freely amongst FICs, and semi-skilled/trades professionals would be subject to a quota mechanism, including the operational aspect of the quota mechanism and the criteria to determine the numerical limit.

Chief trade adviser (CTA) and Pacific Agreement On Closer Economic Relations (PACER) Plus Issue: (i) Contingent on the availability of funding from TradeCom, that the CTA be appointed on a temporary basis via the TradeCom facility, until such time as funding is secured for the Office of the CTA, the appointment being made consistent with TradeCom procedures and taking into account as much as possible the preferred approach for appointment as agreed by PACP Ministers; (ii) agreed that the responsibilities of the CTA will include securing funding for the further support of the PACPS with respect to PACER Plus activities, including, as appropriate, the funding of the Office of the CTA; (iii) directed the Secretariat to provide assistance to the Forum Island Countries in PACER Plus activities until such time as the CTA is appointed; (iv) agreed that the Chair of the PACPTMM write to the Government of Australia, copied to the Government of Tonga, confirming the attendance of the PACPS at the informal consultations on PACER Plus to be held in Tonga in November 2008 and advising that the Forum Island Countries have directed the Forum Secretariat to attend to provide technical support to the Forum Island Countries; and

North Asia Relations: (i) agreed that 2010 be the target date for FICs and the PRC to launch a roadmap for deepening trade, investment and tourism relations based to the extent possible on the recommendations of the Scoping Study prepared by Professors Scollay and Yunling; (ii) appointed Samoa and Kiribati as lead spokespersons to oversee the process of deepening trade, investment and tourism relations between the FICs and the PRC and the FICs and ROC, respectively.

World Trade Organisation (WTO) Issues: Report on the current state of the Doha negotiations and directed their officials to; review the long-standing preference lines to ensure that they cover all lines of interest to FICs; determine sensitive products that might be of interest to FICs for special treatment under the negotiations on Agriculture; collaborate with the Geneva Office to continue work on the Chair’s text on fisheries in preparation of the resumptions of negotiations in this area.

Traditional knowledge implementation action plan: Noted the progress on the draft Traditional Knowledge Implementation Action Plan and the desire of all PACPS to participate in the Action Plan; requested the Secretariat to make arrangements enabling all PACPS to participate in the Action Plan; and endorsed the Model Law on Traditional Biological Resources, Innovations and Practices for consideration and use by PACP countries in the formulation of their own national legislation as appropriate.

The meeting was attended by Cook Islands, the Federated States of Micronesia, Fiji Islands, Kiribati, Nauru, Niue, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Marshall Islands and Palau were represented by their senior trade officials. Also present was the Brussels/London-based ambassadors of Fiji, the Pacific Islands Forum Representative to the WTO in Geneva, a representative of SPREP, technical experts and consultants. Representatives of Pacific Islands Private Sector Organisation attended as observers.

 source: Pacific Magazine