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US Pacific Island Country trade and development agreement being explored

CTA | 02 September 2013

US Pacific Island Country trade and development agreement being explored

In July 2013, Pacific Island Country (PIC) Trade Ministers called on the Pacific Forum Secretariat to give priority to trade and economic cooperation discussions with the United States. The Forum Secretariat is now seeking funding for a study to identify the main issues to be addressed in any trade and economic cooperation negotiations with the USA. Representatives of the Forum Secretariat said that a comprehensive assessment would be required to determine what type of trade and economic cooperation agreement would be most appropriate between Pacific Island States and the United States.

According to the Forum Secretariat, “for the Pacific Island Countries to be able to export to the USA, they need to overcome quite a few hurdles, and many of these are actually non-trade barriers.” The scope for a broader agreement is being explored as a result of US interest in accessing the Pacific region’s tuna resources.

The fundamental nature of some of the wider non-tariff hurdles faced by Pacific Island exporters were raised in July at the Pacific Forum Trade Ministers’ meeting by the host, Prime Minister of Samoa Tuilaepa Aiono Sa’ilele Malielegaoi. Addressing the Trade Ministers, the Prime Minister expressed concern that “after all the good work” being undertaken by Ministers and officials to address issues of quarantine, rules of origin and technical barriers to trade, as well as customs procedure constraints and the basic work of product development, this work might be wasted if “high freight costs simply make Pacific island export products uncompetitive”. The Prime Minister called for innovative and bold initiatives to get to grips with freight cost challenges faced in the Pacific.

 Radio Australia/PACNEWS, ‘New Pacific-US trade and development agreement underway’, 24 June 2013:
 Forum Secretariat, ‘Samoa Prime Minister’s keynote address at Forum Trade Ministers meeting’, 19 July 2013:
 Pacific Islands Forum Secretariat, ‘Outcomes document’, 19 July 2013:
 Youtube/Commonwealthtube, ‘Professor Joseph Stiglitz – The right to trade’, 9 July 2013:

Editorial comment
The aspirations of Pacific Trade Ministers for a development-oriented trade and investment arrangement with the United States are consistent with similar aspirations under the EPA negotiations with the EU, and the PACER-Plus negotiations with Australia and New Zealand. The Pacific Forum seeks to see development measures firmly interwoven with all provisions under the various chapters of any agreement.

However, achieving this in practice has proved the Achilles heel of the EPA negotiations and is likely also to be the Achilles heel of the PACER-Plus process. The scheduled Forum Secretariat study is likely to face the same challenges in identifying how concretely to interweave development provisions into any agreement as already faced under the EPA and PACER processes.

Speaking at a Commonwealth Secretariat workshop at the WTO in July 2013, Nobel Prize-winning economist Joseph Stiglitz introduced a report in which he and Andrew Charlton propose that the WTO rules be amended in order to move beyond the provisions of Article XXIV of the General Agreement on Tariffs and Trade and to make WTO trade rules more pro-development. Under these proposals, states would have ‘a right to trade’ and ‘a right to development’, with a limitation on the applicability of WTO obligations where their enforcement would have a significant adverse effect on development. In effect, a right not to be harmed by the imposition of trade rules would be enshrined in the WTO rules.

These proposals may well need to be taken on board, if Pacific government aspirations for “a development-oriented Trade and Investment Arrangement” with the US are to be realised.

The development of a framework for trade negotiations that reaches beyond the confines of Article XXIV to recognise and accommodate the stark realities facing the small, remote island nations of the Pacific would appear to be an important priority for PIC Trade Ministers.

This may require special dispensations from WTO rules to allow PIC governments to use a range of policy tools aimed at addressing the major freight cost disadvantages currently faced. There may also need to be special dispensations for the use of trade measures to promote the development of higher value, low volume export products, with binding commitments on arbitration to resolve disputes around non-tariff barriers to trade (including SPS and food safety requirements).

 source: CTA