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Progress reported in PACER-Plus negotiations

15 July 2013

According to an interview with Dr Edwini Kessie, Chief Technical Advisor for the Pacific Island Forum Countries, “good progress” is being made in the PACER-Plus negotiations, with efforts being made “to narrow the differences between the parties”. Negotiations have been focused on six priority issues – “customs procedures, rules of origin, sanitary and phytosanitary measures [SPS], technical barriers to trade [TBT], development assistance and labour mobility”. Substantial progress is reported on the chapters on SPS, TBTs and rules of origin, with some progress also being made on “development assistance and labour mobility”.

In the interview, published by Islands Business magazine in May, Dr Kessie observed that the Pacific Island Forum countries are looking for “substantial assistance from their negotiating partners to build their trade-related infrastructure so that they can take advantage of the market access opportunities”.

Broader press analysis, however, citing Pacific member state officials, suggests that the absence of substantive progress on labour mobility and development assistance aspects would mean that “PACER-Plus would turn out to be another conventional trade agreement which would fail to transform the economies of [Forum Island Countries].” Indeed, on the fringes of the inaugural Melanesian Spearhead Group (MSG) Trade Ministers’ meeting in May 2013, Papua New Guinea’s (PNG’s) Trade Minister expressed disappointment at the pace of PACER-Plus negotiations and suggested that PNG may refocus its efforts on developing increased trade and economic cooperation within the MSG.

While the current non-reciprocal SPARTECA arrangement allows “duty-free entry of islands goods to Australia and New Zealand”, the agreement is deemed ineffective since “its rules of origin were too stringent and island countries had great difficulties complying with the agreement’s measures on sanitary and phytosanitary (SPS), as well as technical barriers to trade (TBT).”

Also in May, the Secretariat of the Pacific Community reported that the Increasing Agricultural Commodity Trade (IACT) project, which is supported by the EU, is rolling out a programme of branding and marketing assistance and technical assistance to Pacific enterprises in developing their production and export capacities.

In the horticulture sector, reports on Freshplaza.com indicated that “after over 12 years of negotiations, it appears the path may soon be clear for Fiji to commence exports of ginger to Australia.” The Australian Department of Agriculture, Fisheries and Food (DAFF) has noted “two potential threats”, yam scale and burrowing nematode. While acknowledging that these are “low risk”, DAFF is proposing “a series of registrations and audits to source any potential incursion and trace it to source as quickly as possible”. However, “the Australian ginger industry believes that a thorough research project into pests and diseases in Fiji should be carried out so that all major pests and diseases can be screened for [their] strain and virulence” before access is granted for imports of ginger from Fiji.

Reports on success in developing Tongan-branded vanilla exports to Japan highlight the scope for effective brand development and marketing. However, press reports also point out that while Heilala Vanilla sources its bean from Tonga, “value-added vanilla products are produced” at the company’s base in Tauranga, New Zealand, before being distributed “to a range of retail, food service markets and food manufacturers”.

Editorial comment

In the agricultural sector, the ongoing discussions over Fijian exports of ginger to Australia highlight the importance of SPS issues within the PACER-Plus negotiations, for SPS issues are a critical determinant of whether market access opportunities granted through tariff concessions can be realised in practice. If procedural constraints on securing SPS approvals are not addressed, no amount of infrastructural development or ‘aid for trade’ support at the level of commercial enterprises will be effective in allowing Pacific Island Countries to “take advantage of the market access opportunities”.

While the PACER-Plus negotiations and the discussions over Fijian ginger are independent of each other, the ginger case highlights the kind of issue that any enhanced PACER-Plus arrangement will need to deal with. ‘Aid for trade’ support under the AusAid-financed Pacific Horticultural and Agricultural Market Access (PHAMA) is currently establishing operational procedures and training in standards compliance that are needed to enable exports to take place. The first consignment of ginger exported to Australia is expected in September 2013. However, the Australian ginger industry is still calling for a detailed and comprehensive study of all pests and diseases in Fiji and their transmission paths before any such exports are allowed, potentially further delaying the commencement of ginger exports.

This is the type of delay that any new PACER-Plus provisions should aim to reduce – and in some instances, linked to industry protectionist pressures, eliminate. It requires the establishment of transparent, time-bound procedures or SPS approval processes. Against this background, the question arises: how substantive is the progress being made in the SPS, TBT and rules of origin chapters of the PACER-Plus agreement in addressing precisely these types of issue.


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