pacific
23 Sep 2008
Balancing Trade and Aid
Pacific countries have a lot to gain from the kind of economic reforms Australia is advocating, writes Parliamentary Secretary for Pacific Affairs, Duncan Kerr
In a recent article in newmatilda.com, titled What’s So New About Rudd’s Pacific Policy?, Maureen Penjueli and Wesley Morgan pose the question: Does the Rudd Government have the will to address the development needs of the region, independently of the Government’s desire for access to Pacific markets through free trade agreements?
As the person responsible for Pacific Island Affairs in the Rudd Government, I would argue that development needs in the Pacific are not mutually independent of free trade. I would also argue that achieving long lasting development outcomes in the Pacific is exactly what the Rudd Government is dedicated to.
Our government is committed to a partnership approach to the region, tackling issues of aid, trade and broader socio-economic development. This approach, based on mutual respect and responsibility with the region is also informed by the developmental experience of the two most "developed" countries in the region — namely New Zealand and Australia.
Australia’s sustained growth and prosperity over the last twenty years cannot simply be put down to the mining boom we have experienced in the last ten. The Australian and New Zealand economies were fundamentally and irreversibly changed for the better through the reforms designed and implemented during the Hawke/Keating and Lange/Douglas periods.
These economic reforms included micro and macro economic, industry and trade reforms. Prior to these reforms both economies were sluggish, inefficient and without innovation — oriented around legacy systems and the structures of their colonial past. Such systems, often using protection and subsidies, masked real imbalances of trade, economic and political power. Freeing up trade has changed this. Free trade has resulted in far more jobs, far more wealth, far more opportunities and far more aspiration than was ever imagined in the past of either country.
While free trade agreements remove the barriers on the free flow of goods, services and capital, it is the freeing of the dependency mindset — opening up opportunities for people to aspire to not only lift themselves out of poverty, but improve the lot of future generations — that is the fundamental reason we are so keen to pursue PACER Plus.
As Penjueli and Morgan point out — there are currently very few barriers stopping Pacific goods and services entering the Australian market.
I am of the strong belief that what actually stops the Pacific from taking up opportunities in Australia and New Zealand are public and private institutions moulded by years of trade subsidies and aid dependency. The distortion of incentives that such policies have created, rather than helping people and industries (as often argued by proponents of the status quo), actually protect the vested interests of a few (state owned enterprises, protected industries, elites) to the detriment of the majority. Are we really serious about improving things in the Pacific or do we just want to keep developing commodity-based economies to satisfy our own demand for a cheap coffee?
This is not to say that such changes will not come without some pain — all reforms do. However, as Simon Crean, Bob McMullan and I have said on many occasions, Australia stands ready to support the region through such tough transitions.
It is all too easy to compartmentalise each part of Australia’s approach to the Pacific into specific areas, such as trade, aid, regional and bilateral relations. However this government is doing things differently. This government is committed to an approach that not only improves millennium development goal indicators in the region, but also the future opportunities and sustainable options for its people.
It is about a commitment to the Pacific that is not based on our differences (as arguably many previous policies have been), but rather upon what we share.
It is our belief that by breaking the shackles of what has defined the Pacific in their colonial past, we can empower the region to take on the future. A future that is common to all of us.
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Duncan, this is all sounding very familiar. As anyone who has followed developmental economics through different models can tell you, the kind of free trade pushed by the developed world is exactly what the developing world doesn’t need. It is nothing but tired rhetoric designed to disguise the transfer of wealth away from its target – hiding behind the language of free this and free that (‘the dependency mindset’ – that’s a good one) is supposed to convince us that really it’s about personal freedom. Nothing could be further from the truth.
Can I ask whether you yourself are familiar with the ‘economic miracles’ produced by free trade? Every one - yes, every one - has been an unmitigated basket case. As I argued in a discussion here recently, no economy in history has developed a high standard of living through free trade; quite the opposite, in fact. The pushing of free trade is even more incongruous given that a perfectly good developmental model exists, and has been tried and tested: a mixed economy. Forgive me for being unfashionable.
The benefits of a mixed economy in a developing country are multiple and obvious: governments with their constituents’ interests at heart (i.e. ‘the people’) can retain control of strategic sectors, giving them both a say in their affairs and a safety net; controls can be put on inflows and outflows of capital, preventing the extraordinary distortion of markets that led to the Asian crisis and other disasters; indigenous industries can be protected until they are ready to stand by themselves, without having to compete immediately with goods produced by companies that are more experienced, better funded, heavily subsidised or which are more economic by sheer scale. (See South Korea’s amazing steel industry, for one of a litany of examples.) These are not ‘the vested interests of a few’ – they are the vested interests of nations.
Do we sometimes find inefficiency or corruption? Yes, just as we do in private sector organisations. Can some economies benefit from some deregulation? Yes, of course – as long as they have developed to a position where they can compete rather than be swallowed up. None of this is in question; it is the simple lesson of history.
The real question, Duncan, is this: are you disingenuous or just ignorant? You have to be one or the other – this information is freely available, and anybody who is not blinded by the Washington Consensus (how’s their experiment in deregulation going, by the way? I heard it was a bit rocky at the moment – something about a global depression) could see it years ago.
Anyway, to development. Yes, perhaps Australia is open to Pacific goods and services – are we expecting the flood of high-tech imports soon? Do you know a word for letting a small nation export to you without flooding them with your own products? Hmm, let’s see … I know – development! Or to cast aside the relatively recent phenomenon of intellectual property and engage in the kind of technology transfer developing nations cry out for? Um … development! Easy visas for study and work? Yes, development! Access to expertise and money without strings? Development development development! If this government is as interested in the long-term as you claim, put your money where your mouth is and give us something concrete that will actually help – not more tied aid and neoliberal ‘solutions’.
Also, spare us the Howardesque aspirational stuff – consumer wealth in Australia is built on debt, and the government is running high deficits in a time of boom for its major exports. And do not conflate economic deregulation with personal freedom – there is no causality. How much freedom do you have when you’re starving, at the mercy of global commodity prices and can still remember just a little while ago when your country could feed itself? That’s not, to borrow a phrase of yours, a future that’s common to all of us, Duncan – just millions of people in developing countries who never got the solution they were promised.
Cheers
Phil Annetta philannetta.blogspot.com
Philanetta - “Do you know a word for letting a small nation export to you without flooding them with your own products?” - yes, “free trade”. Why would you want to deny them the right to purchase your own products anyway?
“Or to cast aside the relatively recent phenomenon of intellectual property and engage in the kind of technology transfer developing nations cry out for” - yes, Import Substituting Industrialisation reliant on free trade for it’s success.
“Easy visas for study and work?” - that’s easy philanetta, personal freedom and individual liberty will provide that for you, found under the list of basic requirements for free trade.
“Access to expertise and money without strings” - if you want rid of the strings, well then you very definitely want free trade, hell, even hard core communists know the answer to that one philanetta!
I’m with Phil, more or less - i can’t believe people still advocate for ‘free trade’ (particular now, of all times). It is simple a system designed to further intensify wealth disparities (in or between) countries. Only good for those with a pre-existing trade advantage and dubious even in that situation.
I can see why the developed world gave it a go, it was possibly their only hope for becoming even richer after the benefits from regulated trade systems were reaped after WWII. The result of allowing capitalist to rule the world (ie “free trade” which is removing democratic controls on the economy) has been famines, poverty, environmental destruction, people dying of cholera because private companies controlling their water supply refuse to let the water flow. For more people have died from western trade than guns or bombs.
The question of ignorance or disingenuity is an interesting one? I think (willful?) ignorance, but it is hard to say. Same Q for Rockjaw
Free trade certainly brought China back from the brink of starvation, took the USA from an insignificant nation to the world’s leading economic power until socialism began its long cancerous growth and which today cripples the USA placing it onto the same slippery socialist slope which the USSR slid down for 80 years before it died a painful economic death not too long ago.
People have not died from western trade Crappy, they have succumbed to the West’s socialist money,credit and banking systems which are entirely socialist, nothing free market about them at all.
Promise of free trade merely got the socialist’s foot in the door.
The developing nations are quickly learning how socialism, central banking and an overtly central controlled economy is a terminal disease for any nation or economy, and the only people still left on this planet who still worship at socialism’s altar are also those who still own 1950’s and 1960’s wardrobes - they are all barbarous relics from a past millenium. They will all disappear soon anyway, and good riddance.
Actually Rockjaw, despite the common myth the US was one of the most protectionist economies in the world until it became globally powerful, at which point people realised that they would benefit hugely - and more than anyone else, which is the important point - by having unfettered access to other markets. That’s when they started pushing free trade. The British did it before them. And why wouldn’t they? If you open your markets before your industry is mature, it’ll be overrun. Do it when you’re more powerful than others and you’ll widen the gap. Such is the way of the world.
You might know that the IMF and World Bank were originally Keynesian institutions (and if you know the circumstances of their founding, that’s not surprising), but they’ve been cross-carrying members of the church of Friedman for decades. So they don’t promise free trade and deliver socialism - they promise equality and prosperity for all (which some call socialism) and deliver free trade that essentially sells a nation’s economy to a mix of external interests and the internal elite. Their prescription always involves privatising government services (so consumers/citizens pay more for essential services or don’t get them anymore) and deregulating the financial markets so that the target nation is at the mercy of international capital flows, which are dominated by investors who aren’t interested in your brand of utopian capitalism. They trade in ‘products’ that don’t enhance the productivity of any economy and are fundamentally worthless, as we’re finding out at the moment. That is the essence of deregulation: if you’re wealthy enough to take advantage of it, it’s wonderful. If you’re one of the poor suckers who make up the vast majority of the population, you’re in trouble. This holds true both on a societal and an international level.
Oh, and China - actually starvation was all but eliminated by the Communists until Mao’s Great Leap Forward, which was a triumph of stupidity on his part and cowardice on the party’s, as they all knew it was rubbish. Still, Deng’s opening of the economy couldn’t have happened without infrastructure that had been developed under the Communists. It has brought massive wealth to a few in China, a raise in living standards to some, nothing to many more and a pile of environmental devastation for all. No thanks. Why do you think so many were at Tiananmen Square? philannetta.blogspot.com
Well they were not at Tianamen square because they wanted more socialism, I’ll tell you that much for free.
You know philanetta, the Chinese have a saying - “it takes more than one day for the river to freeze three chi deep” and this refers to the seeds of chaos of their Cultural Revolution which were planted by the CCP suppressing and depriving people their fundamental human rights before Mao Zedong.
One of the end results of their affair with socialism was the manner in which they solved the starvation problem which you claim happened under the communists above, and how they did it was to label the many officials who reported the levels of starvation “rightist opportunists” and “counter revolutionaries”. Officially, starvation did not exist! Vale Sozialisme!
Socialist African states have learnt from that lesson as so many socialist African states today deny the existence of Aids - simple, the socialist state says it does not exist and voila! problem solved! You got to love those socialists Phil!
Brainwashing has always been a primary tool in the socialist’s toolbox to wax lyrical with all their double talk about how free trade impoverishes people and free speech is the right only of specially privileged people.
Had the Chinese suffered less socialism and a little more freedom and free trade, well then the 40 million or so Chinese people who starved to death would not have died and the terrible destruction of their culture, their history and their literary traditions would not be lost to the world today.
The IMF and the World bank may PROMISE free trade Philanetta, but their activities result in anything BUT free trade. The economic wasteland which is modern Africa today is the result of socialism, the IMF and the World Bank, and that can be verified with any person doing business with Africa today.
As a Pacific Islander I find this discussion both stimulating and disheartening. I have to say that it is refreshing to hear a Pacific leader like Duncan Kerr, even if he is Australian, write so openly on this issue. It is a reflection of our own leaders and their lack of confidence, or worse as Kerr notes their vested interests, that there is so little open discussion of these issues.
Phil when you say “governments with their constituents’ interests at heart (i.e. ‘the people’) can retain control of strategic sectors” - I assume you naturally extend this to legacy colonial monopolies like Cable and Wireless in the Pacific and the fact that calling home still attracts some the most expensive interconnect charges in the world. You also point to the need to protect industries such as South Korea’s amazing steel industries. Are you seriously suggesting that we will see either the incentive or need for such protected industries in the Pacific? At the moment what you seem to be advocating is protecting institutions such as commodity marketing boards. I assume then that you’re in the cheap cup of coffee advocate set Duncan Kerr refers to…
Thank you also for speaking on behalf of Pacific Islanders and their aspirations - I’ll remind my cousins back in the village that their aspirations to pursue a livelihood outside of what they’ve been given is too Howardesque and that they should stop.
To be honest I find your and other discussions on this topic a little bit disingenous. You have taken an important discussion on the future of the Pacific (and by extension my family) to argue ideology and abstractions. In his piece, Duncan Kerr at least seems to be willing to talk about the region and our interests and Australia’s take on this. I’m not sure that this is the case with others.
I sometimes wonder what planet some ALP politicians live on. To boast of the reforms of the Lange Douglas period in NZ is just obscene. Unions smashed, wages savegly cut, social security payments reduced by 25% and whole industries destroyed. The outcomes were so stark that the NZ people changed the whole electoral system to avoid the tweedle dum/dee two party system which foisted economic rationalism or in Kerr’s terms ‘reforms’ upon NZ. As I understand it Douglas went on to establish a new party that is so right wing it makes One Nation seem middle of the road. I despair when I read such rubbish from senior ALP figures.
Is it really a case of politicians being on one planet or another - or simply the fact that the world has changed and governments of all ilks need to adjust their policies in what they hope will be in the best interests of their people. I think this is what Kerr is alluding to, and I’m not sure that it’s all worth throwing out without honest and informed debate.
Its all very nice to live in a world created by the extraction of surplus rents from imperialism and colonies like the Pacific. Once you move on from there it does take at times tough reforms and re-thinking to adjust. Have Australia and New Zealand done well economically and socio-politically since those reforms were undertaken? On the whole I would have to agree with Duncan Kerr.
As a Pacific Islander I think I’d prefer Kerr’s musings to those of former Labour movement luminaries like Caldwell.
Pacman, that’s not what I meant at all. What we find when going through the history of free trade as advocated by neoliberal institutions, is that it’s always couched in the rhetoric of helping the people in the target nation – it’s very seductive: ‘Stand on your own two feet’, ‘aspire’ (forgive my cynicism – this became a dirty word to some during the Howard years), ‘free markets equal free people’, etc.
What actually happens is the opposite: small economies that were previously sheltered from the vagaries of the global market are suddenly ripe for picking. Their public assets and utilities are privatised and become expensive user-pays systems, natural resources are exploited with no regard to the wellbeing or profit of the population, and they are locked in to the system for fear of shattering ‘market confidence’, leading to such nastiness as capital flight and currency devaluation. Really, it’s a new form of colonialism that sounds palatable in polite company.
So I’m all for the empowerment of Pacific island nations. I don’t claim to be an expert on their economies, so I’m not attempting to give them a specific policy prescription. I just hope that they’re not taken by surprise, as many before them have been, and that they do what’s best for them without outside pressure.
Rockjaw, the Tiananmen protesters didn’t go there for socialism? Perhaps you should find some and tell them that. Start with Wang Hui – I’m sure he’d be surprised to hear it and could set you straight quick-smart. While it was portrayed in Western media as young democrats versus old authoritarians, there were many including workers, teachers and small entrepreneurs who were protesting Deng’s economic ‘reforms’, which were ‘lowering wages, raising prices and causing a crisis of layoffs and unemployment’ (Wang Hui, author of China’s New Order, partially quoted in The Shock Doctrine). And while I’m on China, the Communists at the end of the civil war (i.e. when the Japanese and Nationalist depredations were finished) were the first group in China for many years, possibly ever, to make a good-faith attempt to distribute food equally. As the communication and distribution infrastructure was so degraded, they found sometimes that there was, for example, too much cooking oil and not enough rice in one province, and the opposite somewhere else. But broadly, people had enough to eat. And then it was undone, as I said, by the stupidity and cowardice of the Great Leap Forward. And lest you think I’m an apologist, I see your figure of 40 million and raise it to 77 million, which is the figure given by recent research.
Also, can I ask why you regard the Bretton Woods institutions as socialist? You’re the only person I can remember doing it. Again, perhaps you should ask a socialist who’s been on the receiving end of some of their treatment.
Cheers
Phil Annetta philannetta.blogspot.com
Philanetta, you are the first person I know of who believes that the Tianenmen Square incident was the result of rioters demanding more coercion and less freedom in China.
A friend in our Beijing offices responds to your post in an e-mail in which he writes - “The Last Communists Found On Wall Street” blares one Chinese newspaper headline this week. The article continued by noting that having lost their people’s money, the “Wall Street Communists” now wanted the people to pay it back.”
“Chinese citizens recognise Communism and socialist values with ease and with disgust these days. There is a common perception shared by most that if the West continues it’s plunge into socialism, China’s hard won freedom and prosperity will be placed at risk. In fact, respect for the West is in decline mainly BECAUSE the average Chinese person considers the West’s flirtation with socialism to be illogically stupid and ignorant.”
Philanetta, the modern Chinese are very proud of their achievement since Deng Xiaoping ditched hard line socialism in favour of free economic zones way back in 1978.
The benefits of political liberty and economic freedom are obvious from the almost 10% per annum economic growth enjoyed by China since then.
Are you suggesting that free trade has harmed China’s economy?
The current political arrangement between Chinese citizens and their Communist government is that the Chinese citizenry will put up with the Communist regime on condition that they continue to behave like a Capitalist Corporation and in return the Communist Government expects the citizens to stay out of politics.
That is going to change as demonstrations over grievances increase across the country.
Do you think we should impose trade embargoes on Africa and other poverty stricken nations in some misguided attempt to protect them from an equally misguided belief that free trade is “bad”
Are you saying that imposing sanctions on nations is a REWARD?
Philanetta, don’t allow yourself to be so brainwashed about freedom. Freedom really is not nearly as overrated as our socialist spinmeisterss might have you believe.
Philanetta, if a free market system has a banking industry, that banking industry will not be one which is permitted to dictate and to control the definition of or the issue of money. It will not hold a position of authority powerful enough to autocratically control interest rates, the rate of money creation, the control of credit and the finance of a nation’s industry beyond the normal checks and balances of the electorate of that nation.
The Bretton Woods agreement is a Keynesian idea. John Maynard Keynes, the Fabianist socialist, and Keynesian moneterism is what the Bretton Woods system is based upon.
Bretton Woods is about international control granted to banks at the exclusion of governments or any other authority representative of people or voters in either democratic or autocratic governments, which is why the USSR did not object to the terms of that agreement whilst most supporters of free markets and free trade did.
Explain how it is that you consider the IMF, the World Bank and the Globalist Bretton Woods system to be representative of a “free market system”? No two institutions could be more diverse!
Rockjaw, I think I might need to reiterate two of my earlier points, as you seem to have missed them.
Firstly, mature economies that have developed through mixed methods (as all did, no exceptions) can benefit from opening up some areas to free trade. Countries don’t get rich without trade, but it needs to be used at the right time in the right way. China’s economy has certainly grown through trade – it used infrastructure that it had developed in its state-controlled era to kickstart that. It has since become the sweatshop of the world (which is a big part of why it has recently become the largest nominal carbon emitter). But yes, its economy has grown. I should also note that, as you consider China such a success story, you obviously believe that its capital controls and government participation in key economic sectors are part of this.
Secondly, the Bretton Woods institutions began life as Keynesian organisations, but have not fulfilled that role for many years. Rather, they have encouraged and often coerced immature economies into throwing themselves open to the vagaries of the global market. No country – repeat, not one – has benefited from this. Further, they have tried at every turn to stop these economies from reimplementing controls – e.g. capital controls – that would arrest the slide that their policies have brought. Remember the Asian financial crisis?
It also seems that we hear from very different people in China! Is your colleague a local? If so, he or she sounds like one of the new middle class. Good luck to him or her. Reliable figures aren’t easy to come by, but that class makes up probably less than half of the population. This is the main reason for unrest in China, and for the roving People’s Armed Police force that polices ‘economic crimes’, i.e. protests and strikes by aggrieved workers. (Though apparently, and I haven’t confirmed this, the increasing frequency of these protests has forced the government to increase spending on rural healthcare and education.)
As for your thoughts on banking communists, you’re correct to a point – losses in state-controlled economies are indeed socialised, but so are profits. Losses in market economies are often socialised (conveniently forgetting the free trade rhetoric), but profits are not. That’s the moral hazard of deregulating markets while having sectors or companies that are ‘too big to fail’.
Finally, your statement on embargoes is nonsensical; an established economy waiving or reducing tariffs on imports from developing economies is one way of trade-encouraged development. China does this and does it closer than most to the proper spirit – i.e. without economic strings. Often, however, the demand is that this goes both ways. A developing economy cannot compete in this case, and the agricultural sector is a tragic example here. It seems intuitive to liberal-minded people that if people in developing economies can work so cheaply, they will therefore be able to compete with goods from developed economies. Right? Wrong. To take agriculture, they do not have the advantages of economies of scale or industrial production. What they find – and there are myriad cases of this – is that they eventually need to import foodstuffs that they used to grow, because they couldn’t compete with the lower prices of imports from developed economies. And when global prices spike, as they did recently, millions go hungry.
I’ll finish my contribution to this discussion here, though I’ll check back for your response. Essentially, I’m not against trade. What needs to be recognised is that economies need participation by their state (and / or other states) to bring them to a level where they can reap benefits from participating in the global market. To force economies that are not ready to open completely invites – and has always brought – disaster. Developed economies too often see it as a chance to get into new markets cheaply and monopolise essential services. This benefits only a small elite, and has been the case in every economy in which it has been tried. China is different in that it has protected its currency (as Malaysia fortunately did during the Asian financial crisis, though the IMF tried to persuade it otherwise) and kept state involvement in key sectors. The divide has therefore not been as sharp as in some other countries, though it is still there and still a source of unrest. Of course, there is the environmental cost of this growth to consider as well, but I guess that’s a whole other discussion.
Cheers philannetta.blogspot.com
But philanetta, your arguments are all old hat already. Few argue that the failure of socialism’s IMF are not real and particularly damaging to the developing economies. The arguments being presented today, and from those very same developing economies, is that socialism, the efforts of the IMF and the World Bank have all been immiserising influences on those nations since most of them embraced them after the terrible years of colonialism.
Free trade is what the people of Africa are preaching today and which those same starving people are beginning to demand from their failed socialist governments. Free trade of the type which elevated Zimbabwe to the “basket of Africa” before socialists turned it into the “basket case of Africa”.
Free trade is what young South Africans are beginning to demand from their economically failed socialist regime, particularly since that same regime has whittled away that nation’s wealth and level of education from net exporter of food and technology to it’s current dubious position of net importer of foodstuffs and technology and skilled labour for the first time since 1670.
You obviously do no business with these people philanetta, and you obviously spend little or no time actually visiting those nations and witnessing, first hand, the growing revolution from the young and the starving who are currently enjoying a newfound respect and understanding of the benefits of political liberty and economic freedom.
You may not be aware of this philanetta, but the end of last century and the start of this new millennium signalled the greatest move away from socialism to individual political and economic freedom that mankind has ever witnessed since we lived in caves.
Only a few fools in the west, who have not yet ingested a full dose of socialism’s poison, remain unconvinced.
I say to you again philanetta, pack away that mouldy old wardrobe from the 1950’s and 1960’s and greet the new century with the same joyous relief experienced by the majority of mankind, by celebrating the recovery of their long lost freedom and by throwing off the shackles of socialist enslavement which has caused the many genocides and terrible wars suffered by the hundreds of millions of people murdered and killed by the aberrations of last millennium’s flirtation with this destructive disease called “socialism”.
Just saw this - seems to be a consistent protectionist theme from PANG and Penjueli on these issues…
Walk away from EPA: Time to reclaim development02 OCTOBER 2008 SUVA –— As leaders from the African, Caribbean and the Pacific (ACP) meet for the 6th ACP/ EU Summit in Accra, to advance the Economic Partnership Agreement (EPA), the Pacific Network on Globalisation (PANG) joins NGOs globally calling for leaders to strengthen their resistance as the ACP group enters a new and unprecedented stage in negotiations.
The EPA pose the most severe test for the future relevance and viability of the ACP group, with serious implications for the collective and individual development prospects of its member-countries and peoples.
“The Summit is being held at a time of growing discontent amongst ACP members”, said Maureen Penjueli, Coordinator for PANG.
“Public events such as these are being held in Africa, the Caribbean, Europe and here in the Pacific to send a strong, clear message to the EU as well as politicians in Accra that the EPA falls well short of it’s development aims and in some cases undermines it”. “The EPA in its current form seeks to open markets around the globe to European corporations, with Europe standing to gain at the expense of some of the poorest countries in the world”.
The details of the EPA proposed by the European Commission on behalf of the European Union and the methods employed to bully and manipulate ACP countries to initial and sign those agreements, undermine the EU’s claim that it is most interested in development in the ACP countries. Papua New Guinea and Fiji initialled an interim agreement on goods-trade at the end of 2007, under threat of a dramatic increase in tariffs on tuna and sugar exports to the EU and potential jobs losses for thousands.
At the recent trade negotiations in Brussels it emerged that vital issues for developing Pacific countries such as infant industry clause and export taxes will not even be negotiated until the region negotiates on services and investment. This despite the fact that the Pacific had formally written to the European Commission earlier this year to suspend negotiations in services and investment because the Commission failed to show the flexibility needed to enable PACPs to be genuine service providers in the EU market in the near future. In addition there are indications that the Commission will use the divide and rule strategy to get negotiations started on services and investment in the Pacific with at least one Pacific Island country indicating interest in negotiating services and investment.
“A partnership implies equal exchange yet while our governments have already conceded to the Commission’s demands for reforms, to reduce tariffs, the Commission continues to make demands bringing into question whether this is a genuine partnership”, Penjueli added. “There is no legal basis to begin negotiations on services and investment and it would be unfortunate if one of our own did break the regional decision to suspend negotiations on services”.
“Our governments are now our last hope to ensure that they defend our development interests and their strength lies in negotiating as a block. If the Commission fails to genuinely negotiate than our leaders must as a region have the political courage to walk away from a bad deal”.
For Further information please contact:Maureen Penjueli: + (679) 973 8828 or 9466 776 For further information: www.pang.org.fj