Nov 26, 2020 Last Updated 3:47 AM, Nov 26, 2020

Undiplomatic diplomats

Around the kava bowl in Suva, people were discussing some undiplomatic behaviour by Chinese diplomats last month. Then for day or two, reports that Chinese officials had intervened at a Taiwanese National Day ceremony in the Fiji capital, leading to a physical confrontation, dominated local media and featured internationally. There were conflicting reports about which head first attacked which fist, followed by duelling press releases from Beijing and Taipei. Fiji police later issued a statement saying, “the matter is now being handled at the diplomatic level, as agreed to by all parties involved.”

It’s not the first time that disputes between Chinese and Taiwanese officials have played out in the Pacific, but the tone of the debate is getting sharper.

Speaking at a press conference in Beijing in May 2020, China’s Foreign Minister Wang Yi said that his country’s diplomats would push back against “deliberate insults.”

“We never pick a fight or bully others, but we have principles and guts,” he stated. “We will push back against any deliberate insult, resolutely defend our national honour and dignity, and we will refute all groundless slander with facts.”

The latest brouhaha in Suva replicates other reported incidents around the region in recent years: a long-running dispute between the Chinese Consul-General and his landlord at the consulate in Tahiti; reports that Chinese officials barged into the PNG Foreign Minister’s office during APEC in 2018; and the seizure of equipment from Chinese journalists by security officers in Australia.

To read the full story, get your copy of Islands Business today.

Post-COVID-19 propositions for various sectors of the economy currently abound. Credit to those who are churning out these fine ideas for public consumption. One in particular, by Dr. Transform Aqorau: ‘Imagining a new post-COVID-19 international economic order (NIEO) for the Pacific Islands’ is essentially regional in essence and in application. Dr. Aqorau refers to it as ‘a single custom and development union’, or alternatively, ‘a single economic and development union’.

His article goes on to describe this NIEO for the Pacific Islands. In the lexicon of regionalism, Aqorau’s NIEO is essentially regional economic integration, with a degree of specificity on extractive industries, structured on the basis of a free trade agreement, and which has progressed to a customs union, common market and economic union. But it goes beyond that to include advanced regional integration measures to coordinate policies beyond economic, including the coordination of institutions through a regional parliament, for example.

Professor Biman Chand Prasad had earlier suggested something similar: a ‘Pacific community and Pacific Parliament.’ It is this regional architecture that is the face of regionalism and necessarily the counterpart to the rest of the world. This thus earns its ‘NIEO’ lexicon in Aqorau’s perspectives.

But all this rings a loud bell. The regional leaders, way back in 1971 at the first ever meeting of the then South Pacific Forum, were also deeply immersed in imagining the various solutions to the challenges they faced. Then, the unprecedented challenges for the five Pacific Island Countries (PICS) related to their newly independent state. A solution, they imagined, was ‘the possibility of establishing an economic union for the area.”

‘The area’ in this specific instance can be deduced from the formulation of the leaders’ decision as trading between and amongst the five PICs, ‘whose senior officials were to meet within three months’ to progress the establishment of an economic union; and officials from Australia and New Zealand were to join this task by way of promoting ‘trade and economic cooperation in the region.’

The sense of creativity and adventure that characterised the decision-making above is worthy of notice. It all came about notwithstanding the two-caucus approach to conferencing that existed then. This two-caucus approach, however, disappeared the following year (1972) on Australia’s initiative. It remains to be seen whether this structural re-organisation to merge the two unequal groups was responsible for the dilution of the natural impulse to bridge the socio-economic gaps and inequality that existed then and has continued to frustrate the Pacific Island Forum’s membership and its inherent unity.

Dr. Aqorau is correct in acknowledging that the idea behind a ‘single custom and development union’ or ‘single economic and development union’ (SCDU) is not new. “What might be novel,’ he says, “is the idea of integrating our economies to have a SCDU…….” The latter is so because Pacific regionalism has not faithfully committed itself to progressing the idea. Many factors have come into play.

The question to be asked, therefore, is what has happened to this bullish concept of an economic union that was envisaged some 49 years ago. The events of Pacific regionalism over the decades are revealing and instructive and from them we can learn to better strategise to avoid the mistakes of the past.

It took nine long years for the South Pacific Forum (SPF) to make the first move towards an economic union. In 1980, the SPF opted for a preferential, non-reciprocal trade arrangement to establish the foundation for an economic union. Such a preferential arrangement was considered with greater compliancy at the time by the global trading system. The dichotomy of SPF membership, resulting from Australia and New Zealand’s privileged positions as developed countries vis-à-vis others, played a pivotal role as well.

The idea of a Free Trade Agreement (FTA) amongst the PICS as basis for an economic union was still over a decade away.

Australia and New Zealand thus agreed to establish the preferential South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA). This was signed in 1980 and came into force in 1981.

SPARTECA was unidirectional. PICs’ exports were provided market access in Australia and New Zealand. Rules of Origin (ROO) were devised for the conduct of trade. The agreement however lacked provisions and resources to support and promote the supply side of the PICs’ export trade. Thus in 1984, SPF noted the decline in PICs’ exports under the agreement. In the following year, SPF queried the relevance of SPARTECA. Later in 1988, SPF noted PICs’ problems of production capacity and the inadequacy of the agreement’s ROO.

Fiji was factoring all these issues in its approach to regionalism. So much so that Fiji’s delegation to the 1993 Leaders’ meeting opted to propose a SPARTECA-look-alike agreement to the rest of the PICs. This, however, did not see the light of day. Had that progressed, it would have been interesting to note its formative impact on economic union at the time.

Fiji, furthermore, took advantage of its close bilateralism with Australia and New Zealand to negotiate changes in the SPARTECA Rules of Origin. This consequently boosted the development of Fiji’s garment industry at the time.

Sometime later, however, further negotiations to expand to capitalise on the same ROO proved negative. The global trade scenario had changed somewhat. The catchphrase of ‘free trade’ prevailed over preferential trade. Australia and New Zealand were thus prevailed upon to advise PICs that SPARTECA (and its ROO), had outlived its time.

In the late 1990s, it was back to basics in considering a basis for an economic union. SPF members negotiated an FTA: the Pacific Regional Trade Agreement (PARTA). This was to be an intra-regional trade agreement, including Australia and New Zealand.  The idea for a FTA just for PICs as the basis for the development of an economic union did not get the nod at the time. It was to come later, however, when PARTA was discarded. Did political economy considerations of SPF’s dichotomous and differentiated membership get in the way? Did geopolitical considerations cloud rationality in this instance?

When it came to signing PARTA, the PICs rebelled, unhappy with their treatment under the agreement, and refused to sign. PARTA’s provisions lacked the trade and trade rules concessions that would persuade Pacific Island trade ministers to readily commit to the agreement.

This predicament was resolved when SPF discarded PARTA and quickly negotiated the Pacific Island Countries Trade Agreement (PICTA) – an FTA for PICs only, and the Pacific Agreement on Closer Economic Relations (PACER) – an economic framework agreement between the PICs and Australia and New Zealand.  PACER then gave rise to PACER Plus, a FTA between twelve PICs and ANZ. This is finally to come into force with Cook Islands’ ratification. But its 16 years of negotiations diverted much energy and intellectual competencies from the task of properly establishing the economic union envisaged for PICs in 1971.

In the meantime, PICTA came into force after it was signed in 2001. However, in 2020, only seven members (50 per cent of membership) are implementing the agreement. The envisaged economic union remains a dream.  Professor Chand’s advanced regional integration scenario of a regional parliament will remain on the ‘to do’ list for the time being. Much was discussed on these advanced regional integration projects in the early 2000s during the formulation of the Pacific Plan. However, little or no progress eventuated due to claims they were ill-conceived and lacked buy-in.

Yes, it is time for new normal. Post-COVID-19 demands all that. But history still has a role to play. Pacific regionalism is best advised to occasionally cast its eyes back at its own history and re-evaluate events, and itself, from the perspectives particularly of political economy and geopolitics. The Blue Pacific should not become a cliché. It should learn from George Orwell: “Who controls the past controls the future. Who controls the present controls the past.”

The author is a former Fijian Ambassador and Foreign Minister and runs his own consultancy company in Suva, Fiji.

Globalism is being threatened in the post-Covid-19 global order. However, there is still ample common sense around to counter such a threat. Those engaged are still at an early stage in their coordinated countermove. They are likely to attract reinforcements to ensure some semblance of the familiar multilateralism in the interest of global orderliness and of humanity in general. During this period of enforced unsettledness, regionalism, e.g. Pacific regionalism (Pacific Islands Forum – PIF) will need to be strong, active and react as effectively as is possible, to avoid any major setback in members’ economic, social and geo-political status. This is critical given that the majority of PIF members are vulnerable, small island developing states - globally characterised as developing or least developed countries.

The US under President Trump, with its nationalistic and autarkic ‘Make America Great Again’ is leading the charge for the disintegration of globalism. Its newest trade armament, brought about by COVID-19, straddled new heights of aggressive protectionism. So much so that a new trade lexicon has been coined to mark its undignified entrance. ‘Sicken Thy Neighbour’ relates to US’s export restriction (and even diversion) of medical products to deserving importing countries for, inter alia, protectionist reasons. The new lexicon joins its equally nefarious ‘Beggar Thy Neighbour’ to take autarky and protectionism to a new level.

The counter-movers to recapture lost grounds from globalism have globalisation and multilateralism at heart. Despite the downsides of globalisation, they believe that a multilateral approach to solving humanity’s challenges, including existential threats like climate change, can only be effectively addressed at the global level. A number of great world thinkers share the same view. Historian Yuval Noah Harari, for example, believes that the three challenges he identified for the world, viz: ecological collapse, technological disruption and nuclear war, can only be resolved at the global level.

For PIF members, especially the 16 Pacific Island Countries, Pacific regionalism is a critical pathway and an effective collective tool linking them additionally to the multilateral framework. Strong, active and effective regionalism will complement national initiatives to benefit through regional outputs and outcomes. Further, through Pacific regionalism, PIF members can aspire to increasing levels of integration amongst them and PICs especially can effectively exercise their collective innate agency on global issues that matter to them. At the multilateral level, they would benefit from, inter alia, the articulation of reasoned, effective and efficient advocacy of critical global issues.

For Pacific regionalism, therefore, it is now a critical time for self-analysis. PIF needs to step up its game in order to raise its levels of aspiration. The post-COVID-19 new normal demands this. Apart from the propitiousness of timing, PIF also needs to critically think about its own strategy given the disunity that reigns within. There is disunity in PIF’s stance on climate change. There may also be disunity as regards PIF’s stance on the disintegration of globalism. Australia, for instance, is known for having attacked the UN last year, speaking against ‘negative globalism’ and ‘unaccountable international bureaucracies.’ PIF needs the global pathway. It should be its core geostrategy.

At the practical level, PIF needs to double and treble its efforts at integration and especially economic integration. I have written at length about the delayed economic integration amongst the Pacific Island Countries (PICs) as regards Pacific Island Countries Trade Agreement (PICTA). The same scenario can definitely be said about integration between the PICs, on one hand, and Australia and New Zealand (ANZ), on the other hand, under the PACER Plus trade agreement. This trade agreement is yet to be implemented. However, the demand on its deliverables for economic integration has intensified under current circumstances to warrant immediacy of action. And I believe that the opportunity desperately beckons.

When the collective negotiations on PACER Plus were declared concluded to facilitate signing, Fiji opted to continue negotiating. There was no dissension on this matter. Fiji was upfront as regards its intention to improve some aspects of the ‘agreed texts’. The bilateral negotiations thus ensued and have yet to be declared closed.

This article endorses the need for greater economic integration within PIF to raise its profile in addressing the disintegration of globalism. Therefore, PIF needs to sanction the continued negotiations on PACER Plus with the view of attributing the trade agreement with all the concessions, special and differential treatments, waivers and derogation possible to render maximum benefits especially to the PICs. This can all be done with the requisite dosage of political will, by both Australia and New Zealand, the two developed country members of PIF.    

The opportunity should also be taken to effectively engage with Papua New Guinea (PNG) in the extended negotiations. PNG had opted out of the earlier negotiations. In the context of Pacific regionalism, there is just no logic to having a trade agreement with ANZ without the biggest economy of all the PICs involved. From statements released from Port Moresby, it can be appreciated that the issues of concern to PNG are similar to those that Fiji had highlighted.

Additionally, Vanuatu’s concern about lost tax revenue resulting from hasty and hefty tariff reduction, can also be addressed with more concessionary tariff reduction scheduling. This may require, firstly, reviewing the contents of Vanuatu’s allowable schedule of protected goods and services. Secondly, it may also need increased tolerance level as regards the definition of ‘substantial part of the trade’ – to be subjected to trade liberalisation under the agreement.

The renewed negotiations can therefore focus on these specific issues with targeted outputs. It has to be made clear at the start that new improved agreed texts should be merged onto previous texts to benefit all PICs, parties to the negotiations, including those who earlier signed the then existing agreement.

The various issues raised by Fiji, if addressed fairly and objectively, can result in greater economic integration amongst PIF members and offer more solid bases of economic growth and development. The infant industry clause, for instance, can be improved through strategic choices of industry to be protected and with appropriate liberalisation timelines.

The mandatory ‘most favoured nation’ (MFN) clause can also be subjected to concession and derogation. As it is, the MFN clause requires that any concession obtained by a party to an agreement would necessarily apply to the other party. However, this can be avoided through a waiver. The waiver, for instance, could be formulated to say that the MFN clause (on the PICs’ side) will only apply to concessions obtained from developed countries or a group of developed countries. It will not apply to concessions obtained from developing or least developed countries or a group of these countries.

Fiji was also not happy with the provision on Labour Mobility. As it is, Fiji believes that it is really nothing to write home about. Merely providing a forum for annual talkfests is hardly the stuff for considered and enhanced regional economic integration.

Another concern raised is the need to enjoy the security of the market access provided for by the agreement. Essentially, this is an oblique reference to unsupervised and unjustified non-tariff barriers (NTBs) imposed by the importing markets, ANZ in this case. On the plus side, it has to be said that both ANZ are ably addressing this matter through provisions of relevant systematic processes and training of PIC exporters with joint ANZ-funding provided for under the PACER Plus for Aid for Trade. Pacific Horticultural and Agricultural Market Access (PHAMA), an initiative by ANZ, is leading the charge on this matter.

In the first place, Fiji’s concerns were about the lack of balance and the loss of policy space for PICs in the texts of the PACER Plus agreement at that time. If improvements, as discussed above, are finally incorporated into the legal texts, they would certainly render the agreement a more consolidated basis for determined regional economic integration. Pacific regionalism would then grow from strength to strength. It, moreover, would be better placed to address its inherent disunities and contradictions. The flow-on effects from there would have positive implications on multilateralism and on PIF’s/PICs’ agency in the global scheme of things.

The author is a former Fijian ambassador and Foreign Minister and runs his own consultancy company in Suva, Fiji.

 

A mere decade before the Pacific Island Countries join the rest of the world to account in terms of what we have done collectively to deliver the 2030 promise and the Sustainable Development Goals, a global pandemic has struck the earth with devastating consequences.

The crisis is forcing governments and policymakers to consider the unavoidable trade-offs between saving lives and preserving jobs and livelihoods.  Countries have been grappling with the collision of a triple menace – COVID-19, climate-related disasters, and rising domestic violence – compounding the wide-ranging challenges for sustainable development, national security and foreign policy.  The new challenges further stress an already difficult position for the Pacific Islands Forum.

The outcomes are not the same for everyone and the crisis is forcing governments to consider the painful questions and hard choices between inequality and economic growth, the redistributive and resetting pressures of building and strengthening health systems and preserving jobs and livelihoods that makes small states of the region economically dependent on foreign influence, aid-dependency, and soft power initiatives. 

The uncertainty in transitioning to a durable solution is unique with COVID-19, as there is a dilemma of managing the profound and long-lasting shock in the context of addressing the pre-existing challenges of poverty and inequality. The challenges are wide-ranging, from care work, including unpaid care work; to preparedness and readiness of health and social systems, to repatriation of nationals and travel bubbles; from economic recovery to debt-management, and the list continues.

The Pacific Island Forum’s vision for its peoples is one that is both familiar and ever-evolving, in response to the changing currents of the new world regime. Resetting the Blue Pacific has to be a Pacific story driven by the Pacific leaders’ aspirations for a region of peace, harmony, security, social inclusion and economic prosperity through assertive diplomacy, assessing the diverse voices and paying much more attention to the large swaths of the Pacific Blue Continent. The timely invoking of the Biketawa Declaration and the establishment of the Pacific Humanitarian Pathway on COVID-19, as the avenue for the one Blue Pacific family to manage recovery and build back better is a point of convergence for resetting. Resetting with stronger genuine and durable partnerships as promoted by the Pacific Small Island Developing States (P-SIDS) along with the rest of the world’s SIDS in the SAMOA Pathway for sustainable development and using the 4Cs for effective delivery and lasting impact.   

The novel COVID-19 pandemic has challenged the region’s priorities and sustainable development goals, demanding innovative ways, and enhanced cooperation at all levels. The situation calls for a reset in the regional approach to these issues, in a way that is bold and innovative, while tapping into the deepest strains of our Pasifika psyche and traditions.  In tackling, we must not revert, instead, this is a once-in-a-lifetime to lay the foundations for a new revitalised Pacific way that will benefit generations to come. 

“Lalanga” or weaving, is a tradition that is common in communities and societies of the Pacific, whether from Micronesia to Melanesia and Polynesia.  This fundamental skill of our communities to weave baskets, mats, clothing or fishing nets, entails a patient and careful approach by multiple hands, laying strand upon strand, with overarching view of what the finished creation will be.  Lalanga, however, is more than weaving.  As our ancestors have taught us, the lessons of Lalanga — coordination, cooperation, commitment, and care (4C’s) — can be applied methodically through our life’s challenges.

In resetting the pathways for the Blue Pacific, we should enhance our traditional knowledge of the 4C’s. For a new normal, the regional architecture must be enhanced and sustained to ensure that the 4Cs of the Pacific Lalanga drive regional actions and deepen collective responsibility and accountability to deliver on the promises of sustainable development under the prospective 2050 Blue Pacific Strategy. The strands of 4Cs for the Lalanga must be stronger and more assertive. 

The growing interest of the world in the Pacific requires a rethink and reset of the Forum’s security and foreign policy positions to safeguard the stability and strengthen the resilience and sustainable development of the Blue Continent.  As described by the World Bank, the shocks of COVID-19 are causing the world economies to experience the deepest global recession in decades, despite the extraordinary efforts of governments to counter the downturn with fiscal and monetary policy support.

To eliminate and stop the spread of COVID-19 and its impacts, means not reverting to business as usual.  It is instead an opportunity to get it right, so that no one is left behind and that we could be in the same boat and we all come through this together. It is an opportunity to reinforce the links between climate actions and sustainable development, adaptation responses with goals of environmental conservation, economic development and societal wellbeing of all peoples of the Pacific. 

At this critical juncture, we must ask: Is Pacific regionalism robust and ambitious enough to navigate this new terrain effectively, and are the 4Cs working?

The Pacific Islands Forum is a coalition of the willing to protect the interests of its member states. It is committed to ensuring that the future of the Blue Pacific cannot simply be left to chance but requires a collective commitment to achieve it.  The 4Cs of coordination, cooperation, commitment and care are not new, but need rejuvenation with more assertive diplomacy, development cooperation and investment now to support member countries to manage the long-lasting shock of COVID-19 and build back better toward a post-COVID-19 durable solution. 

The greatest risks of the final decade towards 2030 are present, and every effort must be better coordinated, every opportunity for development cooperation must be seized to prevent further shocks, and manage existing shocks for P-SIDS.  The commitment of Forum Leaders to act now is demonstrated in the 2019 Forum Leaders endorsement of a 2050 Strategy for the Blue Pacific Continent.   It reflects a commitment to urgency for making it happen.  

The 2050 Strategy must be concrete, with binding and realistically achievable targets, and with the financial capacity and investments for implementation.  As we have learned from our ancestors, the 2050 Strategy during such an unprecedented epoch should not ignore our traditional 4Cs. Through our history of cooperation, mechanisms, and responses to coordinate economic and humanitarian aid can seamlessly be integrated. The key elements of the complex challenges of the vulnerable Pacific infrastructures and increasing costs as related to development assistance and foreign policy are also critical to the 2050 Strategy. More assertive diplomacy is needed with attention to multilateral mechanisms and protocols to boost Pacific regionalism for building back better. Let’s not forget our traditional knowledge.

The COVID-19 pandemic is a common threat and must be tackled using the 4Cs of Lalanga of coordination, cooperation commitment, and care for a better Blue Pacific.

Amelia Kinahoi Siamomua is a Pacific islander and an expert on regional and international affairs, serving more than 30 years as an international civil servant in the United Nations system and other international organisations globally, including the Pacific region.  She is the Tongan Prime Minister’s nominee for the position of Secretary General of the Pacific Islands Forum.

Delving into PICTA

  • Nov 26, 2020
  • Published in June

In the last issue of Islands Business, I discussed the abysmal state of the Pacific Island Countries Trade Agreement (PICTA) and concluded that there was indifference in the way signatory countries have regarded and treated this trade agreement. This article further pursues this matter to try to find out what is really going on and what lies behind the surface of the immediate problem.

I wanted therefore to use a political economy analysis (PEA) to get behind the scene. My search for any PEA of PICTA or of Pacific Island Countries (PICs)/Pacific Islands Forum (PIF) in general was unrewarded. The Pacific region lacks the depth of analysis and research that other regions take for granted.

I searched elsewhere for a guide. I was rewarded with a PEA of regional integration in Africa’s East African Community (EAC) with its finding pointing directly to the twin shortages of ‘political will’ and ‘capacity’ as being responsible for obstructing regional integration.

I opted therefore to use the finding as first basis of my own attempt at a PEA of PICTA. I figured out that if these twin shortages were obstructing regional integration in EAC, they are likely to be doing the same with the more specific regional economic integration driven by a trade agreement. And, given therefore, the similarities in developmental status of the EAC and PICs – comprising both developing and least developed countries, it can be concluded that those twin shortages would also apply to regional economic integration involving PICs.

On reflection, such a methodology and its deductive conclusion is not far off the mark. The shortages of political will and capacity resonate loudly with Pacific regionalism. For example, regional commentators, from time to time, have identified shortage of political will to explain the wide implementation gap regarding decisions reached by regional leaders. As regards capacity, a paper tabled at the ‘What We Can Learn’ regional symposium of 2012 stated: “….capacity is a key constraint both to policy development and policy implementation……Building capacity is at the top of all our priorities. It is however a long-term issue.”

Having come this far, I opted to apply a PEA to PICTA and of related regional economic integration, albeit, in a non-rigorous manner. Political economists have their own tool for PEA – a five lenses framework, with series of sub-lenses under each category.

From historical, geographical and other related lenses, the PICTA signatory countries – with exception of Papua New Guinea (PNG) are all small island developing states (SIDS), with small economies characterised by lack of resources that give rise, for example, to rent-seeking. Capacity is clearly a constraint. All are recipients of overseas development assistance (ODA). On a per capita basis, the region as a recipient of ODA scores very highly.  

When it comes to the acquisition of imported resources, these SIDS are constrained by the quantity and range of exports and thus by their ability to purchase their imports. They are further constrained by the tyranny of distance. Their relatively low degree of integration into the global economy restricts them from taking full advantage of various trade concessions, preferences and incentives that are available to them.

On the other hand, PNG and Nauru have/have had relatively large mineral resources. However, there is evidence of Resource Curse and Dutch disease. The abuse and mismanagement of the economy resulting from them tend be linked to capacity constraint and thus underdevelopment generally.

As regards the shortage of political will, the evidence also speaks for itself. The most prominent lens that irrefutably points to lack of political will is what can be referred to as ‘rules of the game’. That is that Pacific regionalism is - generally speaking, voluntary. Leaders and ministers who readily make decisions at the regional level are not obliged legally to comply and implement those decisions - either at national or regional levels. Furthermore, there is no political cost for non-compliance. Ministers do not lose their jobs for not implementing those decisions.  This has contributed directly to the growing implementation gaps that characterise Pacific regionalism.

This situation has changed somewhat under the Biketawa Declaration when it comes to regional security. It should be noted that it was under the provision of this Declaration that Fiji was suspended from PIF in 2009. However, there are other lenses that bring up the same evidence of lack of political will.

The 14 PICTA signatory countries belong to four sub-regional groupings, viz: Melanesian Spearhead Group (MSG), Polynesian Leaders Group, Micronesian Chief Executives Summit and the Smaller Island States (SIS). Five of these signatory countries have cross membership of two subregions. Only the SIS is structurally part of PIF. It can be envisaged that for these PICTA signatory countries, there would be a tendency to prioritise subregional issues before PICTA, which transcends subregional borders. This is particularly true for the MSG members who already have their own Free Trade Agreement in the MSG Trade Agreement.

The same can be said for PICTA signatory countries that have strong bilateral relations. The three Micronesian signatory countries, for example, have the Compact agreement with the US; The Cook Islands and Niue enjoy a special political arrangement with New Zealand; Nauru and PNG have special bilaterals with Australia.  Bilateral interests, in these cases, are likely to prevail over any PICTA issues. This can spill over to politics.

Another aspect of the ‘rules of the game’ is that Australia and New Zealand are PIF members. They also happen to be two of the largest aid donors to PICs and are the biggest contributors to the PIF budget. Their influence in regional matters can be overwhelming. Add their respective bilateral influences on specific PICs, they do indeed represent sizable diversionary forces form PICs’ own regional economic integration. Australia and New Zealand’s seasonal labour schemes, for example, may have contributed to the lack of political will for PICTA and the prospects for its regional economic integration benefits.

Related also to the ‘rules of the game’ is PICTA’s Rules of Origin (ROO). This is being modernised. It can be deduced therefore that such ROO currently lacks concessions such as cumulation that can incentivise value adding amongst the signatory countries. This is unlikely to motivate politicians.

There is also the factor relating to the diversity of size of countries and economies – from tiny Niue, to large PNG; from the smaller islands of Polynesia to the relatively larger islands of Melanesia. Such diversity can be divisive. It can breed indifference and lack of drive for any regional integration by way of PICTA, for example, especially if national development and economic growth are already proving difficult to sustain. This can only raise questions as to whether this wider engagement will be cost-effective – PICTA being the first Free Trade Agreement for the PICs concerned. The status of the private sector development in the region and its lack of concerted influence is perhaps reflective of assumed cost-ineffectiveness of regional economic integration.

The realisation that the twin shortages of capacity and political will are constraining regional economic integration in PICTA signatory countries is perhaps not unprecedented. Regional commentators have entertained and affirmed such ideas in the past. For them, such a revelation is nothing to write home about. What this intimation hopes to achieve however is that it may drive the regional planners and strategists, who are currently formulating the 2050 Strategy for the Blue Pacific Continent, to seriously factor in shortages of capacity and political will in their planning to the extent of having to design new, imaginative and enterprising operational and structural features of Pacific regionalism, even if unprecedented, to take us through the post-Covid-19 new world order.

 

Page 1 of 5

We use cookies on our website. Some of them are essential for the operation of the site, while others help us to improve this site and the user experience (tracking cookies). You can decide for yourself whether you want to allow cookies or not. Please note that if you reject them, you may not be able to use all the functionalities of the site.