News Item

PACER Change a Plus

News 13 Sep 2018

The growing momentum of PACER Plus was evident when the Pacific Connections unit of the Ministry of Foreign Affairs and Trade (MFAT) hosted an update and conversation on the implementation of the PACER Plus Agreement at its Auckland office on Monday evening.

PACER (the Pacific Agreement on Closer Economic Relations) Plus is a landmark trade and development agreement signed in 2017 to lower barriers and provide greater certainty for New Zealand businesses, while raising living standards, creating jobs and increasing exports in Pacific Island countries.

The umbrella agreement between members of the Pacific Islands Forum (the Forum Island countries plus Australia and New Zealand) provides a framework for the future development of trade cooperation.

Jessica Allison-Batt, MFAT’s PACER Plus Implementation Project Manager (pictured above) and the main presenter, says the team are “working like crazy, have 11 signatories at this stage and we’re welcoming others to join”.

The 11 countries that are signatories are Australia, Cook Islands, Kiribati, Nauru, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

PACER Plus was built on existing trade agreements: the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) (1980) and the original PACER Agreement (2001).

The Federated States of Micronesia, Palau and Republic of Marshall Islands are still completing their domestic approval processes.

As Pacific Island nations are New Zealand’s nearest neighbours, and with almost 300,000 Pacific peoples living in New Zealand, there is a clear interest in a prosperous and sustainable region, hence the main aim of PACER Plus; to encourage economic development in Pacific countries.

New Zealand’s aid for trade target is valued at $NZD 740 million over the first five years of the agreement.

“The key activities we’re having to work through before the agreement goes live are around preparing signatories and getting countries ready for PACER Plus,” says Jessica.

“There’s much to consider, including all the frameworks that govern how we interact with businesses and each other to provide 20% aid for trade to Pacific countries and also develop and stand up the implementation unit.”

She adds some projects are already underway as part of the Pacer Plus Readiness package worth $AUD7.7 million.

“The assistance provided helps countries get ready to implement the agreement and ensure they’re compliant and can take advantage of the benefits from day one.

“Some of the key aspects of that work package involve the United Nations, which has been contracted to provide training on trade and transparency, gender and also an exciting project around a regional trade portal,” she adds.

“The trade portal will help reduce red tape and make it easier for businesses to operate in the Pacific by having access to information about procedures for trade and investment in the region.”

Another sizeable piece of work already underway is greater labour mobility among the PACER Plus nations. It includes a pilot programme where Kiribati workers are on New Zealand-flagged fishing vessels working under New Zealand labour laws.

“They’re taking home significantly more per week, which is exciting,” adds Jessica.

“But it also generates questions as to how they’re going to invest it wisely, as doing so will result in a more meaningful, positive and sustainable change.

“With the momentum for Pacer Plus starting to happen, there’s a growing sense of empowerment, which increasingly includes women, and meaningful change.”

What are the potential benefits?

Opportunities for economic development in Pacific Island countries are limited because of their small size and the difficulty achieving the economies of scale needed to compete in international markets. PACER Plus should help create jobs and wealth in the Pacific by making it easier for these countries to trade.

The intended benefits of PACER Plus are:

  • a more predictable trading environment
  • more consistent and transparent rules throughout the region on sanitary and phytosanitary measures, technical barriers to trade, and customs procedures
  • more liberal and product-specific rules of origin
  • increased investment in the region, in particular by New Zealand and Australian investors into Pacific Island countries
  • greater certainty around tariffs for exporters
  • more opportunities for trade-related development assistance for Pacific Island countries
  • a more mobile labour force in the region.