Download Development Benefits of PACER Plus for the Forum Island

Development Benefits of PACER Plus for
the Forum Island Countries
OCTA, Brisbane
14 October 2016
Brief background
 Importance of trade to the FICs
 Low share in world trade – estimated at 0.05 per cent
 Regional economic integration as an instrument for enhancing the
participation of the FICs in international trade
 Leaders’ vision of closer economic integration in the Pacific
 SPARTECA
PICTA
MSG Trade Agreement
 PACER
MTEC (Northern Pacific Countries)
 Launching of PACER Plus negotiations in 2009
 Negotiations cover, inter alia, trade in goods, trade in services,
investment, labour mobility and development assistance.
 Negotiations concluded on all Chapters. Market access
negotiating ongoing. Expected to be concluded in Oct/Nov 2016
Trade in Goods in PACER Plus
Objectives: Facilitate trade; create larger market of 40 million
people; participation in regional value chains; flexible rules of origin
Main negotiating issues: Asymmetrical obligations -special and
differential treatment; Technical assistance and capacity
Development benefits: Special and differential treatment for the
FICs; enhanced, secure and predictable market access; access to a
larger market; prices of goods will come down – better for consumers
and industries using inputs from other PACER Plus Parties in their
production process; flexible rules of origin; assistance to the FICs to
comply with the relevant SPS and TBT requirements of Australia, New
Zealand and key trading partners
Customs Procedures in PACER Plus
Objective: Simplification of customs rules and procedures to
reduce trade costs and facilitate the conduct of trade among PACER
Plus Parties
Main negotiating issues? Application of WTO disciplines to the
FICs; Technical assistance and capacity building
No new obligations on the six FICs which are WTO Members. The
non-WTO FIC Parties to apply the WTO disciplines only to the extent
of their capacity
Development benefits: FICs to be provided assistance to streamline
their customs procedures to reduce trade costs and enhance
competitiveness; assistance to upgrade trade-related infrastructure,
including ports.
SPS/TBT in PACER Plus
Objective: Strengthen the SPS and TBT systems of the FICs with a view to assisting
them to comply with the relevant SPS/TBT requirements of key trading partners
Main negotiating issues: Application of WTO disciplines to FICs that are not WTO
Members; Technical assistance and capacity building
Development benefits: assistance to implement the provisions of the SPS/TBT
Chapters and strengthen their SPS/TBT systems to take advantage of market access
opportunities; enhance ability to ensure that imported products meet relevant
standards – measures against the spread of NCDs etc.
Development assistance needs: Needs highlighted by the FICs include biosecurity
treatment facilities (HFTA, fumigation and testing laboratory, X-ray machines,
container treatment machines); processing facilities and pack houses; training on
consumer and product safety standards; capacity building on compliance with
international certification rules for tuna exports; food safety accreditation and
testing facilities for processed fish exports and other products of interest;
assistance to negotiate equivalence and mutual recognition agreements
Labour Mobility in PACER Plus
Objective: increase labour mobility across the region; enhance the existing
labour mobility schemes (RSE and SWP)
Main negotiating issues: Whether an arrangement or agreement;
improving the current schemes; mutual recognition of qualifications;
technical assistance and capacity building
•Development benefits: Increased opportunities for FIC workers
(uncapping of the SWP and other improvements introduced by the
Australian Govt; NZ has increased the cap from 8000 to 9500 and initiated
pilot projects in the construction and fisheries sectors); all FICs to benefit
from the SWP (FSM, RMI, Palau, Cook Islands and Niue); assistance to be
provided through the Arrangement to ensure that the FICs take advantage
of the schemes;
•Increased remittances; upskilling of FIC workers; benefits for host
countries – enhanced productivity of industries using Pacific labour
Trade in Services in PACER Plus
Objective: Reduce barriers to trade in services among the Parties; increase the
participation of the FICs in regional/ international services trade.
Main negotiating issues: Special and differential treatment of the FICs ; Scheduling
Approach; Scope of the right to regulate; Technical assistance and capacity building
Development benefits: services accounts for over 60% of GDP in most FICs and the
largest source of employment in several countries; attract foreign investment into
the critical sectors of their economies (telecommunications, financial services,
transport, construction, etc.) and enhance their participation in services trade;
increased competition – better serviced delivery and affordability.
FICs’ proposal on TMNP seek, inter alia, enhanced commitments on mode 4 and
on temporary employment. Substantive commitments by A/NZ should provide
opportunities for FIC workers to work temporarily in ANZ. Benefits include
increased remittances and upskilling of FIC workers
Parties have the right to regulate, provided measures not inconsistent with their
obligations under the Agreement.
Investment in PACER Plus
Objective: encourage and promote the free flow of investments between the
Parties; creation of a secure, predictable and favourable environment for investors
and their investments
Main negotiating issues: definition of investment ; scheduling approach; protection
of investments; dispute settlement; promotion
Development benefits: attraction of foreign direct investment into important
sectors of FIC economies (creation of jobs, participation in supply chains, transfer of
technology and management skills, etc)
• Agreement on a positive list approach. Broad flexibility to choose sectors in which
to give commitments in line with national priorities.
• Pre-establishment rights circumscribed under the Chapter. Possibility for
countries to exclude sectors, impose limitations in the sectors in which they have
undertaken commitments.
• No ISDS – disputes to be settled in domestic courts
• Right to regulate recognised under the Chapter.
• Australia and NZ expected to adopt positive measures to encourage their
investors to invest in the FICs.
Development Assistance in PACER Plus
Objective: strengthen the capacity of the FICs to take advantage of the PACER Plus
Agreement to achieve robust economic growth and sustainable development
Main negotiating issues: scope of the chapter; new and additional funds for aid for
trade; legal status of the Chapter; Implementing Arrangement.
Development benefits: A/NZ to provide the FICs with technical and financial
assistance to implement their obligations, and also to assist them to address some
of the supply side constraints that have prevented them taking advantage of market
access opportunities under trade agreements
• Improved trade-related infrastructure will reduce trade costs and improve
efficiency of FIC firms
• Target amounts for implementation and broader trade-related assistance to be
stated in the Implementing Arrangement
• Parties refining the list of activities to be funded under the Work Programme
Development Assistance in PACER Plus
Fast-track Activities
(i) Support for the transposition of goods tariff schedules and the PSR
schedule into HS2017
(ii) Support for all FICs’ customs administration to implement HS2017
(iii) Technical assistance to help plan and mitigate revenue loss
(iv) Technical assistance to support FICs’ domestic legislative review and
ratification processes
(v) Training on the contact point, notification and publication
requirements under PACER Plus, including for SPS, TBT, Customs, Tariffs
and Trade in Goods Chapter
Concluding Remarks
 PACER Plus is a trade and development agreement. Focus not entirely on market
access, but also how to assist the FICs to use trade as an engine of economic growth
and development
 Special and differential treatment provisions in favour of the FICs under most
Chapters – positive list approach in services and investment; possibility to exclude
revenue-sensitive items from liberalisation under the Trade in Goods Chapter.
Possibility to have recourse to a number of measures to safeguard revenue and
protect infant industries (modification/withdrawal of tariffs article; infant industry
article; transitional and global safeguards etc) Adequate policy space to pursue
development-oriented policies.
 Development assistance to be provided to FICs to strengthen their productive
capacity to produce goods and services for export
 Possibility of attracting foreign investment into critical sectors of their economies
 Development benefits of labour mobility schemes – triple win for sending countries,
host countries and workers participating in the schemes
 Recourse to the General Exception Chapter to promote, health social and
environmental goals