1. PACER Plus: Introduction & Overview Kaliopate Tavola 4 September 2009

2. Scope Introduction Overview Challenges Issues Role of the Private Sector

3. Provisions of the PACER Agreement Art 3(2): PP to be ‘stepping stone’ to allow FICs to gradually become part of a single regional market and integrate into the international economy – More advanced regionalism envisaged Art 5(1): provides for the trigger point at which PP is to start – 8 years after PICTA has come into force – Triggered off by FTA negotiations as per Art 6 Art 6(3): provides for consultations with a view to the commencement of negotiations of a FTA

4. What is PACER Plus? Art 5(1): ……with a view to establishing reciprocal free trade arrangements Art 6(1): specifies FTA, customs union or an interim agreement leading to a FTA as per Art XXIV, GATT PP can be bilateral, sub-regional or regional – Art 6(3)(b) The + has expanded the scope, form and nature of the agreement to be negotiated Definitions of + abound

5. The PACER Plus Process to date Notifications under Art 6(2) took place when PACPS entered into negotiations on EPA Consultations under Art 6(3)(a) have taken place when PACPS commenced formal negotiations with EU on EPA There have been 4 informal consultations already at officials level and reports submitted to the FTMM There has been 1 informal ministerial consultation FTMM report went to PIF in Cairns PIF has decided ‘to commence PP negotiations forthwith’.

6. The PACER Plus Process to date CTA position has been advertised and applications closed Next FTMM will be in November 2009 in FSM Agenda: Framework of PP negotiations; timelines; identification of issues; issues for CTA to negotiate Leaders noted the need for FICs to undertake national consultations and capacity building Fiji will not participate but will be kept informed at the officials level.

7. The Expectations of PACER Plus More than just a FTA PP is to be a development tool – to go beyond DDA and EPA Apart from national benefits, there is commitment to direct much benefits to the collective development needs of the FICs in the interest of REI and regionalism as a whole To craft a unique and visionary development trade agreement between developed ANZ and developing FICs

8. Realization of Expectations in the context of WTO Art XVIII GATT: ‘Government Assistance to Economic Development’ – Protective or other measures affecting imports – Additional facilities to maintain sufficient flexibility in tariff structure to grant tariff protection for the establishment of a particular industry – Application of TRQ for BOP purposes – Can deviate temporarily from provisions

9. Realization of Expectations in the context of WTO Art XXIV GATT: ‘FTAs’ – Notification – Derogation facilities – Substantially all the trade (SAT) – Period of tariff reductions Part IV GATT: ‘Trade and Development’ – Preferential treatment – ‘Enabling Clause’, which consolidates SDTs for developing countries, and non-reciprocity in trade agreement

10. The Challenges the Negotiators face Commitment to take the negotiations beyond conventional reach Commitment to be creative in formulating SDT, asymmetry, differentiation, etc Commitment to go beyond WTO conventions Commitment for the bigger picture – REI Commitment to notifying to the WTO an unprecedented developmental FTA

11. Forum Island Countries Interests Adequate resources to cover adjustment costs Attention to supply-side constraints to take advantage of market access Attention to ‘behind the border’ activities Attention to industrialization measures Simplified and facilitative ROO that will encourage industrialization and diversification Broad-based economic growth to generate lost tax revenue and more

12. Forum Island Countries Interests Elimination of NTB, tariff peaks, tariff escalation Promoting and safeguarding ‘special products’ to FICs Labour mobility schemes Optimizing new opportunities, e.g. economies of scale Concessionary ‘SAT’ Concessionary ‘reasonable length of time’ Differentiated market access offers

13. Consideration of Alternatives ANZ unilaterraly conferring benefits to FICs - WN SPARTECA Plus - Oxfam Enhanced GSP - ditto PACER-lite - ditto

14. Role of the Private Sector Tongan Informal Consultation agreed with the engagement of the NSAs NZAID study on capacity building and how best to engage NSAs. – Awaiting report PIPSO’s first workshop on PACER Plus – 25 June 2009

15. THANK YOU