REPA Booklet - Stop Epa

to establish probable coverage, content, procedures and administrative aspects of future negotiations. Discussions
on process would have been followed by preliminary negotiations on fisheries, tourism, investment and trade
facilitation, safeguards, dispute settlement and rules of origin. Market access issues would have been dealt with
in a second, later stage of negotiations, in parallel with the Cotonou time frame.
How did the Pacific Islands respond?
They refused even to have an informal dialogue with Australia and NZ about their negotiations with the
Europeans, let alone agree to a proposal for parallel negotiations. This was partly because they feared what
negotiations under PACER might mean; they were also angry with Australia and NZ over the amount of funding
being offered under the trade facilitation part of PACER.
What is the situation now?
Tensions were defused when the European Trade Commissioner Pascal Lamy called into Wellington on his
way to launch the Pacific Economic Partnership Agreement negotiations in Nadi in September 2004 and into
Canberra on his way home. Who knows what was discussed behind the scenes, but presumably he promised
to keep both countries informed. That is unlikely to be enough for Australia and NZ, who will want to insist that
negotiations with the European Union were formally launched in September 2004 and should be with them too;
but they are still discussing what to do next.
“PICTA and PACER are
instruments to lock the
Pacific Islands into an
unjust trade regime
that will see their
national economies
systematically opened
to suppliers of goods
(and eventually
services and
investment) from
around the globe.”
(PANG, 2002)
Can the Islands argue that formal negotiations have not yet begun?
There are at least four possible arguments:
1. the current negotiations with the European Commission are not formal negotiations for a free trade
agreement in goods as defined by GATT Article XXIV. The first phase, until January 2007, is to
negotiate a framework agreement and does not require WTO approval – rather like PACER. Formal
negotiations to convert this framework into a formal legal text don’t begin until 2007.
2. the formal legal negotiations in 2007 may never result in a free trade agreement in goods as defined by
GATT Article XXIV. The Islands might opt instead for agreements on specific commodities, such as
sugar and fish, and on non-goods areas such as services or investment that wouldn’t trigger PACER.
3. it is impossible to know until the end of the legal negotiations in 2007 which, if any, Forum Island
Countries may end up signing a free trade agreement in goods as defined by GATT Article XXIV or
whether all PICTA members will sign. Some may prefer the Everything But Arms or the General System
of Preferences, rather than the final deal, when they see what the European Union will agree to.
4. the obligation under PACER arises ‘as soon as practicable’. The burdensome demands of the Pacific
Economic Partnership Agreement negotiations, the WTO Doha round, implementation of PICTA and
the MSG trade agreement mean it is not practicable to begin consultations with Australia and NZ until
after the Cotonou negotiations are concluded.
What leverage can Australia and NZ use to push their demand?
They don’t have the same leverage that the European Union has with the end of the Lomé preferences.
Australia and NZ promised to continue to apply SPARTECA and any other market access arrangements with
any Forum Island Country until they conclude a new or improved arrangements which gives that Island equal
or better market access. On the other hand SPARTECA’s value keeps falling as Australia and NZ remove their
tariffs on imports from other countries and enter more free trade deals with other countries.
Would the Islands have to offer Australia and NZ the same as they give the European Union?
There is no formal obligation to do so. There has been a general expectation that they would, based partly on
the special status of Australia and NZ as Forum ‘partners’ and partly on the ‘most favoured nation’ principle that
countries should be offered the best treatment that is given to any other country.
Are the Forum Islands off the hook with Australia and NZ if they avoid pulling the triggers?
No, it would just delay the inevitable. Parties to PACER must begin negotiations with Australia and NZ in 2011
‘with a view to establishing reciprocal free trade arrangements’. Australia and NZ will be determined to secure
at least as good treatment as the Pacific Islands give the European Union and probably much more.
A People’s Guide To The Pacific’s Economic Partnership Agreement 49