PACFIC:PNG and Fiji break ranks in negotiations with Europe
Updated
Papua New Guinea and Fiji have broken ranks with other Pacific Island nations and signed an interim deal on trade-in-goods with the European Union. After five years of complex negotiations for an Economic Partnership Agreement the Pacific has been under intense pressure to meet the December 31st deadline set by Europe for the goods part of the Agreement.
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Presenter: Jemima Garrett
Speakers: Roshni Sami, Co-ordinator of the Pacific Network on Globalisation.
ROSHNI SAMI : The way Europe managed this trade negotiation they really left very little choice for PNG and Fiji but to sign this interim trade agreement and that's because both countries have their arms twisted, Fiji in the case of the sugar industry and PNG in the case of preferences they receive for tuna exports to the EU market.
JEMIMA GARRETT : So the threat was really tariffs. What were, what was Europe threatening PNG and Fiji with?
ROSHNI SAMI : Well Europe's in fact been threatening 77 countries around the world with increased tariffs and the rescinding of the preferences they receive. So these countries economies are based on, for the last 20 years, on the preferential market and quota access to the EU and this Mandelson, and other trade negotiators, were going to remove these preferences if interim agreements were not signed.
JEMIMA GARRETT : So is it fair to say that, that could mean the loss of possibly thousands of jobs?
ROSHNI SAMI : Absolutely. And what it also does is undermines then fundamentally weakens economies that are, are growing through the use of these trade preferences and market access.
JEMIMA GARRETT : Now you say there's a double standard in these negotiations with Europe asking for binding commitments from the Pacific but only offering non-binding commitments in the ... in return. Could you explain what you mean exactly?
ROSHNI SAMI: Sure. So Europe is asking the Pacific for binding commitments on trade liberalisation which will effectively restructure their economies or continue liberalisation in their economies. And, and Europe knows that this is going to have huge adjustment costs, right from loss of government revenue to how its funds are immediately going to impact industries, like the sugar industry which is going to lose its preferences over the next 8 years. In return, so these are binding agreements that are going to have profound changes to these vulnerable economies. In return, Europe is saying yes, we're going to give aid but they're not saying how much, they're not making any commitments to the kind of adjustment funding that they're going to provide to assist in this switch, to neo, to basically a WTO compatible trading arrangement.
JEMIMA GARRETT : Now you're quite critical of the Pacific Island countries even being asked to go to WTO compatible trading arrangements. What Europe says is that it just wants a level playing field. What's wrong with that?
ROSHNI SAMI : Well how can you, how can you say that it's a level playing field when you have distinctly unequal partners? I mean the European economy is 1400 times the size of the Pacific economy.
JEMIMA GARRETT : So where does the fact that Papua New Guinea and Fiji have now signed up for this trading goods deal leave other Pacific island countries that didn't sign?
ROSHNI SAMI : One of the fundamental tenants of the Cotonou agreement is Europe's support for regional integration. So the fact that we have two and the two largest most industrialised economies with a liberalised trade agreement, with the EU, this, this will undermine regional integration efforts particularly under PITA which is the Pacific Islands Trade Agreement.
JEMIMA GARRETT : And where should the Pacific island nations go now in their negotiations for an economic partnership agreement which are still ongoing?
ROSHNI SAMI : That's right. I mean what's happened in the story is we have this interim agreement that's going to be agreed by the end of the year so that Europe won't have to sign another waiver with the WTO on goods. And next year Pacific countries will be seeking the things that they actually wanted out of this agreement which is labour mobility, reform of development finance institutions, increased accountability for investors and that kind of thing. So what Europe's really done here is get what they needed by using time pressure, threat of losing preferences, threat of cutting aid and really forced Pacific countries to put their development priorities on the back foot. And it's going to be very difficult for us to negotiate these when we've already given Europe what they want.
