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eUpdate - Trade Justice Now


Trade Justice Now! is a monthly e-update from PANG. 

Download your copy here:

March/ April 2010: Trade Justice Now!
March/ April 2009: Trade Justice Now!

July 2008: Trade Justice Now!
August 2008: Trade Justive Now!
September 2008: Trade Justice Now!
October 2008: Trade Justice Now!
Nov-Dec 2008: Trade Justice Now!
January 2009: Trade Justice Now!
March/April 2009: Trade Justice Now!


A Crisis in International Trade Options

Australia's Trade Minister Simon Crean recently raised the point that in the wake of the global financial crisis it seems like a strange time to launch more negotiations about the liberalisation of trade. Indeed Minister, it seems not to make much sense at all.

The recent spate of crises, from food, to petrol, to financial have laid bare the logic of blindly pursuing trade liberalisation. Bodies like the World Trade Organisation as well as the signing of Free Trade Agreements has seen the enshrining of a liberalised world of trade and investment that has long put the interests of investors ahead of communities. With some niceties on the sides, the Pacific trade agreement known as PACER-Plus is the latest in the extension of the prioritisation of investors over Pacific Islanders.

The global financial crisis has seen tourism and remittances fall world-wide. For the Pacific that is no exception. Tourism and remittances play an important role for many Islanders as a means of accessing the cash economy and the decline in these has been felt throughout the islands. The inter-connectedness of the Pacific just through these areas has shown just how vulnerable the Pacific can be to changes in the global economy. Whilst there are signs of recovery in the global economy, just how quickly the flow on effects will arrive in the Pacific remains to be seen.

The global financial crisis however has had another impact, it has highlighted the importance of the traditional economy for pacific lives. Ni-Van Parliamentarian, Ralph Regenvanu, has outlined how the traditional economy has acted for Pacific communities as a buffer to some of the impacts of the global crises through its provision of food and housing for Islander populations. Indeed it is these differing and alternative traditional economies of the Pacific that have provided the resilience and strength for the Pacific people throughout the recent crises, and not, as some would say, any existing openness to international trade.

The dynamic systems that comprise the Pacific Islands has to be reflected in any talk about future trade agreements. The one-size-fits-all belief that trade liberalisation will benefit all can no longer suffice. Neither can vague attempts to offset the impacts of free trade by non-committed aid funding.  Talk about taking into account the individual circumstances of Pacific Island Countries must be reflected either in allowing countries to sign up to the parts of PACER-Plus that benefit them, or better still, by putting something on the table that steps away from the blind faith of conservative trade ideology.

There are real threats to the Pacific from the proposed PACER-Plus. Governments stand to lose considerable amounts of revenue from the reduction of tariffs (import taxes). For the Pacific, imports come largely from Australia and New Zealand making any agreement on the reduction of tariffs crucial. It is easy to say that this issue might be resolved beforehand with the current trade talks between the Pacific and the European Union, but  everyone, including trade ministers, knows that the impact of lost tariffs on European imports pails in comparison to those from the region's bigger neighbours. Under PACER-Plus, Vanuatu is forecast to see 17% cut from its government budgets due to tariff reductions whilst bigger countries like Fiji and PNG would lose more than $10million.

The loss of government revenue raises concerns about the ability of governments to provide essential services but also how they would recoup that revenue. Pacific governments already exist with limited budget capacities to provide services to populations that are often isolated. Reductions in these budgets will severely impact the provision of services like health, education and water, undermining fundamental rights that communities have.

Whilst the cost of reduced services will be borne by people, so too may the attempts to raise government revenue. Consumer taxes like Value-Added Taxes are seen as one way to recoup government budgets. Such taxes shift the burden of taxation away from the more wealthy, who previously would pay through import taxes on luxury goods, to everyone through the taxation of everyday items. Whilst in theory prices may drop with reduced tariffs there has already been experience in the region of import 'middle-men' increasing their prices, effectively raising prices back to levels similar to when tariffs were in place. A shift to such tax schemes have also been found by the International Monetary Fund to recoup only 30% of the original government revenue levels received from tariffs. This would leave Pacific Islanders paying more for goods but still getting less in terms of government services.

The global crises have provided the perfect context to re-evaluate how countries trade with each other. Launching new trade negotiations for PACER-Plus at a time like this seems not only like a strange idea, but indeed a dangerous one. The Pacific Islands however are under no obligation to sign up to PACER-Plus if it isn't in the interest of Pacific communities. Pacific countries will not benefit from old-fashioned, reciprocal styled trade agreements, some new and bold needs to be discussed. As Mr Crean said, anything worth doing takes courage and commitment, indeed courage and commitment are needed to start to move beyond the blind faith of market economics and onto something that supports the traditional economies and systems that are thriving in the Pacific.


PANG in the media:

As a fair trade campaigning organisation, PANG aims to disseminate considered analysis of trade issues as widely as possible through local, regional and international media channels , as well as through presentations to conferences, trade workshops, university seminars etc.  PANG appears regularly in newspapers, magazines, radio, on television and on the World Wide Web.  In the past month media releases and comments from PANG have appeared in:

Only way is up

Fiji Times newspaper
Fiji Sun newspaper

Fiji Daily Post
NZ Herald
Solomon Island Times
Fiji TV
Fiji Radio (Fiji Broadcasting Coporation Limited - FBCL)
Pacific Magazine
Pacific Business magazine
Radio New Zealand International
Radio Australia
Radio Niu (in Auckland)
FijiLive (website)

PANG Media Appearances (September 22, 2007 – October 22, 2007)
Please see below for links to recent PANG media appearances. 
*Please note that some of these links will become outdated as news organisations update their sites.  It is not possible for PANG to maintain a complete list of media appearances.

http://www.pacificmagazine.net/news/2007/08/29/stand-up-for-the-region-pang

http://www.pacificmagazine.net/news/2007/10/05/pacific-urged-to-beware-of-trade-agreement-trigger

http://www.islandsbusiness.com/news/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=130/focusContentID=10162/tableName=mediaRelease/overideSkinName=newsArticle-full.tpl

http://www.usp.ac.fj/news/story.php?id=194

http://www.fijilive.com/business/show/news/2007/10/17/news3.html

http://www.nzherald.co.nz/section/466/story.cfm?c_id=466&objectid=10467300

http://uriohau.blogspot.com/2007/08/network-hits-out-at-dirty-eu-politics.html

http://www.fijitimes.com/story.aspx?id=72090

http://www.fijitimes.com/print.aspx?id=71158

http://www.fijitimes.com/print.aspx?id=71387

http://www.fijitimes.com/print.aspx?id=71049

http://www.fijitimes.com/print.aspx?id=71356

http://www.fijitimes.com.fj/story.aspx?id=71850

http://fijitimes.com.fj/story.aspx?id=71816

http://www.radioaustralia.net.au/news/stories/s2041752.htm

http://www.radioaustralia.net.au/news/stories/s2054982.htm

http://www.abc.net.au/ra/pacbeat/stories/m1452229.asx

http://www.radioaustralia.net.au/news/stories/s2041752.htm

http://www.abc.net.au/ra/news/stories/s2054982.htm

http://www.abc.net.au/ra/pacbeat/stories/m1452229.asx

http://www.solomontimes.com/news.aspx?nwID=656

http://www.samoaobserver.ws/local/LNPages/1007/1707ln007.htm

http://www.fijidailypost.com/print.php?type=news&index=11366

http://www.rnzi.com/pages/news.php?op=read&id=35417

http://www.radiofiji.com.fj/fiji2/fullstory.php?id=4462

http://www.radionz.co.nz/audio/national/mdr/world_watch6


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