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, buteveryone, 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:
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.
