Trade
Fiji Summit Hears Trade Worries
Smaller Islands Tell ACP About Costs Of
From Vanuatu came the story of the ice cream battle. Of how Fiji-based ice cream manufacturer Tuckers is sending local rival Switi’s ice cream to the freezer. With Tuckers selling its 12-liter pack at 1780 Vatu, Switi realizes its 2-liter pack hitting the market at 800 Vatu simply cannot be creamier.
Vanuatu consumers are loving it, of course, with a recent PINA Nius report claiming the Fiji ice cream had swamped local competition. However, for Switi and the small, still developing local manufacturing sector, the ice cream battle was a rude awakening to the other side of free trade; it is difficult to comprehend the benefits of trade liberalization when what you get first is pain and more pain.
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It was under such a cloud of apprehension and trepidation that Vanuatu and other Pacific Island nations approached last July’s third summit in Fiji of the African, Caribbean and Pacific bloc of nations, with the exception, perhaps, of the host, Fiji, and its equally big partner in the region, Papua New Guinea. With the Melanesian Free Trade Agreement already in force, the two countries have been accused of reaping the most benefits, since each has a developed manufacturing base and both have quite a number of products to export. Now with the Pacific Islands Trade Agreement and the Pacific Islands Agreement on Close Economic Relations about to come on line, grumblings from their smaller island neighbors are sure to get louder.
Whether this was evidenced during the recent ACP summit, no one would confirm. It probably was, given the generalities that surrounded the wording of the summit’s 94-point communiqué, now known as the Nadi Declaration. In reiterating that trade liberalization should be "phased and sequenced in a progressive manner."
The strengthening of "special and differential treatment" should be the fundamental principle of any multilateral trading system, it added. What form that special and differential treatment will take was not specified, and has yet to be thrashed out, something with which many small island nation delegates would not be comfortable.
Regional trade pacts like PICTA and PACER are here to stay. Even the EU is pushing for this. Under its Cotonou Agreement, the trade and aid contract that binds EU members and their ACP counterparts, regions such as the Pacific must negotiate Regional Economic Partnership Agreements (REPA) with the EU. This is why the question of compensation was raised, with ACP members wanting recompense for the costs incurred for opening up their domestic markets in the name of trade liberalization.
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"Regionally, neither Fiji nor Papua New Guinea will give Palau and the Marshall Islands anything in return, as has been proven in the past," explains Surendra Sharma, the trade representative for the two countries and Vanuatu to the EU, based in Brussels.
"Regionalism is fine, but at the end of the day, the bottom line is: What do you get out of it? You are the poor nation, you should be able to get a little bit more than the bigger boys.
"These are some factors that my countries will take into account," Sharma tells the Suva-based Pacific news agency, PacNews. He is a Fiji national and left as chief executive of the Fiji Trade and Investment Board some years ago to take up a senior posting with the ACP office in Brussels.
Surprisingly, similar sentiments came from Fiji trade officials, who felt trade liberalization is simply going to benefit the bigger and richer nations. They felt the region should go slow on opening up their markets and that trade concepts being flouted around by the EU and the World Trade Organization ought not to be embraced wholesale and unmodified by Pacific Island nations.
Sharma’s advice to his clients: "At the end of the day, they are going to keep their options fully open, so they are not going to make any kind of commitments, neither to the region, nor the ACP nor the European Union, they will go this way or that way. They won’t decide yet whether they want to commit themselves to any kind of arrangement."
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| NADI DECLARATION AT A GLANCE |
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