Showing posts with label PACER Plus negotiations. Show all posts
Showing posts with label PACER Plus negotiations. Show all posts

Sunday, December 01, 2013

X-Post: Don’t Be A “Bully” - Message To Australia & New Zealand On Trade Talks.

Source: Samoa Observer

by Lealaiauloto Aigaletaule’ale’a Tauafiafi

Green party MP Jan Logie. CREDIT: REBECCA THOMSON/
Samoa’s Minister for Trade was talking tough leading in to a trade meeting last Friday between Pacific countries and New Zealand and Australia, in Auckland.

Added to that was Pacific islands spokesperson for the Green Party, Ms Jan Logie calling for Australia and New Zealand to put the interests of the whole Pacific ahead of their domestic interests – and not “bully” their smaller island neighbours.

The trade meeting was the third consultation and update of Non State Actors (N.S.A.) on the proposed Pacific Agreement on Closer Economic Relations (P.A.C.E.R.) Plus. It follows the second N.S.A. meeting that was held in Brisbane, Australia in April 2012.

The proposed P.A.C.E.R. Plus agreement aims for greater regional trade integration between Pacific countries and Australia and New Zealand. It is seen as the way to create jobs, drive private sector growth, raise standards of living and improve the Pacific region’s economic development so that it is self-sustaining.
But last week, Fonotoe Pierre Lauofo, Samoa’s Minister for Trade, and Deputy Prime Minister told media that Samoa is not happy with the way things are going. He wants current barriers on trade to come down more quickly.
Samoa Deputy P.M: Fonotoe Pierre Lauofo.

Specifically he is referring to one of the four priority areas in the proposed P.A.C.E.R. Plus agreement, that of ‘regional labour mobility’. The other three priority areas being: rules of origin, development assistance, and trade facilitation.
Fonotoe wants the current regional seasonal employment scheme (R.S.E.) between New Zealand and Samoa, to also include traineeships and working holiday programmes.
“That’s a bit of the contentious issue from the New Zealand perspective, and Australia, because Australia is also part of P.A.C.E.R. Plus. So those are the issues we are looking at resolving as soon as possible so that could better access the markets in New Zealand and Australia.”

While Ms Logie this week told the New Zealand Pacific, “P.A.C.E.R. Plus is supposed to be a development agreement rather than a free trade agreement but up until now no progress has been made on development assistance. Australia and New Zealand have been saying they’ll deal with funding separately. It’s hard to see how that’s in the best interest of the Pacific.”
She added that latest figures out of the Asian Development Bank “highlight again the need for additional development support for the Pacific to adapt to climate change. New Zealand shamefully took that money out of the existing aid budget. This track record doesn’t bode well for the P.A.C.E.R. Plus.”
“New Zealand has already made a significant investment in negotiating this agreement, we need to make sure that it’s not just another attempt to bully our smaller neighbours.”

Ms Logie’s comments hit at the heart of the matter in this third N.S.A. meeting. In last year’s N.S.A. meeting in Brisbane, there was a fall-out. And it pointed to the lack of funding assistance by Australia and New Zealand to get Pacific N.S.As to provide critical input.

A number of N.S.As leveled heavy criticism about the lack of meaningful discussions and participation by non government organisations. Only one non-government organization was in attendance at the 2012 meeting, Mr Adam Wolfenden, Campaigner for Pacific Network around the region on Globalisation (P.A.N.G.) told the Vanuatu Times back in April 2012.
“The lack of funding available for key groups and no discussion of substantive issues has resulted in a consultation that has lacked critical input,” said Mr Wolfenden.
The key issues that need to be resolved according to him are “adequate funding for effective participation and real discussion about the substantive issues at regional consultations as well as adequate funding and capacity for national consultations.” The concern amongst private sector organisations was the “inability of the diverse voices of non-state actors to be present”.

Added to Mr Wolfenden’s comments were those made by the Australian Fair Trade and Investment Network (A.F.T.I.N.E.T.). They commented that it is time for Australia to provide the money necessary for the Pacific to hear from N.G.Os. “Whilst we appreciate and welcome Australia’s provision of some funding for the N.S.A. dialogue, this consultation is an example of a job half-done,” Harvey Purse, Trade Justice Campaigner of A.F.T.I.N.E.T. told the Vanuatu Times.

“Australia has always acknowledged the constraints in the region including limited funding for consultations and the involvement of N.S.As. “However, the funding provided by Australia and New Zealand is inadequate. So we've now had a consultation that is not representative of the wide spectrum of views in the Pacific, and failed to include any critical voices. “It can hardly be seen as improving the lives of Pacific peoples when the non government sector, with their diverse expertise and views, have less representation at these key consultations than multi-national corporate interests such as big tobacco (B.A.T.), alcohol (Heineken) and finance (A.N.Z.).”

The Vanuatu report noted that Pacific Island business was well represented with the regional body the Pacific Islands Private Sector Organisations (P.I.P.S.O.), several business councils and Chambers of Commerce present. However, largely absent were small and medium enterprises mainly owned by Pacific islanders.

According to the draft agenda of the Auckland meeting this Friday, P.I.P.S.O. will present and discuss the views of their Membership with regard to the nature and depth of consultation desired during P.A.C.E.R. Plus negotiations. They will discuss best practice, and provide examples of ways to strengthen consultations and make them more effective.
The stated main objective of the 2013 meeting is about finding ways for better consultation between N.S.As and national governments in the P.A.C.E.R. Plus process. And to also look at their respective roles in implementing P.A.C.E.R. Plus when it comes into force.

Criticism from 2012 was seen as the litmus test for the 2013 meeting. Will there be more than one N.G.O. in attendance? How much funding was made available for Pacific N.S.A.s to attend? Have there been funding made available for national consultations leading up to these regional meetings?

On the bigger picture, what is P.A.C.E.R. Plus? Who said it is important to the Pacific, and why?
The answer is found at the highest level. In 2009, Pacific Trade Ministers from 13 Pacific countries agreed in Apia, Samoa to negotiate P.A.C.E.R. Plus because they saw the need for a much stronger regional trade integration with Pacific super powers Australia and New Zealand. They felt that by having a trade agreement such as P.A.C.E.R. Plus, it will give them a formalized framework that will benefit each Pacific country through the creation of jobs, drive private sector growth, raise standards of living and improve the region’s sustainable economic development.

Meantime for it to work for each country at different stages of economic development, the structure of P.A.C.E.R. Plus should be flexible enough to allow countries ready to move ahead with negotiations, to do so, while countries who are not, are given more time to prepare.
And to make sure that the voices of all countries are heard, that a true assessment of their different stages of development are accounted for, it is important that a wide and diverse voice from N.S.A.'s is heard.

The process therefore, promotes gradual regional integration in a way that supports the economic development of the 13 party members while taking into account their differences.
Even though the coverage and framework of P.A.C.E.R. Plus have yet to be agreed upon, the priority areas for negotiations have been identified.
In October 2009, in Apia, Samoa, Forum Trade Ministers agreed on the common priority issues:
  • Rules of Origin
  • Regional Labour Mobility (beyond Mode 4)
  • Development Assistance, focusing on physical infrastructure for trade, trade development and promotion; and
  • Trade Facilitation, including Sanitary and Phytosanitary (S.P.S.) Measures,
  • Technical Barriers to Trade (T.B.T.), Standards and Customs Procedures.

And in 2010, Forum Trade Ministers Meeting also noted ‘the fundamental importance of shipping, aviation, telecommunications and water infrastructure to increase trade in goods and services between Member Countries’, and agreed that these were priority negotiating issues for P.A.C.E.R. Plus.


According to Article 6 of the Cotonou Agreement, non-state actors include:
  • Civil society in all its diversity, according to national characteristics;
  • Economic and social partners, including trade union organisations and;
  • The private sector.
In practice, it means that participation is open to all kind of actors, such as community-based organisations, women's groups, human rights associations, nongovernmental organisations (NGOs), religious organizations, farmers' cooperatives, trade unions, universities and research institutes, the media and the private sector.
Also included in this definition are informal groups such as grassroots organizations, informal private sector associations, etc. The private sector, however, is considered only insofar as it is involved in non-profit activities (such as private sector associations, chambers of commerce, and the like).

Saturday, August 17, 2013

X-Post: Eureka Street - Finagling Free Trade In The Pacific.

Source: Eureka Street

Jemma Williams | 

Map delineates Pacific Island region relative to Australia and New Zealand Negotiations towards a free trade agreement involving Australia, New Zealand and 14 of our neighbouring Pacific Island countries are underway this week in Port Vila, Vanuatu.
The agreement, known as PACER-Plus, aims to enhance development through greater trade in the region. However, the negotiations are being carried out on unequal playing field, with Australia and New Zealand leading the talks which involve largely small, underdeveloped island nations, five of which are listed by the United Nations as among the least developed countries in the world. Recognising this, Australia and New Zealand are funding the negotiations as well as providing assistance to Pacific Island countries to implement the agreement.

Despite insisting that promoting development in the Pacific is the priority, Australia stands to gain more than most of the Pacific Islands, which already have tariff-free access for their goods into Australian markets under previous trade arrangements. Among the issues expected to be discussed in Port Vila is trade in services, which would mean Australian companies, providing services from banking to health and education, would have unrestricted access to Pacific Island markets, and Pacific Island governments would have less rights to regulate them.

The logic for including services in trade agreements is that established private service providers, in this case based in Australia or New Zealand, would be enticed into Pacific markets through deregulation, and Pacific Island nations would benefit from increased access to the service they provide. Indeed, the entry of international telecommunications companies into a number of these island economies did improve mobile phone coverage and connectivity, including in rural areas.

However, opening up all service 'markets' in vulnerable economies poses many threats. The inclusion of services in a free trade agreement restricts the regulation of any service which could be considered to have any commercial activity or where there are one or more service providers. This deregulation and entry of private service providers is often followed by pressures to privatise essential services like water. In countries like Argentina and Bolivia private companies have raised prices and have not invested in infrastructure in unprofitable areas.
Jeema Williams

" Many Pacific Island nations question what they would gain from PACER-Plus. Earlier in the year Papua New Guinea's trade minister said PNG would gain nothing from the negotiations and he would consider withdrawing. "

Additionally, services are typically negotiated on what is known as a 'negative list basis' — meaning that all services are included unless they are specifically excluded. This means that all services now and in the future would be subject to these rules even in light of new environmental or social problems or new research. This would undermine governments' policy space to address pressing development concerns like climate change, which is already affecting Pacific Island countries.

Many Pacific island nations are already struggling to provide essential services such as water, health and education. Having access to many of these services is a basic human right. Implementing policies to ensure the equitable distribution of essential public services throughout all areas of the country is one of the essential responsibilities of government. Liberalising trade in services could hinder the ability of government to fund or provide local or government-owned services to their most vulnerable populations.

Healthcare is a typical example. Foreign healthcare providers are likely to establish themselves in wealthy areas, profiting by charging high prices to those who can afford it. They would not service rural populations where the majority of people are unwaged and survive on subsistence agriculture. Governments would still have to fund or provide health care to the most vulnerable populations. Additionally, the stark inequalities in healthcare provision could lead to a 'brain drain,' where the most qualified professionals seek work in clinics which serve the wealthy.

Many Pacific Island nations question what they would gain from PACER-Plus. Earlier in the year Papua New Guinea's trade minister said PNG would gain nothing from the negotiations and he would consider withdrawing. The islands are pushing for the inclusion of temporary labour mobility rights so that their citizens will be able to gain visas to work in Australia and New Zealand, as well as more development assistance. Neither of these issues is normally included in free trade agreements, but they are being used as bargaining chips for Pacific Island nations to concede access to Australia and New Zealand access to their services markets.

If the Australian and New Zealand governments really want to achieve development in the Pacific, it is difficult to understand why they are pushing these islands to reduce their barriers to trade in a manner which could restrict their achievement of human development goals.

Jemma Williams headshotJemma Williams has an honours degree in international studies specialising in international development. She currently works for the Australian Fair Trade and Investment Network.

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Monday, May 20, 2013

PNG Shoots Down PACER Plus, In MSG Trade Talks.

Source: Radio Australia

Pacific trade talks 'waste of time': PNG 
Samisoni Pareti
Mon May 20, 2013

Officials from Papua New Guinea say they are considering withdrawing from free trade negotiations between Pacific Island countries and Australia and New Zealand. PNG's Trade Minister, Richard Maru, on Monday told a meeting of trade ministers from the Melanesian Spearhead Group that his country was considering withdrawing from Pacific Agreement on Closer Economic Relations (PACER) negotiations.

PNG's Trade Minister, Richard Maru


My country is not interested in PACER Plus, our focus is the MSG Trade Agreement[...]

Our feelings at the moment is that PACER Plus would be one sided in favour of Australia and New Zealand[...]

We are frustrated with them. We can't export our taro there, they wont accept our greens[...]

[PACER Plus negotiations]are a complete waste of time. "
 "My country is not interested in PACER Plus, our focus is the MSG Trade Agreement," Minister Maru told a press conference convened at the end of the meeting at the Sofitel Fiji Resort and Spa in Nadi.
Fifteen countries are involved in the PACER negotiations, with the aim of helping Pacific Islands Forum countries benefit from enhanced regional trade and economic integration.

Asked whether PNG would withdraw immediately from PACER Plus negotiation talks, Mr Maru said the matter is under serious review by PNG's government. "Our feelings at the moment is that PACER Plus would be one sided in favour of Australia and New Zealand," he said. "We are frustrated with them. We can't export our taro there, they wont accept our greens.There's nothing to be gained from a trade agreement at the moment. We cannot justify the huge amount of resources we expend on such negotiations. They are a complete waste of time."

Asked for Fiji's position on PNG's stand, the country's Minister for Trade and Attorney General, Mr Aiyaz Sayed Khaiyum, said Fiji sees a lot of merit in PNG's position. He said Melanesian countries need to consolidate their trading capacities first before they look at free trade pacts with their bigger neighbours.

Papua New Guinea's Minister for Trade Richard Maru, Solomon Islands High Commissioner to Fiji Patterson Oti and Vanuatu's Minister for Trade Marcellino Pipite give their governments views on PACER and PACER Plus negotiations. (Video posted below)

Friday, March 09, 2012

X-Post- 36th Parallel Weekly Analysis: Commodities Boom widens PIF Rift.

In order to understand political dynamics, underlying economic factors often need to be considered. The growing rift within the Pacific Island Forum between the Melanesian Spearhead Group (MSG) and the Polynesian Leaders Group (PLG) is one such instance.

The metals boom preceded the minerals boom, both of which have been paralleled by  ongoing interest in discovering new sources of energy, oil and natural gas specifically. Once metals markets were consolidated, investment flows turned to mineral resource extraction and towards exploring previously inaccessible sources of oil and natural gas. Rising prices for fuel and mineral commodities in an era of technological innovation has pushed capital investment into previously unexploited areas of the globe, including the South Pacific. Under highly competitive market conditions, Asian capital has joined the quest and accelerated the pace of primary resource investment even where it remains a secondary market player. The race to secure market share in these commodities is well and truly on.

Against that backdrop  Commodore Voreqe Baimimarama travels this week to Vanuatu in his capacity as Chairman of the Melanesian Spearhead Group (MSG) , a sub-group of the Pacific Island Forum (PIF) regional organization that encompasses most Pacific Island States, including Australia and New Zealand. Created in 1999, the MSG has recently been rivaled by the 2010 creation of the Polynesian Leader’s Group (PLG), which aggregates eight members of the PIF.

Unlike the PLG, the MSG has an established institutional structure and programmatic agenda, increasingly  dominated by Fiji due to its diplomatic importance and the relative underdevelopment of or political instability in other member states (New Caledonia, Papua New Guinea, the Solomon Islands and Vanuatu).The MSG contains a multilateral trade agreement between the its members, and because of historical investment interest in resource extraction in the sub-group (forestries and fisheries as well as minerals), it has seen the bulk of regional foreign investment in the last two decades. The ExxonMobil-led liquefied natural gas project in the PNG is one sample of that ongoing interest, now pushed into newly exploitable areas.

Polynesia has begun to experience the impact of the global energy and mineral rush. Whereas MSG members have a number of land and seabed mineral exploitation contracts within their Exclusive Economic Zones (EEZs), only recently have PLG nations begun to see significant investment in land mining, and fewer have seabed exploitation agreements (one, Nauru, has secured a license to exploit seabed resources in international waters). Many of the companies involved in developing the PLG region for mineral extraction are already in the MSG, so the economies of scale they bring to negotiations with small Polynesian states provides them with good leverage when negotiating agreements. As in the case of MSG members, these contracts are not bound by regulatory vehicles embedded in regional trade agreements such as PACER and PICTA (on regional architecture, see here).

36th Parallel Analysis

"Fiji is the strongest partner with the MSG, that antagonism has spilled into MSG diplomacy vis a vis the Antipodean states and has seen the sub-group prioritize its relations with Asian partners as a balance to Western patronage relationships (which is based more on developmental aid than investment).
[...]The sanctions and suspension regime has done little to hurt the Baimimarama regime but have pushed both Fiji and the MSG more firmly into an Asian-centric diplomatic orbit, accentuating the cleavage within the PIF (which the MSG sees as too compliant with Australian and New Zealand diplomatic interests)."

The PIF is an observer of the Trans-Pacific Partnership Agreement (TPPA) negotiations involving the US, Australia, New Zealand, Chile, Singapore, Peru, Brunei, Vietnam and Malaysia.  Japan, South Korea and Canada have also expressed desire to join the TPPA. Should the TPPA be ratified, increased trade volumes within the region are expected to grow even if the PIF does not become a full member itself. However, discussion has begun within the MSG about emphasizing bi- and multilateral trade with the so-called BRIC emerging economies: Brazil, Russia, India and China. None of these are party to the TPPA and yet are among the fasting growing economies in the world. They are, in fact, emerging great powers, gradually supplanting traditional Western powers as the motor force of the global economy.

China already has an established economic footprint within the MSG and its diplomatic presence, the largest in the PIF region, has grown  commensurate to the size of its investments. Russia and Fiji have just signed economic cooperation agreements, and Indian venture capital has made footholds there as well.

This trend has begun to be seen in PNG and the Solomons. Should the move to emphasize trade and investment between the MSG and BRICs lead to higher levels of commerce with the latter, the impact will significantly increase the investment gap between the MSG and PLG. Given its larger membership and smaller resource base, PLG benefits from an eventual TPPA will be much more diffuse than in the MSG with or without the BRIC connection. The more the BRIC-MSG connection comes into play, the less the MSG will need to be part of the TPPA and other pan-Pacific trade agreements. Should that happen, the MSG will begin to outweigh the PLG influence within the PIF, which opens the possibility of  an MSG-Australia/New Zealand confrontation within the PIF because the Antipodean states do not want the PIF to be dominated by Fijian interests.

As a result of the 2006 coup that brought Commodore Baimimarama to power, Fiji is currently suspended from the PIF and Commonwealth, and has been the subject of sanctions by Australia, New Zealand, the US and European Union. In response, Fiji has strengthened its ties to non-traditional partners such as China, something that gives it more flexibility in its foreign relations. Although the US has  softened its stance regarding the Baimimarama regime and its timetable for 2014 elections, the impasse continues with the Commonwealth, EU, Australia and New Zealand. Because Fiji is the strongest partner with the MSG, that antagonism has spilled into MSG diplomacy vis a vis the Antipodean states and has seen the sub-group prioritize its relations with Asian partners as a balance to Western patronage relationships (which is based more on developmental aid than investment).

Respecting the concept of national sovereignty, Asian economic partners are less concerned about Western notions of good governance, transparency, labor market conditions and environmental impact and more focused on returns on investment. This approach has been successfully used by Western companies operating within the MSG. The sanctions and suspension regime has done little to hurt the Baimimarama regime but have pushed both Fiji and the MSG more firmly into an Asian-centric diplomatic orbit, accentuating the cleavage within the PIF (which the MSG sees as too compliant with Australian and New Zealand diplomatic interests).

Against this backdrop, Baimimarama’s inspection visit before the 19th MSG conference later  this month provides him with the opportunity to set the agenda for this year’s discussions and to solidify Fijian interests within the group. Contentious topics such as granting both Indonesia and Western Papua observer status in the MSG (given Indonesian occupation of  Western Papua) are likely to be downplayed in favor of a consensus on strengthening ties with non-Western states and solidifying the MSG’s pre-eminent position within the PIF, at the expense of the PLG (and the much smaller Micronesian States Chief Executives Group).
Consolidating his position as leader of the MSG reinforces Baimimarama’s position at home, where in the face of Western demands that he keep to a timetable leading to open elections in 2014 he can point to demonstrable gains in terms of Fijian influence in regional politics as well as increases in Asian capital investments in that country (even if the country has experienced negligible net growth in the last decade). Bolstered by such events, the Baimimarama regime may feel confident enough to delay or cancel the elections, which will have major implications for the PIF.

The rift within the PIF  is evident in increased MSG demands that Fiji be included in any PIF trade discussions (such as PACER Plus). Whichever the approach adopted by the PIF Secretariat (inclusion of Fiji on matters of trade or its ongoing suspension), the division between the MSG and PLG is likely to widen in 2012. Boosted by the influx of foreign investment in minerals and energy exploitation, the MSG is in a position to make demands within the PIF that it previously could not. Given the failure of the sanctions regime, the inclusion of Fiji in future trade talks (the next PIF forum is in late August) could be a way of incrementally restoring it to full membership status while allowing Canberra and Wellington to save face (recent reports suggest that Australia and New Zealand are already re-considering the issue of Fijian sanctions). The ball is in the MSG court, with Fiji controlling the MSG play.

Summary PIF stability score is 5 (medium), the MSG score is 7 (good) and the PLG is 2 (low). (Stability score is ranked 1-10 on a range extending from none to full institutional capability and enforceable authority over time).
Futures Forecast: Sharpened differences between the MSG and PLG within the PIF will lead to an institutional weakening of the latter.

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Monday, August 03, 2009

Pacific Islands Forum Meeting-The Cracker In Cairns?

From Island Business, "Letter From Suva"(LFS) column examines the lead up to Pacific Islands Forum meet in Cairns. This meet is expected to be a cracker and already some sparks have been observed, as L.F.S describes the leak of Forum draft report.


Laisa Taga - Editor-in-Chief

Australia’s Prime Minister Kevin Rudd hosts his first Pacific Islands Forum Leaders meeting in Cairns next month and those in the know expect it to be fiery and fiesty.
And that’s judging from how the June trade ministers meeting in Apia went. Observers who attended the meeting told LETTER FROM SUVA that it was obvious the meeting was split when it came to Fiji and its non inclusion at the trade ministers meeting.

“On one side you had Australia, New Zealand, Samoa and the Cooks and, on the other side, the Melanesian Spearhead Group—PNG, Solomons and Vanuatu—Kiribati and Tonga. Tonga’s PM Dr Feleti Sevele was definitely very vocal about Fiji’s non-inclusion and he was supported by other ministers including PNG’s Sam Abal.

“Most of these ministers were expressing the view that legally Fiji has every right to be at the meeting before chairman, Samoa’s trade minister Misa Telefoni, ruled the issue closed,” a Forum observer said.

“Judging from what was happening there in Apia, there would definitely be fireworks at the leaders meeting if the Fiji issue is not handled properly. It could turn out to be divisive or be a dynamite waiting to explode,” the observer said.

Already the islands are split over Fiji’s suspension by the Forum. A draft report leaked to LETTER FROM SUVA was critical about Fiji’s suspension from the Forum saying it is a major setback for regional co-operation and intergration.

The report was authored by Makurita Baaro, a former senior adviser at the Forum Secretariat (ForumSec). She was hired by the ForumSec to review the three years of implementation of the Pacific Plan.
Forum Leaders had called for an independent comprehensive review of the progress on implementation, every three years. In her report, following extensive consultation meetings totalling over 150 with all Forum members and other stakeholders across the Pacific, Ms Baaro said Fiji’s suspension would pose a major challenge to regional solidarity and the Pacific Plan.

“Already, there are differing views and an increasing polarisation amongst the Forum membership on this very sensitive issue and the subject is one that has real potential to create fragmentation and a major division amongst Forum members.”

She added that Fiji’s suspension will have far reaching and major implications, not only on regional solidarity but also on the implementation of the many initiatives under the Pacific Plan.

The leakage of the report, just a few days after it was presented to the Forum Secretariat, forced the secretariat to launch a major investigation on who leaked the sensitive report. When this edition went to press, the Forum Secretariat was still no way near identifying the culprit, although they have their own suspicions.

But why the witch-hunt? What was so sensitive about the report that ForumSec did not want people to know about? Was it the differing views revealed about Fiji’s suspension by islands countries, which is contradictory to the decision made by the islands leaders in PNG early this year? Was it because the ForumSec was caught out before it had time to censor or tone down the report?

LETTER FROM SUVA understands Ms Baaro was instructed not to include comments on Fiji in her report. But she refused. As a result, ForumSec has now put on hold payment of the rest of her consultancy fees.

Ms Baaro is being paid A$10,000 a month to carry out the review. It was to be a three-month exercise but was extended by a month. So far ForumSec has only paid her A$20,000.
It is not the first time ForumSec has tried to tone down a report. Consultants of an AUSAID review in September last year were also asked to tone down their report but refused, saying it was an independent report and as such they were entitled to their views.
This review was critical of regional organisations and the Pacific Plan, warning that if they don’t shape up and improve their act, they could lose funding from their two major donors—Australia and New Zealand. Both countries poured approximately A$130 million into regional organisations during 2005-2008.

So what now? What version of the Baaro report gets to see the light of day when it is presented to the leaders in Cairns? It will be interesting to see which version finally makes it to the leaders.
Hopefully, the ForumSec will not tone down or censor it that it does not truly reflect the views of the Forum member countries which are coming out loud and clear.

Melanesian Spearhead Group leaders (PNG, Solomons, Vanuatu and Fiji) will meet this month in a special one-day retreat in Port Vila on July 10. Although there is no set agenda, the meeting has been specifically called by the MSG chair, Vanuatu’s Prime Minister Edward Natapei, to discuss concerns about Fiji and its suspension from all Forum organised meetings.

Fiji had issued a statement expressing disappointment about being excluded from the PACER talks held in Apia, Auckland and Port Vila. The exclusion, the statement said, was a violation of its rights.

All MSG leaders have indicated they will attend the Port Vila meeting, where they are also expected to discuss their position at the Cairns meeting.

Fiji’s Bainimarama has been specifically asked by PNG’s Sir Michael Somare to attend the meeting where he will also deliver Fiji’s roadmap to 2014, when it is expected to hold an election.
Bainimarama will be banking on these leaders and on this meeting to push Fiji’s case at the Cairns meeting, after all he won’t be there.

A MSG source said the Port Vila meeting will be interesting. “MSG leaders will be asking themselves – do we consolidate on our position on Fiji, or do we have differing views?

“Meeting chairman Vanuatu’s Natapei and Solomons’ Dr Derek Sikua are likely to gravitate towards Fiji and while Somare, I think, will differ slightly. He is likely to adopt a more cautious stance, reminding the leaders that a decision has already been made and to do otherwise will undermine the intergrity of the Forum and its leaders,” the MSG source said.

“But if the MSG decides to take a stand on Fiji, Kiribati, Tuvalu, Federated States of Micronesia, Marshall Islands and even Tonga will jump onboard. If this happens, we may come out with the fragmentation of the Forum,” the MSG source said. Another issue that is likely to cause fireworks in Cairns is PACER and particularly how the islands countries were railroaded by Australia into accepting its position.

What then? Australia anticipating fireworks at the Forum meeting, could use its chairmanship to douse the fire by steering clear of regional issues like Fiji and PACER and putting the current global economic crisis centre stage—an issue that affects everyone across the board, relegating regional issues as secondary issues.

Let’s hope the islands leaders will stand up and be counted and stop bending backwards to accommodate others’ interests that run counter to their own.

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Monday, July 20, 2009

MSG, Pacific Forum, Global Trade & The American Dream.

From The Interpreter's
Jenny Hayward Jones post:

Is the MSG a threat to Pacific unity?

by Jenny Hayward-Jones - 20 July 2009 9:26AM
The decision by the Melanesian Spearhead Group’s (MSG) leaders on 10 July to lend their support to Fiji’s interim Government, and the backpedalling by leaders since that decision, reveals some interesting insights into how diplomacy works — or does not work — in the Pacific.
The meeting was held at a useful juncture for Bainimarama – a week after he delivered his Strategic Framework for Change speech and three weeks before the Pacific Islands Forum (PIF) Leaders’ Summit in Cairns, from which he has been excluded. He seized the opportunity to secure endorsement for his agenda from a group of the region’s most influential countries.

The support offered to Bainimarama by the leaders of Papua New Guinea, Solomon Islands and Vanuatu was likely driven by a sense of obligation to Melanesian brotherhood, a desire to assert a Melanesian approach that differed from that of Australia, New Zealand and the Polynesian members of the Forum, and some pandering to domestic constituencies concerned about Fiji’s suspension from the Forum.
If the MSG is to prove it is an effective sub-regional grouping, its leaders should present a clear and united front to the region and demonstrate that Melanesian-style diplomacy offers a better way of dealing with Fiji. The situation in Fiji is such that the region is crying out for creative solutions. Supporting Bainimarama's Strategic Framework for Change, Fiji’s continuing engagement in the PIF and the right to participate in regional trade agreements all telegraphed a strong message to the region about Melanesian solidarity.
But in the week since that message was delivered, Prime Minister Somare has said dialogue with Fiji was 'not an issue for the MSG', confirming that the MSG would ultimately abide by the majority decision on Fiji’s status in the PIF in Cairns. And Vanuatu Prime Minister Edward Natapei has indicated the MSG didn’t necessarily support Bainimarama’s roadmap.
The softening of the MSG’s tone may have been a response to reminders from other PIF members (almost certainly delivered early last week) about the importance of Forum unity. But it does beg questions about the future role and integrity of the MSG. The MSG should be a dominant sub-regional group and should be leading discussion within the Forum on handling Fiji. The members of the MSG (excluding New Caledonia) have a combined population of 8.2 million, GDP of US$12.7 billion and land area of 521,672 sq kms. By contrast, their Polynesian and Micronesian fellow members of the Forum have a combined population of 608,000, GDP of US$1.7 billion and land area of 6,363 sq kms.
The delivery of such contradictory public messages on Fiji within the space of one week, however, is hardly a demonstration of a group capable of challenging the status quo in the region or indeed of an approach that will assist Fiji in 'building commitment and capacity for genuine dialogue consistent with Melanesian values and traditional practices.'
Photo by flickr user Jo Levine, used under a Creative Commons license.

New Zealand Prime Minister, John Key is gearing up for Forum meeting in Cairns. Article originally from New Herald, about the signals being sent to Pacific states.
PM Key sending clear diplomatic signals to Pacific nations
By Online Editor
5:04 pm GMT+12, 20/07/2009, New Zealand

NZ PM John Key
Too much attention to foreign fields can result in a few tantrums back home.
In the Far North last week, Mayor Wayne Brown wrote a truculent column about the attentions Mr Key had given to the Pacific compared to the Far North. Callers to a talkback show grilled him about giving aid to Pacific countries when New Zealand itself was hardly rolling in the money.
A supporter of medicinal cannabis castigated him for "enthusiastically" swigging back "a psychoactive substance called kava" despite rejecting bids to allow the use of marijuana for medicinal purposes at home.
They should get their pens ready again - Mr Key is off in a fortnight to Cairns in Australia for the Pacific Forum leaders' meeting. He will visit Australia again soon after, to meet Prime Minister Kevin Rudd to push for the furtherance of the single economic market goals.Then it is off to Trinidad and Tobago for the Commonwealth Heads of Government Meeting. A trip to the United States follows the month after.
By choosing to take over the trip that is traditionally left to the minister of foreign affairs, Mr Key was sending a clear indication that he intends to be no less prominent in foreign affairs than Helen Clark was.
On the face of it, it was a “goodwill” mission. After a decade of Miss Clark, the leaders must have wondered what they were in for. It did not take them long to find out. He has a proclivity for what the media call “Clark would never have done that” moments.
There was a “Clark would never have done that" at the lively nature of Mr Key's delegation, complete with hip hop dancers and former All Blacks.
There was another as Mr Key camped up his dance with Miss Niue and again as he used the word “children” about Fiji and Samoa when commenting on the relative merits of their kava.
“Clark would never have done that,” they muttered after John Key hollered out a joke to them about the king's dog Poobah. It is true that Miss Clark - a polished performer on the international stage and well aware of the gravitas of her role - would never have done the things Mr Key does.
But the difference is deliberate and, for him, it works. He knows he lacks the grounding to emulate Miss Clark, of whom a foreign affairs official only half joked was better placed to brief them to be briefed by them.
His personality is also starkly different. Mr Key has never been risk averse, as long as the risk is calculated. The trip proved that.
The delegation which began looking somewhat like a circus did more than simply cement Mr Key's relationships at a leader to leader level.
The hip-hop crew proved strong ambassadors at a level Mr Key could never have done.
But the leaders of those countries will also have learned that after the dancing is over, Mr Key plays as straight a game as Miss Clark did.
Niue's Toke Talagi in particular learnt not to try to lure Mr Key into a diplomatic game by playing China off against New Zealand in a bid to have aid funding released.
Mr Key called his bluff - telling him to go ahead. Mr Key takes a pragmatic stance on China's incursions with aid money and easy loans into the Pacific.
Rather than rail King Canute-like against it, he has instead publicly said China's increasing role is an inevitable consequence of its efforts to gain wider international influence.
Instead of protesting, he has urged China to work with New Zealand.
His aim is not only to ensure the money is not spent on wasted efforts, but to allow New Zealand to see exactly where it is spent.
However, he has also sent the clear message to those island countries that they deal with China at their own risk, that New Zealand will not step in to bail them out if it goes awry.
Behind the doors, Mr Key was also trying to shore up support for centring the Pacific Forum agenda next month on them and the economic downturn - not Fiji.
The Pacific Islands Forum has often been criticised as of negligible value, a grouping that talks a lot but does little.
Such outcomes are anathema to Mr Key, and so his reconnaissance trip was more about trying to ensure something concrete emerges when the leaders meet next week.
What he wants when he flies into Cairns is allies to help staunch talk of allowing Fiji to rejoin the forum.
What he wants when he flies out of Cairns is to be carrying a communique filled with concrete proposals on measures to help the Pacific Islands in the recession.
So as soon as Mr Key returned from his trip, Murray McCully went on his own - to Kiribati and Tuvalu, as well as follow-up visits to Tonga and Samoa.
Duncan Kerr, the Australian Parliamentary Secretary for Pacific Islands Affairs, was simultaneously roaming the Pacific, peddling much the same message Mr Key - tend to your own lands in a time of trial, not Fiji.
What Mr Key got out of the trip was some surety that the other leaders would largely be singing from the same song sheet.
What the Pacific leaders got out of it was some reassurance that Mr Key would not neglect their interests - and the chance to make it just that little bit more difficult for him to make decisions based solely on bottom lines.
The difference in New Zealand's relations with the Pacific and the wider world was spelled out in an uncharacteristically sentimental paragraph in a Cabinet paper on the Pacific Agreement for Closer Economic Relations.
“In every other context, trade policy starts by putting the interest of New Zealand exporters first and aggressively so. In the Pacific, it is different.
“Here, our policy approach should start by putting our political, people to people relationships first. In some cases - Tonga, Samoa, the Cooks, for example - they are part of us.”
A day in each country was not long. But it was long enough for Mr Key to learn the truth of that. John Key emerged from his trip knowing he got on famously with the King of Tonga, albeit perhaps with a slight headache after being plied with champagne at 11am and then two hours of pre-dinner drinks later in the day for a dinner that went well past the scheduled 10pm end.
Samoa also won a little of his heart, especially the village of Poutasi, where he was met by the village men proudly wearing New Zealand themed T-shirts as a tacit "thanks" for the seasonal labour scheme.
After just one hour in the village, they were offering him a chiefly title and he was waxing lyrical about the conch shell blowing at 6pm for prayers each day and 10pm bedtime rule. Miss Clark's greatest gift to Mr Key is in the area of foreign affairs where she drove home the importance of assiduously built connections and Zealand's reputation as an honest broker.
He knows he cannot out-Clark her - but nor does he plan to squander what she has bequeathed him.

Claire Trevett is a political writer for The New Zealand Herald.


Trans-Tasman leverage against MSG countries appears to be eroding like a sand castle on Bondi. As the post by Interpreter alludes to, the MSG decision to back Fiji was recognized as a constructive engagement that could undermine the very credibility of the forum.
Lately, the definition of decisions conveniently stamped with "manufactured consensus" in Forum communiques seems to be attracting clouds of doubts. Subjectively, those decision were made with Pacific Island representatives, wholly omitted from the negotiating table.

These warnings have been heard before. Some from a former and ousted Pacific Forum's Director of Economic Governance, Dr. Roman Grynberg; who dispatched an open letter to PNG Prime Minister and MSG Leaders prior to their recent meet.
Such advice. which was undoubtedly crucial and persuasive to the outcome. Melanesia Spearhead Group (MSG) represents a regional sub-bloc of island states in the region-with more population, mineral and fossil fuel resources.
Dr. Grynberg's letter was published in Pac News website.
The excerpt:

Open Letter from Dr Grynberg's to PNG Prime Minister and MSG Leaders
By Online Editor
1:38 pm GMT+12, 10/07/2009, Fiji

Dr Roman Grynberg is the former Director of Economic Governance at the Pacific Islands Forum Secretariat

Grand Chief Sir Michael Somare

I am writing this public letter to you and the other MSG leaders in the hope that the troubling recent developments in regard to the future PACER Plus Agreement with Australia and New Zealand can be addressed at the up-coming MSG Leaders Summit.
There can be little doubt that the PACER Plus agreement, if properly negotiated, will be of enormous benefit to the people of Papua New Guinea as well as all the peoples of Melanesia and the wider Pacific islands region. However, the lead up to these negotiations has shown that the reality is likely to fall far short of the potential because of the excessive haste that has been shown by Australia and New Zealand in pushing the Pacific Island Countries into negotiations when they are simply not ready to do so given that they remain involved in highly complex negotiations with the EU.
The Pacific island nations have not had sufficient time to either consult adequately with national stakeholders or to undertake genuinely neutral and scientific analysis of what type of future trade arrangement would be in their interests. The arrangements for future negotiations that have been reported in the media following the Apia meeting of Forum Trade Ministers are very disturbing and will almost certainly leave the PNG, as well as Melanesian countries and the wider Pacific islands without sufficient capacity to negotiate.
A significant issue in all of this has been the exclusion of Fiji from the negotiations. While I am deeply supportive of the democratic process and the Forum efforts to promote democracy the current situation will mean that the entire people of Fiji will be penalized by their exclusion from PACER through events not of their own making. Moreover, once democracy returns to Fiji there can be little doubt that a future democratic government will have little choice but to accept the terms of an agreement that will have been negotiated without its participation.
The arrangements being developed require complete ownership of the negotiating process by the Pacific islands. It is for this reason that I write to you to call on you and other MSG leaders to remove the negotiating process from the Pacific Islands Forum altogether and move it to the Melanesian Spearhead Group Secretariat. I also call upon you to assure the rights of the people of Fiji are protected and that their voice can be actively heard at the trade negotiations.
In order to assure that a neutral negotiation occurred the small island states should also be invited to participate in an MSG based negotiation. While I recognize the direct financial cost of such an action the PACER plus treaty is so important to an entire generation of young Papua New Guineans, Melanesians and Pacific Islanders that it cannot be handled by institutions which are so thoroughly dominated by Australian and New Zealand interests. Only the MSG has the neutrality to manage this process.
I know that PNG and other Melanesian countries jealously and rightly guard their sovereignty. To sacrifice this sovereignty on such an important matter as your future economic relations with your neighbors and to potentially end up with a treaty that is not in your interests would be the sacrifice of your sovereignty for which you fought.
Sir, you are the last remaining father of the Forum. Your vision in creating the Forum was grand but in certain matters such as these the Pacific Islands simply cannot leave such important negotiations to institutions dominated by the interests of Australia and New Zealand.
Yours sincerely
Dr Roman Grynberg

Dr Roman Grynberg is the former Director of Economic Governance at the Pacific Islands Forum Secretariat.

As growth seems to be among the crucial factors for economic growth. In light of the current global economic climate, and the ripple effects to the world in general. The aspect of the American Dream was addressed and how that image of consumerism inadvertently contributed to the global financial malaise.

This discussion of trade, growth, consumerism and global trade was featured in an American Radio Works documentary and the growing doubt about the entire system of trade, banking, regulation and government.


The "American dream" has powered the hopes and aspirations of Americans for generations. It began as a plain but revolutionary notion: each person has the right to pursue happiness, and the freedom to strive for a better life through hard work and fair ambition. But over time, this dream has come to represent a set of expectations about owning things and making money. So what exactly is the American dream? How did we come to define it? And is it changing?

Saturday, July 04, 2009

Australia had the Pacific Islands for lunch in Apia

In a follow up to an earlier SiFM posting that covered the controversial PACER Plus negotiations in the Pacific.

An interesting letter to the Editor of Matangi Tonga adds context to the debate.

04 Jul 2009, 06:36



THERE'S an old saying in trade negotiations, if you're not on the menu, you're on the table. So there's no doubt that Australian trade officials are happy with what was served up in Samoa last week, June 17/18. When trade ministers from the Pacific region met in Apia to discuss a potential free trade agreement, they concluded with a unanimous recommendation to their leaders to enter into negotiations come the Pacific Islands Forum Leaders meeting in Cairns this August.

Before the meeting Australia, New Zealand and a number of other countries, including host country Samoa, were pushing for an agreement. Many expected this meeting to conclude with a recommendation to enter into negotiations, but few expected it to happen so easily.

What was scheduled for the whole second day of the meeting was in effect agreed to over a luncheon on the first. The Ministers went out to lunch without their delegation of advisors and government officials and ended up agreeing on a statement that would most likely have been pre-drafted. By the afternoon it was all stitched up, some happy, some very happy, and some quite rightly embarrassed.

Just six months ago the Pacific had presented to Australia and New Zealand a draft roadmap for dealing with a Pacific trade agreement, the Pacific Agreement on Closer Economic Relations, or PACER-Plus. In that draft road map, the Pacific Island nations mapped out a much longer timeframe, first starting with national consultations and research to determine whether or not to enter into negotiations. If the research suggested negotiations were a good idea, this would be followed by informal negotiations, and then finally formal negotiations beginning in 2013. In addition to this was the $11 million proposed for an Office of Chief Trade Advisor, a separate entity that would provide research and negotiation capacity and even act as a point of contact for negotiations. This would all up take 5 years. All these would have combined to place the Pacific in a much better position to assess and participate in any negotiations.

What did they end up with? Negotiations to be announced in August with the first round likely to be one week after that with timelines for the whole process yet to be decided. An Office of Chief Trade Advisor funded to the tune of $3 million over 3 years with a reduced remit that boils down to essentially facilitating meetings. In terms of funding for research and capacity building, Australia has offered $65,000 for research and will continue with its ten module training course for negotiators. That's right, the Pacific officials are learning how to negotiate their sensitive trade issues by discussing them with Australia before hand. This is a far cry from the Pacific's initial call for an independent Office of Chief Trade Advisor that would act as a collective point for research and negotiations.

You do have to hand it to the Australian and New Zealanders, they comprehensively outmanouvered and outplayed their Pacific counterparts. Critical to this was the removal of Roman Grynberg from the Pacific Islands Forum Secretariat. Dr Grynberg has long been a thorn in the side of Australia's trade ambitions with his expertise and strategy in negotiations, particularly in providing assistance to the under resourced Island Countries. So it must have been much to Australia and New Zealand's delight that his contract was not renewed last year on account of some Pacific Islands Forum members not being happy with his role in the servicing of all the clients, including Australia and New Zealand, in Pacific Islands Forum. To add even more insult to injury, it now looks like an Australian, Dr. Chakriya Bowan will fill Dr Grynberg's role as Economic Governance Director.

Not only this, Australia played the old trick of starting out with the outrageous and then 'compromising' on something more in line with what they wanted. Australia was initially demanding to have a say in the governance of the office of chief trade advisor. This is highly controversial as any negotiating party should not have a say in the structure of the capacity and negotiating support for another party. This is something that Australia would surely not stand for in negotiations with other trade partners and the Pacific should have done the same. This was one thing that should never even have been on the table, yet there it was and there were no surprises to see it cut back in the giving and taking of the final decision. However with the Office of Chief Trade Advisor initially being housed at the Pacific Islands Forum Secretariat the likely Australian replacement of Dr Grynberg will, as it turns out, have some involvement in its governance. How this influences the OCTA remains to be seen but as a symbol it further erodes any supposed 'taking' for the Pacific in the negotiation of this decision.

If that wasn't enough, there was the presence of Bob McMullan, Parliamentary Secretary for International Development Assistance. Throughout this year Bob McMullan and Simon Crean have been touring the Pacific talking about the benefits of free trade and handing out aid money as they go. With Pacific countries so dependent on aid money, the message was not lost: free trade and aid go together.
Fiji's absence was also apparent. Fiji has been one of the strongest voices in holding a strong Pacific position and their absence significantly weakened the stance of the Pacific. Simon Crean has maintained that the suspension of Fiji from the Pacific Islands Forum automatically applies to PACER-Plus talks, a very convenient position from Australia's point of view. Fiji's exclusion however, is being challenged.

A legal opinion released to the media by the Pacific Network on Globalisation claims that PACER is a separate legal framework to the Pacific Islands Forum, hence the suspension of Fiji from the Pacific Islands Forum doesn't automatically equal suspension from PACER-Plus talks. This means that the recommendation to launch PACER-Plus negotiations is technically not legally binding. Fiji has already issued a statement condemning their exclusion from the talks last week and stated that any outcomes from the meeting violate the terms of �consensus� and therefore doesn't apply to Fiji. How this gets taken up by the rest of the countries remains to be seen.

This was the situation that faced the Pacific. Not only were they facing pressure from Australia and New Zealand to negotiate, but they also faced the issues of diminished capacity and extreme demands. With media statements from various Ministers within the Pacific Islands buying into the idea, as well as the host of the meeting and agenda setter, the pressure on those trade ministers from still holding out was immense. Not only this, the lunch �meeting� without government officials also meant that the expertise of the officials was lost on the decisions of the Ministers. With decisions needing to be made by consensus it's hard to be the lone dissenting voices.

It was this backdrop that greeted us non-government organisations when we rocked up to the Ministers' cocktail party. Despite officials from the Australian delegation reassuring us that there was a consensus and general happiness with the outcomes one only had to talk to those who weren't 'celebrating' at the cocktail party. A number of ambassadors from the Pacific Islands expressed their anger at what Ministers had agreed upon to the non-government groups. One Pacific Minister from the Cook Islands was so upset by what was agreed to he was on the first plane home, without a cocktail.

As the Pacific enters this new era there are big questions that need answering. All the social, environmental, and labour issues associated with a proposed PACER-Plus remain, this decision to enter into negotiations does nothing to answer them. Not only that, the trade ministers from all these countries need to be called to account. It is reckless for all involved to enter into negotiations without knowing the full impacts of what is proposed. In particular, Simon Crean needs to explain why undermining the capacity and time for the Pacific to be prepared to enter into negotiations (if they found it was worthwhile) helps them enter into what he refers to as �enhancing prosperity in the Pacific�.

With PACER set to diminish $10 million in government revenue for the Pacific as well as see thousands of jobs go the Pacific has a lot of soul searching to do. Australians on the other hand shouldn't let their government get away with pushing their neighbours around like this.

Adam Wolfenden

Adam Wolfenden is the Trade Justice Campaigner for the Australian Fair Trade and Investment Network (AFTINET).

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