A War of Words- Fiji and The Pacific Island Forum.

A war of words has erupted between Fiji and The Pacific Islands Forum (PIF)over the recent announcement that, Fiji had voluntarily withdrawn from the hastily scheduled PACP meeting in Solomon Islands, 'as a matter of principle'.

PIF General Secretary responded to the allegations leveled by Fiji, in a statement issued by the PIF:

“The Secretariat said that the special meeting of Pacific ACP Trade Ministers and Fisheries Ministers convened in the Solomon Islands was duly notified to Fiji and other countries and freely agreed to and attended by the Pacific ACP States (PACPS). Following the impasse in Economic Partnership Agreement (EPA) trade negotiations in Brussels in October 2013, the European Union (EU) Trade Commissioner wrote to the Pacific ACP Lead spokesperson proposing that he could meet with as many Pacific Ministers as possible in Honiara, Solomon Islands, on 12 December.  The Trade Commissioner’s proposal was circulated to all PACPS via an official circular in the normal way.
Until Fiji’s unheralded withdrawal, there was no dissent and not one objection to the Honiara meeting from any PACP country, including Fiji.
The Secretariat clarified that the meeting with the EU Trade Commissioner is not a negotiation session but a special meeting that was convened to clarify issues and to take stock on the status of the EPA negotiations, before formally resuming the negotiations with the EU.”

Fiji repudiated the PIF response in a released statement today:

“Fiji dismisses the Pacific Islands Forum Secretariat's ("Secretariat") claim that it has diligently and professionally executed its responsibility in relation to the EPA negations between the Pacific ACP (PACP) and the European Union (EU).

Fiji stands by its earlier statement that the Secretariat has failed in its obligation to carry out the decisions of the PACP member states and has demonstrated a clear lack of transparency and propriety in the manner in which it organised and conducted the special EPA-related meetings in Solomon Islands this week.

After the EU suspended EPA negotiations due to PNG's withdrawal, the core group of PACP ministers agreed in Brussels in October that we needed the opportunity, as a united region, to regroup and strategise on contentious and outstanding issues before continuing discussions with the EU.

The decision for all 14 member states – including PNG – to regroup in Fiji before meeting with the EU Trade Commissioner was deliberate and strategic. It was agreed that PACP leaders and ministers needed the opportunity to provide informed political input into the process, with ample time to properly address a number of challenging issues.

The Secretariat should have focused its efforts on organising this meeting.

However, the Secretariat’s circular makes no mention of the proposed meeting in Fiji with PNG in attendance. Instead, in direct contravention to the ministers’ decision, the Secretariat organised a special meeting between PACP ministers and the EU Trade Commissioner in Solomon Islands with only three days scheduled for preparatory sessions with officials and ministers beforehand.

Contrary to the statement released by the Secretariat to the media, Fiji – a country with one of the biggest stakes in the EPA negotiations – lodged a clear objection to this schedule of meetings in a letter dated the 8th of November to the Tongan Minister for Commerce and Lead PACP Spokesperson, Dr. Viliami Latu, copied to all PACP Ministers and the Secretariat.”

While the PIF response highlighted the attendance with some overly optimistic numbers, “Except for Papua New Guinea and Niue, all PACP countries are represented in the meeting in Honiara. Eleven countries – not six - are in attendance, with 10 Pacific Ministers participating.”

Fiji's counter-argument on the point of attendance:

“As it turned out, Fiji's fears were confirmed and three PACP countries – including PNG – were not in attendance in Solomon Islands and only seven countries (as confirmed yesterday) were represented at the ministerial level: Fiji, Tonga, Samoa, Tuvalu, Nauru, Palau and Solomon Islands. The Secretariat's statement that there were ten ministers present was because three countries (Samoa, Tonga and Tuvalu) were represented by both a trade and fisheries minister.
Fiji maintains that the EPA negotiations need input from the highest level and that the PACP's strength is as a united front.”

PIF's statement appeared to gloss over some legitimate and serious concerns raised by Fiji, with some added abrasiveness:

“The Secretariat said that the suggestion from Fiji that the Secretariat is acting for the EU and that it is putting pressure on the PACP states or dictating directions to PACPS is simply not true, and hardly deserves a serious response.
The Secretariat is the technical advisory body to the EPA regional negotiating machinery, and that the Secretariat has very diligently and professionally executed its responsibility. The Forum Secretary General, Tuiloma Neroni Slade, responded in the meeting to counter the allegations from Fiji. He said that the Secretariat is a service organisation that is proud of its competence and professional behavior, and that it remains ready to be of assistance to all Pacific island member states.
The Secretariat said that the Fiji walk out from a Ministerial meeting is simply not done, and was an extraordinary display of unwarranted and un-Pacific behavior.”

Fiji piqued by the PIF statement, remained steadfast in its position, outlined its displeasure with the PIF and gave some examples of other nations equally disturbed about the dubious dealings within the PIF, surrounding the accelerated PACP meeting in the Solomon Islands:

“In contrast, it appears that the Secretariat's primary interest is concluding the negotiations at any cost, including making concessions that could have negative impacts on the policy space, sovereignty and development of countries in the region.

Fiji’s objection to this schedule of meetings is also based on the fact that the decision to call them was not the Secretariat’s to make in the first place. The Secretariat should not dictate the nature, scope and agenda of meetings, but should rather seek guidance from PACP states and assist where needed.

The Secretariat is only meant to act as a technical advisory body. In this case, Fiji believes that the Secretariat overstepped its bounds as a technical advisory body and unduly wrested control of the EPA agenda from PACP leaders and ministers.

Promoting and encouraging regional unity has always been at the very centre of Fiji’s position in the EPA negotiations and to be called “un-Pacific” for standing up for the sovereignty and integrity of the PACP is derisory.

Fiji – working side-by-side with its neighbours in the Pacific – will do everything in its power to ensure the best possible future for the region. We will not compromise on our future. We believe that's truly the Pacific way.

In fact, we acknowledge Tonga's immediate support after Fiji withdrew from the Joint Trade and Fisheries Ministers meeting on Tuesday. Furthermore, Tonga questioned the congested agenda proposed by the Secretariat when the region was preparing only for an informal meeting with the Trade Commissioner.”

The relations between Fiji and the PIF has been somewhat testy, ever since Fiji's suspension from the once paramount regional institution in 2009. Fiji's Foreign Minister has made some public statements indicating the Fiji, was not obligated to rejoin the PIF. This recent exchange of words, albeit publicly, is an extension of the animosity brewing behind the scenes and perhaps will not be the last of it.

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X-Post: Pacnews - Fiji Withdraws From What It Describes As ‘Rushed’ Trade Talks In Solomon Islands.

Source: Pacnews

Fiji has withdrawn from the Pacific ACP (PACP) meeting in Solomon Islands organised by the Forum Secretariat “as a matter of principle.”
The current meeting, meant to prepare PACP trade ministers for discussions with the European Union (EU) later in the week, was called by the Forum Secretariat before a full meeting of the PACP was allowed to take place, in direct contravention to the path agreed to by the member states. Only 6 of 14 PACP trade ministers were able to attend on such short notice.

In a very strong statement to his fellow PACP trade ministers who were present today, Attorney-General and Minister for Industry and Trade Aiyaz Sayed-Khaiyum said PACP countries need to meet without the EU’s presence or pressure from the Forum Secretariat.

“The Pacific Trade Ministers who were present in Brussels [in October] had decided and agreed to meet separately in Fiji, not just for one day but for the necessary period required to resolve and strategise on the issues pertaining to the comprehensive EPA, vis-à-vis the outstanding and contentious issues,” he said.

The Attorney-General said that such a meeting would also allow PACP states to address the withdrawal of PNG from the negotiations in Brussels, a crucially important issue surrounding the EPA negotiations.

The AG said that by calling “rushed” trade talks with the EU before this meeting was allowed to take place, the Forum Secretariat clearly has not fulfilled its responsibility to action the decisions of the Ministers and the wishes of the member states.

“The Forum Secretariat is not here to act on behalf of the EU and they should not dictate directions to the members but provide technical advice and further our position,” [Sayed-Khaiyum] said.

The Attorney-General told his fellow ministers that the EPA was not something to play with or decide on the trot. “The reality is that the Comprehensive EPA in its current form has enormous ramifications on our policy space, sovereignty and development,” he said.

"It also constraints our ability to deliver basic socio-economic rights to our citizens.  The Fijian Constitution, assented to by the President on 6 September 2013, provides for unprecedented socio-economic rights, including the right to housing, education, health, food and the right to economic participation. We cannot let any trade agreement prevent Fiji from providing these basic necessities to our citizens," [ Sayed-Khaiyum] said.

He stated that only as a united region can the Pacific achieve a better agreement that provides markets and at the same time ensures the sustainability of vital resources for the betterment of all Pacific Islanders.

[Sayed-Khaiyum] urged fellow PACP countries not to be pressured by the EU into finalising a deal or into moving into an agreement that is less than favourable and could have detrimental long term impacts.

“In this regard, we understand the urgency of Solomon Islands, who are perhaps being pushed into acceding to the Interim EPA to secure market access of their precious fisheries resources,” he said.

The Attorney-General said that they had reached a stage in the negotiations where the PACP grouping needs the political will from the highest level.

“The region’s Leaders have been left out of the major developments in the PACP region and the EPA negotiations.  The PACP Leaders need to meet and provide the mandate to us Ministers and Officials on the way in which the EPA needs to be progressed,” [Sayed-Khaiyum] said.

At the meeting today, the AG repeated Fiji’s invitation to host a full PACP meeting at either the Leaders or Ministerial level. He concluded his remarks by saying that Fiji’s decision to withdraw from the meeting does not mean that it is abandoning its regional neighbours.

“We are and have been from the start, a strong advocate of regional solidarity, which, perhaps has been to the chagrin of the Forum Secretariat and our detractors,” [Sayed-Khaiyum] said.

“We are committed to negotiating a Comprehensive EPA, but one that is favourable to all parties, has development at its core and which is for the benefit for all our citizens,” [ Sayed-Khaiyum]said

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

Source: Eureka Street

Jemma Williams | 

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 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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MSG Talks In Fiji.

Melanesian Spearhead Group (MSG) Economic Ministers meeting begins in Suva, followed by the Leader's Summit later in the week. The MSG Senior Officials Meeting (SOM) which began over the last few days, had met, to discuss key points of cooperation; as reported by Solomon Star (S.S) article.

The excerpt of S.S article:

MSG meets key cooperation issues

Sunday, 25 March 2012 10:37

Senior Officials from the five members of the Melanesian Spearhead Group met key cooperation issues to be presented to the Foreign Ministers Meeting this week.

Chair of the MSG Senior Officials Meeting (SOM), Mrs Saipora W. Mataikabara thanked delegates from Papua New Guinea, Solomon Islands, Vanuatu, FLNKS and Fiji for their contribution and cooperation on addressing these key issues of common interest at the two-day meeting.On the first day, SOM endorsed among other issues the Director General’s Report to the Leaders, Secretariat papers on MSG Properties, Corporate Planning Process and the MSG Secretariat Soft Reforms.  SOM Chair confirmed that the Secretariat papers were to strengthen the organization’s administration arm of the MSG organization.

Mrs Mataikabara said on the second day of meeting the other reports presented to SOM were all endorsed.  She said the members’ endorsements reflected the common interests of the MSG in strengthening cooperation amongst member countries in particularly on cultural cooperation for instance the endorsement of the draft MSG MOU on Cultural Cooperation presented by the MSG Council of Arts & Culture.  She said other issues that will promote more cooperation between member countries include the preparation for the first Melanesian Games in 2013 as mandated by Leaders on 31st March 2011 was also endorsed by the Senior Officials Meeting today.

Mrs Mataikabara said the Special SOM was also able to endorse key recommendations presented by the Subcommittee on Institutional Issues (SCLII) to complete discussions on the Review of the Agreement Establishing the MSG. 

SOM Chair said legal and institutional issues are backbones of MSG as an organization and that is why members felt that careful consideration on the legal and institutional issues will help guide senior officials, foreign ministers and leaders in making sound decisions to strengthen the organization.  A key recommendation that was endorsed by SOM is that SCLII meet in July to further complete important discussions on the Review of the Agreement Establishing the MSG, Reporting Requirements, Membership Issues (Observers & Associate Members) and MSG Visa Arrangements.

Reports from the different subcommittees and technical committees such as Security, Trade and Economic Officials Meeting (TEOM), and the Police Commissioners’ Conference were also endorsed.  The draft MOU for the MSG Skills Movement Scheme and the MSG Trade Agreement on Rules of Origin and principles for enhancing fiscal management in Melanesia were all endorsed this special SOM.
Mrs Mataikabara thanked all delegates for their participation and cooperation in the pre-Summit SOM and confirmed that the SOM outcomes will be presented to the Foreign Ministers Meeting for their consideration this week.

Fiji Times article, quoted from MSG Director General, Peter Forau, who alluded to the absence of "power play" within the MSG; in comparison to the regular undue influence from larger metropolitan countries, in  the Pacific Islands Forum (PIF). Mr Forau highlighted the growing influence of the MSG, which could over shadow the PIF.

Excerpt of Fiji Times article:

No 'power play'

Elenoa Baselala
Monday, March 26, 2012

Director Trade and Investment MSG secretariat Mere Falemaka (left) and Barbara Ege

THE Melanesian Spearhead Group can easily become an influential power in the region, even more than the Pacific Islands Forum Secretariat.

"This should have happened long time ago," MSG director general and former Pacific Islands Secretariat deputy secretary general Peter Forau said.

In an interview with The Fiji Times, Mr Forau who has been on the job for the past six months said the MSG, made-up of the five big economies in the South Pacific region Vanuatu, Papua New Guinea, Fiji, New Caledonia and the Solomon Islands had great potential to become influential.

In fact, Mr Forau said the MSG trade agreement was the only trade agreement that was working with the Pacific Island Countries Trade Agreement "all over the place".
And while, many see the MSG as a threat to regional unity, Mr Forau said this was not the intention of the MSG.

Mr Forau said unlike PIFS, the MSG members had equal rights and there was not much "power play" or influence from bigger countries.
"If the MSG is seen as a threat that is not our intention, we are just working in the best interests of our members.

"If we are to become influential that is the natural cause of things," Mr Forau said.
Mr Forau, however cautioned, that for the MSG to grow to greater heights it must be united.
And they must do things to international standards to be recognised globally.
"Things are starting to happen. There are a lot of opportunities," he added.
The MSG Foreign Economic Ministers meeting starts today and ends tomorrow. The Leaders Summit will follow on Thursday and Friday.

In a Fiji Village (FV) article, Forau also addressed the need for the MSG countries to bring the benefits to their citizens.

Excerpt of FV article:

MSG issues to benefit citizens- Forau  

Publish date/time: 26/03/2012 [11:21]

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The Melanesian Spearhead Group cooperation must bring gains for their citizens at the national level.

That was the message Director General for the MSG secretariat Peter Forau urged regional Foreign Affairs ministers at the opening of the meeting this morning in Suva.

The Foreign affairs ministers will consider political, trade, economic, social and Secretariat organizational issues of interest that have been endorsed by the senior officials last week.

The Foreign Ministers Meeting will then present to the Leaders' Summit to make decisions which will be implemented accordingly.

Forau has encouraged the ministers to discuss and think thoroughly on the issues put forward.

Leaders attending later this week include Prime Minister Commodore Voreqe Bainimarama, spokesperson of the FLNKS Victor Tutugoro, PNG Foreign Affairs Minister Ano Pala,  Prime Minister of Vanuatu Sato Kilman and Prime Minister of the Solomon Islands Darcy Lilo

Fiji's Foreign affairs minister Ratu Inoke Kubuabola officially opened the meeting at the GCC complex in Nasese.

Story by: Sofaia Koroitanoa

Fiji News footage (video below) of the recent discussions among MSG Trade officials.



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X-Post-Foreign Policy In Focus: Vacuuming Up the Pacific's Resources

By Arnie Saiki, March 5, 2012

The 11^th round of the Trans-Pacific Partnership (TPP) negotiations is currently taking place in Melbourne, Australia. Although negotiators have agreed to the broad outlines of the TPP agreement, a new trade issue has created a snag in the process: the inclusion of investor-state dispute settlement provisions. Australia has refused to accept the investor-state dispute settlement, and U.S. industry associations are urging President Barack Obama to overcome these objections. These investor-state dispute settlement provisions have been included in U.S. investment treaties and trade agreements with more than 50 countries, and there are over 2,500 of these accords currently on record. These provisions, however, give advantages to large economies and can cripple small island states like Pacific Island nations.

Obama describes the TPPA as a "a trade agreement for the 21st century" that improves on and rectifies the past problems in U.S. trade and investment treaties and trade agreements with more than 50 countries, and there are over 2,500 of these accords currently on record. These provisions, however, give advantages to large economies and can cripple small island states like Pacific Island nations.

Nine countries are currently negotiating the TPPA:the United States, Australia, New Zealand, Chile, Peru, Brunei, Vietnam, Malaysia, and Singapore. Japan is in preliminary talks, and Canada and Mexico are looking to join. Although the negotiations are being held in secret, leaked documents confirm that the TPPA is a “NAFTA on steroids.” Contrary to democratic practice, the documents connected to the negotiations will remain secret for four years after being signed or dismissed.

Arnie Saiki

"For most Pacific Island countries (PICs), trade has been a series of disadvantageous agreements with larger economies that negotiate access to island resources. The PICs have remained economically tethered to larger economies despite attempts at small-island integration by sub-regional institutions like the Pacific Island Forum (PIF) or the more progressive Melanesian Spearhead Group (MSG). Just last year, a new sub-regional group called the Polynesian Leader’s Group challenged the MSG, which had made waves by advocating participation in an alternative economic system."

The United States is leading the negotiations and has a great deal of influence over the outcome of the agreement, which covers a vast range of subject matters, including tariffs on goods, trade in services, labor and the environment, telecommunications, and intellectual property. For Pacific Islands, however, the investor rights chapters may offer the greatest challenge to Pacific Island environmental resources.
The small Pacific Island economies are not formally a part of the TPPA negotiations and yet they are tethered to the larger economies of Australia, New Zealand, Chile, France, and the United States. Pacific Island countries are also not member economies of APEC (the economic regional forum that spawned the TPPA). They participate only as observers through the Pacific Island Forum, which facilitates the neo-liberal economic agenda through a basket of sub-regional agreements like the Pacific Island Countries Trade Agreement (PICTA). Still, larger economies pay considerable attention to the Pacific Island countries because of their resources, like fisheries, precious metals, and minerals, as well as their strategic value as military outposts and waterways.

Pacific Trade

Throughout Oceania, native peoples separated by thousands of miles share similar cultural and often linguistic bonds. Long before contact with the west, Pacific peoples not only were connected by the currents of their ocean homes but had established trans-pacific navigational routes, trade, and for the most part a sustainable relationship with their environmental resources.
For most Pacific Island countries (PICs), trade has been a series of disadvantageous agreements with larger economies that negotiate access to island resources.

The PICs have remained economically tethered to larger economies despite attempts at small-island integration by sub-regional institutions like the Pacific Island Forum (PIF) or the more progressive Melanesian Spearhead Group (MSG). Just last year, a new sub-regional group called the Polynesian Leader’s Group challenged the MSG, which had made waves by advocating participation in an alternative economic system. By joining with a bloc like the BRICS (Brazil, Russia, India, China, South Africa), Pacific Islands might do better than the neoliberal programs advocated by PIF.

In comparison with other emerging economies, Pacific Islands have poor performance records. Much of the blame rests on the neo-liberalism of regional institutions like the ADB and APEC. Since the late 1990s, an increase in aid-based relationships has not only stunted the development of many island peoples but also provided a dumping ground for overstock and consumer detritus. Although private investment has had some success in developing traditional farm and fishery practices, these projects are dependent on funding from the Asian Development Bank (ADB), the EU, the World Bank, and U.S. and Australian aid organizations.

In a 2006, the ADB examined small island states among the developing member economies, suggesting that isolated and vulnerable economies remain under economic stress as a result of their governments’ inability to guarantee the basic security of their people.

In 2008, as a response to its self-funded study, the ADB worked with international partners to deliver infrastructure services in the Pacific to streamline private-sector investment to industrial sectors like energy, water, waste, security, and telecommunications, as well as mining, cash crops, and fisheries. The Pacific Region Infrastructure Facility (PRIF) is one such organization.
Privatization is the latest vehicle for the exploitation of island resources. But these international investment projects, along with the bilateral investment treaties that support them, have yet to provide any long-term sustainable cultural or environmental benefit to small island economies.

 Impact of the TPPA

Embroiled in a decades-long struggle for independence from Chile, Rapa NuiTPPA that Chile signed in 2005. Since joining the TPPA, Rapa Nui has been fighting a tidal wave of development proposals for mining projects, airfields, ports, casinos, and hotels. These projects, which would irreparably change a UN World Heritage site, primarily benefit the Chilean government and the investment regime. For example, through the transnational Transoceanica Holdings, international investors funded the development of the Hotel Hanga Roa on land belonging to the Hitorangi clan. In 2010, as the Hanga Roa prepared to open, members of the clan occupied the hotel. Rapa Nui erupted in violence when Chilean President Sebastián Piñera sent navy cruisers and hundreds of armed security forces to end the unarmed protests.

In recent discussions around the TPPA, little attention has focused on how a regional “Asia-Pacific” free-trade agreement will actually impact Pacific Islands. But some recent examples of investments in the region are quite revealing. In Papua New Guinea, Canada’s Nautilus Minerals has launched a new deep seabed-mining project called Solwara 1. Large deposits of gold, silver, nickel, copper, manganese, and other rare-earth minerals are buried deep in the seabed, and the method for extracting these minerals – basically vacuuming up the seabed onto a barge – has only recently been developed.

Little is known about the deep seabed, and no conclusive environmental study has been completed. But the life that thrives in this unusual environment is sulfur-based rather than oxygen-based. When the sludge is extracted onto a barge, it is then separated from the commodity metals and minerals and then dumped back into the ocean. The impact of this sulfuric sediment absorbed by fish or reefs is unknown. However, sulfuric changes in the environment negatively affect oxygen-based plants and animals, as people living with vog (volcanic smog) know all too well.

After the International Seabed Authority changed the regulations for deep seabed mineral extraction, Nautilus acquired even more international investment to lease large tracts of deep seabed in Fiji, Tonga, the Solomon Islands, and New Zealand. These changes have prompted other Canadian, U.S., and Australian mining companies to lease seabed areas in the Exclusive Economic Zones of many other Pacific Island Countries. This mining deregulation, which has resulted from agreements like the TPPA, will likely push ocean biodiversity closer to what the International Programme on the State of the Ocean describes as “irreversible, catastrophic change.”

Consider also the case of Endeavor Mining, which recently offered the Cook Islands government a partnership proposal worth $1 billion over three-and-a-half years for mineral and mining rights to the seabed resources. Typically, since Endeavor is also an independent merchant bank focusing on the global natural resources sector, it will likely offer investors a package of financial incentive benefits that will reward investors at the expense of a state whose 2009 GDP was just short of $200 million.

If made responsible for cleanup in the event of accidents, island governments and taxpayers could be liable for any financial losses. As a result, Cook Islanders might find themselves in an ecological catastrophe and mired in debt. Additionally, to qualify for loans to pay back this debt, multilateral lending institutions may well insist on austerity measures that would lead to further deregulation. Locked into a variety of competing investor agreements, the Pacific islands will find themselves in a race to the bottom, both economically and environmentally.

If the investor-rights “chapter 11” provisions in NAFTA provide any clues about how the TPPA will privilege international investor agreements over government regulations, the Pacific Islands will be opened up to tremendous resource exploitation. Environmental regulations are all that protect the fragile biodiversity of the region. And the costs associated with the despoliation will largely fall on the shoulders of Pacific islanders themselves. The corporations will reap the profits; the Pacific Islands will have to pay the long-term bill.

Looking Beyond the TPP

The average GDP of the smaller developing Pacific islands is around $350 million, with the exception of Fiji, whose annual GDP is around $3.5 billion, and Papua New Guinea at around $9.5 billion (for perspective, New Zealand’s GDP is around $125 billion). There is a tremendous gap between the combined GDP of the islands and the value of the resources exploited from these countries.

This gap represents a strategic imperative for Pacific island economies to integrate along the lines of sustainable trade and sensible environmental regulations. The TPPA is certainly not an equitable integration scheme.

Rather, this NAFTA of the Pacific is like tossing a shark in a fish tank. The TPPA will give even less room for PICs to negotiate positive environmental regulations or manage to accrue social or economic benefits from their natural resources.

Pacific Islanders need to be part of the negotiating process to ensure they are at least able to integrate their commodity resources, since they are critically unequipped to develop their economies to scale with the larger economies. They also need to create a regional regulatory agency that can independently manage the various trade and investment agreements. Without democratic input and democratic control, the TPPA will vacuum up all the resources of the Pacific and leave a poisoned ocean in its wake.

Arnie Saiki is the writer/director for Statehood Hawaii/Imipono Projects. He coordinated the Moana Nui 2011 conference in Honolulu with Pua Mohala I Ka Po and the International Forum on Globalization. He is a contributor to Foreign Policy In Focus.

Recommended Citation:

Arnie Saiki, "Vacuuming Up the Pacific's Resources" (Washington, DC: Foreign Policy In Focus, March 5, 2012)

Further Reading :

Pacific warned of hidden dangers in Obama's new TPP push (Radio Australia)

The Trans-Pacific Partnership-A New Paradigm Or Wolf In Sheep's Clothing?

Economists Issue Statement on
Capital Controls and the Trans-Pacific Partnership Agreement

TPP-The NAFTA of the Pacific

 How Brazil Challenged Europe and Won.

Taxonomy of Dolls and Mutants (Radio Lab)

SiFM post on seabed mining:

http://stuckinfijimud.blogspot.com/2008/04/rush-to-mine-pacific-seabed-fiji.html

SiFM post on TPP and America's Pacific Century Pivot:

http://stuckinfijimud.blogspot.com/2011/11/americas-pacific-century-pivot.html

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