New studies show negative impacts from Pacific Island trade deal (PACER Plus) as Cook Islands delays ratification

5 November 2018: Chatham House has published an article by research fellow Cleo Paskal which argues that PACER Plus mainly benefits Australia and New Zealand, and could damage their relationships in the region. She says that Fiji and PNG, representing 80% of Pacific Island Countries’ combined GDP, have not joined PACER Plus because the increased imports from Australia and New Zealand may threaten their developing industries.  Nine smaller Pacific Islands have been pressured to sign a deal they are reluctant to implement.

So far only New Zealand has taken steps to ratify the deal and bring it into force. The Cook Islands government has announced that it is delaying ratification because of uncertainty about its access to Australian and New Zealand development assistance to implement the deal.

Meanwhile the community group Pacific Network on Globalisation (PANG) has produced a new study showing the nine Pacific Island countries signed on stand to lose up to 10% of total government revenue each year from tariff cuts under the deal. Samoa would lose $US12.5 million each year, the Solomon Islands $US13 million, Tonga $US7.2 million and Vanuatu $US7.5 million. This could affect the capacity of these small economies to provide essential services, and there is no clear means of replacing this revenue.