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Australian aid and trade watchdogs denounce Pacific Free Trade Agreement

Independent Australian organisations, the Australian Fair  Trade and Investment Network (AFTINET) and AID/WATCH, Australia’s aid  monitor, have voiced serious concerns about the PACER-Plus Free Trade  Agreement currently being negotiated between Australia, New Zealand  and Pacific Island Countries.

Both organisations assert that  PACER-Plus will leave Pacific Island Countries disadvantaged, and  ignores calls from Pacific Islanders who claim that this agreement is  not in their interest.

PACER-Plus negotiations began in 2009 with the agreement introduced as  different, with a primary objective of economic development in the  Pacific region. An agreement has still not been reached.

“These negotiations were born out of fears from Australia and New Zealand that they would lose market share in the Pacific. You can see  this in the negotiations as it is the Pacific Islands who are bearing  the burden of making binding commitments on liberalising their goods  and services,” said AFTINET Campaigner Jemma Williams.

“This will reduce their ability to regulate, especially in areas such as foreign investment in land and essential services and will result in the loss of income through tariffs.”

“The Islands are pushing for additional development assistance and greater access to Australian labour markets to be included in the deal. There is no precedent for these areas to be included in trade negotiations, and the negotiations have come to a deadlock over this issue as the Pacific feel that what is on offer represents an unbalanced agreement.”

The June PACER-Plus closed door negotiations in Adelaide were closely  followed by Australian Foreign Minister, Julie Bishop’s announcement  of the new aid policy to the National Press Club.

Aid for Trade is  presented as the cornerstone of the new aid trajectory. The Australian  Government claims that the primary objective of the PACER-Plus trade  talks is to achieve economic development in the region.

Similarly, Aid  for Trade policy is being presented as pathway towards poverty  alleviation, while giving Australia ‘better value for money’.

AID/WATCH Director Thulsi Narayanasamy said, “Australia has  aggressively pursued this trade agreement despite significant pushback  from Pacific Island countries. There is a worrying level of coercion  involved when aid is used as a bargaining chip. This is an example of  Australia pursuing its interests at the expense of the people of  Pacific Island Countries. DFAT need to articulate how this will  benefit the Pacific”.

Both AFTINET and AID/WATCH claim that the recently unveiled Aid for  Trade policy will not lead to a better outcome for Pacific Island  countries through this trade agreement.

Narayanasamy said “Aid for Trade is presented as new but it has been an ongoing policy pursuing trade liberalisation since Howard. PACER-Plus is simply a way to brand an agreement that favours Australia and New Zealand as a development opportunity for the Pacific – an insidious way for two regional heavyweights to pursue their commercial priorities”.

“Australian companies like resources companies, service companies and banks investing in the Pacific clearly stand to gain the most from investment and services liberalisation.” said Williams.

Narayanasamy said “If the Government is serious about working to alleviate poverty in the Pacific, it needs to seriously review the role trade liberalisation has played in sustaining inequality.  Increased trade leading to increased economic growth does not always  translate into positive development indicators and in Pacific  Countries such as Papua New Guinea, this hasn’t been the case. In fact  economic growth has often been linked with income inequality yet the  Government is turning a blind eye to the evidence.”

AFTINET and AID/WATCH have long demanded increased accountability and  transparency on Australia’s trade agreements.  “Australia’s focus in the Pacific should be on effective development programs, rather than secretive trade negotiations. If this agreement is mainly about development, why is it being negotiated behind closed doors?” Williams questioned.

Narayanasamy concluded, ‘Aid for trade is set to represent a 20%  portion of the overall aid budget. That will be almost $1billion a  year in whitewashing unequal trade agreements, presenting trade as a  mechanism out of poverty rather than a method of sustaining it, and  lending an unequal trade system an undeserved legitimacy. People need  to look past the rhetoric extolling the virtues of aid for trade to  examine what the real impacts of free trade are on the poor and  marginalised in developing countries.”

“We stand in solidarity with the people of the Pacific calling on their Governments to reject this predatory trade agreement.”.