Globalisation is coming to the Pacific. But are the islands heading for a free-trade paradise; are they forever lumbered with their colonial inheritance; or is there a middle way – a Pacific way? This paper attempts to untangle the numerous trade agreements with the aim of focussing discussions to address such fundamental questions as: What will the islands export in order to benefit from trade deals? Are there enough points of different for countries to specialise and trade competitively? What are the benefits of deals with Canberra and Wellington? Can multilateralism bolster commerce with the wider world?
These are the key messages of Beyond fish and Coconuts:
- Special relations with former colonial powers encouraged dependence on a limited range of commodities and a select few export destinations.
- Tariffs protected Pacific producers from foreign competition and generated significant proportions of government revenue. They also delayed the reality of inefficient and uncompetitive local industries.
- Big trading partners like Europe, Australia and New Zealand are expecting the fledgling economies of the Pacific to quickly liberalise.
- Pacific island countries have little to sell each other, and intra-regional trade is low due to major economic, historical and geographic factors.
- PACER is arguably the most controversial trade agreement facing the region, partly because of the potential for significant revenue losses Pacific island countries face by opening up to Australia and New Zealand.
- Doing nothing is not an option: the region cannot continue to rely on past arrangements and high tariffs.