Worried About The TPP? Australia Is Pushing Another Bad Deal

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Despite receiving little attention in Australia, efforts to establish a new regional trade agreement are raising eyebrows among Pacific neighbours, writes Thulsi Narayanasamy.

Earlier this month in Melbourne regional negotiations for the controversial PACER-Plus free trade agreement resumed. So too did the fierce protests against it. The trade agreement has been important news across Pacific Island countries but has flown largely under the radar in Australia.

For seven years Australia has sought to tie down a trade deal that will see it and New Zealand disproportionately benefit at the expense of the Pacific Island Countries. The impetus for the agreement is purportedly the economic development of Pacific Island Countries. They don’t seem to agree.

While arguments against the agreement are varied, what Pacific Island Countries do agree is that PACER-Plus will irrevocably damage the Pacific.

The case of Vanuatu serves as a reminder that the impacts of free trade policy can be widespread and destructive. Vanuatu has been part of the Melanesian Spearhead Group Free Trade Agreement since 1993, which has resulted in the destruction of local industries. Factories ranging from fibreglass to tinned fish have had little choice but to close down leaving hundreds unemployed.

Tusker Beer, Vanuatu’s local brew and a national icon, is in a position where it is considering having to close its doors, no longer able to compete with imported beer from the Solomon Islands. It’s not just beer. Fijian bottled water is cheaper in Vanuatu than locally bottled water. The list goes on.

PACER-Plus is pushing to exacerbate these issues by eliminating import tariffs. Without an income, state resources are entirely dependent on value-added tax and import revenue. At current levels it is difficult to provide adequate social services. Even by conservative estimates, this agreement will decimate Vanuatu’s ability to provide education and health care.

Without an income tax, many government resources are entirely dependent on value-added tax and revenue collected from trade. At current levels it is difficult to provide adequate social services. Even by conservative estimates, this agreement will decimate Vanuatu’s ability to provide education and health care.

Vanuatu. (IMAGE: Phillip Capper/Flickr.)
Vanuatu. (IMAGE: Phillip Capper/Flickr).

Trade barriers aimed at protecting local industries are not allowed under the rules of the World Trade Organisation (WTO). In spite of these rules, island countries have taken steps to protect their local industries. Papua New Guinea (PNG) recently instigated a ban on the imports of Australian vegetables, citing the need to protect and grow local agriculture. The Australian government is opposing the ban due to the commercial value of the Australian vegetable export industry to PNG.

Samoa banned the import of high-fat meat waste products such as turkey tails and mutton flaps, which many cite as a cause of the obesity problems facing Pacific Island countries. These meats are ordinarily used for pet foods but can fetch a higher price for human consumption, so they are sent to Samoa. Affluent countries affected by Samoa’s ban fought against it and with the assistance of the WTO, the ban was lifted. Australia’s national interests can be at odds with those of our closest neighbours. Posturing as if this isn’t the case is an insincerity the Pacific is familiar with.

Australia prides itself on an aid program focussed the Pacific, which receives the lion’s share of the aid budget. Unfortunately, pursuing a trade agreement that will exacerbate many of the development issues facing Pacific Island countries is not out of character. Pursuing land privatisation, mining and commercial contracts for Australian companies is what Islanders will readily cite as the legacy of the Australian aid program. It’s no secret that Australia uses its aid program to leverage its priorities, particularly those relating to immigration policy, of which PNG and Nauru have borne the brunt.

The only benefit that Pacific Island countries can identify from this agreement lies beyond the scope of the trade agreement. This is how non-binding chapters on development assistance and labour mobility came to be proposed (an unprecedented addition – aid and migrant worker policies usually have no place within a trade agreement).

The Australian aid program has already committed to an aid for trade policy: development assistance to promote trade liberalisation. It is difficult to construe its addition to the agreement as a win for the Pacific. While it may assist some Pacific exporters it will also ensure that Australian exporters get swifter access to Pacific markets.

As for labour mobility, expanding the existing Seasonal Worker Program may be welcomed but from a rights-based perspective the lack of job security, monitoring and enforcement of rights, benefits and the gendered nature of this work (in that it largely caters for men), makes it far from ideal, particularly when the same agreement that provides work abroad for some people will, through closure of Pacific industries lead to less employment opportunities at home.

In addition to the individual impacts that will be felt by each Pacific country are the broader impacts of increased free trade in the context of the global climate crisis. A rising sea level is cited as an existential threat by many Pacific Island nations. Low lying countries such as Tuvalu and Kiribati are urgently requesting action from Australia and New Zealand on climate change. Fish from PNG is being imported by the Solomon Islands at the same rate as the same product is being exported. Situations like this are common yet the environmental impacts of increasing industrial transport of goods are often not considered.

The Pacific-led campaign against the PACER-Plus free trade agreement is calling a moratorium on the trade negotiations until adequate human rights and environmental impact assessments take place. The campaign has rapidly gained momentum, joined by civil society organisations, unions, and members of parliament. It may be the trade agreement you haven’t heard of, but just because it’s good for Australia doesn’t mean we should give it a free pass. Promises of mutual benefit ring hollow and with negotiations set to conclude this year, the window to stand with the people of the Pacific and demand an end to these negotiations is steadily closing.

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Thulsi Narayanasamy

Thulsi Narayanasamy works on labour rights for War on Want. She was previously the Director of AID/WATCH, Australia’s independent monitor of foreign aid and trade.

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