Papua New Guinea may pull out of trade agreement

Byron Clark, Fightback coordinating editor

Richard Maru

Papua New Guinea (PNG) looks likely to pull out of the Pacific Agreement on Closer Economic Relations (PACER), the trade agreement between Australia, New Zealand and the island nations of the Pacific. This comes as the latest round of talks for ‘PACER Plus’ a new pact aiming to replace the current PACER agreement, have failed to secure key demands of Pacific nations, such as labour mobility in the region.

PNG Trade Minister Richard Maru has stated he would prefer to focus on strengthening the Melanesian Spearhead Group Trade Agreement, a sub-regional preferential trade agreement which includes PNG, Vanuatu, The Solomon Islands and Fiji. Excluding Australia and New Zealand the MSG bloc includes over 90% of the Pacific population.

Maru has described the PACER agreement as “a waste of time”

“Right now if we enter into such an arrangement it will be one sided all the goods will be coming from Australia and New Zealand into the Pacific market. At the moment we are not really doing much trading with Australia and New Zealand. We can’t even sell taro there, we have no capacity to sell our greens it’s all one sided traffic so what’s the point of going into a trading arrangement with Australia and New Zealand”.

Other Pacific leaders sympathise with PNG’s position. Solomon Islands Prime Minister, Gordon Darcy Lilo said “I don’t blame them for saying that… there is potential for much more meaningful trade cooperation within the Melanesian sub-regions of the Pacific”.  Fijian Minister for Trade Aiyaz Sayed Khaiyum, told Radio Australia that Fiji sees a lot of merit in PNG’s position. Khaiyum has also spoken of the need to re-examine the Pacific Island Countries Trade Agreement (PICTA) which includes Polynesia and Micronesia.

Adam Wolfenden & Maureen Penjueli of the Pacific Action Network on Globalisation (PANG) have suggested the Pacific region look to overseas examples such as The Bolivarian Alliance for the Peoples of Our America (ALBA) a trade agreement set up in South America by Venezuela under Hugo Chavez as an attempt at regional economic integration based on a vision of social welfare, bartering and mutual economic aid.

“Instead of pitting the countries against each other like PACER-Plus would, ALBA looks at ways that countries can help each other in the spirit of solidarity with guaranteed benefits for all those who participate…[A] far cry from what is currently on the table…PNG is right to want to walk away from PACER-Plus,”

The aims of the MSG trade agreement are not dissimilar to those of ALBA, the preamble for the agreement mentions “the overriding need to foster, accelerate and encourage the economic and social development of [Melanesian] States in order to improve the living standards of their peoples” and states that “the promotion of harmonious economic development … calls for effective economic cooperation”

This is unsurprising given one of the founding members of the Melanesian Spearhead Group was Walter Lini, the first Prime Minister of the Republic of Vanuatu, an advocate of “Melanesian socialism” who believed that the principles of socialism were inherently compatible with  Melanesian societies and customs.

Australian and New Zealand business interests, which have often used the Pacific region as a market for goods and a source of cheap labour, will likely be at odds with this growing regionalism in Melanesia, led by Papua New Guinea, a nation which has in recent years gained more control over its natural resources following decades of colonial and post-colonial exploitation. The people of the Pacific however are likely to benefit.

“Papua New Guinea is not boasting about its richness over the world in their resource abundance that they have.” Gordon Lilo told Radio Australia, “It is all about sharing the fortunes that they have for the development of a broader Melanesian region. And that is what we are getting out of it, a region that is committed to human development, and expansion of the space and the environment between the Melanesian region for all of our citizen to be able to prosper.”