Solomon Islands Refutes Erroneous PACER Plus Claims by PANG

In a new publication, the Hon Milner Tozaka, Caretaker Minister of Foreign Affairs and External Trade of the Solomon Islands, as the Lead Spokesperson of the Pacific Island Countries (PICs) on PACER Plus, has refuted the misrepresentations and erroneous claims made by the Pacific Network on Globalization (PANG) about the regional trade agreement between PICs, Australia, and New Zealand.


The publication by the Lead Spokesperson responds to claims by PANG that PACER Plus would not fulfil its key objective of assisting the PICs to increase and diversify their trade and achieve economic growth and sustainable development.  The Lead Spokesperson considers that the claims are unfounded and not based on a true and proper analysis of the Agreement:


Regrettably, the [PANG] report is based on numerous incorrect assumptions and contains flawed analysis, as well as factual inaccuracies and errors. Therefore, when compared against the actual provisions of PACER Plus, the report provides a misleading representation“, said the Lead Spokesperson.


The Lead Spokesperson believes that PACER Plus will provide tangible benefits to the PICs and enable them to enhance their participation in international trade:


PACER Plus responds to the long-standing and key demands of PICs in the areas of development assistance and labour mobility, is flexible and takes into account the different levels of development in the region, and respects key national sensitivities and national objectives of PICs“, said the Lead Spokesperson.


The publication sets out instances where the PANG’s Report provides misleading claims.  In the area of Trade in Goods, the Lead Spokesperson contests the view that PACER Plus will lead to significant revenue losses for the PICs and that the rules of origin, which determine which products will have preferential tariff treatment, are too complex to be of benefit:


The real figures show that [the] PICs will either face zero or negligible revenue losses due to PACER Plus tariff commitments, or they already have a tax regime in place that would make it relatively easier to shift from import duties to other taxes such as excise taxes, if they deem it appropriate“, said the Solomon Islands.


The publication further states that: “[t]he actual PACER Plus rules of origin provisions reflect a carefully designed schedule of product-specific rules that have been tailored to meet specific requirements of PIC exporters, allowing for significant flexibilities, and in some instances more flexibilities than what is usually found in other free trade agreements (FTAs)“.


With respect to Trade in Services and Investment, the publication rejects PANG’s view that PACER Plus would somehow negatively impact on the right of PIC Governments to provide public services or regulate in the public interest, or that it poses a risk to established land rights and access to fresh water:


These claims are alarmist and unfounded.  Naturally, PACER Plus in no way threatens public services or the right to regulate of the Parties. Neither does it provide foreigners with new rights to land or affect the right to fresh water.  Provisions on investment and trade in services in PACER Plus reflect the flexibility that has been sought by Pacific Island Countries (PICs) and are not controversial. PICs decided to include chapters on Trade in Services and Investment that support their development objectives“, said the Lead Spokesperson.


In addition to a publication responding to the claims made by PANG, the Lead Spokesperson also circulated another publication entitled “Benefits and Misunderstandings”, which highlights the expected benefits of the Agreement from the perspective of PICs, and addresses misunderstandings that are sometimes associated with it. The publication notes that:


PACER Plus will encourage trade and investment in the region, increase domestic economic activity, lower costs for consumers and local companies, improve the business climate, and create new opportunities.”


PACER Plus was signed by 11 countries in Nuku’alofa, Tonga in June 2017 and it is expected to enter into force when 8 of the signatory states ratify it. Thus far, Australia and New Zealand have ratified the Agreement.  It is expected that the PIC signatory states will ratify the Agreement in the coming months.