Island News

Pacific aid for trade strategy: A missed opportunity for the Pacific

Written By : Source: PACNEWS OPINION. When the African, Caribbean and the Pacific (ACP) and the European Union (EU) attained the waiver of the Cotonou preferences for another six years
13 Nov 2010 12:00

image Written By : Source: PACNEWS OPINION. When the African, Caribbean and the Pacific (ACP) and the European Union (EU) attained the waiver of the Cotonou preferences for another six years under the Doha Mandate, there was so much optimism that the Economic Partnership Agreement (EPAs) would bring an endearing path of economic relations between these regions.
After years of negotiations, many of the officials are exhausted, tired and in some cases, the ultimate price has been paid where couriers have been lost.
Likened to a War of Attrition, both sides are looking at each other every day across the trenches and dugout pill boxes, wondering what would be the next move.
After all, the EU wants to rules its trade norm hegemony in the world while the ACP want what every developing country in the world want, the opportunity to use trade and development resources to grow.
So when the concept of Aid for Trade (AfT) started germinating in the 2004 Hong Kong Ministerial and the EU Gleneagles 2007 pledge of 2 Billion Euros for Aid for Trade, a new norm was evolving.
That was, developing countries were not simply asking for cash to implode their economic policies but wanting to make a clear link on targeting trade related assistance nationally and in their region for the sole purpose to enhance trade.
Or using the buzz word in the aid world, developing countries wanted Aid Effectiveness and in this instance, the developing countries said we will liberalise our economies if you target aid to enhance our institutions and private sector to be able to partake in trade.
In 2007, the legalistic EU trade officials dovetailed the ACP demands for additionality in the EPA resourcing to be contingent on an AfT Strategy.
They were indeed the 1st Developed Nation to create this linkage and the semblance of what an AfT norm was now been fertilised between two of the largest groupings in the world. Naturally for the ACP, Africa had the first bite of the cherry. The Common Market for Eastern and Southern African (COMESA)’s formulation and in particular the arrangements in ESA was as expected, prescriptively leaning towards trade capacity growth with the contingency of liberalising the economy and negotiating rules.
As the Pacific was recovering from the injuries of the 2007 negotiations, the EU demanded the Pacific to also develop an AfT Strategy, which will be the basis of funding the 10th EDF in the region.
After a zap 14 country tour, thousands of pages of possible projects nationally and regionally, countless regional meetings, the Pacific AfT Strategy, although inspired by the EPA negotiations, was the first of its kind, in linking a holistic aid programme to trade liberalisation and rules.
Pacific negotiators were given months to peruse the contents of the report and comment back to the Pacific Islands Forum Secretariat (PIFS) and in a sign of maturity, many members gave constructive proposals to improve it.
It was going to become the norm the Pacific was going to push for any partner, if you want to trade with us, here is our position. Realign your aid to be consistent with our norm, and will talk trade. After all, it’s a template of demands.
That’s right a template. For example, most Pacific islanders want bio-security arrangements to assist their exporters to access markets around the world. Systems facilitating standards, regulatory approvals and mutual accreditations is what exporters want and this is what the Pacific wanted to demand from any partner wanting to negotiate a economic relationship.
Put it another way, it’s no different in the EU’s template position on export taxes.
Just because Russia and Argentina are killing their exporters, they have been pursuing its elimination not only in the EPAs but also in the WTO multilateral negotiations. So why can’t the Pacific pursue a norm of bio-security development norm contingent for trade liberalisation and rules?
On a separate path, the EU has agreed to the Pacific AfT and 40 million Euros will fund its A4T initiatives. But this was beyond the EU and EPA and it has the potential to set the region on course to build a prolific norm to bring stability and predictability to use aid effectively when trading off to liberalisation and rules. Well the region was given the opportunity to consider bio-security and every other possibility presenting itself in the Pacific AfT.
The big day was 2009 Pacific Trade Ministerial and what was to come was not anticipated.
The Pacific crumbled in a spectacular case of the age old strategy superpowers use, Divide and Rule.
Led by Australia and ironically by the current Director or Economic Governance, of the PIFS, Dr Chakriya Bowman, the Pacific negotiators were coerced to reject the AfT Norm because it didn’t reflect their needs?
But that’s ok, she’s on our side now and she might undo this great sin so let’s give her a fair go.
Emphasising their national needs was not met, that steamy afternoon in Apia turned into a bloodbath when the Pacific islanders turned on each other. One by one they unraveled a platform of strength to a position of vulnerability.
Eventually, the proposed norm evaporated and the Developed partners (ANZ in particular) got what they wanted. What happened at the ministerial meeting proved what many political commentators have warned all along, the influences of ANZ in the affairs of Pacific Islands Forum – We will decide what is good for you, and not you tell us!
This set the course in the right direction for Australia New Zealand to advance their trade and commercial interests in the PACER Plus.
Yep, let’s push all the concessions we want, all the rules we want and here is the best part, we also can shove down the Pacific’s throats the sort of aid they need for trade.
That’s right – they don’t know what they need so we will get a couple of consultants, wannabe trade experts in the islands to dream up what they need.
So what can we expect from these consultant reports.
Well first liberalising your economy is great for the Pacific and of course throw in the rules as well.
It’ll make the EPA look like my son’s Wiggles ABC Colouring Book. And as for development, sure, we will fund your Chief Trade Advisor for three years (which 75% of the cost will be his salary) and some lose change of $50,000.00 to ensure you will be ready.
The latest Forum Trade Ministers Meeting in Pohnpei has already indicated what’s to come. The outcomes were littered with liberalisation and rules issues for further consultations, or we should be honest and say negotiations.
Look at its outcomes – they want to talk about rules of origin, telecommunications, investment and bio-security.
And here is the big mystery, absolutely on aid. Could this be because the deal for aid modality has been done?
The CTA and the loose change – is that the aid coming from PACER Plus?
What’s even disturbing is that there is no discussion for a successor for the Regional Trade Facilitation Programme (RTFP) currently in the PACER, to be in the PACER Plus. RTFP is the only regional mechanism available to assist Pacific islanders in trade capacity.
They don’t have an ODI or Hub and Spokes Scheme or any other assistance arrangement. But that’s for another time, more on the RTFP.
To regale your thoughts, this was the system to empower or should I say provide aid to Pacific islanders in trade facilitation rules and training to partake effectively in the Pacific Island Countries Trade Agreement (PICTA). More importantly, it was to prepare for future trade relations with ANZ i.e. PACER Plus.
It’s coming to an end and the Aussies and Kiwis don’t want to fund it and shockingly, it seems senior management of the PIFS quarters also don’t want it. Or should I say the Aussie quarters of the PIFS.
Pacific negotiators and the CTA must steer the discussions back to a calculated modality for demanding aid for trade. We must use the Pacific AfT Strategy as a pillar to refine, debate, build and negotiate.
It is gravely unfortunate that all the analysis that has come from all quarters of the Pacific on PACER Plus has not addressed this.
It reminds me the time many years ago an incident I had with my grandfather.
As he saw me get my scroll on graduation day, he presented me a rusty bush knife.
He had a sense of humour so I was looking for the message in the gesture.
With tears streaming down his eyes he told me on how he sold large hunting and gardening grounds to the white man many years ago, in exchange for a bush knife.
Present day bustling suburbs have replaced the great savanna and my people have missed out on the benefits of land utilisation.
The next words he said were so powerful that they have been engraved in my soul for eternity, “My generation saw wealth in the land and there was great reverence and prestige of conquering it. Unlike my time, the wealth in your generation lies in knowledge.
Conquer your opponent with it, acquire new frontiers with it because my child, the white man killed me and my land because my knowledge was limited.”
There is a critical mass of Pacific negotiators who are veterans of the WTO, EPA and PICTA theaters.
They have fought the trenches on Brussels, Geneva and Apia and they know that when dealing with Developed Nations, our position should be development first before commitments in liberalisation. We have the knowledge and unlike back in the day, we can tell the white man to go and jump, if he doesn’t give a good deal.
If the PACER Plus has no meaningful aid for trade norms, then it’s like the rusty bush knife I inherited from Gramps.
It’s blunt, as it has no effect in cutting the rife of poverty, its rust makes it brittle and therefore cannot withstand the tall grasses onerous trade rules to implement and yes, the handle is all but gone.
So controlling it is indeed difficult and as such, the ownership of paving the commercial and economic policy of Pacific Island Countries will not be in their sovereign and rightful hands, but in the hands of Canberra and Wellington.

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