Mar 27, 2017 Last Updated 12:15 AM, Mar 15, 2017

THE Melanesian countries in the Pacific dominate the economic landscape in the region and with that vantage point; they are on the verge of formalising a new free trade agreement to operate in a single market economy that will bring prosperity to their citizens and economies.

We can call them the M4 or the Big4 - PNG, Fiji, Solomon Islands and Vanuatu - whose combined market size of 9.6 million people encompasses 94 per cent of the whole Pacific region. But they prefer to be known as the MSG, or the Melanesian Spearhead Group. And just as the name suggests, its role is to spearhead trade and economic integration for the benefit of the member countries.

The idea to form a new trade bloc was first introduced in 2005 by the MSG leaders and over the years the concept has blossomed into what is now being penned to allow the free movement of goods and services, investments, and labour amongst the four countries. Consent to the agreement from Solomon Islands and Fiji make it half complete. Once PNG and Vanuatu ratify, which could be any day now, it becomes the only trade agreement operational in the Pacific.

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Kava ban

Suspect exports under scrutiny as Fiji prepares to stop two-day kava

FIJI will soon ban the importation of the suspect two-day kava variety from Vanuatu to safeguard the quality of its kava exports to the global market and the health of its kava-drinking population. It is part of the Ministry of Agriculture’s plans as the country prepares to implement quality standards for its kava industry and pass legislation to ensure strict guidelines for all stakeholders.

The Kava Bill, which will be reviewed by Parliament in its first sitting this month, comes just weeks after Pacific kava exports to the United States came under scrutiny. The alleged discovery of tainted kava from Vanuatu, from which some Fiji dealers buy two-day kava from and mix with their Fiji noble kava for export to the US, threatens the sustainability and faith of this growing global market.

The issue was highlighted in January when Sarami Plantation, one of biggest exporters of kava there, was accused of shipping tainted kava to the US via New Zealand. The concerns were raised by kava scientist Dr Mathias Schmidt, whose work resulted in Germany lifting the kava ban after almost 12 years, and Vanuatu Ambassador to the European Union, Roy Mickey Joy, in Brussels. Germany lifted the ban on June 11, 2014, the court ruling that based on available data, the benefit-risk ratio of kava medicinal products was confirmed as positive.

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Can of worms

Dispute over tinned meat

FED up with constant bullying and a continued trade imbalance with its Melanesian neighbour, Papua New Guinea has threatened to ban imports from Fiji. It’s a reaction to Fiji shutting out imports of Ox&Palm Corned Beed, Trukai Rice and a number of other foods from PNG.

The official line has been that PNG exporters have not met the biosecurity requirements put in place by Fijian authorities. Recent statistics show that Fiji exports goods worth more than $FJD41 million to PNG. Only $FJD2.8million in exports flows in the opposite direction. In 2012, Fiji exported $FJD73million worth of products to PNG. This fell to $FJD63million in 2013 and then to $FJD17million in 2014.

Fiji Bureau of Statistics figures show that imports from PNG, in 2012 were worth $FJD4.4 million, rising in 2013 to $FJD7.2 million and dropping back to $FJD7 million in the following year. Based on these figures alone, Fiji has more to lose than its Melanesian Spearhead Group counterpart. And all this against a backdrop of an increased number of Fijian businesses looking at PNG as a future major export market. Many businesses – mostly in the processed food industry - are already exporting and others are in the process of establishing capacities to increase trade with PNG.

That means any threat of a trade war will cause anxiety among Fijian exporters who have growing trade relations within the MSG. PNG Trade Minister, Richard Maru, has been forthright in his views about Fiji and accused the Pacific neighbour of ignoring the Melanesian Free Trade Agreement.

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Pacific nations can open up markets without help of our big brothers

THE Pacific Network on Globalisation has been vocal on its opposition to the PACER-Plus trade agreement. It has been at the forefront of civil society objections and the call for a more just regional trade framework which will boost economies and help Pacific people.

Netani Rika spoke to PANG Director, Maureen Penjueli

ISLANDS BUSINESS: Proponents of PACER-Plus sell the concept as an agreement which will solve regional trade imbalance. What are the disadvantages of such an agreement to Pacific countries? MAUREEN PENJUELI: Australia and New Zealand already dominate trade within the region, particularly in Melanesia and Polynesia, and PACER-Plus is set to exacerbate that.

The Pacific already enjoys duty-free and quota-free market access to Australia and New Zealand under SPARTECA yet have been unable to really take advantage of such access except for Fiji and Samoa due to nontrade barriers. PACER-Plus is doing little to address that and in fact the commitments on technical barriers to trade and quarantine standards will help streamline Australian and New Zealand goods into the Pacific, worsening the imbalance in trade.

The ratio of food imports to exports from Australia and New Zealand paint a grim picture. For example, Dr. Jagjit Phale and Mr Wendell Cornwall warn Solomon Islands of worsening trade imbalance from food imports from Australia and New Zealand at a staggering 95.3 and 12.7 times their exports respectively.

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PACIFIC island governments must retain their right to regulate to protect their national development interests as sovereign states, argues a report commissioned by the Pacific Network on Globalisation (PANG) on the social impact assessment of regional trade, PACER-Plus.

The report titled, Defending Pacific ways of life: A Peoples Social Impact Assessment of PACER-Plus, calls on Pacific government to protect the ownership and control of land, natural resources and environment, as well as the social and economic rights of their people ahead of the empty development promises from Australia and New Zealand and walk away from the regional PACER-Plus negotiations.

The report, comprising of four assessments from leading academics in Fiji, New Zealand and Australia, examines the impacts of PACER-Plus on gender, health, food and national sovereignty, thus, providing Pacific governments, negotiators, parliamentarians, civil society actors, customary landowners and the private sector with an alternative assessment to the impacts that PACER-Plus will have on the region.

PANG Coordinator Maureen Penjueli said that the assessment, based on leaked negotiating text, warns of the very serious implications that PACER-Plus poses to island countries in the region and urges Forum Island Countries to consider the assessment particularly against the backdrop of emerging new research on the economic costs of non-communicable diseases, growing impact of increase in VAT especially for poor communities and the transition of least developed countries.

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