Analysts Praise A New Australia's Trade Agreement with Pacific Nations
A new trade between Australia, New Zealand and Pacific Island economies have significant benefits, stated the study by business analysts and academics.
A regional development-centred trade agreement by Australia, New Zealand and nine Pacific island economies Cook Islands, Kiribati, Nauru, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu with combined value of more than $ 1.4 trillion comes into force when Beijing is cutting off Australia from its market.
The agreement includes a provision on the reduction of tariffs, cuts regulations, and creates a potential for more unskilled labor mobility in the region.
The net boost to the growth and efficiency of Pacific Island Countries economies is likely to be substantial, the authors of the Research Study on the Benefits, Challenges and Ways Forward for Pacer Plus published by Institute for International Trade and the University of Adelaide concluded.
New trade agreement of economies with more than $ 1.4 trillion combined GDP
will provide a net boost to the growth in the Pacific region.
The analysts stated that the agreement has the breadth and ambition to anchor the economic platform of regional growth and economic development in the Pacific.
The authors of the research, however, warned against of the influx of large number of unskilled workers since such provision could change the economic landscape throughout the region.
This trade deal ensures greater market access and lower tariffs across a range of products that will benefit communities, farmers, fishers, businesses and investors in our region, Mr Birmingham said in a statement.
Foreign Minister Marise Payne said the agreement's entry into force would also assist the region's economic recovery from the coronavirus.
New trade agreement has potential to solidify economic development in Pacific region
Pacer Plus establishes a common set of trading rules for the region, which will cut transaction costs in trade throughout the Pacific.
For Australian farmers, PACER Plus opens up market access, albeit to small markets, for meat, dairy, grains, oilseeds, sugar, animal feed and processed food exports. Tariff reductions will also create more opportunities such as beef and dairy exports to Samoa and wheat, animal feed and dairy to Solomon Islands.
With PACER Plus coming into effect, existing Pacific Horticultural and Agricultural Market Access Plus will expand its scope to include small island state participants to increase the quantity and quality of their agricultural exports, stated New South Wales' Agriculture Minister David Littleproud.
According to the agreement, tariffs in the eight regional developing country signatories must fall to zero by 25 years after 2017, the date of entry into force of the agreement, with most tariff reductions taking place in the first 10 years.
Australia and New Zealand will provide an Aid for Trade funding target for the Pacific of 40 per cent of Pacific Official Development Assistance. In addition to that Australia will will provide A$19 million in total to fund the management and delivery of a development and economic cooperation work program aimed at helping the islands benefit more from trade. New Zealand will provide NZ$7 million.
In 2019 and 2020 Australia exported $14.6 million in chicken meat, $11.6m in lamb and $7.4 million in wheat to Pacific Island Countries.