Pacific Beat, ABC Radio Australia

  • Transcript, E&OE
Subjects: Pacific Agreement on Closer Economic Relations (PACER) Plus.
31 August 2016

STEVEN CIOBO: It is a terrific step forward. I was really pleased to join together with New Zealand's Trade Minister, Todd McClay and a number of other trade ministers to finally bed down the last few areas of the PACER Plus text. Obviously we're still waiting on some countries, offers to be made with respect to goods markets but look, bedding the text down is a big step forward.

JEMIMA GARRETT: You say that PACER Plus will reshape the economic fundamentals of the region, and that's just what NGO critics have been concerned about - that their economies will be swamped by Australian products; that their government's room to move on policy will be curtailed. Particularly in areas like health and food security. Don't they have a point?

STEVEN CIOBO: No, they don't have a point at all. In fact those fears are completely and totally unfounded and also unsubstantiated. What's more, they actually also fly directly in the face of the stated comments from Australia, from New Zealand, and indeed from those of us who've been negotiating this agreement for some time. The fact is that Australia and New Zealand are invested in making sure that across the Pacific we're able to get countries in a stronger position. There's obviously a high level of disparity between the economies of for example, PNG in Fiji verses other economies such as Cerebos or Niue or Palau. So with that divergence in terms of the economic shape of each country, we've made sure that we built into the agreement an understanding and appreciation of that economic divergence. But most importantly, what PACER Plus does is provide the pathways for these economies to come together and to get access to global export markets. That's the real pathway, the real opportunity that lays at the core of PACER Plus.

JEMIMA GARRETT: The Pacific already has duty free access to Australia and New Zealand under the SPARTECA agreement. How does PACER Plus help with the rest of the world when it's an agreement with Australia and New Zealand? Why do they need it if they already have the duty free access under SPARTECA?

STEVEN CIOBO: Because we want to make sure that these Pacific Island countries have the opportunity to trade not only with Australia but through Australia. We want to make sure as well that Australia's in a position to provide industry assistance and support to help broaden and deepen the economies of Pacific Island countries. We can do that a number of ways - knowledge sharing; making sure that countries are better placed with respect to diversifying their economic base as well as building capacity in particular export areas will also be a key part of the future for them if they continue to reap these opportunities and they're in a stronger position to make sure they can continue to invest in the labour force, to build capacity in the labour force and to drive those export sales.

JEMIMA GARRETT: So which sectors do you see PACER Plus creating new jobs in the Pacific?

STEVEN CIOBO: LookI think it will vary from country to country. Clearly one of the key areas where we can see opportunity is in relation to services exports – in other words tourism. We know for example that The Cook Islands and Fiji are two powerhouse economies when it comes to – to give you two examples of economies - when it comes to the tourism industry. But obviously it's much broader than that. There's also a particular opportunities with respect to for example, fish and the opportunities to, in a sustainable way exploit the vast reserves of the fisheries that exist throughout the Pacific. But there's also opportunities around root crops as well as, over time, opportunities to identify for particular economies how they might be part of a global supply chain. How they can play a role with for example respect to manufacturing. They could actually be building a component of a supply chain which has of course a global market.

JEMIMA GARRETT: Market access negotiations are not complete as you said. What is Australia looking for in these?

STEVEN CIOBO: Well we'd like them to be as comprehensive as possible. Bear in mind that we have got a very graduated approach under PACER Plus. Those economies that face the most significant developmental challenges have a much longer period to deal with those issues. Let's also be frank. You are not going to build an industry off the back of tariff protections. Tariff protections are only one small part of industry development. So what we want to do is make sure that as economies continue to mature, they're able to over time, draw upon finance, knowledge, skills, market access that's available from Australia and other countries that are part of PACER Plus, to really make sure that those industries mature and provide the job opportunities for the future.

JEMIMA GARRETT: On another issue, in Papua New Guinea we're seeing government policy threatening to wipe out the $360 million a year rice business owned by Australia's SunRice. This affects a big proportion of Australia's rice exports and a lot of jobs in Papua New Guinea. What's your message to Prime Minister Peter O'Neill on this?

STEVEN CIOBO: Well Australia of course wants to work closely with PNG. We have a good relationship. We think that that relationship works in the best interests of both countries. I've seen mixed reports with respect to potentially what PNG might be doing in relation to rice. I'm not going to go off half-cocked. I'm not going to go off with a kneejerk reaction. Instead I want to make sure that we're fully apprised of exactly what it is that PNG is doing and make an informed decision off the back of that.

JEMIMA GARRETT: PNG's Trade Minister Richard Maru has said that the policy is in breach of the World Trade Organization rules and the PNG Australia Investment Protection agreement. What's Australia doing about this?

STEVEN CIOBO: As I said there's not been any formal announcement so I'm not going to go off half-cocked. I'll wait until we have the full information and make a decision in accordance with that.

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