A COLUMN WRITTEN BY KALIOPATE TAVOLA, PUBLISHED IN ISLANDS BUSINESS, JUNE 2021

The Pacific Island Countries Trade Agreement (PICTA), which had acquired the required ratification by signatory Pacific Island Countries (PICs), came into force in 2003. However, some 18 years later, the Free Trade Agreement (FTA) is only being implemented by half (seven PICs) of its membership. Clearly, the FTA’s impact on the desired regional economic integration can only be perceived as rudimentary, if any at all. Moreover, its raison d´ȇtre, as an entry point to the eventual formation of an economic union, envisaged by the foundational regional leaders way back in 1971, is really nothing to write home about.

However, the prospects may be changing for the better. The European Development Fund (EDF), disbursed under the ACP-EU Cotonou Agreement, potentially has the means to turn the situation around – to bring about the much-needed regional economic integration amongst all the PICs. This will then strengthen the basis of extra-PICs trade and economic integration with Australia and New Zealand (ANZ) under the PACER Plus FTA, and similarly with the EU under the interim Economic Partnership Agreement (iEPA) as well as with the comprehensive EPA when that comes into effect in the future.

During the process of developing regional economic integration, regional planners can then, with benefit of gainful foresight, put in place a policy framework that will guide the region to the eventual realization of this long-standing objective of an economic union. The policy framework should identify the various integrational phases that PICs have to necessarily undergo – their implications on PICs’ indispensable sovereignty, and what all this will mean in the structural edifice of Pacific regionalism.

The EU’s Pacific Regional Integration Support Programme (PRISE) under the existing EDF tranche has a component earmarked for ‘Strengthening Pacific Intra-Regional and International Trade Project’ (SPIRIT). It specifically aims to boost and increase intra-regional and international trade by strengthening institutional and human capacity in the region. Further, it aims to facilitate the implementation of trade agreements and contribute to the development of a statistical monitoring framework for regional economic integration.

Given the sad state of PICTA and considering the immense benefit it could accrue for regional economic integration, this article proposes that part of the resources under SPIRIT be disbursed to enable full and effective implementation of the trade agreement.

With only seven of the PICs implementing the agreement, it can be assumed that the other seven members would be at different phases of the agreement’s ratification process. It is general knowledge that some PICs, especially the Smaller Island States (SIS), lack the technical capacity, for example, legal, to ensure that ratification of trade agreements is done properly and on time. As such, it is proposed that technical assistance (TA) be offered by the Pacific Islands Forum Secretariat (PIFS) under SPIRIT to ensure complete ratification of PICTA. That will then ensure implementation of the agreement by all signatory members.

Should TA be required for the completion of the enlargement of PICTA to include a Trade in Services Agreement (TSA) to supplement its Trade in Goods Agreement (TGA), it is suggested that this be done also.

Once PICTA is being implemented by all members and intra-PIC trade has picked up, it can then be envisaged that relevant activities to foster regional integration could be funded from other sources, for example, the Pacific Aid for Trade Strategy 2020-2025 or from Trade Facilitation provisions of the World Trade Organization (WTO). The majority of the PICTA members are also signatories of PACER Plus. Any resultant regional integration from PICTA will certainly benefit the latter; and that will justify and facilitate disbursement of additional resources under that agreement.

PICTA is a means to an end. We see from above that this FTA is a means to building extra-PICs trade and economic integration with ANZ. Further, it is also a means to building and strengthening extra-PICs trade with the EU. Prospects of facilitation of other multilateral trade – existing and new ones, cannot be ruled out.

For the PICs specifically, however, PICTA is a means to their economic development and growth towards an economic union.  PICTA is just a start.

This intended regional economic union has been 50 years in the making. And the PICs are just starting to get off the starting block.  Such a sad state of affairs reflects, inter alia, the challenges and the constraints that PICs constantly face in their collective effort to integrate into the world economy. With this in mind, it is further suggested that TA be funded under SPIRIT to map out a clear pathway to achieving an economic union specific to the needs of the PICs.

Conventionally, there is a pathway from free trade area, a customs union, a common market to an economic union. The TA, apart from being clear, can also be prescriptive as to what each phase requires – both at the national and at regional levels.

Furthermore, when all these phases are being framed and contextualized in Pacific regionalism/Pacific Islands Forum (PIF), the TA needs to prescribe the changes essential for PIF. This is particularly significant as regards its legal framework.

We have seen from Greg Fry’s book: ‘Framing the Islands’, 2019, that Pacific regionalism, since 1971, has operated as what is popularly referred to as voluntary. The power needed at the regional level to make decisions has not been delegated to it from the States, members of the Forum. The Forum has been unable therefore to pursue what can be termed as the classical pathway of regionalism – through greater regional (and economic) integration, similar to that of the EU.

Pacific regionalism has however pursued what I have referred to in an earlier article as a non-classical pathway. Fry was more clinical in his book. Regional leaders, he inferred, have seen that through this non-classical approach, they were still able to secure ‘political significance’ in their collective activities. Thus, they were able to sustain their own brand of regionalism during the last half century.

 But, going forward, with our intended greater regional economic integration, with each integrational phase growing in terms of complexity and intensity, such a non-classical approach is more likely to be deficient. Whilst we can learn from the European experience, Pacific regionalism however is not going the full measure as regards the European regional integration pathway. We are only going part of the way to attaining an economic union.

The TA however needs to spell out specifically PIF’s sovereignty issue to enable it to carry out its regional economic integration. How is that sovereignty linked to the power of the States which comprise the Forum? How can the States be incentivized to transfer that power? How can that power be derogated to the Forum? How can the Forum sustain and configure that power in a way that does not send alarm bells to the members?

After half of a decade of existence, Pacific regionalism needs to re-orient itself. It needs to generate greater benefits for its members. It needs to be meaningful – more so than what it has been to date. It needs to seek ways and means of applying regional leaders’ momentous ideas.  Past regional leaders have had the foresight. Today’s regional leaders, planners and practitioners just need the gumption.

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© Kaliopate Tavola and kaidravuni.com, 2025. Excerpts and links may be used, provided that full and clear credit is given to Kaliopate Tavola, kaidravuni.com and Islands Business with appropriate and specific direction to the original content.