South Pacific Free Trade Area Planned

  • John Luxton
International Trade

Moves to free up trade in the South Pacific took a major step forward at a meeting of the South Pacific Forum Trade Ministers in Suva earlier this week, Associate Minister for International Trade, Hon John Luxton said today.

At the one day meeting, the Trade Ministers agreed to recommend to Heads of Government their endorsement in principle to establish a Free Trade Area in the Pacific. The Trade Ministers have tasked officials with proposing a draft agreement. Forum officials are expected to begin this work immediately after the meeting of Forum Economic Ministers in October and to have it completed in time for the 2000 Forum meeting.

Mr Luxton emphasised that New Zealand's position was to be guided by the wishes of the region and support the consensus view. He was however able to point to New Zealand's experience of reducing tariffs and liberalising trade.

"I am pleased the Forum countries took this step which I believe will play a major role in enhancing the prosperity of the region over the coming years," Mr Luxton said.

"Critics who observe that there is little scope for trade between countries with similar economies should note the success of the Australian and New Zealand Closer Economic Relations Trade Agreement (CER) which faced the same criticisms two decades ago. Trade between those two countries has blossomed since then and is responsible for wealth and job creation in both countries.

Mr Luxton acknowledged any Agreement must deal with potential short term transition costs as well as finding an alternative revenue source to replace the trade distorting tariffs. Mr Luxton said this would be part of the agenda when Economic Ministers meet in October later this year.

Other key highlights of yesterday's meeting include Trade Ministers' support for the establishment of a Forum representation at the WTO in Geneva and the creation of a permanent working group to develop common positions for the up-coming round of multilateral trade negotiations.