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Trading preferences and protection - is it good for Pacific Island countries?

Gounder, Neelesh N. and Prasad, Biman C. (2012) Trading preferences and protection - is it good for Pacific Island countries? The Journal of Pacific Studies, 32 . pp. 57-64. ISSN 1011-3029

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The trade policy agenda in Pacific Island Countries (PICs) has certainly become crowded, as the cast of players involved in regional trade politics and negotiations has become larger. In fact it is commonplace around the world that players such as commercial firms, non-governmental organisations (NGOs) and international bodies like the World Trade Organization (WTO) are becoming actively involved in trade negotiations at the regional level. Consequently apart from the state, other voices are exerting attention-grabbing influence in the conduct of regional trade politics. While firms have always played an important role, the rise of NGOs proclaiming that they are acting in the interests of society presents an additional challenge in the move towards a more liberal trading system. The demonstrations by NGOs at the WTO Ministerial Conferences in Singapore (1996), Geneva (1998) and the US (1999) are well known. It is also well known that such huge interest from NGOs led the then Director-General of WTO, Renato Ruggiero, to announce an enhanced plan for cooperation with NGOs (WTO, 1998). Penjueli and Morgan (2010) argue that a regional trade agreement of PICs such as the Pacific Agreement on Closer Economic Relations (PACER) Plus would not meet the needs of the PICs and that such an agreement would displace ‘. . . domestic production and imports from other countries and [add] further to the considerable trade imbalances [of] many Pacific countries’ (p. 219). The authors of this article represent the Pacific Network on Globalisation (PANG), a Suva based NGO. The article is in fact a response to an earlier article by Kaufmann (2009) justifying the benefits to PICs of signing PACER Plus with Australia and New Zealand. The crux of the argument by Penjueli and Morgan (2010) rests on the basic idea that a preferential trade agreement (PTA) like PACER Plus would not meet the needs of the PICs. In this paper we argue that the lines of reasoning both Kaufmann (2009) and Penjueli and Morgan (2010) have used are flawed. The paper disagrees with Kaufmann (2009) that an agreement with Australia and New Zealand will bring maximum benefits to PICs and questions the basic issue raised by Penjueli and Morgan (2010) and PANG. From the publications of PANG it is unclear whether it supports unilateral trade liberalisation, although its opposition to a regional trade agreement among PICs and Australia and New Zealand is obvious. While we agree with the opposition to such a trade agreement, the reasons PANG argues cannot go unchallenged. Such reasons could prove to be seriously detrimental if carried over to challenge unilateral liberalisation, which seems most likely to be the case for opponents of free trade. Most of the arguments raised by PANG wrap themselves up in the language of job preservation, national sovereignty and infant industries. It seems that PANG and law professor Jane Kelsey, the key author of its various reports (2004a and 2004b) ignore the logic of the economic case for free trade and as a consequence, end up revealing the old and now discarded mercantilist rules.

Item Type: Journal Article
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Business and Economics (FBE) > School of Economics
Depositing User: Generic Account
Date Deposited: 17 May 2013 02:37
Last Modified: 25 Jul 2016 03:27

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