Dr Ben Thirkell-White (International Relations & Politics at Victoria University of Wellington) examines PACER-Plus, the free trade agreement currently being negotiated between the nations of the Pacific. See http://www.dosomething.org.nz/ for more info

1. Trade and Development in the Pacific (A very brief primer) Ben Thirkell-White Victoria University of Wellington

2. Trade and development 1 You can have growth with no poverty reduction But it’s very hard to have poverty reduction with no growth Growth comes from doing things more efficiently One way is to specialise in what you are best at ‘Development’ is then built on more complete specialisation Trade allows us to specialise worldwide Do what you’re relatively best at Trade for everything else

3. Trade and development 2 ‘Not trading’ is generally about making it hard or expensive for foreigners to sell you stuff Tariff barriers – tax on goods at a border Non-tariff barriers – ban goods, usually for health and safety reasons Freer trade takes away those barriers, so consumers can by the cheapest and best worldwide Consumers may stop buying local produce, putting local firms out of business But that’s OK because workers will find something else to do (and/or wage rates will adjust to reflect domestic productivity) and that will be something more efficient

4. Is the Pacific different? So, trade helps you to move everyone into the most productive sector (the one that gets you most international stuff per hour worked) And it makes products (and services) cheaper What’s not to like? What if the resources in the businesses that go bust aren’t ‘redeployed more efficiently’? Not enough ‘entrepreneurs’ Very small market so hard to create new business Weak infrastructure Capital flight, migration What about the tax revenues from tariffs (Tax at border) What about distributional questions – rich/poor, gender etc.

5. Historical ‘unequal’ trade agreements EUROPE PACIFIC AUS and NZ LOMÉ CONVENTION SPARTECA

6. New arrangements EUROPE PACIFIC PICTA AUS and NZ EPAs (economic partnership agreements) PACER PLUS

7. More than trade? Trade in services Mode 3 – establishing businesses to deliver services (especially finance and education) Could make it easier to get useful services like telecomms , financial services, transport Potentially controversial as may create legal right to challenge regulations as discriminatory or unnecessary May put domestic firms out of business Mode 4 – movement of labour

8. What has worked in the Pacific? MIRAB – migration-remittances and aid-bureaucracy Tourism – SITES PROFIT – People management, Resource management (eg fisheries), Overseas engagement / paranationalism (fishing quotas, stamps, offshore companies), Finance, Transportation For more information on Pacific development, see http://www.geoffbertram.com