A Fiji economist says the trade agreement, the Pacific Agreement on Closer Economic Relations, or PACER, will see major political fallout for Pacific Island governments.
Professor Wadan Narsey says PACER will allow Australia and New Zealand to increase their exports to the Island countries.
And he is concerned that Island governments aren't prepared for likely job losses and budget cuts.
"Once they lose their jobs you can be sure they will be jumping up and down and this can have very serious political fall out on Governments, so Governments will be quite frightened of proceeding with this policy - I don't think any of the Governments in the Pacific are preparing"
Professor Waden Narsey , the director of employment and market studies at the University of the South Pacific.
He was commenting during a conference on the 'Political Economy of Small Islands in the 21st Century' held in Wellington this week.
