12 Jul 2002

Free trade agreement with the European Union too costly for Pacific countries

5:05 pm on 12 July 2002

The Deputy Secretary for the Pacific Islands Forum Secretariat says any free trade agreement with the European Union will be too costly for Pacific island nations.

Iosefa Maiava says Pacific forum countries which form free trade agreements with the EU will have to do the same with New Zealand and Australia, as will Micronesian countries with the US.

He says this is an obligation under the Pacific Agreement on Closer Economic Relations or Pacer.

Currently a multilateral trade agreement to expand EU trade in regions such as the Pacific is being negotiated in Geneva

Mr Maiava says free trade agreements with the EU could cost the Pacific millions of dollars.

"Agreements with Australia and New Zealand and the United States carry much heavier adjustment costs for the Pacific Island countries because most of the imports come from Australia New Zealand or the United States, which means the tariffs on those imports will have to be removed,...we are talking about up to 50 percent/60 percent of tax revenues foregone, ...we are talking essentially about roughly two hundred million dollars a years"

Iosefa Maiava.

Representatives from the EU, Austalia, New Zealand and other Pacific Island Forum countries are in Auckland this weekend to discuss the EU's trade role in the region.