The perceived disparity in advantages between Australia/New Zealand and the smaller Pacific Island countries is a major source of contention. The two developed economies, which already control the majority of regional trade, are disproportionately favored by the agreement, according to critics. For example, Pacific Island nations must remove tariffs on the majority of imports from Australia and New Zealand, but they are still allowed to keep some protections for their agricultural industries. This disparity prompts worries about the possible oversupply of low-cost imported goods in Pacific markets, which could threaten regional sectors like manufacturing and agriculture.

The largest economies in the Pacific, Fiji and PNG, are not included, which lessens the agreement’s overall effect. Both countries have voiced their doubts about PACER Plus; Fiji’s Prime Minister Frank Bainimarama has said that the agreement “lacks fairness” and does not address the structural disadvantages that smaller island states face. In contrast, PNG has made its bilateral trade agreements—including a new one with China—a priority. Their lack of involvement restricts the agreement’s efficacy and scope.

Although PACER Plus contains provisions about trade in goods, it does not adequately address labor mobility and services, which are crucial issues for Pacific Islanders. Remittances from employees overseas, especially in Australia and New Zealand, are a major source of income for many PICs. Nevertheless, the agreement does not significantly improve Pacific Islanders’ access to work opportunities or relax visa requirements. PACER Plus has been accused of putting corporate interests ahead of human development as a result of this omission.

Tariffs account for a sizable amount of government revenue for many Pacific countries. Public finances may be strained if these tariffs are removed under PACER Plus, especially in nations with small tax bases. Despite the agreement’s development assistance provisions, some doubt if they will be enough to make up for lost revenue.

China’s growing economic and strategic influence in the Pacific is one of the main drivers behind Australia and New Zealand’s support for PACER Plus. China has greatly increased its infrastructure investments, aid, and trade throughout Oceania in the last ten years, especially in nations like the Solomon Islands, Fiji, and Papua New Guinea. China has provided funding for vital infrastructure projects, including ports, roads, and telecommunications networks, through programs like the Belt and Road Initiative (BRI), frequently with less stringent terms than loans backed by the West. Canberra and Wellington are now worried about Beijing’s ability to use economic connections to gain geopolitical clout. In this regard, PACER Plus is viewed as a means of strengthening established ties and guaranteeing that Australia and New Zealand continue to be the nations of choice for Pacific Island countries. Fiji and PNG’s unwillingness to sign the deal, however, indicates that some Pacific leaders are hesitant to align themselves too closely with Western-dominated frameworks, particularly when other partnerships provide instant financial advantages.

Even though the Pacific is one of the areas most at risk from climate change, PACER Plus’s scant attention to environmental sustainability is a significant flaw. Low-lying atoll countries like Kiribati and Tuvalu are in danger of extinction due to rising sea levels, more powerful cyclones, and ocean acidification. Although the agreement contains broad guidelines for collaboration, it makes no legally enforceable promises to promote climate adaptation or green trade. For example, even though sustainable fisheries management and the trade of renewable energy are essential to many Pacific economies, there are no particular incentives for these sectors. Critics contend that island nations are left to deal with environmental crises without strong economic protections because PACER Plus represents a lost chance to incorporate climate resilience into regional trade policy.

One of the PACER Plus signatories, Samoa, provides a useful case study of the agreement’s conflicting possibilities. On the one hand, the nation has tried to use the agreement to increase exports of specialized goods to markets in Australia and New Zealand, such as noni juice and organic coconut oil. According to preliminary reports, market access has improved somewhat, especially for small and medium-sized businesses (SMEs). However, Samoa has trouble adhering to strict sanitary and phytosanitary (SPS) regulations, which necessitate expensive improvements to production facilities. Although progress has been sluggish, the government has relied on PACER Plus’s development assistance provisions to finance some of these improvements. Additionally, local farmers are concerned about undermining domestic food security by competing with subsidized agricultural imports from Australia. Samoa’s experience demonstrates PACER Plus’s advantages and disadvantages for smaller economies.

Civil society organizations have organized against PACER Plus throughout the Pacific, claiming that it was negotiated with insufficient openness and public input. The agreement has drawn criticism from groups like the Pacific Network on Globalization (PANG) for putting corporate interests ahead of the needs of regular people. Because PACER Plus limits governments’ ability to enact protective measures for local industries, activists in Tonga and Vanuatu have expressed concern about the loss of policy space. Women’s organizations have also noted that, despite women’s crucial role in informal and subsistence economies, the agreement does little to address gender disparities in trade. A larger conflict between top-down trade liberalization and the socioeconomic realities of Pacific communities is highlighted by this grassroots opposition.

Significant changes might be required if PACER Plus is to meet its stated objectives. Renegotiating specific provisions to give Pacific Island countries more latitude in safeguarding emerging industries is one possible course of action. Another is adding direct budgetary support to the agreement’s framework for development assistance, which will assist governments in making up for lost tariff revenue. Furthermore, the agreement might be more acceptable to detractors if it included more robust labor mobility clauses, like seasonal worker quotas or expedited visa procedures. The ability of PACER Plus to transform from an instrument of economic liberalization into a true collaboration for equitable development will ultimately determine its success. The lessons learned from this agreement will have a significant impact outside of Oceania as the Pacific region continues to negotiate a quickly evolving global trade environment.

Beyond its effects on the economy, PACER Plus poses significant queries regarding the preservation of culture in the face of trade liberalization. Cheap imports, such as processed foods from New Zealand and dairy products from Australia, pose a threat to local markets and traditional subsistence economies. Small-scale farmers in Solomon Islands and Vanuatu, for instance, are concerned that imports on a large scale may undermine food sovereignty and lessen the cultural value of traditional crops like yam and taro. Furthermore, by giving preference to Western corporate patents over models of collective ownership, the agreement’s intellectual property provisions—which are in line with international standards—may unintentionally disadvantage indigenous knowledge holders. Policymakers must fill the gap left by PACER Plus’s lack of protection for Pacific communities’ intangible cultural heritage through complementary cultural protection measures, even though trade can have positive economic effects.

Some Pacific countries are looking into alternative trade frameworks as a result of PACER Plus’s limitations. A more regionally oriented model of economic integration is provided by the Pacific Island Countries Trade Agreement (PICTA), which does not include Australia and New Zealand. Smaller island economies are better suited to PICTA’s focus on solidarity and gradual tariff reductions. In the meantime, the Melanesian Spearhead Group (MSG), which consists of Vanuatu, Fiji, Papua New Guinea, and the Solomon Islands, has advanced its trade agreement (MSGTA) with more robust labor mobility provisions and less stringent regulatory requirements. These options show that some Pacific countries are increasingly choosing intra-regional cooperation that puts developmental equity ahead of quick liberalization. The fact that these frameworks coexist with PACER Plus highlights how disjointed Oceania’s trade governance is and how more unified policy coordination is required.

To make sure that trade agreements like PACER Plus meet the needs of the general public, Pacific civil society organizations’ (CSOs’) opinions will be essential going forward. Advocates for more equitable trade conditions, openness in negotiations, and inclusive stakeholder consultations have been greatly aided by organizations like the Pacific Islands Association of Non-Governmental Organizations (PIANGO). Concerns that are frequently ignored in high-level negotiations, like environmental justice, gender equity in trade, and the rights of workers in the unorganized sector, have been brought to light by their campaigns. CSOs can exert pressure on governments and regional organizations to embrace a more people-centered approach to trade policy by promoting these viewpoints. The willingness of policymakers to have sincere discussions with the communities most impacted by their decisions will determine the future of PACER Plus and other agreements of a similar nature.

PACER Plus loses a significant chance to promote e-commerce and digital trade in Oceania in a world economy that is becoming more and more digital. Many Pacific Island countries find it difficult to engage in the digital economy due to inadequate cybersecurity frameworks, expensive internet, and underdeveloped digital infrastructure. The agreement does not specifically address obstacles to digital trade, such as limitations on cross-border data flow or the absence of unified e-commerce regulations, despite having general provisions on trade facilitation. Access to regional digital platforms may create new export opportunities for small businesses in the Pacific, especially those involved in agriculture, tourism services, and handicrafts. In order to empower Pacific entrepreneurs and lessen the region’s economic isolation, a future version of PACER Plus might include pledges to increase broadband connectivity, encourage fintech innovation, and lower digital trade barriers.

The success of PACER Plus, a daring attempt to transform Oceania’s economy, depends on resolving the justifiable worries of all parties involved. Australia and New Zealand must make sure that labor mobility provisions are increased, development assistance is significant and precisely targeted, and measures are put in place to protect Pacific industries that are at risk if they want the agreement to be truly transformative. Furthermore, Fiji and PNG’s exclusion highlights the necessity of a more inclusive approach to regional trade governance.

PACER Plus will continue to be an important case study in the interaction of trade liberalization, economic sovereignty, and sustainable development as Oceania negotiates the challenges of globalization. Its signatories’ dedication to inclusive and equitable growth will determine whether it ultimately acts as a spur for prosperity or a cause of even greater inequality.

By Luwei Zhu