Fair deals a Pacific pipedream

21/08/2008

Labour mobility may be in the headlines but as Kevin Rudd talks the talk at the Pacific Islander Leaders' forum in Nuie, he'll have one thing on his mind; trade.

Allowing Pacific workers to plug the holes in Australia's labour market is certainly a priority for Australia's farmers. But the real gain for Rudd lies in the bargaining power the scheme will give Simon Crean as he moves into the second phase of the Pacific Economic Cooperation Agreement negotiations, the free trade agreement Australia and New Zealand are negotiating with the Pacific countries.

At $5 billion, annual trade with the Pacific is relatively small from Australia's perspective. But for most Pacific countries, Australia remains their largest trading partner. Its dominance in the Pacific, however, is increasingly under threat from Asia's emerging economies and most recently by the European Union's efforts to establish an economic partnership agreement in the Pacific.

In an area traditionally considered Australia's ''backyard'', this has caused some concern and made the agreement a key priority for the Rudd Government.

The Pacific countries, however, are wary of the agreement, and with good reason. Reducing tariffs will make it difficult for local producers to compete alongside Australian imports, especially on products such as textiles, clothing and footwear...

Using such a scheme to pressure the Pacific countries into a free trade agreement opposed to their interests is only likely to increase resentment in the region.