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SUVA, Fiji Islands (June 2, 1999 -PACNEWS)---Trade Ministers from the 16-member South Pacific Forum have endorsed, in principle, a Free Trade Area (FTA) between Forum Island Countries (FIC) in the region and have agreed to hold further negotiations over the details of a draft framework agreement.

The Ministerial endorsement of the FIC free trade area and other outcomes of Forum Trade Ministers Meeting will be considered by Forum Leaders when they meet in October in Koror, Palau.

Forum trade officials have been tasked to negotiate the details of the draft agreement, including negative lists and measures to provide for application to Australia and New Zealand in appropriate ways.

The officials are to have a proposed draft agreement ready for the consideration of Trade Ministers and subsequently by Forum Leaders at the 2000 Forum meeting.

Gradual implementation of the FTA is expected to start in 2001 with tariffs between FIC’s being eliminated over a number of years.

The South Pacific Forum Secretariat is to undertake further studies on the effects of possibly extending the FTA to French and U.S. Pacific Island territories.

The study will examine the effects of extending the agreement to services trade, long term integration of the FTA into the Closer Economic Relations agreement between Australia and New Zealand.

Furthermore they will examine the market access issues between Forum island countries and the United States and Japan, social impacts of the free trade agreement and trade facilitation measures.

Trade Ministers recognized the pioneering work undertaken by the Melanesian Spearhead Group countries through the MSG Trade Agreement and Bilateral Agreements.

At the same time, the Ministers also agreed that there was a need to enhance further the prospects of liberalization and regional integration through a wider and more inclusive regional trading arrangement.

The concept of a FTA or economic union dates back to the formation of the Forum and the establishment of the South Pacific Bureau of Economic Co-operation (SPEC) in 1973 and was recognized in the Forum Agreement in 1991.

The most recent mandate arose out of the Forum Economic Ministers Meeting ‘98 Action Plan where the Forum Secretariat was requested to further develop a framework for achieving a free trade agreement among Forum members.

The Secretariat will look at the benefits to be attained by preferential and non-preferential approaches, taking into account the need for WTO consistency, and the differing speeds at which the FICs may be able to proceed with preferential and non-preferential liberalization.

The Trade Ministerial meeting recognized that there had been rapid and fundamental changes in the global aid and trade regimes. These were reflected in the decline in real value of aid, the loss of trade preferences, and in the pressure from the World Trade Organization and external trade partners towards trade liberalization.

To help prepare for the next round of WTO-sponsored multilateral trade negotiations, the Ministers agreed to recommend to the Forum that a Forum delegation be established in Geneva. Forum trade officials that are members or observers of the WTO would serve as a permanent working group to develop common positions on the up-coming Millennium Round negotiations.

The Ministers endorsed a review of all measures having an impact on trade facilitation together with an investigation into the constraints associated with trade liberalization and facilitation issues.

Forum trade officials would consider the findings of the proposed review and report back to the next Forum Trade or Economic Ministers meeting. The Ministers expressed their appreciation to Australia for the offer of assistance in carrying out the review.

The Forum Trade Ministers recognized that many of the Forum members are already undertaking major reforms to address these challenges and several are now engaged in the process of voluntary trade liberalization.

This is being supported at the regional level through the Forum Economic Ministers Action Plan on trade and investment issues.



SUVA, Fiji Islands (June 2, 1999 - PACNEWS)---The Secretary General of the South Pacific Forum Secretariat, Noel Levi, says the endorsement in principle of a Free Trade Area (FTA) among Forum Island Countries (FIC) should not be interpreted as willingness on the part of FICs to enter a deal with its external trade partners right away.

"The concept of the FIC FTA is to provide FICs with the time and opportunity to create a common market first, and to use this as a basis for negotiating any trade agreement with external partners," Levi said.

The FTA concept was endorsed in principle by Forum Trade Ministers on Tuesday, June 1.

Levi made the comments while addressing a workshop on the Post-Lome Trade arrangements at the Forum Secretariat in the Fiji capital, Suva. The workshop is for officials of the eight Pacific states in the African, Caribbean and Pacific (ACP) group; Fiji, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. These countries benefit from a special aid and trade relationship with the European Union under the Lome Convention.

"An FIC/ FTA could provide the basis or "template" for negotiating trade agreements with other external trade partners including the EU. It signals our (Pacific) region's willingness to consider new measures for dealing with globalization and trade liberalization, through regional integration," said Levi.

The Post-Lome Trade Workshop is designed to help the Pacific ACP Trade Ministers reach an agreement in relation to the trade proposal made by the EU for Regional Economic Partnership Agreements (REPA) with the ACP group.

The outcome of the officials’ meeting will be considered by Pacific ACP Trade Ministers on Thursday for endorsement as a regional position.

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