FORUM TRADE MINISTERS MEETING

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PACIFIC ISLANDS FORUM SECRETARIAT Suva, Fiji Islands

Opening Statement by

Mr. W. Noel Levi, CBE Secretary General, Pacific Islands Forum Secretariat

Apia, Samoa June 27, 2001

1. Honourable Prime Minister, Honourable Ministers, Your Excellencies, Stake President Solovi Lueli Teo, Trade Officials, Resource Persons, Colleagues.

I am pleased to welcome you all to Apia, to this Second Forum Trade Ministers Meeting. I wish to thank the Government of Samoa for hosting this meeting and the courtesies and hospitality they have extended to all of us since our arrival. This meeting again underscores the growing recognition of the importance of trade within our region and indeed, the region’s trade relations with the rest of the world.

2. The Pacific Islands Forum represents some of the smallest, remotest and most vulnerable economies in the global trading system. This does not mean that we ignore and hide from the forces of globalisation. We must in fact ensure that the gains from it are maximised to make more substantial contribution to enhancing regional and global governance.

3. It is a reality that globalisation demands the establishment of more integrated regulatory mechanisms to govern the global flows of goods services, capital and so forth. A new global agenda is no longer defined as simply mutual liberalisation of trade and investment but as harmonisation and possibly coordination of economic policies and domestic laws or regulatory systems and institutions governing economic activities.

4. In the context of our region’s contribution to enhancing regional and global trading and economic governance, you as Ministers responsible for Trade matters made the choice some two years ago for the Pacific Islands Forum Countries to integrate regionally so that our region will in the long term be able to interact meaningfully with the major world economies and the global trading system. The decisions on a range of trade issues and the choice you made for the region to negotiate a free trade agreement among member countries were endorsed by our Leaders at the 1999 Palau Forum meeting.

5. I would like to therefore recall some of the important decisions that were taken by our Leaders based on your recommendations. These are:

Forum Free Trade Area

At the 1999 Forum in Palau Leaders

"endorsed in principle the establishment of a Forum free trade area noting that this will be implemented in stages up to 2009 for developing island countries and 2011 for small island states and LDCs". Leaders further "tasked the officials to negotiate the details of the draft Agreement, including negative lists and measures to provide for the application of the arrangements to Australia and New Zealand."

6. The Forum Trade Officials since then have been involved in negotiating two agreements. The first of these is the Free Trade Area Agreement amongst the Forum Island Countries (FIC-FTA). The second, on Umbrella Arrangement amongst all Forum members, which provides for the application of the proposed FIC-FTA trade arrangements to Australia and New Zealand.

7. The Umbrella Agreement, which is an Economic Cooperation Agreement amongst all Forum members, is an overarching Agreement setting out the Forum region’s vision on future trade and economic relations while the FIC-FTA is a trade Agreement under this overarching Economic Cooperation Agreement. The Umbrella Agreement also allows for the future integration of the Forum Island Countries with Australia and New Zealand. It also allows for cooperation in a number of trade related areas, such as trade facilitation, which will serve to improve the capacity of the Forum Island Countries in achieving the gains from its Free Trade Area Agreement and in preparing them for future liberalisation.

8. Honourable Ministers, the Umbrella Agreement emerged after officials considered a number of options that included a protocol approach, a party’s principal approach and a voluntary MFN liberalisation approach all of which did not meet the satisfaction of all members. The Umbrella Agreement you will note has been the outcome of difficult negotiations to provide a solution that is acceptable to all members of the Forum.

9. On the free trade area amongst the Forum Island Countries, the draft Agreement negotiated by Forum Island Country Trade Officials is based on the draft legal text that was the basis of the FTMM and Leaders’ endorsement in 1999. In recognition of the differences in the development status amongst the Forum Island Countries the FIC-FTA draft Agreement provides for the creation of a free trade area within the region. Full integration and adjustments for the more developed member economies is to take place over 8 years and 10 years for the small island economies and LDCs. The Agreement also provides for the protection of sensitive industries through a negative list, which allows member countries to protect domestic industries from full competition within a slightly longer timeframe.

10. The implementation of the FIC-FTA will need to be accompanied by strategies that mitigate against adverse impacts. A number of countries particularly the small island states and LDCs will be assisted with the implementation of alternative taxation systems and other economic reform measures to compensate for revenue loss from tariff reductions.

11. At this juncture, I must commend the Trade Officials for their hard work and dedication over the past two years. In less than a year they have not only been able to finalise a legal text for the FIC-FTA to start integrating Forum Island Countries amongst themselves but have also come up with this novel and exciting concept of an Umbrella Agreement which allows for possible future integration between the Forum Island Countries and Australia and New Zealand. I wish to also thank Australia and New Zealand for their understanding and support for the Forum Island Countries’ desire to liberalise amongst themselves first based on a ‘stepping stone’ approach.

12. I commend the draft Agreements to Honourable Ministers. Your endorsement of the two legal texts at this meeting will be an important landmark decision for the region.

WTO Issues

13. At this meeting, Honourable Ministers will also review the progress made to date on the implementation of the 1999 Forum decisions relating to WTO and Intellectual Property Rights issues.

14. At the 1999 meeting, Ministers made a number of decisions to enhance the participation of the Forum Island Countries within the WTO process, including the preparation for the launch of a new round of trade negotiations in Seattle in December 1999. As you all know, the Seattle Conference did not get off the ground and consequently the launch of the new round of multilateral trade negotiation was aborted.

15. It is possible that a new round of trade negotiations will be launched at the Qatar Ministerial meeting. The important thing for our region at this point in time is not so much as to when the new round of trade negotiation is launched. Our concern should be more about developing an appropriate regional strategy, which will ensure the protection of small vulnerable economies from further marginalisation by the rich and powerful nations who call the shots at the World Trade Organisation.

16. The Director General of the World Trade Organisation had expressed an interest in coming to this meeting but unfortunately owing to other prior commitments he is unable to be here. He has however recorded a video message to the meeting.

Intellectual Property Rights (IPR)

17. Another issue which is very important to the region is the intellectual property rights. There is an increasing recognition in the region of the important role that IPR plays in creating a secure investment environment free from abuses and infringements of intellectual property rights. There are two aspects of IPR that are of interest to the FICs. The first is improving the intellectual property systems of the FICs and compliance with the WTO TRIPS Agreement, and the second is the development of a regional framework for the protection of indigenous intellectual property rights in the FICs.

18. The protection of indigenous intellectual property or traditional knowledge in the Forum Island Countries is on the agenda of the meeting for Ministers’ consideration. Work has been undertaken in this regard over the past two years, including the development of a draft model law. These efforts, and continuing work in the development of these concepts, will begin to alleviate the region’s concerns that their traditional knowledge relating to their culture and use of ecological resources, for example for medicinal purposes etc, are not being used by others to produce commercial goods without any compensation to the Pacific communities.

19. On the core IPR issues relating to patents, trademark and the like, the need for improving core IPR systems needs to be recognised. In this regard we have for your deliberation a Regionally Focussed Action Plan (RFAP), which is a collaborative effort between the World Intellectual Property Organisation, IP Australia and the Forum Secretariat in improving the IPR systems in the Forum Island Countries. Both the WIPO and IP Australia have agreed to provide financial and technical assistance towards the project while the Secretariat will play a co-ordination role.

Conclusion

20. Honourable Ministers, Distinguished Delegates, I have outlined to you the various issues that you would be considering in the next two days. These issues as you will realise range from regional trade to multilateral trade issues of importance to the region. They also relate to the many changes taking place throughout the world. For example, declining aid and eroding trade preferences world-wide are exerting great pressure on small economies to become economically self-reliant and to develop trade as the "engine of growth" for their economies. As very small markets the Forum Island Countries need to respond to these changes and seize the opportunities that arise from the larger regional market created by the FIC-FTA and from the multilateral system of the WTO which provides a secure set of rules for small players.

21. Finally, Honourable Ministers responsible for trade matters, distinguished trade officials, let me conclude by thanking you all most sincerely for the cooperation you had given to me and the Secretariat. In particular your patience and the valuable guidance officials gave to the Deputy Secretary General in his role as the facilitator of the negotiating sessions, and to the Director of the Trade Division and his team of dedicated staff over the past two years. I believe our Leaders’ mandate has been fulfilled and all that remains now is for your Excellencies to make the historical decision at the end of your two-day meeting on the legal texts of the two Agreements now in front of you.

22. The final endorsement of the two Agreements by the Pacific Islands Forum Leaders in Nauru in August will be a landmark decision that will have finally put the region on the path to realise the vision of trade and economic integration. A vision that incidentally, was the basis for the creation of the South Pacific Forum 30 years ago. Thank You.

For additional information, contact: Ulafala Aiavao at UlafalaA@forumsec.org.fj 

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