1. Robert Scollay University of Auckland
Pacific Island Countries in the World Trading System: How the Spread of FTAs Changes the Game
Robert Scollay
University of Auckland

2. Rapid Spread of FTAs * major feature of world trading system since 1990s in Asia-Pacific region since 2000

3. The Asia-Pacific “noodle bowl”
CAFTA-DR
Costa Rica, Guatemala, El Salvador, Honduras, Nicaragua & Dominican Republic
SAFTA
Bangkok
Bhutan
Nepal
Maldives
Pakistan
Bangladesh
Sri Lanka
India
APEC
NAFTA
ASEAN + 6 (CEPEA)
United States Canada Mexico
ASEAN + 3 (EAFTA)
Peru
Northeast Asian
China, Korea Japan
ANZCERTA
Chile
ASEAN (AFTA)
Brunei
Philippines Vietnam
Malaysia
Thailand Singapore
Indonesia
Australia
New Zealand
Laos
Cambodia Myanmar
Source: Inter-American Development Bank

4. Spreading FTAs as a Game-Changer
Before
small poor countries have specially advantaged access to markets of major developed country partners – generally on lenient terms
ACP-EU (Lome, Cotonou)
PICs-ANZ (SPARTECA)
concerns over preference erosion focused mainly on impact of multilateral liberalisation in GATT/WTO
relatively slow moving

5. Spreading FTAs as a Game-Changer
After
small, poor countries (e.g. PICs)
sharing “special access” with a growing range of other FTA partners
accelerated pace of preference erosion in key markets
other FTA partners may have better access in some respects e.g. rules of origin
increasingly disadvantaged in markets where they lack “special access”
especially East Asia
FTAs based on developed country rules increasingly needed to maintain existing market access e.g. EPA, PACER-Plus
reciprocity
“substantially all trade”

6. Other WTO Members
Other WTO Members
Australia
New Zealand
PICs (SPARTECA)
USA (A)
China (NZ)
Indonesia, Thailand, Malaysia, Philippines, Viet Nam, Singapore, other ASEAN, Chile,
All LDCs
Korea? Japan? India? Peru?
Australia
New Zealand
PICs (SPARTECA)

7. PICs
Other WTO Members
PICS
Other WTO Members
Japan
Indonesia, Thailand, Malaysia, Philippines, Viet Nam, Singapore, other ASEAN,
Chile, Mexico
India? Korea? China?
Japan

8. Questions for PICs
where should PICs concentrate their trade negotiating resources?
what strategy for
PACER-Plus?
East Asia?
North America?
implications for policy on import barriers?

9. Diverse Needs of PICs Scope for Customising FTAs
Diversity among PICs in proportion of foreign exchange earnings derived from
export of goods
tourism and other services
remittances (based on movement of people)
development assistance
FTAs can be designed to address PIC interests in all of these areas
precedents elsewhere
implications for PACER-Plus
FTA serving PIC interests must cover all of these areas
bargaining issues

10. Capacity-Building for Trade The Potential Importance of Aid for Trade
Long history in GATT/WTO of recognition but little action on need for capacity-building assistance to
meet obligations under new agreements
take advantage of export opportunities under new agreements
“Aid for Trade (AfT) proposed as “circuit-breaker”
Implementation remains problematic
Regional Trade Facilitation Programme (RTFP) under PACER provided some useful assistance to PICs
focused more on facilitating imports
need balancing assistance with export capacity
Application to FTAs e.g. PACER-Plus
identify areas of need to be addressed
technology/expertise to meet ANZ biosecurity requirements?
infrastructure to link production with export ports?