Ensuring a Free Market

A reborn Sparteca agreement protects Pacific trade.

THE NATIONS of the South Pa cific are of vital importance to Australia. Not only is the region of strategic importance as the nations straddle the sea lanes to Australia’s major trading partners, but they also constitute a large market.

In fact, the trade balance is so much in Australia’s favour that the issue has become a sore point over the years with island leaders.

Australia’s exports to the members of the South Pacific Forum in 1985/86, including New Zealand and Papua New Guinea, amounted to SA32I million.

Imports, on the other hand, were around one third of that figure, at SAI27 million. But in 1985 the Aus tralian and New Zealand Govern ments liberalised their import regulations to accord duty free and un restricted access to almost all island exports.

Excepted from the open market in Australia were four areas: sugar, steel, passenger motor vehicles and the prod ucts of the footware, clothing and tex tile industry which were protected by tariffs and quotas. While the clothing import quota has been liberalised more recently, some restrictions remain.

The decision revitalised the exist ing South Pacific Regional Trade and Economic Co-operation Agreement, (SPARTECA), which had been in force

since 1981 in order to encourage South Pacific trade. The agreement is a pref erential, non-reciprocal agreement be tween Australia, New Zealand and the member countries of the South Pacific Forum to progressively achieve duty free and unrestricted access to the mar kets of Australia and New Zealand over a wide range of products.

However the range of items pro duced by the South Pacific nations re mains small and often overlaps with goods already produced in Australia, such as tropical fruit.

The Sparteca agreement provides island exporters with help to promote their products in Australia and New Zealand and gain economic co-opera tion in projects. The Australian Government funds the South Pacific Trade Commissioner, who is based in Sydney and whose job it is to help is land states to develop goods for export and to seek new markets for their ex isting industries.

The revised agreement formed at the Forum’s regional committee on Trade, meeting in Nauru in 1985, also liber alised the rules of origin of goods.

Island governments see the re formed Sparteca agreement as a suc cess. In 1982, 97 per cent of goods exported by South Pacific island na tions were exported under the agreement. □