The signing of a Pacific free trade deal in June has been thrown into doubt with the largest island nation Papua New Guinea saying it favours Australia and will damage local industries.
At the Pacific free trade talks in Brisbane, Australia said it is prepared to offer concessions and will permit thousands more Pacific Islanders access to work on temporary visas.
The PACER Plus deal is scheduled to be signed in June after more than six years of negotiations.
Some of the poorest countries in the world are in the Pacific and the 16 island nation deal aims to reduce poverty through trade, however Papua New Guinea says the trade deal is unbalanced.
“PNG's position is that it is not ready to sign PACER Plus, especially in its current form,” said Max Rai, outgoing PNG director general of trade and ambassador designate to the United Nations said in a highly critical opening address.
“PNG is concerned that the development of our local industries will be threaten by the heavily subsidised and technologically advanced industries in Australia and New Zealand.”
Rai said 'Most Favoured Nation' status for Australia and New Zealand should be removed from the deal after their “non-binding commitments” on labour mobility and development assistance.
“It shows no genuine interest from Australia and New Zealand in PACER Plus to give special and differential treatment to FICs (Pacific Forum Island Countries), beyond securing market access for their goods and services,” he said.
“I'm pleased to inform the government of PNG is undertaking an independent review of PACER Plus and its perceived benefits and losses.”
Fiji was unable to send high-level representatives to the week-long talks after the devastation caused by Cyclone Winston. It is keen to see the deal finalised even though it shares many of PNG’s concerns.
“A stable and prosperous Pacific would benefit all our countries,” said Solomon Islands foreign minister and chair of the trade talks Milner Tozaka.
“We have a unique opportunity to reverse our marginalisation in international trade and we should do very thing possible to make this a reality.”
“Papua New Guinea, being a huge economy, has come up with some issues and it's important they are talked about.”
Tozaka hopes PACER Plus will be signed by the June deadline set by Pacific leaders at last September’s leaders forum in Port Moresby.
The agreement will cover Australia's $21billion (US$15 billion) trade with Pacific - targeting aid for building trade capacity and infrastructure and promoting economic development in the region.