Mark Halabe, an experienced textile merchant and garment exporter, has raised important concerns about the Pacific Agreement on Closer Economic Relations Plus (PACER-Plus), a reciprocal trade agreement initiated by Australia and New Zealand aimed at enhancing trade with Pacific Island nations. Halabe warns that Fiji’s involvement in this agreement could pose serious risks to the nation’s manufacturing sector.
In a recent interview, Halabe reflected on the political and geopolitical undercurrents that accompany Fiji’s potential participation in PACER-Plus. While the agreement seems beneficial from a broader regional perspective, he is not convinced it would be advantageous for Fiji. Despite reassurances from Australian experts regarding improved trade relations and increased assistance, Halabe remains skeptical of the outcomes.
A key concern for Halabe is the implications of granting concessions to Australia through PACER-Plus. He fears this could set a troubling precedent for Fiji, potentially leading to similar concessions with other trading partners. Such actions might significantly undermine Fiji’s tariff revenues, which play a crucial role in the country’s national income. Halabe warns that reduced tariff income could necessitate higher taxes and charges for Fijians, placing an undue burden on the local economy.
Halabe also highlighted the economic inequality faced by local manufacturers compared to larger economies like Australia. He pointed out that a friend who manufactures in Fiji struggles against Australian producers who enjoy economies of scale and advanced technology. This competitive advantage allows Australian manufacturers to offer lower prices, leaving Fijian businesses at a disadvantage.
To further strengthen Fiji’s economic resilience, Halabe stressed the importance of diversifying its economy, which is overly reliant on tourism—accounting for up to 60% of its GDP by some estimates. He argues for the development of a robust manufacturing sector to reduce this dependency, indicating that commitments under PACER-Plus could threaten hard-earned industrial advancements.
Reviewing historical trade agreements, Halabe suggested that the SPARTECA trade agreement, established in the 1980s to facilitate trade while protecting local industries, could provide a more viable framework for Fiji’s partnerships with larger economies. Unlike PACER-Plus, SPARTECA is non-reciprocal, offering necessary safeguards for Fiji’s manufacturing sector.
Halabe’s observations shed light on the intricate challenges associated with international trade agreements. They underscore the idea that while these agreements may promise regional growth and integration, they also carry significant risks for smaller economies like Fiji.