Prime Minister Christopher Luxon has reiterated New Zealand’s commitment to bolstering regional trade through the Pacific Agreement on Closer Economic Relations Plus (PACER Plus), despite ongoing concerns from Papua New Guinea (PNG) about its adequacy for their needs. In an interview on Pacific Mornings, Luxon maintained that PACER Plus is a vital instrument for enhancing trade relations among its member countries, even as PNG expresses reservations regarding its participation.
Luxon articulated the advantages of engaging in such trade agreements, reflecting on New Zealand’s experiences as a small nation. He remarked, “We know from our own experience… that being part of those big trading agreements where the vast majority of our trade is now delivered and done is actually a really good thing.” PACER Plus seeks to lower trade barriers, improve access to significant markets like Australia and New Zealand, and promote intra-Pacific trade across key sectors, including tourism, digital trade, and transportation.
Encompassing nations such as Australia, Cook Islands, Kiribati, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu, PACER Plus came into effect in 2021. Notably, two of the region’s larger economies, Fiji and PNG, have refrained from signing the agreement. PNG’s Trade Minister Richard Maru has urged New Zealand to negotiate a bilateral Comprehensive Economic Partnership Agreement (CEPA), asserting that it would better cater to PNG’s specific economic aspirations and needs. He stated, “After 50 years of diplomatic relations… it’s time to reset the relationship and elevate it to the next level.”
In response, Prime Minister Luxon displayed a willingness to reassess the terms of PACER Plus but emphasized that the existing framework aligns with the priorities of the Pacific nations and confirmed that involved countries are indeed experiencing tangible benefits. This dialogue reveals ongoing efforts to strengthen economic relations and adapt to the evolving economic landscape within the Pacific region.
As both New Zealand and PNG navigate these changes, their focus remains on fostering cooperative partnerships that yield practical outcomes for the Pacific nations. The potential development of tailored agreements, such as a CEPA, could enhance economic collaboration, facilitate labor mobility, and support development goals across the region, paving the way for a more interconnected economic future.