Mark Halabe, a seasoned textile merchant and garment exporter, has raised significant concerns regarding the Pacific Agreement on Closer Economic Relations Plus (PACER-Plus). This reciprocal trade agreement, initiated by Australia and New Zealand for the Pacific Island nations, has been met with skepticism from Halabe, who warns it might jeopardize Fiji’s manufacturing sector.
In a recent interview, Halabe acknowledged the political and geopolitical motivations behind Fiji’s potential involvement in PACER-Plus, emphasizing that while the agreement may seem beneficial from a broader perspective, its implications for Fiji could be detrimental. He expressed that assurances from Australian experts about the potential for stronger trade relations and increased aid packages have not convinced him.
One of Halabe’s main concerns is that by granting concessions to Australia under PACER-Plus, Fiji may create a precedent for offering similar terms to all of its trading partners. This scenario threatens to diminish Fiji’s tariff revenue, which is vital for national income. Halabe fears that reduced tariff income could lead to increased taxes and charges for ordinary citizens, creating a burden on the local economy.
A key point raised by Halabe is the economic disparity facing local manufacturers compared to larger economies like Australia. He cited a friend who manufactures in Fiji but struggles to compete against Australian producers who benefit from economies of scale. With larger production capabilities and cutting-edge equipment, Australian manufacturers can undercut local prices, a scenario that leaves Fijian businesses vulnerable.
Halabe further emphasized the importance of diversifying Fiji’s economy, which is heavily reliant on tourism—accounting for up to 60% of GDP by some estimates. He believes it is critical to foster a robust manufacturing sector to lessen dependency on tourism, highlighting the risks of losing hard-earned industries due to commitments made under PACER-Plus.
Reflecting on historical agreements, Halabe suggested that the longstanding SPARTECA trade agreement, established in the 1980s and designed to facilitate trade while protecting local industries, may offer a more suitable framework for Fiji’s engagement with larger economies like Australia. Unlike PACER-Plus, SPARTECA is a non-reciprocal agreement that safeguards Fiji’s manufacturing sector.
Halabe’s insights underline the complexities involved in international trade agreements, suggesting that while such deals may promise growth and integration, they can also pose significant risks to smaller economies like Fiji.