The Pacific Agreement on Closer Economic Relations (PACER) Plus is a landmark trade and development agreement that will raise living standards, create jobs and increase exports in Pacific Island countries, while also lowering barriers and providing greater certainty for New Zealand businesses.
As a Pacific country, the wellbeing of New Zealand’s people, economy and environment is closely linked to the wellbeing of the wider Pacific region. We are connected through history, culture, people, trade, languages and shared interests. New Zealand is home to more than 381,600 Pasifika peoples – around 8 percent of New Zealand’s total population.
Our Pacific neighbours face unique challenges for economic development, including their small size and difficulty achieving the economies of scale needed to compete in international markets. Pacific Island countries have been severely impacted by the COVID-19 pandemic, with global travel restrictions affecting key economic sectors such as tourism, trade and labour mobility.
PACER Plus establishes a common set of trading rules for the region, which will make it easier for businesses to trade throughout the Pacific. Open, rules-based trade is crucial to help the region and the world recover from the economic impact of the COVID-19 pandemic.
It will help Pacific countries to attract investment and increase exports, driving economic growth and providing higher incomes and more opportunities for people. PACER Plus also improves market access for New Zealand suppliers and investors, and provides a more predictable trading environment.
New Zealand and Australia are offering dedicated development cooperation assistance to help Pacific Island countries adjust to PACER Plus and the opportunities it offers.
Countries in PACER Plus
Eleven Pacific Island Forum (PIF) members have signed PACER Plus:
- Cook Islands
- New Zealand
- Solomon Islands
New Zealand, Australia, Samoa, Solomon Islands, Niue, Kiribati, Tonga, the Cook Islands, Tuvalu and Vanuatu have ratified the Agreement.
All Pacific Island Forum members are encouraged to join in the future.
PACER Plus highlights
PACER Plus is a trade and development agreement which streamlines trade, cuts red tape and reduces compliance costs.
For Pacific Island countries, the agreement helps to increase exports and attract investment. It reduces tariffs across the region, improves transparency for businesses, and provides more liberal rules of origin, which makes it easier to determine what qualifies as a Pacific Island product. It helps to create opportunities for Pacific exporters to get their products and services into Australian and New Zealand markets, and trade throughout the region.
PACER Plus improves market access for New Zealand suppliers and investors. It provides greater certainty around tariffs and creates efficiencies in clearing customs. It also provides New Zealand businesses with legal protections that guarantee market access and treatment equivalent to that given to local and foreign competitors, unless subject to specific exceptions.
To help Pacific Island countries adjust to PACER Plus, New Zealand and Australia are offering dedicated development assistance. This includes an A$25.5m five-year development and economic cooperation work programme. New Zealand has also committed to invest at least 20 percent of its total Official Development Assistance (ODA) in aid for trade activities in the Pacific. This will support Pacific countries to build their capacity to trade and attract investment.
Alongside PACER Plus is an arrangement which will look at ways to enhance regional labour mobility opportunities among participants - the Arrangement on Labour Mobility.
Regional labour mobility benefits both New Zealand and the Pacific region. Through working in New Zealand, Pacific workers can learn new skills and gain higher incomes, and their communities back home can benefit from remittances and local investment. New Zealand businesses can access a reliable Pacific workforce in industries where there are not enough local workers.
Key trade facts
- In the year ended June 2020, two-way trade between New Zealand and Pacific Island Forum countries (excluding Australia) was worth NZ$3.1 billion. This included NZ$2 billion in goods and services exported from New Zealand to the Pacific, and NZ$1.1 billion in goods and services imported from the Pacific.
- New Zealand and PACER Plus signatories (excluding Australia) traded over NZD$1 billion in two-way goods and services. Around 30% of Pacific signatories’ exports are to Australia and New Zealand.
- Our main exports to Pacific countries include dairy, meat, machinery and iron. Key imports into New Zealand from the Pacific include machinery, live animals, meat, vegetables and textiles.
- New Zealand is an important source of tourism for the Pacific region, worth NZ$633 million in 2020, and over NZ$800 million in 2019.
- In 2018/19, there were 11,168 Pacific workers who participated in New Zealand’s Recognised Seasonal Employer (RSE) scheme and 86 workers under other labour mobility initiatives.
PACER Plus preserves the New Zealand Government’s inherent right to regulate in the public interest and contains specific protections in a range of policy areas, including for the Treaty of Waitangi.
As with all of New Zealand’s contemporary trade agreements since 2001, PACER Plus includes a specific provision preserving the pre-eminence of the Treaty of Waitangi in New Zealand.
Nothing in PACER Plus prevents the Crown from meeting its obligations to Māori and New Zealand’s interpretation of the Treaty of Waitangi will not be subject to dispute settlement.
Find out more in Māori Interests.
Background to PACER Plus
PACER Plus builds on existing trade agreements: the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) (1980) and the original PACER Agreement (2001).
PACER Plus negotiations began in 2009 and concluded in April 2017. The Agreement entered into force on 13 December 2020.
Ten countries have now ratified PACER Plus – Australia, Cook Islands, Kiribati, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. The remaining signatory that is yet to ratify is Nauru.
What PACER Plus covers
The agreement covers:
- Trade in Goods and Services
- Movement of Natural Persons
- Technical Barriers to Trade
- Customs and Rules of Origin
- Sanitary and Phytosanitary Measures
- Legal and Institutional Matters
- Implementing Arrangement for Development and Economic Cooperation
- Arrangement on Labour Mobility
PACER Plus does not include government procurement, intellectual property, competition policy or investor-state dispute settlement.