PACER Plus Implementation: A Development Opportunity for Commonwealth FICs

The potential for trade-led sustainable development in most Forum Island Countries (FICs) in the Pacific remains largely untapped. These countries experience several challenges to trade, such as a lack of economies of scale, low levels of foreign direct investment (FDI), inadequate and under developed infrastructure, high costs of doing business and a host of other supply-side contraints. Recent changes in the global economic and trading landscape, including growing trade tensions and protectionism, growth in mega regional trade arrangements, and the rapid advancement in technology have created an additional layer of challenges, producing further impediments for these countries to trade. In addition, the outbreak of the COVID-19 pandemic further worsed their situation, impacting on their trade-led development prospects. However, the coming into force of the Pacific Closer Economic Relation (PACER) Plus Agreement in December 2020 offers a promising opportunity for these countries to deepen regional integration in the Pacific region and expand their trade for post-COVID-19 recovery and trade-led sustainable development in general. This paper provides and analysis of the possible opportunities for FICs presented by the PACER Plus Agreement and argues for the implementation of the Agreement for FICs to take adavantage of these benefits.