The Pacific Islands and Trade in Services : One Step Back to Take Two Steps Forward

The Pacific Islands are small, developing island states which are challenged by their small size, geographical isolation and the unvaried production possibilities. Increased trade in services, facilitated by the ICT revolution, may provide for some much needed economic development. After assessing the offensive potential for services in this complex region, this paper addresses the services liberalisation negotiations in which the Pacific Islands are partaking, both intra- and inter-regionally. While intra-regional economic integration is insufficiently moving forward, the on-going inter-regional liberalisation negotiations, i.e. with the European Union, and with Australia and New Zealand, are unlikely to cater for the Pacific's offensive interests in services. Therefore, and to avoid excessive negotiation costs and implementation difficulties, it is argued that the Pacific would better halt all on-going talks and seek accession to one of two mega-regional trade negotiations around the Pacific rim: the Trans-Pacific Partnership or the Regional Comprehensive Economic Partnership