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Partnership With EU Threatens Self Determination Pacific Islands Pacific Islands Nations, December 3, 12

In 2004 the Pacific ACPs (PACPs) and the European Commission (EC) agreed that the Economic Partnership Agreement (EPA) is supposed to promote the sustainable development of the PACPs, their smooth and gradual integration into the global economy and contribute to poverty eradication in the PACPs. The EPA must be an instrument for development and development dimension must be reflected in all areas of the negotiations. In doing so, it must take into account the specific, special economic, social, environmental and structural constraints of the PACPs, as well as their capacity to adapt their economies to the EPA process.
Fisheries one of the most important economic sector in the PACP region
Without question, fisheries is one of the most important sectors in the PACP region, home to the world’s largest and most productive tuna industry, with annual catches of approximately 2 million tonnes. PACPs hold strong convictions that they should be extracting greater value from their fisheries resources. At the same time, the EU is one of the largest markets for tuna products in the world comprising over 500 million consumers.

On this basis, the PACPs accorded high priority to fisheries (along with labor mobility) from the outset of EPA negotiations as they believed that the EPA could spur development of the fisheries industry, which could lead to job creation and economic development for PACP countries. Almost a decade later EPA negotiations look set to undermine this vision for PACPs.

EPA could undermine sustainable management of fisheries
In a letter from the EC Trade Commissioner, Karl De Gucht to the Hon Isileli Pulu Lead Spokesperson for PACPs on the 14/ 06/ 2012, the EC emphasized “that the comprehensive EPA should include three main elements with regard to fisheries, which should be dealt with as an integrated package: sustainable management of fisheries, global sourcing and access to resources.”

Whilst the letter mentions that the first element on sustainable management will based on conservation and management measures adopted at the regional, sub-regional and national levels there is a fight brewing between the EC and the Parties of the Nauru Agreement (PNA) as differences emerge quickly about fisheries management in EPA negotiations.

The dispute between the PNA and the EU recently highlighted by the media shows dramatically opposed views about fisheries management in the Pacific, and raises the question of the ability of the PNA to enforce rules as a group when individual members sign bilateral agreements with foreign fishing nations such as the EU that do not require the foreign fishing nation to abide by PNA rules.

The PNA was conceived out of the recognition by leaders to change the status quo where the western and central Pacific only got about 6% of the value of a $3billion tuna industry while foreign fishing fleets got the rest. Our leaders understood the need to control and tighten the rules for access into their waters by industrial fleets including from the EU is central to the success of accruing the benefit to its people. The PNA has since worked out to regulate (VDS, license fees, closure of high seas pockets, FADs, etc) the purse seine fisheries industry, all of which are now directly under direct threat by the demands in EPA negotiations. One can only assume that the EC is on a path to ocean grabbing of resources that would feed its own industry and consumers at the expense of the Pacific initiatives.

Already the EC has made significant changes to Article 6 (1) of the fisheries chapter which deals with access to resources which technocrats have strongly advised PACP governments to reject. The first change that the EC has demanded is deletion of the words “in line with the” Western and Central Pacific Fisheries Commission (WCPFC) which has been replaced with the weaker phrase “taking into account” the conservation and management measures of the WCPFC. The WCPFC is meeting over the next couple of days in Manila, Philippines where the show down between PNA and distant fishing nations will take place.

The second change relates to the deletion of the reference to the Palau Arrangement for the Management of the WCPFC Pacific Purse Seine Fishery Management Scheme and the yearly limitations on fishing set under that Agreement. The implications are significant because it appears the EC wants to delete any reference to the Vessel Day Scheme (VDS) that is implemented by PNA members and the yearly limit that are set out under the VDS.

The third crucial change demanded by the EC relates to the deletion of the reference to purse seine fisheries (controlled largely by PNA). The deletion of reference to purse seine fisheries expands the scope of access to all fisheries (long-line, troll and pole and line access) under the responsibility of the WCPFC.

The EC has also demanded the deletion of reference to imposing limitations after taking into account appropriate tuna assessment based on objective and scientific criteria including stock assessments and references to SPC. None of the EC demands makes any sense; given the ECs own strong position, on the need for sustainable management of tuna resources and its strong position on the need for scientific stock assessments!

Ocean grabbing by the EU
The EC has linked global sourcing for fresh, chilled and frozen fish (0304/0305) to a clear commitment on 5% access to resources in the text of the comprehensive EPA. The EC goes further and limits global sourcing to specific species – in particular tuna, instead of covering all fish positions rejected by the Pacific.

Whilst PACPs continue to negotiate in good faith to the extent of giving in to some of the EC’s demand in the fisheries chapter, the EC made it very clear that there is a great deal of uncertainty about whether the EU will eventually be able to grant global sourcing for fresh and frozen fish under the comprehensive EPA because of its own industry pressure back in Europe.

On the issue of additional funding to assist PACPs to develop and add value to its own fisheries resources to be able to take advantage of market access into the European Union, there is no guarantee that PACPs will be able to secure additional funding from the EC. As pointed out in a recent speech by Dr. Transform Aqorau, the trade and non-trade barriers that have to be overcome at a high costs defeats the idea of “free trade” for development

Economics don’t add up?
PACPs have difficult choices to consider going forward. They will have to decide whether the supposed promised market access into the lucrative European market is worth the risks posed in the EPA to the development of their own tuna industry aspirations in the longer term. After all, Europe is not the largest market for Pacific tuna – the US and Asia continues to be our largest markets.

In 2011 a study was commissioned on behalf of PACPs by the Pacific Islands Forum Secretariat to look at the feasibility of exporting products of fresh, chilled, frozen and dried, salted or smoke fish products. The conclusion of the report states that while “exports to Europe represents an opportunity for PACPs that is presently of somewhat limited value”, even though the EU is the largest market. The report further concludes that the situation could change but would be dependent on factors all outside of the control of PACPs including supply from other key markets into Europe tightening (Indian Ocean, Atlantic, and Eastern Pacific).

As it currently stands only Fiji (2.5%) and PNG (0.1%) export frozen tuna loins to the EU market and only Fiji exports fresh whole tuna to the EU (0.2%). The challenges of PACPs making good access to the lucrative EU market are well known. PACPs are well known to be high costs product environment with the EU being the most distant major market for fish products and therefore the most costly to address. The report states that “unless high prices can be obtained, the cost factors may make the EU market unprofitable, or marginal.”

In addition the report finds that the prices in the EU market are not necessarily higher than those in the PACPs more “traditional markets” of Japan and the USA and the logistics of getting fish to the EU are more complex, and the cost higher for Japan and USA. Under normal circumstances, therefore, Japan and USA would be more attractive for PACPs’ tuna export businesses most of the time.

It’s time for political will for PACPs and in particular PNA member states to flex their right to self determine the sustainable management of their own resources in the interest of our own people. As pointed out by Dr. Transform Aquorau, “We can maximize the benefits from our tuna resources if we own and control the vessels that harvest the tuna, own the production plants that process and value add our tuna and own the marketing and retailing platforms that distribute our tuna products in world markets. If not owning the facilities we must retain control of our fish”. PACPs and in particular PNA member states must not allow the EPA or distant fishing nations at the upcoming WCPFC meeting to undermine the sustainable manage of our lucrative tuna resource.