Pacific

The EU is the Pacific region’s fourth trading partner, although the volume of trade is small in both absolute and relative terms. The EU is currently preparing to negotiate free trade agreements with Australia and New Zealand, which are important trading partners. The EU has partnerships in the region with the 15 Pacific Independent Island Countries (PICTs), focused on development, fisheries and climate change, four Overseas Countries and Territories (OCTs), and the Pacific Islands Forum (PIF).

Legal basis

  • Title V (EU external action) of the Treaty on European Union (TEU);
  • Titles I-III and V (common commercial policy; development cooperation and humanitarian aid; international agreements) of the Treaty on the Functioning of the European Union (TFEU).

Evolving policies

The EU has partnerships with Australia, New Zealand, the 15 Pacific Independent Island Countries (PICTs), the four Overseas Countries and Territories (OCTs) and the Pacific Islands Forum (PIF). It is constantly updating its policies in line with the political and economic changes taking place in the region. Development cooperation continues to be an important aspect of the EU’s relations with the Pacific states, which are part of the African, Caribbean and Pacific (ACP) Group of States.

Although the EU ranks as the Pacific region’s fourth trading partner overall, trade between the EU and the Pacific countries is very small in both absolute and relative terms, amounting to EUR 2 993 million in 2016. Free trade agreements are being negotiated with Australia and New Zealand. Relations with the PICTs are focused on development cooperation, fisheries and climate change.

a.Australia and New Zealand

The EU, Australia and New Zealand are like-minded partners with shared values and interests. In addition to strong trade relations, the partners’ similar outlooks have allowed them to develop close government and private-sector contacts on issues such as climate change, world trade, security and development, technological research and human rights. Parliament has a single delegation for relations with the two countries.

Parliament passed a resolution on 25 February 2016 supporting the opening of FTA negotiations with Australia and New Zealand.

1.Australia

The EU and Australia agreed on 15 November 2015 to work towards starting negotiations for a comprehensive free trade agreement (FTA).The preparatory work ended on 6 April 2017 and, as the next step, the Commission will seek authorisation from the Council of the EU to launch formal negotiations. The current bilateral relationship with Australia is based on a legally binding political framework agreement containing a number of economic and trade cooperation provisions: the EU-Australia Framework Agreement, concluded in April 2015 and signed on 29 September 2016. The Framework Agreement will lift the relationship to a new strategic level. The EU-Australia Leadership Forum was launched in September 2016. Australia is an important economic and trading partner for the European Union. In 2016, total trade in goods between the EU and Australia amounted to EUR 46 billion. Overall, the EU is the biggest investor in Australia, with a foreign direct investment (FDI) stock of EUR 146 billion in 2015.

2.New Zealand

On 29 October 2015, the EU and New Zealand started the process for negotiations aimed at the swift conclusion of a deep and comprehensive high-quality free trade agreement. Following the completion of the scoping exercise to determine the issues, objectives and overall level of ambition for the negotiations, on 8 March 2017 the Commission will seek a negotiating mandate from the Council of the EU.

In 2016, total trade in goods between the EU and New Zealand amounted to EUR 8.1 billion. Total trade in services between the EU and New Zealand amounted to EUR 4.3 billion in 2015. The EU’s FDI stock stood at EUR 9.8 billion in 2015 while New Zealand’s FDI stock in the EU stood at EUR 4.5 billion.

The EU and New Zealand signed the Partnership Agreement on Relations and Cooperation (PARC) on 5 October 2016. The PARC provides a comprehensive foundation for EU-New Zealand relations. It will facilitate more effective bilateral engagement by strengthening political dialogue and improving cooperation on economic and trade matters and in a wide range of other areas, from innovation, education and culture to migration, counter-terrorism, the fight against organised crime and cybercrime and judicial cooperation.

b.Other Pacific countries

The EU’s relations with the 15 Pacific Independent Island Countries (PICTs), which are part of the African, Caribbean and Pacific (ACP) Group of States, are focused on development cooperation, fisheries and climate change. EU relations with the ACP group are based on the Cotonou Agreement.

The 15 PICTs are: Fiji, Papua New Guinea and Timor-Leste, which together account for 90% of the region’s landmass and population, and 12 Small Island Developing States: Cook Islands, Kiribati, the Federated States of Micronesia, Nauru, Niue, Palau, the Republic of the Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

The PICTs face major development and climate challenges. Regional trade between these states is based on the Pacific Island Countries Agreement (PICTA), which entered into force in 2006.

The EU’s strategy regarding the PICTs, entitled ‘Towards a renewed EU-Pacific development partnership’ and adopted in 2012, builds on the framework of the Cotonou Agreement with the ACP countries.

The EU allocated EUR 166 million under the Pacific Regional Indicative Programme for the period from 2016 to 2020 to address development challenges in the PICT countries.

The EU is negotiating a comprehensive Economic Partnership Agreement (EPA) with the Pacific Island countries, but negotiations were paused in 2015 pending a review of the management of Pacific fisheries resources.

The EU has an Interim Economic Partnership Agreement with Papua New Guinea and Fiji which was concluded in 2007 and ratified by the European Parliament in January 2011.

As regards climate change, the EU and the Pacific Small Island Developing States supported the establishment of the ambitious, global Paris agreement, negotiated at the 2015 United Nations Climate Change Conference and in force since December 2016.

The Pacific Islands Forum, a political grouping of 16 independent and self-governing states, is an interlocutor for the EU for EU development funding and trade negotiations. The PIF’s members are: Australia, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

The EU has four Overseas Countries and Territories (OCTs) in the region: New Caledonia, French Polynesia, Pitcairn and Wallis and Futuna.

Anna Saarela

06/2017