The Pacific Islands Forum Secretariat has been mandated to carry out a study on the idea of a Pacific Single Market and Economy (PSME).Pacific ACP Trade Ministers approved the proposed study when they endorsed its Terms of Reference at their meeting in Nadi, last month.
"The creation of a PSME is seen as a potentially important strategic response of the Pacific to overcome the issues of market smallness and isolation that have - amongst other things - been the primary determinants for the loss of private capital in the petroleum sector in recent years," says Feleti Teo, Acting Secretary General of the Pacific Islands Forum Secretariat.
Mr Teo explains: "The study aims to identify lessons from the experiences of other regions with respects to the creation of single markets and economies, and, by investigating costs, benefits and architecture, determine the appropriateness of such an undertaking as a long-term strategic option for the Pacific."
"While thus far the main rationale for this work has been to seek a response to the recent crisis in the petroleum market in the Pacific, it is proposed that the study would look into other sectors including pharmaceuticals as well as part of a phased movement towards the single market and economy generally."
"It is an ambitious proposal and it touches on a number of sensitive and complex issues, however, the experiences of other regions indicate that progress can be made in small incremental steps that build trust in the legal framework and strength in the institutions charged with managing the change," says Mr Teo
A single market and economy would see the phased creation of a single economic space in the Pacific islands region whereby the countries of the region would move to eliminate all barriers to trade in goods and services and is consistent with the vision of leaders in the Pacific Plan.
Mr Teo said: "The proposal would certainly be a logical extension of both PACER and PICTA and membership would ultimately depend on which Forum members saw this as being consistent with their own national objectives."
The Pacific Plan endorsed by Forum Leaders in 2005 is to "create stronger and deeper links between sovereign countries of the region and identify the sectors where the region could gain the most from sharing resources of governance and aligning policies".
The proposed Pacific Single Market and Economy is one of the initiatives to implement the Leaders' vision of more regional cooperation and integration.