Between 31 July and 3 August, the Pacific Islands Forum Secretariat meetings in Fiji set a tone for the forthcoming leaders’ meetings in the Cook Islands at the end of August. Much of the media focus surrounding the Pacific has centered on the US involvement in the dialogue as part of its rebalancing, and to a lesser extent, Australia and New Zealand’s changing relations with Fiji. As the Secretariat meetings have indicated, however, reforming the Pacific Plan to reflect the contemporary political, economic and security conditions in the Pacific will be critical for this year. Issues of labor mobility and trade integration within the Pacific Islands region will be critical to the continued development and success of the Pacific Plan and the Pacific as a whole.
A product of the 2004 Auckland Declaration, the Pacific Plan is a ‘living document’ that enables initiatives to adapt with the framework. The Pacific Plan has four pillars aimed at enhancing economic growth, sustainable development, good governance and security of the Pacific through regionalism. Securing actions at the national level has been a paramount concern given the diversity of states and disparity in wealth.
One goal in reviewing the current Pacific Plan should be to improve labor mobility in the region. This goal is steadily gaining traction, but policymakers need to take care to avoid some of the negative aspects of temporary migration and to provide more sustainability. The Australian Pacific Seasonal Work Pilot Scheme and New Zealand Recognised Seasonal Employer Scheme have been workable models to increase remittances among the island states. In fact, there are recruiting firms throughout the Pacific that promote workers for both New Zealand and Australian schemes (see, for example, http://www.workreadyvanuatu.com).
However, the seasonal worker schemes create multiple dependencies on unskilled labor. Horticulture, viticulture and other industries that have seasonal labor needs are more inclined to take on labor with less ability to make demands for rights and benefits; furthermore, migrant labor provides a pool of labor potentially unavailable or unwilling to do the grunt work required in those industries. Migrants, on the other hand, become dependent on impermanent, unskilled and unpredictable work. While remittances are highly valued as essential Pacific economies, the type of work created for seasonal workers is currently not the most sustainable either in terms of returning home as a skilled migrant or with a secure income.
Such an exchange of labor could be expanded to all Forum Island Countries (FICs) in a way that encourages training and the exchange of skills. (See, for example, doctor exchanges between Venezuela and Cuba as a progressive idea; it hasn’t worked well in practice however due to strong ideological fervor among both states). For a more skilled and sustainable Pacific economy, training is needed outside of the temporary program, and protections are needed against exploitation. Migrants and temporary workers are typically the most disadvantaged in in terms of labor rights and the Pacific has the potential to produce a more equitable regional model.
Like the issue of labor mobility, creating a common market and pursuing free trade in the Pacific are goals that require careful attention. Both Australian and New Zealand foreign ministries have explicitly stated that their approach to the Pacific Agreement on Closer Economic Relations (PACER) Plus negotiations differs from their traditional approach to free trade agreements; rather than focusing solely on their states’ commercial interests, Australia and New Zealand aim to promote the development and capacity of FICs. The two regional powers additionally must maintain competitiveness with potential trade agreements that FICs make with the European Union.
With ever-increasing collusion among trade, development and foreign policies, taking steps toward free trade agreements is a precondition for aid and greater access to NZ and Australian markets. The goal of PACER Plus is to start with free trade within the FICs to demonstrate their abilities to cope with such policies. One problem encountered by the region is that the principles of free trade clash with certain traditional Pacific principles (e.g. property rights). Regionally, community development solutions such as bulk purchasing invite avenues for creativity and take into consideration the nature and interests of Pacific Island states.
Globalization and the changing international political landscape are creating an increasingly competitive environment in the Pacific. As the region draws greater attention from China and the US for its geostrategic position and natural resources, the Pacific Islands Forum and its member states should secure a more formidable voice, particularly on issues that impact the region. An effective review and renewal of the Pacific Plan then must include two of the most noteworthy subjects for development, improved labor mobility and closer economic relations.
“In an anarchic world with no central authority, the United States has the ability to either physically force other countries into compliance with violence, or the country can seek co-operative partnerships to reach its goals – partnerships in which it can wield significant influence because it is a great power. The United States has chosen the latter.” (Grillot, Cruise and D’Erman, VJ 2010)
International trade can provide stability in access to goods as well as acting as an engine for growth. As technology improves, the global supply chain becomes more advanced and more actors become involved. The threat of more frequent natural disasters and the potential for terrorism or transnational criminal activities facilitated by global transportation networks, there is an ever-greater need to ensure the security and efficiency of supply chains. This past week at the World Economic Forum in Davos, Switzerland, US Secretary for Homeland Security Janet Napolitano unveiled the latest National Strategy for Global Supply Chain Security (the Strategy). The launch of this updated policy is timely given President Obama’s desire to boost American manufacturing, new bilateral trade pacts with Colombia and Korea and the impending Trans-Pacific Partnership. This post seeks to shed light on the policy and briefly demonstrate the importance of ensuring an operational global supply chain security regime.
Each year 12 million containers are shipped into the US alone. (US Dept. of Transportation, 2009) It is no wonder, then that the Strategy has two primary goals: promote the efficient and secure movement of goods, and foster a resilient supply chain. Security will be integrated as a key component of supply chain operations, but not in such as way as to slow down shipments. For this goal, the US seeks to:
- Resolve threats early to expedite the flow of legitimate commerce.
- Improve verification and detection capabilities.
- Enhance security of infrastructure and conveyances in order to protect the supply chain and critical nodes, through limiting access to cargo, infrastructure, conveyances, and information to those with legitimate and relevant roles and responsibilities.
- Maximize the flow of legitimate trade by modernizing supply chain infrastructure and processes to meet future market opportunities; developing new mechanisms to facilitate low risk cargo; simplifying our trade compliance processes; and refining incentives to encourage enhanced stakeholder collaboration.
Furthermore, disruptions to the global supply chain due to natural disasters or disease can have staggering consequences. Therefore to improve its sustainability, the government aims to:
- Mitigate systemic vulnerability to a supply chain disruption prior to a potential event by using risk management principles to identify and protect key assets, infrastructure, and support systems; and promoting the implementation of sustainable operational processes and appropriate redundancy for those assets.
- Promote trade resumption policies and practices that will provide for a coordinated restoration of the movement of goods following a potential disruption by developing and implementing national and global guidelines, standards, policies, and programs.
As with other public government strategies, the Strategy “provides strategic guidance to departments and agencies within the United States Government and identifies our priorities to stakeholders with whom we hope to collaborate going forward.” With the focus on the “worldwide network of transportation, postal, and shipping pathways; assets and infrastructure by which goods are moved from the point of manufacture until they reach an end consumer; and supporting communications infrastructure and systems,” the policy to “strengthen the global supply chain” naturally relies upon external actors (including other states, multinational corporations and multilateral bodies, to name a few) to be successful. As the opening quote suggests, the US does not plan to facilitate detailed actions on its own. Rather, the government is encouraging feedback and involvement “from host governments, industry partners and other stakeholders” to produce the best initiatives and actions to secure the global supply chain.
There are already frameworks and initiatives in place to facilitate global supply chain security, affecting actors differently. The Container Security Initiative and the SAFE Frameworks of the World Customs Organization (WCO) have been critical to these efforts. However, needing to follow or fulfill requirements of different states can become costly and strenuous for businesses of different sizes. On 1 January 2012, a new version of the Harmonized System Nomenclature entered into force by the WCO as “the world’s global standard for classifying over 98% of goods in international trade”. The WCO is the ideal mechanism for dialogue and implementation of security concepts and standards; the SAFE Framework provides such standards to synchronize varying initiatives. Mutual recognition of security regimes, then, “could become a reality in the future”.
Compliance with regulations falls on the responsibility of the stakeholders (at various levels in the international trade sector), who therefore they must bear much of the cost.* This increased financial burden can have several impacts upon actors and the economies in general. First, those with more financial resources will be in a more favorable position to comply with requirements over those with less experience or resources. Second, investors may turn away from those countries that are less integrated into the “international transport structures for supply chain security. Third, the lack of funding by the WCO and other international organizations for implementation may lead to marginalization or decreased competitiveness of those less able to incur the necessary costs. Keeping current with customs regulations, fees and security requirements can become burdensome; however the Strategy and its ultimate initiatives aim to speed up rather than slow down global trade, and is anything but inward-looking.
In May 2011, New Zealand and the United States signed a joint statement on global supplychain security cooperation. The Asia-Pacific region has a significant role in international commerce and within the supply chain. The two states saw the agreement as a way forward for further collaboration on similar issues. In fact, through Project Global Shield (launched in 2010), New Zealand, the US and close to 60 other countries “share information with each other to ensure that chemicals entering their countries are being used in safe and legal ways, leading to successful interdictions of a number of suspicious shipments and providing promising investigative leads on the smuggling of precursor chemicals into Afghanistan and Pakistan”.
Overall, “container transit is far from being completely ‘visible’ and safe”.* There will always be challenges to security, or threats to shipments from nature. That the US took its time in developing a cohesive Strategy and plans to continue collaboration and dialogue with stakeholders is a positive move. The Strategy acknowledges cooperation is needed, which is a good perspective for policymakers to have. The aim has been for containers to be inspected and cleared for dangerous and unlawful contents before they get close to US borders, so effective and secure networks will be essential.
For further reading:
Frank Altemöller. “Towards an international regime of supply chain security: an international relations perspective.” World Customs Journal. Volume 5, Number 2. [http://www.worldcustomsjournal.org/media/wcj/-2011/2/Altemoeller.pdf]