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China, South Pacific Trade Talks Being Explored, And The Islands Want To Gauge China’s ‘Appetite’

Updated: Mar 31, 2023

- South Pacific is no longer the ‘hole of the Asia-Pacific doughnut’, and the biggest economies want a bigger bite

- China is also looking to cement an economic foothold in the region, but such formal pacts often take years to negotiate and rubber stamp

China and a group of South Pacific island countries could start talks this year toward their first formal trade agreement, according to an official from a regional network of nations.

But while such talks could provide a boost to Beijing’s offshore economic ambitions as US influence spreads in the region, a potential pact is not expected any time soon.

The idea of a trade deal is in its “embryonic stage”, said Zarak Khan, director of programmes and initiatives with the secretariat of the 18-member Pacific Islands Forum.

You can see that the South Pacific is keen to sign, and the world is paying attention to the South Pacific; Zarak Khan, Pacific Islands Forum

Feasibility studies have been carried out, he added, and forum members “are interested in getting more preferential market access for South Pacific goods”.

The Fiji-based Pacific Islands forum, like the intergovernmental Asia-Pacific Economic Cooperation (Apec), steers policy for member nations across a 165.2 million sq km (63.8 million square mile) expanse of sea, but does not negotiate agreements with outside countries.

The island countries, many impoverished and saddled by high costs because of their remote locations, have said they want foreign help that creates jobs, reduces the impact of rising sea levels and revives tourism that stalled during the pandemic.

China is seen especially as a source of help setting up a “digital economy” in the Pacific, Khan said.

China and any number of South Pacific nations could pursue a free-trade agreement (FTA) that slashes import tariffs, he said, or consider a different kind of trade “modality” instead.

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