Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - EU relations with the Pacific Islands - A strategy for a strengthened partnership {SEC(2006) 642}
Date: 2006-05-29
Institutions: European Commission
Subjects: ACP countries, European Union, Pacific Ocean, aid system, cooperation policy, development policy, political cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.5.2006 
COM(2006) 248 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

EU RELATIONS WITH THE PACIFIC ISLANDS -  
A STRATEGY FOR A STRENGTHENED PARTNERSHIP 

{SEC(2006) 642} 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

EU RELATIONS WITH THE PACIFIC ISLANDS -  
A STRATEGY FOR A STRENGTHENED PARTNERSHIP 

1. 

INTRODUCTION 

The EU and the Pacific ACP countries1 can look back on more than 30 years of cooperation in 
the context of the EU-ACP partnership. This long-standing relationship is based on the legacy 
of  a  shared  history,  common  values,  economic  and  trade  cooperation.  Today,  developments 
on both sides warrant renewal of this partnership and establishment of a fully-fledged strategy 
on the Pacific ACP countries. There are compelling reasons for proposing this first ever EU 
strategy for the Pacific. 

On  the  EU  side,  the  revised  Cotonou  Agreement  and  the  European  Consensus  on 
Development  -  a  tripartite  policy  statement  jointly  adopted  by  the  European  Parliament,  the 
Council and the Commission - provide a new basis and impetus for EU-Pacific relations. The 
Cotonou Agreement strengthens the political dimension of EU-ACP cooperation, allowing an 
improved  political  dialogue  with  partners,  while  the  European  Consensus  identifies  poverty 
eradication  in  the  context  of  sustainable  development  as  the  core,  primary  objective,  taking 
into  account  the  importance  of  ensuring  policy  coherence  for  development  and  generating 
synergies between different policies, both internal and external, and the objectives of the EU 
external action. The Paris Declaration on Aid Effectiveness adopted in March 2005 reaffirms 
the commitments to harmonise and align aid policy and sets specific targets for 2010. 

On the Pacific side, the Pacific ACP countries are today experiencing a number of important 
challenges in terms of vulnerability, poverty and weak governance. All too often the Pacific 
ACP countries are overlooked as their total population amounts to less than 10 million, with 
more than half of that number living in Papua New Guinea. In December 2005 Timor Leste 
ratified the Cotonou Agreement and became the second biggest Pacific ACP country in terms 
of population. The Pacific ACP countries, with Tonga as the only exception, are democracies. 
They possess an exceptional cultural diversity, which should be preserved. 

At the same time the region is home to substantial natural resources (fish, timber, agricultural 
produce, oil, gas, minerals). It has a major stake in efforts to mitigate climate change. It has 
very  rich  biodiversity  (e.g.  that  Papua  New  Guinea  alone  is  estimated  to  have  five  times  as 
many  species  of  fish  than  the  entire  Caribbean  region).  Many  powerful  international  actors 
like China, Japan and the USA are increasing their presence in the region.  

Moreover, 2005 brought renewed impetus towards cooperation in the Pacific region, with the 
adoption  of  the  Pacific  Plan  by  all  16  member  countries  of  the  Pacific  Islands  Forum, 

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Cook  Islands,  Fiji  Islands,  Kiribati,  Marshall  Islands,  Federated  States  of  Micronesia,  Nauru,  Niue, 
Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu. 

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including  14  Pacific  ACP  countries2,  Australia  and  New  Zealand.  This  marks  an  important 
and ambitious step forward in cooperation in the Pacific region which focuses, in particular, 
on  economic  growth,  sustainable  development,  good  governance  and  security  for  Pacific 
countries through regionalism and offers an opportunity to step up EU-Pacific relations. 

In  these  changing  circumstances  there  is  a  need  for  upgrading  and  recalibrating  Europe’s 
strategy for the Pacific. It is therefore proposed to focus on a limited set of specific priorities, 
where  the  Pacific  has  significant  needs  for  which  Europe  has  indisputable  comparative 
advantages. 

The  strengthened  partnership  should  therefore  focus  on  governance,  regionalism  and 
sustainable management of natural resources. 

2. 

REASONS FOR EU ENGAGEMENT IN THE PACIFIC 

2.1.  Natural resources and environmental challenges of global significance 

The  Pacific  Ocean  covers  a  full  one  third  of  the  Earth’s  surface  which  means  that 
environmental developments there will have a significant impact on a global scale, such as the 
future of the world’s fisheries and climate change.  

It  is  in  the  interest  of  humanity  to  preserve  the  Pacific’s  immense  biodiversity,  much  of 
which is not even known yet. It has been estimated that as little as 20% of the Pacific Ocean’s 
flora and fauna has been properly researched. The region has the only fishery resources in the 
world which are not yet heavily over-fished, including the world’s largest tuna stocks.  

The  unique  marine  biodiversity  of  the  region  and  the  prevailing  (including  migratory)  fish 
stocks  are  interdependent.  The  Pacific  Ocean  has  immense  potential  for  human  health  in 
terms  of  biotechnology,  such  as  bioengineered  medication  and  treatments  developed  from 
living  organisms  from  the  Pacific  Ocean.  Therefore  the  Pacific  Ocean,  like  other  major 
ecological zones such as the Amazon, can be considered as a global public good. 

Moreover, when communities make unsustainable demands on ecosystems, this may result in 
an  ecological  breakdown,  which  in  turn  leads  to  worsening  poverty,  tensions  and  even 
conflict.  

The tropical forests of Papua New Guinea are of global significance in terms of bio-diversity 
and as regards climate change. Excessive logging there, but also in Samoa, Solomon Islands, 
Timor  Leste,  Tonga  and  Vanuatu  therefore  presents  significant  risks  for  the  global 
community. Together with unsustainable agricultural practices, it leads in some cases to land 
degradation. This finally destroys rural livelihoods and the way of life of Pacific islanders. If 
climate  change  continues,  many  islands  in  Pacific  ACP  countries  will  disappear  and  the 
region  will  face  problems  with  environmental  refugees.  Moreover,  industrial  pollution  and 
environmental mismanagement  are also serious reasons for concern. The environment has a 
direct impact on all economic and social sectors, including tourism, fisheries and health. 

As existing natural resources in other parts of the world are gradually depleted, and as the 
economies of China, India and ASEAN continue to expand, demand for natural resources will 

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Timor-Leste has observer status. 

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increase  further  and  the  substantial  resources  of  the  Pacific  will  become  increasingly 
important  and  the  issue  of  their  sustainable  management  therefore  deserves  close  attention 
from the EU. 

2.2.  The challenge of stability and security 

Considering that a number of Pacific ACP countries have experienced conflicts in the recent 
past,  continued  vigilance  by  the  world  community  and  targeted  support  addressing  the  root 
causes  are  necessary.  The  consequences  of  instability  can  be  dramatic  in  terms  of  lost 
development  opportunities.  For  example,  the  tensions  in  Solomon  Islands  reduced  the 
country’s per capita GDP by a third. 

The  EU  has  an  interest  in  the  stability  and  security  in  the  Pacific  region.  Recent  events  in 
Timor Leste and the Solomon Islands are yet another reminder that this region is threatened 
by  civil  strife,  crime  and  political  instability.  The  EU  provided  an  election  observation 
mission  for  the  general  elections  in  Fiji  in  2006  and  the  Commission  has  gained  some 
experience in supporting the region’s own efforts at intra-state stabilisation, such as measures 
complementary to the ongoing Regional Assistance Mission to Solomon Islands (RAMSI).  

Fragile  states  in  the  Pacific  pose  major  challenges  for  the  international  community.  Weak 
institutions  and  governance  failures  combined  with  low  economic  growth,  high  rate  of 
unemployment  and  poverty  contribute  to  state  fragility.  The  region  will  face  worsening 
problems  in  future.  On  average,  the  economies  of  the  Pacific  ACP  countries  are  hardly 
growing  while  rapid  population  growth  continues.  If  this  trend  is  not  reversed,  it  could 
trigger an explosive  social and/or political situation, as poverty will worsen.  It is also a sad 
fact that HIV-AIDS is creeping in on the Pacific ACP countries with Papua New Guinea at 
the centre of the crisis. 

2.3. EU relations with third countries in the region 

The  15  Pacific  ACP  countries  are  part  of  the  wider  Asia-Pacific  region,  whose  geopolitical 
importance is growing. The EU has already recognised the growing importance of the wider 
region by establishing a new partnership with South-East Asia in 2003.  

Australia and New Zealand are key Pacific players. The EU’s relations with both countries 
are solid and broad based. They include cooperation on foreign policy issues, trade, security, 
environment and education. Moreover, development cooperation is steadily becoming a more 
valuable component in the overall relations with Australia and New Zealand and this should 
be enhanced. The USA and Japan are also very important actors in the Pacific. They all have 
important security, political and trade interests in the wider Pacific region, while the European 
role  has  decreased.  The  EU’s  bilateral  relations  with  the  USA,  Japan,  Australia  and  New 
Zealand could also benefit from an enhanced European role in the Pacific region. 

The  growing  engagement  of  China  is  a  new  factor  influencing  future  developments  in  the 
Pacific, already injecting a new dynamic in the region and influencing the political stance of a 
number of Pacific ACP countries. 

France continues to play an important role through its three overseas territories and military 
presence. The UK, which has an OCT (Overseas Countries and Territories) in the Pacific, has 
recently been downgrading its diplomatic presence in the region, while Portugal plays a key 
role in the reconstruction of Timor-Leste. 

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Four OCTs (New Caledonia, French Polynesia, Wallis and Futuna, Pitcairn) in the Pacific are 
associated with the EU, and they represent a valuable and important European presence in the 
region. They also constitute an asset to be taken fully into account in the strategy in order to 
promote their integration in the region. 

A  strengthened  partnership  and  an  enhanced  political  dialogue  between  the  Pacific  ACP 
countries  and  the  EU  can  better  support  joint  actions  in  multilateral  fora  (thirteen  Pacific 
ACP countries are members of the UN and they often act as a group), where the two regions 
often share interests in improved global governance, for instance on climate change.  

3. 

STRATEGY FOR A STRENGTHENED PARTNERSHIP 

The Cotonou Agreement is based on five pillars, all of which are highly relevant to today’s 
cooperation between the Pacific ACP countries and the EU: (i) reinforcement of the political 
dimension;  (ii)  involvement  of  civil  society,  the  private  sector  and  other  non-State  players; 
(iii)  poverty  reduction;  (iv)  an  innovative  economic  and  trade  cooperation  framework; 
(v) rationalisation of financial instruments and a system of rolling programming.  

The strategy proposed consists of three components: 

(1) a strengthened relationship between the EU and the Pacific ACP countries and region in 
order  to  pursue  a  broad  political  dialogue  on  matters  of  common  interest  ranging  from 
political  and  security  to  economic,  trade,  social,  environmental  and  governance  issues,  thus 
enhancing the visibility and political profile of the EU-Pacific partnership on both sides; 

(2)  more  focused  development  action,  with  greater  emphasis  on  regional  cooperation  to 
build up critical mass, enhance regional governance and facilitate cross-fertilisation. The main 
focus  will  be  on  matching  the  key  priorities  of  the  region,  notably  as  defined  in  the  Pacific 
Plan3; 

(3)  more  efficient  aid  delivery,  including  greater  use  of  budget  support  and  closer 
coordination with other partners, in particular Australia and New Zealand. 

3.1.  A strengthened relationship 

The  proposal  is  to  enhance  the  political  dialogue  with  the  Pacific  by  increasing  contact 
primarily  with  and  through  the  Pacific  Islands  Forum  which  is  the  main  regional  institution 
for political issues which is about to secure international legal status and which has a mandate 
and coherent regional policies set out in the Pacific Plan.  

The  Post-Forum  Dialogue4,  which  is  the  current  interface  between  the  two  regions,  has  a 
number of shortcomings, such as limited visibility, interaction and impact and too little time 
for preparation and discussion at a point when the EU-Pacific agenda is growing. 

It should be added that several of the region’s partners, such as Japan, have already instituted 
dedicated  interfaces  with  the  region  in  addition  to  their  participation  in  the  Post-Forum 
Dialogue. 

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See annex for details 
See annex for details 

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The October 2005 decision of the Forum leaders to adopt a new Agreement establishing the 
Pacific Islands Forum as an intergovernmental organisation in accordance with international 
law  offers  a  good  opportunity  to  strengthen  the  dialogue  between  the  EU  and  the  Pacific 
region in order to address the abovementioned shortcomings of the Post-Forum Dialogue. 

The modalities for the enhanced EU-Pacific dialogue should be agreed with the objective of 
conducting the dialogue in the most efficient and effective way. 

In addition to the strengthened dialogue at regional level proposed above, the proposal is to 
conduct the dialogue at national level with key Pacific ACP countries. Such national political 
dialogues are to be pursued in accordance with the Cotonou Agreement, while recognising the 
Pacific’s specific features, but at the same time making full and systematic use of its potential 
and provisions. 

3.2.  More focused development action  

Focus  is  necessary  to  ensure  optimal  impact.  It  is  proposed  to  focus  on  three  priorities 
reflecting  interlinking  key  needs  of  the  Pacific  and  European  comparative  advantages: 
Governance, regionalism and sustainable management of natural resources. 

3.2.1.  Governance  

The  EU  can  play  a  constructive  role  in  the  form  of  support  for  both  prevention  and 
stabilisation  in  post-conflict  situations,  drawing  on  the  EU’s  experience  from  similar 
situations  in  other  parts  of  the  world.  In  situations  such  as  these  European  assistance  must 
support  a  smooth  transition  to  long-term  development  and  have  a  clear  governance  and 
nation-building perspective. 

The  EU  will  continue  to  seek  to  address  the  root  causes  of  conflict,  such  as  poverty, 
degradation,  exploitation  and  unequal  distribution  and  access  to  land  and  natural  resources, 
weak  governance,  human  rights  abuses,  gender  inequality  and  democratic  deficits.  It  will 
promote dialogue, participation and reconciliation. 

Good  governance  is  a  crucial  prerequisite  for  sustainable  development.  A  central  part  of 
good and effective governance is to strengthen credible institutions – such as parliaments, the 
judiciary  and  public  financial  management  systems,  including  statistical  services  –  at  both 
national and regional levels. The EU will continue to offer, in cooperation with other donors, 
support  to  the  democracies  in  the  Pacific.  Some  Pacific  ACP  countries  face  governance 
problems in the fisheries and forestry sectors, notably with leakages, e.g. in the form of tax 
exemptions, which result in much lower revenue for the governments concerned.  

Furthermore,  as  regards  governance  it  is  essential  to  encourage  greater  compliance  with 
international  standards  in  the  fight  against  corruption,  money  laundering  and  terrorist 
financing. In the past there has been an issue with money-laundering in the region. Although 
this  is  still  a  risk,  the  problem  is  now  much  more  under  control.  However,  the  EU  will 
continue to promote transparency and effective exchanges of information between authorities 
in order to fight corruption and corporate and financial malpractice. The EU will also support 
key efforts made by Pacific countries to implement their commitments towards the OECD in 
the tax area and to eliminate any harmful tax practices. It is in the common interest of the EU 
and  the  Pacific  countries  to  ensure  that  these  commitments  continue  to  be  effectively 
implemented. 

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3.2.2.  Regionalism 

Achieving critical mass 

The Pacific Plan is based on the concept of regionalism. Stronger regional cooperation would 
improve  the  region’s  capacity  for  dealing  with  the  development  challenges  it  faces.  An 
effective  development  support  strategy  must  therefore  be  based  primarily  on  assistance  for 
regional integration to build up critical mass, to enhance regional governance and to facilitate 
cross-fertilisation. 

There  are  concerns  about  the  effects  of  increasing  globalisation,  and  –  by  extension  –  of 
closer  regional  integration,  on  both  diversity  among  the  Pacific  ACP  countries  and  their 
socio-economic development. Europe’s experience based on combining competitiveness and 
social cohesion demonstrates that it is possible and advantageous, even for small nations, to 
link up in a globalising world while protecting their national identities and cultures. 

A  long-term  formula  for  effective  and  politically  well-anchored  regional  integration  in  the 
Pacific  is  still  under  construction.  In  certain  areas  regional  cooperation  is  already  yielding 
good  results,  such  as  the  Pacific  Islands  Forum  Fisheries  Agency  (FFA),  which  brings 
together  17  member  governments.  The  Pacific  Plan,  while  an  important  step,  must  be 
considered a “living document” and the start of a process rather than the end. Pacific regional 
cooperation is bound to evolve and the EU’s policy for the region will therefore have to adapt 
over  time.  This  is  best  done  through  sustained  support  to  the  Forum  Secretariat  and  other 
relevant CROP (Council of Regional Organisations in the Pacific) agencies5 in particular as 
regards  natural  resources  management,  vulnerability  and  governance.  This  will  encourage 
strengthening Pacific regionalism in areas where it is needed and where the EU can bring real 
added value. 

Economic Partnership Agreement 

The EPA process is having a catalytic effect on economic cooperation and integration in the 
Pacific region as: 

–  it stimulates the Pacific ACP countries to negotiate as a group; 

–  it provides an incentive for openings among the Pacific ACP countries themselves;  

–  it  stimulates  and  hopefully  institutionalises  stronger  regional  governance  in  the  form  of 

peer reviews. 

Ten per cent of the Pacific ACP countries’ total exports go to the EU. This is a remarkable 
figure  considering  the  size  of  these  countries  and  the  physical  distance  between  the  Pacific 
and Europe, but is not large in absolute terms. The benefits from trade in goods flow mainly 
from a number of specific products relevant to a number of countries. Additional benefits for 
all  countries  in  the  region  would  accrue  from  enhanced  regional  integration  and  economic 
governance, particularly if trade-related rules, services and investment were to form part of 
the EPA.  

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The  nine  CROP  agencies  are  specialised  technical  agencies  operating  on  the  basis  of  international 
agreements at the Pacific regional level. 

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Only a group of larger Pacific countries are involved in trade in goods with the EU. The main 
traded  products  are  fish  and  fish  products,  and  sugar.  Fiji,  as  a  Sugar  Protocol  country,  is 
eligible  for  assistance  for  its  adaptation  strategy  following  the  sugar  reform.  The  expected 
restructuring  of  the  sugar  industry  in  Fiji  together  with  the  EPA  should  improve 
competitiveness. Moreover, accompanying measures for Sugar Protocol countries, benefiting 
from specific EU funding, are very likely to reinforce the action on sustainable development 
of natural resources, focusing on energy production from biomass and reforestation. 

The  EU  remains  a  distant  and  comparatively  small  trading  partner  for  the  region  and  the 
eventual  impact  of  trade  liberalisation  under  the  EPA  on  the  Pacific  ACP  countries 
collectively is likely to be relatively small. On the other hand, the proposed regional free trade 
agreement  with  Australia  and  New  Zealand  (PACER)  is  of  another  order  of  magnitude  and 
could entail significant adjustment costs for the Pacific ACP countries. It will therefore be 
important  to  favour  a  gradual  approach  to  trade  liberalisation  in  combination  with  other 
measures,  such  as  opening  developed  partners’  markets  to  labour  from  the  Pacific  ACP 
countries and increasing development assistance. 

In  order  to  maximise  the  desired  effect  of  the  EPA,  it  is  crucial  that  the  negotiations  and 
outcome  are  closely  coordinated  with  programming  and,  in  due  course,  implementation  of 
development assistance, at both regional and national levels, in order to harness synergies. Of 
particular  importance  are  trade-related  assistance  and  capacity-building,  socio-economic, 
financial and tax governance as well as targeted support measures including compliance with 
international customs standards and trade facilitation where relevant, sugar, the private sector 
or human resource development and social protection. 

Through  flexibility,  constructiveness  and  innovation  the  EU  can  set  new  development-
friendly standards in trade negotiations with small developing island economies, which could 
be taken into  account  by the region’s other developed trading partners when (re)negotiating 
their own trade arrangements with the Pacific ACP countries. 

3.2.3.  Sustainable management of natural resources 

Given  the  importance  of  the  sound  management  of  natural  resources  the  Commission 
proposes that one central “blue-green” theme for this strengthened cooperation should be to 
deal  with  the  sustainable  management  of  natural  resources  and  to  support  Pacific  ACP 
countries  in  their  action  to  deal  with  the  consequences  of  climate  change,  rising  sea-level, 
diminishing  fish-stocks,  coral  bleaching,  unsustainable  logging,  land  degradation  and 
increasing pollution and waste.  

This is a policy domain where the EU’s added value is clearly recognized and where Europe, 
in addition to its financial assistance, could offer its collective experience and know-how in 
dealing with environmental problems and resource management issues. This would also allow 
integration of these EU-Pacific cooperation efforts into the international efforts to deal with 
key global environmental challenges, where the Pacific ACP countries, New Zealand and the 
EU  share  common  objectives,  such  as  those  of  the  Kyoto  Protocol.  A  dialogue  with  other 
third countries actively involved in the exploitation of natural resources in the region should 
be sought. 

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On the basis of the priorities expressed by the region itself6, the European Union can assist the 
Pacific ACP countries in managing their ocean and coastal resources in a sustainable manner 
through  initiatives  which  could  combine  conservation  of  fisheries  and  marine  biodiversity, 
while  at  the  same  time  promoting  regional  cooperation  and  strengthening  the  voice  of  the 
SIDS (Small Island Developing States). These initiatives could provide for capacity-building 
measures  to  support  implementation  of  multilateral  environmental  agreements  and  other 
necessary  policies  related  to  sustainable  management  of  natural  resources  and  could  also 
provide a platform for interested EU Member States to become involved. The CROP Marine 
Sector Working Group under the Forum7 would be well-placed to take this initiative forward 
and oversee implementation.  

Fisheries is a sector with great potential to contribute to the Pacific ACP countries’ economic 
development  and  integration  into  the  world  economy.  Sustainable  utilisation  of  fisheries 
resources and good governance of this sector are therefore high on the region’s agenda. The 
EU has already gained considerable experience with regional cooperation on fisheries in the 
Pacific  both  under  its  common  fisheries  and  its  development  policies,  especially  where 
research and stock assessment are concerned. The EU and partners from the region organised 
in the Pacific Islands Forum Fisheries Agency have a longstanding successful cooperation in 
regional  management  organisations,  such  as 
the  Western  Central  Pacific  Fisheries 
Convention. The EU could step up its efforts to promote sustainable fisheries management by 
supporting  the  region’s  monitoring,  control  and  surveillance  system  (MCS)  and  by 
strengthening  the  region’s  capability  to  fight  illegal,  unreported  and  unregulated  fishing 
(IUU),  especially  in  view  of  the  loss  of  earnings  incurred.  There  is  further  potential  for 
fisheries and marine research, which the EU intends to support in order to further sustainable 
fisheries management in the region. 

The new generation of Fisheries Partnership Agreements (FPAs) mark a new approach as, in 
addition to providing regulated access to fishing opportunities for European vessels, they also 
envisage  close  cooperation  to  promote  responsible  fishing  and  ensure  conservation  and 
sustainable use of the fishery resources of the partner countries concerned. This approach will 
be  implemented  through  a  policy  dialogue  and  financial  support  for  the  sector  to  provide  a 
key contribution to definition and implementation, by coastal states, of a policy on sustainable 
development of fishing activities in their waters. The first two new FPAs were concluded with 
Pacific Ocean partner countries. 

Several Pacific ACP countries and OCTs have tropical forests and related biodiversity. The 
EC already has significant experience of cooperating with Papua New Guinea on sustainable 
logging. Increasingly, verification of the legality of logging operations and timber exports is 
seen  as  a  key  instrument  in  sector  reform  programmes.  Reliable  systems,  which  can 
distinguish  legal  from  illegal  production,  will  be  essential  in  order  to  provide  credible 
guarantees to the market that timber has been legally harvested. In line with the Forest Law 
Enforcement,  Governance  and  Trade  (FLEGT)  Action  Plan  for  the  ACP  countries,  the 

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The Pacific Plan lists as one of the region’s key priorities the facilitation of international financing for 
sustainable  development,  biodiversity  and  environmental  protection  and  to  counter  the  effects  of 
climate change in the Pacific. Under this heading the Pacific Plan also refers to an integrated agriculture 
and forestry plan. The Pacific Islands Ocean Policy adopted in 2002 makes the case for an integrated 
ocean management in the interest of future generations of Pacific Islanders, and provides an Integrated 
Framework for Action of Ocean Initiatives. 
The Group consists of the Secretariat of the Pacific Community (SPC), the South Pacific Applied Geo-
science Commission (SOPAC) and the Pacific Regional Environment Programme (PREP). 

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Commission proposes supporting a regional approach, building national and regional capacity 
to monitor and support FLEGT partnership agreements.  

Considering  the  vulnerability  to  natural  disasters,  the  Commission  proposed  in  2005  to  the 
Pacific  ACP  countries  the  establishment  of  a  regional  disaster  preparedness  programme. 
This  initiative  could  be  followed  up  and  expanded  into  the  field  of  disaster  reduction  (risk 
reduction,  hazard  mitigation  and  reduced  vulnerability  taking  into  account  the  need  for 
adaptation  to  climate  change).  Such  measures  complement  the  existing  regional  action  to 
reduce vulnerability. 

High oil prices, remoteness and small markets are all reasons for the small Pacific islands to 
place renewable energy and energy efficiency high on their agenda. Present EC initiatives 
in  this  sector  could  be  followed  up  and  expanded,  particularly  in  the  framework  of  the 
European  Union  Energy  Initiative  (EUEI)  and  of  the  related  EU-ACP  Energy  Facility. 
Pollution control, water and sanitation could also be considered for EC support.  

Action on sustainable management of natural resources should help create the conditions for 
economic  growth  leading  to  the  creation  of  productive  and  decent  employment,  social 
cohesion  and  protection,  as  well  as  less  poverty  thereby  contributing  to  attaining  the 
Millennium  Development  Goals.  Continuing  attention  will  be  given  to  the  vital  issue  of 
human  resources  development.  In  this  context,  non-state  actors  play  an  important  role, 
because  of  their  crucial  contribution  to  open  societies,  notably  by  promoting  improved 
governance, nation-building and empowerment.  

Investment in science and technology in the Pacific islands together with investment in human 
resources and institution building will reinforce the capacity in a range of areas essential for 
their  sustainable  development,  such  as  fisheries  management,  biodiversity  and  disaster 
preparedness.  Possibilities  for  research  cooperation  could  be  followed  up  under  the 
European Union’s Research Framework Programmes. 

Modern information and communication technologies are important enablers, in particular 
in a region spanning great distances, and can be integrated systematically into implementation 
of the abovementioned proposed action, e.g. in the form of surveillance and control systems 
for fisheries and logging and of facilitating communication in the education sector, as well as 
allowing  the  media  to  present  and  safeguard  the  vast  cultural  diversity  of  the  region  and 
realize  its  economic  potential.  The  potential  for  introducing  or  strengthening  distance 
learning, notably e-learning, for remote rural areas and island communities will be explored. 

3.3.  More efficient aid delivery 

To make EU development assistance more efficient and to reduce the considerable transaction 
costs on both sides, the Commission proposes that assistance should be more concentrated, as 
outlined  above,  with  a  stronger  focus  at  regional  level,  more  efficient  use  of  small  country 
allocations and greater use of budget support where possible. 

3.3.1.  Donor coordination 

The proposed concentration of the EU strategy will facilitate donor coordination both at EU 
level  and  with  others,  notably  Australia  and  New  Zealand,  which  the  Commission  will 
continue  to  pursue  in  order  further  ease  the  pressure  on  the  limited  capacity  of  the  national 
administrations  concerned.  Co-ordination  is  critical  to  avoid  overlap  or  inconsistencies 

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between  those  seeking  to  achieve  common  goals.  Donor  coordination  is  of  particular 
importance in fragile states. The Global Fund to fight AIDS, Tuberculosis and Malaria has a 
series  of  programmes  in  the  region,  and  the  existing  multi-donor  Trust  Fund  on  Avian  and 
Human  Pandemic  Influenza  could  be  an  example  of  international  donor  coordination  in  the 
health sector should an outbreak occur in the region.  

3.3.2.  More effective and efficient cooperation with the smallest countries 

Full  engagement  in  the  Cotonou  partnership  entails  sustained  political  dialogue,  co-
management  of  development  cooperation  and  full  participation  in  the  EPA  process.  For  a 
number  of  the  smallest  Pacific  ACP  countries  such  intensive  cooperation  poses  a  serious 
challenge  for  their  administrations,  in  particular  for  implementing  individual  country 
programmes. In order to increase aid efficiency and reduce transaction costs, notably for the 
smallest  Pacific  ACP  countries,  while  ensuring  local  ownership,  new  approaches  should  be 
considered,  based  on  existing  experience.  The  on-going  multi-country  renewable  energy 
programme could be a model to follow.  

3.3.3.  Budget support 

The EU intends to apply more systematically the budget support instrument in its cooperation 
with the Pacific ACP countries. 

To this end, given the limited involvement of Bretton Woods institutions in the Pacific region 
the  plan  is  to  enter  into  a  dialogue  with  the  IMF  in  particular  in  order  to  share  analyses, 
experience and studies with a view to developing stronger cooperation in the Pacific regarding 
budget support.  

Furthermore,  the  EU  will  proactively  assist  the  Pacific  ACP  countries  in  meeting  the 
eligibility criteria for budget support, i.e.: 

–  a  Poverty  Reduction  Strategy  Paper  (PRSP)  or  a  national  development  strategy  under 

preparation; 

–  a stable macro-economic framework, which is either satisfactory or under reform; 

–  transparent and sound public finance management. 

At present, there is one relatively modest EC-financed budget support programme in Vanuatu. 
The Commission is examining the scope for extending such support to other countries such as 
Samoa and Fiji, and, possibly, to others.  

At  regional  level  the  EC  is  providing  funds  to  the  Pacific  Islands  Forum  in  the  form  of 
contribution  agreements  which  ensure  a  high  degree  of  ownership.  An  institutional 
assessment  will  be  carried  out  shortly  to  establish  the  conditions  for  closer  cooperation.  In 
future consideration could be given to moving to other forms of funding, implying a greater 
EU contribution to defining and monitoring relevant programmes. 

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4. 

CONCLUSIONS 

The Pacific and the EU have a long-standing and close partnership rooted in history8. While 
links  inevitably  weakened  in  the  second  half  of  the  20th  century  following  decolonisation, 
since then the two regions have evolved substantially and are drawing closer together again. 

This presents a real opportunity for strengthening the partnership in terms of a broad political 
dialogue, trade and development cooperation. While the Pacific and the EU are far apart from 
each other geographically, they are more important to each other than is generally realised or 
understood in Europe. The two regions have much to offer each other, they complement each 
other considerably and they share key values and interests. 

Since only a few Member States and the Commission have representations in the Pacific ACP 
countries, the Pacific region would appear particularly well-suited for joint EU presence and 
action in the field, for instance through seconding officials from Member States’ services to 
the Commission’s regional Delegations in the Pacific, which could also provide facilities on 
an ad-hoc basis (“Europe House”).  

A  gradual  process,  combined  with  the  necessary  flexibility,  would  provide  a  framework  for 
better external representation of the EU in the Pacific, in the form of broader presence, deeper 
political dialogue and a higher profile for the EU.  

8 

See annex. 

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ACP COUNTRIES - KEY STATISTICS 

Population 

Area 
(km²) 

HDI 
(UNDP 
2003) 

EEZ 

GDP/ Capita (purchasing 
power standards $) 

2004 

(1000 
km²) 

World Bank 

Cook Island 

20300 

240 

Fiji 

848000 

18272 

0.752 

Kiribati* 

98000 

690 

Marshall 
Islands 

60000 

170 

Micronesia 

127000 

700 

10100 

24 

1800 

259 

20000 

487 

Nauru 

Niue 

Palau 

Papua  New 
Guinea 

Solomon 
Islands* 

Timor-
Leste* 

Tonga 

5700000 

462840 

0,523 

3120

Samoa* 

179000 

2857 

0,776 

120

471000 

28446 

0,594 

1630

925000 

14874 

0,513 

322

102000 

699 

0,81 

Tuvalu* 

11190 

26 

Vanuatu* 

215000 

12189 

0,659 

1830

1260

3600

2131

2978

320

390

601

700

757

680

2004 

4896** 

2690 

970 

2370 

1990 

1917** 

2970** 

6870 

580 

1860 

550 

550 

1830 

989** 

1340 

Total 

8788390 

542773 

20439

* 
** 

Least-developed countries  
figures from 2002, source University of the South Pacific. 

Sources:  NZaid:  AnnualReport  2004-2005;  Pacific  Development  Report  (2002);  Secretariat  of  the  Pacific 
Community; World Development Report 2006; UNDP: Human Development Report (2004) 

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PACIFIC OCT STATISTICS 

Country 

Population 

Area 

(July 2006 est.) 

(km²) 

EEZ 

(km²) 

GDP per capita 
(ppp) (2003 est.) 

New Caledonia 

219,246 

19,060 

1,347,964 

$15,000 

Pitcairn 

French 
Polynesia 

45 

47 

837,221 

N/A 

274,578 

4,167  

4,553,115 

$17,500 

(second largest of 
the world) 

Wallis & Futuna 

16,025 

274 

271,050 

$3,800 

(2004 est.) 

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ANNEX  

1. 

THE PACIFIC REGION 

1.1.  Key characteristics 

Oceania is an essentially maritime continent of about 30 million people with Australia at its 
centre of gravity. There are 15 countries in this region that have a special development, trade 
and political cooperation with the EU, governed by the Cotonou Agreement between the EU 
and Africa, the Caribbean and the Pacific (ACP). The total population of the 15 Pacific ACP 
countries is only about 9 million. Papua New Guinea (PNG) with its 5.7 million inhabitants is 
the biggest, while Niue with 1800 is the smallest. The Pacific ACP countries are inhabited by 
Pacific peoples (Melanesians, Micronesians and Polynesians). Papua New Guinea, Solomon 
Islands  and  Vanuatu  are  all  Melanesian  countries.  Timor-Leste  and  Fiji  are  predominantly 
Melanesian, while Fiji also has an important Indo-Fijian population. The Federated States of 
Micronesia  (FSM),  Kiribati,  Nauru,  Palau  and  the  Republic  of  the  Marshall  Islands  are  all 
Micronesian  countries.  Cook  Islands,  Niue,  Samoa,  Tonga  and  Tuvalu  are  the  Polynesian 
countries.  

In  addition,  the  Pacific  region  includes  eight  territories,  of  which  four  are  European:  New 
Caledonia, French Polynesia and Wallis and Futuna are French territories, while tiny Pitcairn 
is  the  last  remaining  UK  territory  in  the  Pacific.  Of  the  remaining  four  territories  three  are 
with the United States (American Samoa, Guam and Northern Marianas); and one with New 
Zealand (Tokelau). 

Apart from PNG, Solomon Islands and Fiji land resources are limited, but marine resources 
are very considerable. Twenty million sq km of the Exclusive Economic Zone (EEZ) of the 
Pacific  region  belongs  to  the  Pacific  ACP  countries9.  The  Pacific  has  the  richest  fishing 
grounds in the world and is one of the world’s centres of marine biological diversity, with up 
to 3,000 species found on a single coral reef. It has been estimated that PNG alone has five 
times more species of fish than the entire Caribbean region and twice as many as the Red Sea. 
Forests  and  their  biodiversity  are  other  important  components  of  the  Pacific  islands  natural 
capital,  especially  for  poor  rural  communities  in  Melanesia.  PNG  hosts  one  of  the  world’s 
four  remaining  tracts  of  tropical  rainforest  and  7%  of  the  world’s  species  of  plant  and 
terrestrial life forms, while Solomon Islands has the highest concentration of endemic birds on 
the planet. The region is rich in minerals – gold, copper, nickel – as well as oil and gas, and 
much of it is still unexplored. 

Australia and New Zealand play a special role in the region. Each country has its own Pacific 
strategy, however, Australia and New Zealand have coordinated policies in some areas. 

Australia,  the  region’s  dominant  economy  and  political  actor,  is  geographically  close  to 
Melanesia.  The  region’s  stability  has  always  been  an  important  issue  for  Australian  foreign 
policy, while the Pacific is less important for Australia in commercial terms. Key concerns for 
Australia  relate  to  transnational  crime,  and  in  recent  years  Australia  has  been  pursuing  a 

9 

Of the 15 Pacific ACP countries six (Cook Islands, FSM, Nauru, Niue, Palau and the Republic of the 
Marshall  Islands)  have  a  total  population  of  around  or  less  than  250.000,  but  combined  EEZs  that 
exceed 8 million km2. 

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robust  policy  aimed  to  prevent  the  emergence  of  failed  states  in  the  region,  including 
important initiatives to stabilise the Solomon Islands, to improve governance in PNG and to 
promote regional police cooperation. Its policy has been influenced by a number of terrorist 
attacks outside Australia, where Australian lives were lost. Australia has a delicate balancing 
act  so  as  not  to  be  seen  as  over-dominant.  The  country’s  relations  with  its  immediate 
neighbour,  Papua  New  Guinea,  have  sometimes  been  strained,  while  its  negotiations  with 
Timor-Leste regarding a permanent maritime boundary, including access to natural resources, 
have, at times, been difficult. An important ongoing debate in the region concerns the interest 
of  the  Pacific  ACP  countries  in  gaining  access  for  their  citizens  to  the  Australian  labour 
market, in particular for unskilled labour. Australia is the most important donor in the region 
and  has  recently  announced  a  very  substantial  increase  of  its  ODA.  Australia  is  about  to 
launch its first White Paper on Development as well as an analytical report highlighting major 
challenges  facing  the  Pacific  to  the  year  2020.  Australia  is  highly  supportive  of  EU 
engagement with the region and keen to coordinate its development assistance with the EU. 

New Zealand has close ties to the Pacific, and notably Polynesia, partly for historical reasons, 
partly  because  of  its  large  Polynesian  population.  The  Pacific  is  a  primary  area  for  New 
Zealand’s foreign policy. It played an important role in the peace process for Bougainville and 
it  is  the  second  biggest  participant  in  the  Regional  Assistance  Mission  to  Solomon  Islands 
(RAMSI).  New  Zealand  is  committed  to  promoting  Pacific  regionalism.  The  Pacific  is  a 
medium-sized trading partner for New Zealand. It concentrates most of its relatively limited 
ODA to the region and is an important development partner for many Pacific ACP countries. 
Like Australia, New Zealand is also highly supportive of an active EU engagement with the 
region and keen to coordinate its development assistance with the EU. 

1.2.  Geo-political and geo-economic importance 

The  US,  Japan,  China,  Australia  and  New  Zealand  are  the  key  Pacific  powers,  and  they  all 
have important security, political and trade interests in the wider Pacific region, where the US 
has been the leading power since the end of World War II. Japan and Australia are close US 
allies, and have underpinned the position of the US in the wider Pacific for decades, while the 
European  role  has  decreased  with  decolonisation.  France,  however,  is  significantly  engaged 
through its territories and military presence. The growing engagement of China in the region 
is a new factor influencing future developments in the Pacific in the form of Chinese trade, 
investments, migration and aid coupled with an intensifying diplomacy. As the economies of 
China, India and ASEAN continue to grow rapidly, demand for the region’s natural resources 
is increasing. 

1.3.  Main development challenges 

Of the 15 Pacific ACP countries no less than 11 have populations around or below 250.00010. 
It is difficult for such small nations to attain a critical mass for production and trade or indeed 
political influence, because of important dis-economies of scale. The concern is that for many 
small  Pacific  ACP  countries  globalisation  may  not  mean  interdependence,  but  increased 
dependency. 

10 

All 15 Pacific ACP countries are SIDS (Small Island Developing States), and they participate actively 
in  the  UN-sponsored  SIDS’  process,  which  most  recently  resulted  in  the  Mauritius  Declaration  and 
Mauritius  Strategy  for  the  Further  Implementation  of  the  Programme  of  Action  for  the  Sustainable 
Development of SIDS agreed in January 2005. 

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With  the  exception  of  Tonga,  which  is  an  almost  absolute  monarchy,  all  Pacific  ACP 
countries  are  fully  fledged  democracies,  but  modern  institutions  have  not  yet  taken  root 
everywhere  and  do  not  easily  combine  with  traditional  power  structures.  In  recent  years 
political  developments  have  proven  that  a  number  of  Pacific  countries  are  potentially 
unstable11. 

A number of Pacific countries, notably PNG and Solomon Islands, face important problems of 
governance  and  corruption.  These  are  often  linked  to  the  issue  of  nation  building  in 
countries  that  are  very  heterogeneous,  as  identification  with  a  clan  or  similar  group  may  be 
stronger than with the State12. 

While  the  region,  apart  from  Tonga,  is  not  in  general  marred  by  grave  human  rights 
problems, there are serious issues related to gender. While the situation differs from country 
to country, violence against women and polygamy constitute important problems and women 
still have far to go in terms of empowerment13.  

Poverty  and  progress  towards  the  Millennium  Development  Goals  (MDGs)  remain 
important  challenges  in  a  number  of  the  countries.  Poverty  of  opportunity  is  a  particularly 
acute  problem,  with  rural  communities,  where  most  Pacific  islanders  live,  facing  problems, 
such  as  poor  access  to  basic  social  services,  sustainable,  efficient  and  affordable  energy 
services  and  telecommunications,  and  with  economic  activities  hampered  by  distance, 
insufficient and expensive transport services and limited access to capital.  

Unsustainable management of natural resources is a serious issue facing several countries 
in the region. In particular, the rates at which forests are being depleted and biodiversity is 
being lost are so high that the countries concerned risk losing critical economic assets within a 
very short time span. Often a result of weak governance, this combines with serious leakages 
of financial resources away from Government. The result is that critical resources that should 
be invested in the development of these countries are diverted. 

The Pacific ACP countries have relatively good food-security, although there is a problem of 
malnutrition in some places. However, while there is a tradition for safety nets and a culture 
of sharing, community support systems are now under strain in many places. 

11 

12 

13 

Secessionist war on the island of Bougainville in PNG; tensions in Solomon Islands; repeated coups in 
Fiji; severe economic and financial crisis in Nauru; democratic deficit in Tonga. 
While PNG is ranked 130th in Transparency International’s corruption perception index, in some other 
Pacific countries corruption is a minor issue, such as in Kiribati, where theft is seen as dishonouring, 
and carries severe social sanctions. 
An extreme case is Solomon Islands, which as late as early 2006 did not have a single female member 
of parliament. 

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EN 

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The  Pacific  possesses  an  exceptional  cultural  diversity14,  which  is  the  basis  for  an 
extraordinary richness of cultural expression. This diversity, including the linguistic heritage, 
should be preserved15. Furthermore, this diversity also represents a non-negligible source of 
wealth  in  economic  terms  which  the  media  through  the  use  of  ICTs  can  help  realise..  The 
question of how best to achieve the desired and inevitable economic modernisation without 
jeopardising  fundamental  strengths  of  the  traditional  culture  is  crucial  to  the  future  of  the 
region.  When  engaging  in  dialogue  and  development  cooperation  with  the  Pacific  ACP 
countries this cultural dimension needs to be fully taken into account. 

For potential investors Pacific culture imposes a number of important constraints. Traditional 
collective land ownership raises barriers to obtaining land for development and using land as 
collateral. The strong culture of sharing constitutes a disincentive to saving for investment.  

Some  of  these  factors  may  partly  explain  the  weak  economic  growth  experienced  by  most 
Pacific ACP countries, a concern not least in view of the growing population (around 3% a 
year) A study of economic data (available for 11 of the 15 Pacific ACP countries - excluding 
Cook  Islands,  Nauru,  Niue  and  Tuvalu)  shows  that  in  the  period  2000-2004  average  annual 
GDP growth was only 1.1%. However, some countries, notably Samoa, have recorded strong 
growth in the same period. Average inflation for the 11 countries stood at a modest 1.6% in 
2004.  There  are  considerable  differences  in  GDP/capita  requiring  adapted  policies  and 
cooperation. 

The  Pacific  is  particularly  vulnerable  to  natural  disasters,  such  as  earthquakes,  tsunamis 
and hurricanes, and generally with the poorest population segments being the most exposed. 
Since  1950  natural  disasters  have  affected  more  than  3.8  million  people  in  14  Pacific  ACP 
countries  (Timor-Leste  not  included).  In  the  1990s  alone  natural  disasters  cost  the  region 
about  USD  2.8  billion  (in  real  2004  value).  From  1990  to  1999  the  region  had  the  world’s 
highest rates of disaster-related mortality, percentage of population affected, and damage cost 
per capita. While traditional coping mechanisms are strong, the number of reported disasters 
and  the  population  affected  per  event  have  increased  significantly,  reflecting  population 
growth,  rapid  urbanisation,  growing  environmental  degradation  in  coastal  areas,  climate 
change  and  variability.  With  climate  change  and  increasing  sea  levels  many  low-laying 
Pacific  islands  are  at  risk  and  the  region  may  in  future  face  a  serious  problem  in  terms  of 
environmental refugees. 

Last but not least,  the geography of the Pacific is characterised by the enormous distances 
between  and  within  most  of  its  countries.  The  Cook  Islands  (population  less  than  25,000) 
stretch  1,400  km  from  North  to  South,  and  1,000  km  from  East  to  West,  while  Kiribati 
(population 100,000) includes Christmas Island located 3,200 km from the country’s capital. 
In addition, it is the ACP region which is the furthest removed from the EU in geographical 
terms.  This  “tyranny  of  distance”  is  a  serious  constraint  for  development  in  the  Pacific, 

14 

15 

It has been estimated that Papua New Guinea alone has more than 1000 cultural groups speaking some 
800 different languages. 
The  forthcoming  UNESCO  Convention  on  the  Protection  and  Promotion  of  the  Diversity  of  Cultural 
Expressions  will  offer  a  new  international  framework  to  promote  international  cooperation  aimed  at 
preserving cultural diversity, which may be important in this regard. 

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because of serious diseconomies of distance resulting notably in low frequency and high-cost 
transport. However, electronic communication is becoming cheaper and more available. 

1.4.  Regional cooperation 

The Pacific Islands Forum (the ‘Forum’) is the premier regional policy-making body of the 
self-governing  states  in  the  Pacific.  Established  in  1971,  its  membership  includes  14  of  the 
Pacific ACP countries together with Australia and New Zealand.16 Forum Heads of State and 
Government  meet  annually,  as  do  Forum  Economics  and  Education  Ministers.  Similar 
meetings are planned for Forum Health Ministers. Ad hoc meetings of Transport and Fisheries 
Ministers are also held. The Chairmanship of the Forum rotates on an annual basis among the 
Member  States.  As  regards  security,  the  Biketawa  Declaration  of  2000  establishes  a 
framework for Forum intra-state security cooperation, which calls for Forum Foreign Affairs 
Ministers to meet as part of an ad hoc crisis management mechanism for the region.  

The  Forum  is  served  by  its  Secretary-General,  whose  work  is  supported  by  the  Forum 
Secretariat.  The  Secretariat’s  overall  objective  is  to  service  the  Member  States  and  to 
promote Pacific regional cooperation, particularly on economic and trade matters. It also acts 
as  the  Forum’s  administrative  arm,  implementing  its  decisions,  including  delivering 
development assistance to Member States. In the case of trade-related assistance, it can also 
act as implementing agency. 

The  Forum  Secretary-General  is  also  permanent  Chair  of  the  Council  of  Regional 
Organisations in the Pacific (CROP), which brings together the Forum Secretariat and nine 
other Pacific regional organisations (see annex A)17. 

At  the  October  2005  meeting  of  Forum  Heads  of  State  and  Government  two  important 
decisions aiming at strengthening regional cooperation were taken. The Leaders approved an 
Agreement giving the Forum legal personality under international law. They also approved 
the  Pacific  Plan  and  a  roadmap  for  its  implementation.  This  decision  represents  the 
culmination of a process started in 2003 by initiative of the New Zealand Forum Chair aimed 
at  strengthening  Pacific  regionalism.  The  Plan,  covering  the  years  2005-2015,  has  been 
presented  as  a  dynamic  framework  for  strengthened  regional  cooperation  and  integration.  It 
remains  to  be  seen  how  far  effective  implementation  can  be  achieved.  Full  implementation 
will  depend  on  continued  political  commitment  and  mobilisation  of  the  required  financial 
resources. 

Presently,  regional  cooperation  in  the  Pacific  is  neither  broad  nor  deep.  Among  the 
explanatory factors can be mentioned the geography of the region, the fact that many Pacific 
countries  are  still  relatively  young  as  independent  states  and  therefore  particularly  sensitive 
about  issues  pertaining  to  sovereignty,  and  the  asymmetry  between  Australia  and  New 
Zealand on the one hand, and the Pacific ACP countries on the other18. 

16 
17 

18 

Timor-Leste has observer status in the Forum and is not at present considering full membership. 
The  core  activities  of  these  regional  organisations  are  funded  by  contributions  from  Member 
governments, but they are governed by bodies that reflect their varying membership. 
Attempts at sectoral regional integration have had mixed results since the 1970s. PNG, by far the largest 
Pacific ACP country, established its own higher education system (UPNG, Unitech), while the rest of 
the  region  created  the  University  of  the  South  Pacific.  Nauru,  Samoa,  Solomon  Islands,  Tonga  and 
Vanuatu  initially  created  Air  Pacific  but  then  quickly  set  up  their  own  national  airlines  to  promote 

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In 2004 intra-regional trade between the Pacific ACP countries was as low as 3%19, mainly 
due to transport costs and the limited size of their markets. These countries have concluded 
the Pacific Island Countries Trade Agreement (PICTA), aiming to establish a FTA among 
its parties. The Pacific Agreement on Closer Economic Relations (PACER) is a trade and 
economic cooperation agreement among all 16 Forum Member States. It sets out the basis for 
the future development of trade relations among these states20. 

The  Melanesian  Spearhead  Group  (MSG)  is  a  sub-regional  trading  arrangement  among 
PNG, Solomon Islands, Vanuatu and Fiji, with New Caledonia as an observer. MSG aims at a 
FTA in 2008 and aspires to a Customs Union. 

There is scope for increased cooperation and synergy between the Pacific ACP countries and 
the region’s OCTs in areas such as environment and vocational training. 

1.5.  Key  partners  of  the  Pacific  beyond  Europe,  Australia  and  New  Zealand: 

United States, Japan, China and Taiwan 

The  United  States  has  important  security  interests  in  the  Pacific,  which  it  has  dominated 
since  its  victory  in  World  War  II.  US  trade  with  the  larger  Asia-Pacific  region  has  now 
overtaken  its  trade  with  the  EU,  so  also  for  this  reason  the  US  has  a  strong  interest  in 
continued  stability.  The  US  National  Security  Strategy  from  March  2006  highlights  the 
importance  of  in  particular  Japan,  South  Korea  and  Australia.  In  its  Quadrennial  Defense 
Review Report from February 2006 the US Department of Defense reports that of the major 
and emerging powers, China has the greatest potential to compete militarily with the United 
States, adds that the pace and scope of China’s military build-up already puts regional military 
balances  at  risk,  and  states:  “U.S.  policy  remains  focussed  on  encouraging  China  to  play  a 
constructive, peaceful role in the Asia-Pacific region and to serve as a partner in addressing 
common security challenges, including terrorism, proliferation, narcotics and piracy.” The US 
has renewed economic and military agreements (Compacts of Free Association) with Palau, 
Micronesia and the Marshall Islands. The US also has territories in the Pacific, and Hawaii is 
a US state. Having curtailed its development cooperation with the region in the past the US 
has recently reengaged, notably with Vanuatu. The US has indicated its interest in seeing the 
EU pursue an active role in the region. 

Japan  has  security,  foreign  affairs,  trade  and  fishery  interests  in  the  region,  and  is 
traditionally an important donor, specialising mainly in infrastructure. As memories of World 
War II fade Japan’s cooperation with the Pacific ACP countries becomes easier. 

China’s role21 in the Pacific region is growing in line with its increasing economic weight in 
the  world.  There  is  also  migration  from  China  to  the  Pacific  ACP  countries.  China  is 
competing  with  Taiwan  for  diplomatic  relations  with  a  number  of  the  13  Pacific  ACP 
countries, which are members of the UN22. It already pursues defence cooperation with PNG, 

19 

20 
21 

22 

tourist arrivals directly from major airports in Australia, New Zealand and Hawaii. The Pacific Forum 
(shipping) Line also proved unviable as a way of servicing the more peripheral states. 
Timor-Leste,  which  acceeded  to  the  Cotonou  Agreement  in  December  2005,  is  not  included  in  this 
statistic. 
Timor-Leste is neither party to PICTA nor to PACER. 
In  2000  the  Pacific  Islands  Forum  agreed  to  establish  of  a  Pacific  Trade  Office  in  Beijing  and  from 
2000 to 2004 bilateral trade with China has doubled from USD 267 million to USD 530 million. 
Six  Forum  Member  States  currently  recognise  Taiwan:  Solomon  Islands,  Kiribati,  Marshall  Islands, 
Tuvalu, Palau and Nauru. 

EN 

21 

   EN 

 
 
                                                                                                                                                         
Fiji  and  Tonga.  China  has  been  a  “Dialogue  Partner”  of  the  Forum  since  1989  and  has 
contributed  generously  to  its  activities.  Since  1992  Taiwan  has  held  its  own  separate  post-
Forum  meeting  with  “friendly”  Pacific  Islands  States.  This  competition  between  China  and 
Taiwan,  through  investments  and  development  cooperation,  can  be  destabilising  for  the 
Pacific ACP countries concerned, as was seen in PNG in 1999, and most recently in Vanuatu, 
where it caused a political crisis in 2004. 

EN 

22 

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2. 

EU AND THE PACIFIC 

2.1.  EU – Pacific relations so far 

EU  relations  with  the  region  are  based  on  the  colonial  past,  most  recently  with  the  UK, 
France and Portugal as the important players, and before that Germany and Spain. These EU 
Member States have all influenced the region in ways which are still perceptible today. The 
influence of British political institutions and tradition has been profound. Many Pacific ACP 
countries are members of the Commonwealth and most of these retain the Queen of England 
as Head of State23. 

France and UK have territories in the Pacific. The EU has an Association Agreement with 
four OCT in the region. The OCT are subject to a different preferential regime from the ACP 
countries.  Under  their  statutes  of  autonomy,  the  French  OCT  are  showing  an  increased 
interest in Pacific regional cooperation as they are enhancing contacts with their neighbours 
and their region. 

France  is  a  regional  power  with  an  important  military  presence  and  a  series  of  diplomatic 
representations  in  the  region,  as  well  as  a  growing  cooperation  with  Australia.  France  also 
engages in development cooperation with Pacific ACP countries, in particular with Vanuatu.  

While  the  United  Kingdom  is  presently  phasing  out  its  development  cooperation  with  the 
Pacific  ACP  countries,  it  remains  engaged  through  its  diplomatic  representations,  its 
investments, volunteer  programmes  and its close relations  with  Australia, New Zealand and 
the United States.  

Several EU Member States are strengthening official contacts with Pacific ACP countries. In 
addition, many Member States are engaged in other ways in the region, e.g. through scientific 
research or through a number of European NGOs, mainly environmental or faith-based, in 
particular from the UK, France, Germany, Italy and The Netherlands.  

A  number  of  EU  Member  States,  in  particular  Portugal,  have  cooperation  activities  with 
Timor-Leste. 

The  EU’s  relations  with  the  Pacific  ACP  countries  are  structured,  and  have  been  so  for 
decades, first on the basis of the Lome Conventions, and now by the Cotonou Agreement. In 
political  terms  an  important  objective  for  the  EU  has  been  to  underpin  a  successful 
stabilisation  following  decolonisation  while  supporting  economic  and  social  progress. 
Considering  the  political  volatility  experienced  in  a  number  of  Pacific  ACP  countries,  this 
goal  has  not  yet  been  convincingly  attained.  Research  and  evaluations  indicate  that  the 
development  assistance  has  had  a  positive  impact  in  the  region  and  that  without  it  growth 
would  have  been  lower  and  social  indicators  poorer.  However,  analyses  indicate  that  in  the 

23 

Pacific culture has influenced major European artists, such as the painter Paul Gauguin and the author 
W. Somerset Maugham. The Pacific also provides a permanent source of inspiration for the European 
haute couture art and industry. English is an official language in all the present Pacific ACP countries, 
apart  from  Timor-Leste,  which  has  Portuguese  as  an  official  language,  while  French  is  spoken  in 
Vanuatu  and  in  the  French  OCT.  The  fact  that  so  many  Pacific  islanders  speak  European  languages 
facilitates exchange and understanding between the two regions. 

EN 

23 

   EN 

 
                                                 
last decade overall economic growth remained sluggish on average and insufficient to reduce 
poverty. 

The  EU  has  furthermore  agreed  Joint  Political  Declarations  with  Australia  and  New 
Zealand,  and  entered  into  a  series  of  separate  Agreements  with  these  two  countries,  on  the 
basis of which regular consultations are held.  

The Pacific ACP countries and the EU share core values, such as democracy, human rights, 
rule  of  law,  effective  multilateralism  and  environmental  protection.  These  countries  are 
generally  supportive  of  EU  environmental  positions.  They  also  play  a  growing  role  in 
international  institutions.  Some  of  them,  notably  Fiji,  contribute  to  UN  peacekeeping 
missions worldwide24. 

The  EU’s  political  dialogue  with  individual  Pacific  ACP  Member  States  is  limited.  At  the 
regional  level,  a  broad  political  dialogue  is  pursued  with  the  Forum,  through  the  so-called 
Post-Forum  Dialogue,  which  traditionally  follows  immediately  after  the  Forum  Leaders 
annual  Summit25.  Article  96  of  the  Cotonou  Agreement  concerning  essential  elements  was 
triggered in the case of the 2000 coup in Fiji. Cooperation was resumed in 2003.  

Members of the European Parliament observed the 2001 parliamentary elections in Solomon 
Islands. A fully-fledged EU election observation mission took take place in Fiji in 2006. 

EU-Pacific  trade  is  relatively  small  and  erratic.  Unprocessed  agricultural  products,  in 
particular palm oil and sugar dominate Pacific exports to the EC. Machinery, ships and boats 
are important items in the EC export structure. There has always been a trade surplus for the 
Pacific in its exchanges with the EC. Australia and New Zealand are major trading partners 
for  the  region  particularly  as  regards  Pacific  ACP  imports.  The  EC  is  a  relatively  small 
trading partner for the Pacific ACP absorbing around 10% of their exports and providing an 
estimated 5% of their imports. Based on 5-year averages PNG and Fiji together accounted for 
a  full  90%  of  the  Pacific  ACP  countries’  exports  to  the  EU,  while  taking  41%  of  the  total 
imports  from  the  EU.  In  2004  Pacific  ACP  goods  exports  to  the  EU  amounted  to  €  588 
million, while goods imports from the EU amounted to € 333 million26. Fiji currently exports 
half  of  its  production  (i.e.  approximately  165,000  tonnes  of  a  total  production  of  330,000 
tonnes) to the EU under Sugar Protocol at guaranteed prices.  

The EU has either signed or initialled fishery agreements with three Pacific ACP countries: 
Kiribati, Solomon Islands and the Federated States of Micronesia. A small number of Spanish 
and French vessels are fishing with licenses under these agreements. In December 2004, the 
European  Community  acceded  to  the  Western  Central  Pacific  Fisheries  Convention 
(WCPFC), which is responsible for overseeing the sustainable management and conservation 
of tuna in the Pacific. The EU also supports the scientific tuna stock work of the Secretariat of 
the  Pacific  Community  (SPC).  The  EC  is  also  an  active  participant  in  the  on-going  inter-

24 

25 
26 

Fiji’s  role  in  international  peacekeeping  is  quite  remarkable.  This  small  country  has  participated  in 
virtually every UN peacekeeping mission - including in Congo, Namibia, Cambodia, Timor-Leste and 
Lebanon  –  and  also  in  Europe,  where  Fiji  has  contributed  to  the  stabilisation  of  Bosnia  and 
Herzegovina, Croatia and Kosovo. 
Cf section 3.1. below. 
As  a  result  the  EU  was  their  second  most  important  export  market,  after  Australia  and  before  Japan, 
while  the  EU  was  only  6th  on  the  list  of  countries/regions  the  Pacific  ACP  countries  source  their 
imports from, behind Australia, Singapore, New Zealand, USA and Japan. 

EN 

24 

   EN 

 
                                                 
governmental consultations for the creation of a regional fisheries management organisation 
for non-tuna species in the Pacific. 

EC  development  assistance  to  the  region  is  substantial,  and  total  aid  granted  under 
successive  Lomé  Conventions  and  the  Cotonou  Agreement  exceeds  €  1.8  billion.27 
Furthermore,  Timor-Leste  has  received  more  than  €  200  M  under  other  instruments  since 
1999.  In  addition,  the  European  Investment  Bank  and  the  Centre  for  Development  of 
Enterprises  are  also  active  in  the  region.  Together  with  ODA  flows  from  the  EU  Member 
States, such as Portugal’s bilateral aid of more than € 300 M for Timor-Leste, the EU is one 
of the few major donors to the Pacific ACP countries, and this includes support financed by 
the EU’s budget, such as the Erasmus Mundus programme, food security and environment. 

In  September  2004  the  EU  and  14  Pacific  ACP  countries  opened  negotiations  on  an 
Economic  Partnership  Agreement  (EPA)28.  These  aim  at  arriving  at  an  ambitious  and 
development-oriented arrangement, which should promote regional integration and economic 
development, policy reform, sustainable management of resources, such as fisheries, thereby 
also  contributing  to  the  reduction  of  poverty.  The  ACP  side  has  indicated  its  interest  in 
securing  arrangements  relating  to  services  and  tourism,  fisheries  and  investment  as  well  as 
goods. Their commitment to these negotiations was most recently confirmed by Pacific ACP 
Leaders in October 2005. However, given that negotiations need to be concluded before the 
end  of  2007,  there  is  a  need  for  the  ACP  side  to  accelerate  preparations  and  negotiations29. 
EPA will replace the preferential access scheme contained in Cotonou and which is currently 
covered by a WTO waiver, which expires in 2008.  

2.2. 

Present challenges facing EU – Pacific relations 

Presently, EU relations with the Pacific suffer from a lack of political profile and visibility on 
both  sides,  inadequate  arrangements  for  regional  interaction  and  reduced  efficiency  in 
development cooperation efforts due to a lack of focus and high transaction costs. Beyond the 
bilateral  consultation  mechanisms  between  the  EU  and  Australia  and  New  Zealand 
respectively, the only structured interaction between the EU and the Pacific region is provided 
by the so-called Post-Forum Dialogue. 

Immediately following the Forum Summit, the Heads of State and Government interact with 
main Forum partners and donors through the Post-Forum Dialogue at ministerial level. On the 
Forum  side  this  involves  a  panel  consisting  of  three  ministers  and  the  Forum  Secretary-
General with a minister representing the Forum Chair as head of Delegation. 

Presently,  the  EU  takes  part  in  this  Dialogue  with  a  delegation  consisting  only  of  the 
Commission.  However,  twice  the  EU  Council  Presidency  has  been  associated  to  the 

27 

28 

29 

Since independence Timor-Leste has benefited from substantial Community assistance under the ALA 
Regulation. 
Timor-Leste,  which  acceded  to  the  Cotonou  Agreeement  in  December  2005,  does  not  at  present 
participate in the EPA negotiations. 
The  EU  recognises  that  the  Pacific  ACP  countries’  close  links  with  Australia,  New  Zealand  and  the 
USA make these negotiations more complex. While trade flows between the Pacific ACP countries and 
the EU are limited, Australia and New Zealand are major trading partners and a FTA with them may 
imply  major  adjustment  needs  for  the  Pacific  ACP  countries.  However,  the  opening  of  the  formal 
negotiations on EPA, have not triggered demands by Australia and New Zealand to open discussions on 
parallel  free  trade  negotiations  as  foreseen  under  Article  6  of  the  Pacific  Agreement  on  Closer 
Economic Relations (PACER). 

EN 

25 

   EN 

 
                                                 
Commission in this exercise. In parallel, France and the UK, the two EU Member States with 
remaining  significant  engagements  in  the  Pacific  region,  hold  separate  Dialogue-meetings 
with the Forum panel. 

Although positive exchanges have taken place over the years between the EU and the Pacific 
region  through  this  arrangement,  the  Post-Forum  Dialogue  does  not  fully  reflect  the 
importance  of  EU-Pacific  relations  and  is  insufficient  in  terms  of  sustaining  the  bilateral 
relationship between the regions. Particular shortcomings are as follows: 

1. Limited visibility for the EU in the Pacific. The arrangement does not reflect the fact that 
the  EU  is  the  second  largest  donor  in  the  region.  No  joint  communiqué  is  issued  after  the 
dialogue. The number of Dialogue partners has been increasing over the years. 

2.  Limited  visibility  for  the  Pacific  in  Europe  due  to  lack  of  formal  preparation  in  the  EU 
institutions and the fact that the meetings always take place in the Pacific region. 

3. Limited impact on both sides due to lack of formalisation. 

4. As the Post-Forum Dialogue takes place the day after the Forum summit is concluded, there 
is insufficient time for the EU side to properly prepare its reactions to the summit outcome. 

5.  The  time  allotted  to  the  EU  dialogue  is  insufficient  to  deal  with  an  increasingly 
comprehensive  EU-Pacific  agenda.  The  distribution  of  responsibilities  between  the  two 
parties as regards the issues in the agenda is unsatisfactory. 

Full  engagement  in  the  Cotonou  partnership  entails  sustained  political  dialogue,  co-
management  of  development  cooperation  and  full  participation  in  the  EPA  process.  For  a 
number  of  the  smallest  Pacific  ACP  countries  such  intensive  cooperation  poses  a  serious 
challenge. The costs for these countries relating to their Cotonou obligations is substantial, the 
cooperation  may  therefore  not  reach  critical  mass  for  them,  and  may  even  outweigh  the 
benefits. For countries with limited administrative capacity there is the added concern that 
the cooperation may crowd out other and perhaps more important activities.  

The  European  OCT  face  specific  challenges,  such  as  economic,  social  and  environmental 
vulnerability, as well as problems of scale and progressive erosion of their trade preferences 
with  the  EU.  At  the  same  time,  the  OCT  have  a  number  of  strengths,  such  as  advanced 
education, health and research facilities and relatively developed economies, which they bring 
to the growing ACP-OCT interaction in the region. 

EN 

26 

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CROP Agencies 

Annex A 

The ten organisations are:  

The Pacific Islands Forum Secretariat (PIFS) 

Pacific Forum Fisheries Agency (FFA) 

Pacific Islands Development Programme (PIDP) 

Secretariat for the Pacific Community (SPC) 

South Pacific Applied Geoscience Commission (SOPAC) 

South Pacific Regional Environment Programme (SPREP) 

South Pacific Tourism Organisation (SPTO) 

University of the South Pacific (USP) 

South Pacific Board for Educational Assessment (SPBEA) 

Fiji School of Medicine (FSchM)  

The CROP membership varies significantly and is summarised in the table below.  

FSchM  FFA 

PIDP  PIFS 

SPC 

SPBEA SPREP  SPTO  USP 

SOPA
C 

America Samoa 

Cook Islands 

Federated States of Micronesia  

Fiji Islands  

X 

French Polynesia 

Guam 

Kiribati 

Republic  of 
Islands 

the  Marshall 

Nauru 

New Caledonia 

Niue 

Northern Mariana islands 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

* 

X 

X 

X 

X 

* 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

** 

X 

27 

EN 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Palau 

Papua New Guinea 

Pitcairn Island 

Samoa 

Solomon Islands 

Tokelau 

Tonga 

Tuvalu 

Vanuatu 

Wallis and Futuna 

East Timor 

Australia 

France 

New Zealand 

United States of America 

United Kingdom 

* 

** 

Associate Member 

Observer / Special Observer 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

** 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

*** 

Plus representatives from the USP, Melanesia, Micronesia and Polynesia. 

EN 

28 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
European Representations in Pacific ACP Countries 

Annex B 

Papua New Guinea 

EC Delegation, UK High Commission, French Embassy 

Fiji 

Timor Leste 

EC Regional Delegation, UK High Commission, French Embassy 

EC  Technical  Office,  Portuguese  Embassy,  UK  Embassy,  Irish 
Representative Office, French Co-operation Office 

Solomon Islands 

EC Office, UK High Commission 

Vanuatu 

Samoa 

Kiribati 

EC Office, French Embassy 

EC Technical Office, UK High Commission 

EC Technical Office 

EN 

29 

   EN