Framework for a Pacific Regional Economic Integration Index

The Project at A Glance

The Pacific Island Forum regroups 18 countries dispersed across hundreds of small islands and atolls. With the exception of Australia and New Zealand, these countries are the most remote places in the world. In this context, the Pacific Island Forum countries have embraced regionalism as a way to overcome the issues associated with their remoteness and isolation from global economic spheres. The region had a combined GDP of just USD 8.6 billion and depends heavily on international trade, with trade in goods and services representing close to 140 per cent of the countries’ GDP in 2015.
In order to ensure that trade contributes to growth and prosperity, it is increasingly important to measure the effectiveness of Regional Trade Agreements (RTAs). International Economics Consulting Ltd. (IEC) developed a Conceptual Framework for a ‘Pacific Regional Economic Integration Index’, proposing options for the dimensions and indicators that can be utilised to assess the state of regional integration for individual economies and their sub-regional groups in various aspects of integration, identifying strengths and weaknesses, and allowing policymakers to track progress in a comprehensive and systematic way.

What We Found

The development of an M&E framework for the Pacific Region is important in order to facilitate the monitoring and tracking of the efficiency and effectiveness of trade agreements and the attainment of their objectives, namely inclusive regional policy development processes as well as micro and macro-economic goals for the region. Aside from the Pacific Region, many other regions have adopted their own M&E frameworks. This includes:

The Association of Southeast Asian Nations (ASEAN) has adopted the ASEAN Economic Community Scorecard and the ASEAN Community Progress Monitoring System.
The European Union which uses the EU Single Market Scoreboard
The African Union together with the African Development Bank, and the United Nations Economic Conference on Africa (UNECA) have come up with the Africa Regional Integration Index.

In terms of their membership to trade agreements, the Pacific Region is Party to five main agreements, namely:

SPARTECA – South-Pacific Regional Trade and Economic Cooperation Agreement
PICTA – Pacific Island Countries Trade Agreement
PACER+ – Pacific Agreement on Closer Economic Relations Plus
iEPA – Interim Economic Partnership Agreement with the European Union (EU)
MSGTA3 – Melanesian Spearhead Group (MSG) Trade Agreement

Our Strategy and Impact

Monitoring and Evaluation (M&E) systems, on the basis of identified indicators, measure progress in regional integration, both in terms of treaty implementation and outcomes. This is crucial in allowing policymakers to improve the sustainability of RTAs and achieve more transparent integration processes.

In designing the framework for the Pacific Region, IEC proposed to build the M&E framework in the form of three pillars for monitoring progress along the expected results chain from regional integration. This consists of three individual indexes namely:

Compliance Index: It evaluates the extent to which the member countries have adopted the necessary laws and regulations as per the commitments made in the regional integration process.
Outcome Index: It tracks the changes experienced following the implementation of regional laws and regulations
Impact Index: It monitors the effect of regulations and their impacts on macroeconomic and social considerations.
The implementation of the Pacific Regional Economic Integration Index (PREII) would allow PIFS, its Member States, and the relevant stakeholders to identify where the bottlenecks exist, and subsequently adopt the necessary policies and measures.

Our Core Solutions

With the rapid proliferation of trade agreements worldwide, there are new market and investment opportunities for countries to explore. At International Economics Consulting, based on our extensive experience in international trade, we assist our clients by providing a detailed analysis of the key impacts of new trade agreements on their operations and competitiveness through an assessment of tariff, and non-tariff barriers, provisions on rules of origin, customs efficiency, the effectiveness of transport networks, and sustainability provisions, among others.
We can help assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth. We also support clients in navigating the policy landscape regarding international trade by establishing robust monitoring and evaluation framework through sophisticated real-time dashboards and reporting systems to ensure the best outcomes.