New Zealand Prime Minister Helen Clark, the chairwoman of the 16-nation Pacific Islands Forum, said that "a vision for the Pacific for the 21st century" is emerging from the "Pacific Plan" report issued by a panel of experts set up last November.
The group began a three-day meeting in the New Zealand capital Wellington on Friday to finalise their initial report to the Forum's 16 heads of government.
The forum's new secretary-general, former Australian diplomat Greg Urwin, said the proposals were "groundbreaking" for the traditionally slow-moving region.
Urwin said that under the Pacific Plan, "with some effort and goodwill we can deepen the cooperation across the region".
"I think there are quite a number of such areas for broad cooperation.
"It strikes me what they have probably got in mind is the way the EU slowly developed from a set of practical measures into something rather broader," he added.
"It's widely recognised we've reached a very particular point in the Pacific's history generally that a number of things do have to be looked at afresh," Urwin said.
Region in turmoil
Although no details of the scope of a possible Pacific islands union have emerged, it would likely be far more powerful than the Pacific Islands Forum, a slow-moving bureacracy that initiates plans to assist the development of the small island economies and supports them with expertise.
"With some effort and goodwill we can deepen the cooperation across the region. I think there are quite a number of such areas for broad cooperation"
Pacific Islands Forum
Led by a former Papua New Guinea premier, Sir Julius Chan, the experts panel worked against a background of a region in turmoil.
Most of its small nations are addicted to foreign aid, have populations who are dwindling as they head to bigger countries in search of jobs, once-pristine environments slowly submerging in waste and low-lying coastlines vulnerable to the threat of rising water levels.
Regional powerhouses Australia and New Zealand are equally concerned, fearing the impoverished region is an arc of instability that could harbour money launderers, people smugglers and even terrorists.
Range of issues
Clark said pressing issues like good governance, transparency, anti-terrorism and security cooperation are all covered in the report, along with environment, waste and "a very wide basket of issues".
She said the report, which has not been published, spells out the need for more region-wide initiatives.
This would "update the mandate of the (Forum) secretariat", to allow the Forum's secretary-general "to be more proactive in crises that hit the region," Clark said.
"Imagine for example if... bird flu hit one of the major tourism markets of the Pacific. Would we not want the Forum secretary-general to be on the front foot, convening forum ministers and getting a plan of action going?" she asked.
"It could be the same with a natural disaster... (or) a security crisis," she said.
The Pacific Islands Forum is made up of Australia, New Zealand, Fiji, the Cook Islands, the Federated States of Micronesia, Kiribati, Nauru, Niue, Palau, Papua New Guinea, the Marshall Islands, Samoa, the Solomon Islands, Tonga, Tuvalu and Vanuatu.