The security issues were high on Australia and New Zealand's agenda at the recent Pacific Roundtable on Counter-terrorism, hosted by the New Zealand government in the capital, Wellington.
The Pacific Islands Forum met to discuss matters such as counter-terrorism, the ratification of a raft of new UN conventions, and "global terrorism" since September 2001.
The outcome of the meeting was an ultimatum to the islands to beef up lax security by mid-year or face economic fallout.
Critics of the EU-style union argue the region's bigger players - Australia and New Zealand - are in fact pushing the small island nations down a path that may devastate fragile economies that are reliant on trade tariffs and preferential market agreements.
The 16-member Pacific Islands Forum met in Auckland, New Zealand in April to unveil an EU-style "Pacific Plan" with four stated priorities - economic growth, sustainable development, good governance and security.
Pacific nations are watching how
the 10 new EU members fare
The plan would supposedly lead to enhanced regional cooperation, the setting up of economic goals, and efforts to ensure impoverished pacific nations do not end up as safe havens for "international terrorists" or criminals.
However, outspoken free trade critic Dr Jane Kelsey says the EU-style Pacific plan is an all-too-familiar blueprint for economic development that is damaging to smaller economies.
The Auckland University law professor fired back a salvo with her own report, released to coincide with the meeting.
Entitled Big Brothers Behaving Badly, it highlighted what she calls New Zealand and Australia’s bullying tactics in striking recent regional trade agreements that have laid the foundations for such a Pacific Union.
"If the 25 much larger countries of Europe accept the need for greater integration … then the rationale for small countries in the Pacific to work together and achieve economies of scale should be even more obvious"
New Zealand foreign minister
Kelsey said she was particularly concerned about a proposal to give more direct authority to Pacific islands trade ministers, who "will end up with authority to agree among themselves", instead of having to take proposals back to island governments to be decided in parliament.
Free trade agreements have potential security consequences in that the strong commitments they lock the islands into could have "massive destabilising" effects on Pacific economies, adds Kelsey.
Stanley Simpson, Fiji-based coordinator for the Pacific Network on Globalisation (PANG), which commissioned Kelsey’s report, says security has been Australia and New Zealand's top agenda in the Pacific ever since the "war on terrorism" began.
"It is given priority at the forum because the Australians are throwing funds at it, and therefore pulling the other Pacific states along."
Security is important in the Pacific, but terrorism is not our biggest security issue, he says.
"Security is important in the Pacific, but terrorism is not our biggest security issue"
Pacific Network on Globalisation
Australia’s use of the island Nauru as a holding point for asylum seekers is a good example, says Simpson.
Nauru was not the only country in the Pacific that Australia tried to get to accept the asylum seekers, he says. "They tried Fiji, Papua New Guinea; even tiny Tuvalu."
The current challenge by Australia, Brazil and Thailand at the WTO against the EU is a case in point.
"Australia has been blind to Fiji's plea that their challenge, if successful, would be a direct blow to the cane farmers, the millers, cane cutters and the rural communities in Fiji who are directly dependent on the sugar industry for their livelihood," said Simpson.
While New Zealand Trade Minister Sutton has dismissed Kelsey's accusations, international development organisation Oxfam believes trade liberalisation in the Pacific and worsening security are linked.
Oxfam NZ director Barry Coates says he is concerned that trade liberalisation in the Pacific is being driven by ideology and the interests of exporters to the Pacific and foreign investors, rather than a careful analysis of the interests of the Pacific peoples.
The economies of Australia and
New Zealand tower over the rest
"It is clear that the Pacific islands have little capacity to build exports from a relatively weak economic base with high transport costs to reach major markets."
Coates says the experience of instability in the Pacific shows a close link between conflict and issues of foreign investment, unemployment and poverty.
"A more coherent approach to security in the Pacific would start with the challenge of providing development opportunities, human rights and support for traditional processes of mediation and conflict resolution for the Pacific people, rather than the emphasis on policing, military intervention and border controls."
Meanwhile, the people of the Pacific islands will be watching closely how the European Union’s 10 new member states fare as part of an enlarged trading bloc.
Although worlds apart, they are grappling with a potentially similar future, facing pressure to go down the path of an EU-style Pacific union that would more deeply integrate them in a free trade area spanning a vast area of the globe.