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JustTrade: Objecting to ‘free’ trade with ASEAN

JustTrade: Objecting to ‘free’ trade with ASEAN

A fortnightly Green bulletin of News, Action and Analysis

# 59 Special Issue 3 December 2004

At the recent ASEAN (Association of South East Asian Nations) summit meeting in Laos our Prime Minister announced that New Zealand would soon be starting negotiations with ASEAN for a free trade agreement. A feasibility study on such an agreement is already available at mfat.govt.nz/aseanausnzfta and submissions are due on December 17. This special issue of JustTrade (out early – the next one will come out on December 16) has what you need to know on why you should be objecting to this deal, plus suggestions on what to say. Please take the time to write a submission (it doesn’t need to be long) and make your objections known.

NEWS

• FROM HUMAN RIGHTS CAMPAIGNER TO FREE TRADE ZEALOT. Committing New Zealand to free trade negotiations with Myanmar completes Helen Clark’s transformation from human rights campaigner to free trade zealot, the Green Party said on 1 December.

“Ten years ago, Helen Clark said that the collapse of apartheid in South Africa only occurred because of international pressure in the form of economic and other sanctions,” Green Co-Leader Rod Donald said.

“Now, she is claiming that Myanmar’s appalling human rights abuses should not get in the way of doing a free trade deal with this oppressive military regime.

“The Prime Minister should have backed off trade talks with ASEAN as soon as Myanmar’s generals announced they were locking up pro-democracy leader Aung San Suu Kyi for another twelve months.

The Green Party is concerned about more than human rights abuses in ASEAN countries, citing sweatshop working conditions, core labour standard violations and poor environmental records as grounds for not entering into trade negotiations.

“To remain true to its principles, Labour’s bottom line should be no trade deals with countries that do not comply with core ILO labour standards or do not respect the environment.

“To do anything less is condoning forced labour, especially of children, and is undermining wages and working conditions in New Zealand.

More at http://www.greens.org.nz/searchdocs/PR8123.html and see Rod’s speech in the General Debate under Analysis, below.

• COUNCIL OF TRADE UNIONS AND AMNESTY INTERNATIONAL CONDEMN TRADE DEALS WITH HUMAN RIGHTS ABUSERS. On 1 December the CTU said:

‘’Unions were …concerned that the human rights of workers producing the goods and services traded under these [free trade] agreements were ignored.

"Myanmar (Burma) has a shocking record on human rights and has been condemned by the International Labour Organisation. The CTU has highlighted to Government numerous incidents of forced labour, assassination of union leaders and gross exploitation of workers."

The agreement with Thailand includes a process for unions to take up complaints about breaches of labour rights, which was an improvement on the Singapore Closer Economic Partnership which had no reference to labour issues, [CTU President] Ross Wilson said.

"But this still falls far short of an enforceable and meaningful process to address beaches of core labour conventions such as the use of child labour, forced labour, discrimination and suppression of union rights."

In a 2003 study on Thailand, the International Confederation of Free Trade Unions reported forced labour, sweatshops, the exploitation of illegal migrant workers (including in the production of clothing for export) and forced prostitution (national and international trafficking of women and girls).’’

Meanwhile Amnesty International Executive Director Ced Simpson said that while Amnesty would not comment on the merits of free trade deals, it did expect the New Zealand government to take human rights into account when signing such deals. He reinforced that several members of ASEAN committed very serious human rights abuses. "We're especially worried about the situation in Myanmar. It's not just that they are imprisoning their political opponents. Most worrying are the forced labour practices, which really amount to slavery. And the question is, in any trade agreement, how is New Zealand going to deal with such practices?"

Acting Prime Minister Michael Cullen was unmoved by these concerns, as can be seen by the following exchange in Parliament on 2 December.

FREE TRADE AGREEMENT – ASEAN COUNTRIES

ROD DONALD (Co-Leader—Green) to the Prime Minister: Will she reconsider the commitment she made in Laos to negotiate a free-trade agreement with ASEAN countries, including Myanmar, in light of comments from New Zealand Council of Trade Unions president, Ross Wilson, that there is a risk such deals will “permanently damage New Zealand’s manufacturing base”; if not, why not?

Hon Dr MICHAEL CULLEN (Acting Prime Minister): No, because I believe that the deal will contribute to the long-run prosperity of New Zealand.

Rod Donald: Does she then agree with the chief executive of Fisher and Paykel Appliances, John Bongard, that free-trade benefits had to spread further than to just agricultural exports, and what assurances will she give to the New Zealand manufacturing sector that any free-trade agreements with ASEAN or China would prevent the dumping of products, or competition, from subsidised manufactured goods?

Hon Dr MICHAEL CULLEN: The fact is that pretty much across the board, tariffs on our exported manufactured goods into South-east Asia and China are higher than New Zealand’s tariffs on imported manufactured goods from South-east Asia and China.

Dail Jones: What assurances can the Prime Minister give the low-paid workers of New Zealand that they will not lose their jobs as a result of free-trade agreements with a very low-wage economy like Laos, and other low-wage countries, remembering the way in which low-paid workers lost their jobs during the term of the 1984-90 Labour Government, of which the Prime Minister was a part?

Hon Dr MICHAEL CULLEN: With unemployment down to 3.8 percent, our biggest problem in the labour market at the moment is labour shortage, not labour surplus. In any case, there is no prospect in New Zealand trying to compete at the bottom end of the wage and labour market with countries such as Laos and others. If we try to do that, it will simply lead to lower wages in New Zealand.

Hon Peter Dunne: Can the Prime Minister indicate to the House what the time frame is from here for the commencement and potential conclusions of negotiations with the ASEAN States, and what particular concerns and interests New Zealand will be taking into those negotiations?

Hon Dr MICHAEL CULLEN: I understand that the negotiations are looking in terms of a timetable over about 2 years or so, but then, of course, some years after that in terms of the phasing in of any agreement—as we have seen, say, within the United States - Australia free-trade agreement. There is a long phase-in period for certain elements.

Rod Donald: Is it respectful to the thousands of Kiwi workers who will lose their jobs as a result of these trade deals to call them “adjustment challenges”, as the Government did in its China trade-deal report, and will she be directing her officials to use plain English in future and refer to human beings as human beings, and lay-offs as lay-offs?

Hon Dr MICHAEL CULLEN: There is no evidence to suggest that the job losses involved for some sectors will involve thousands of jobs. The Government’s strategy is about assisting sectors such as textiles, clothing, and footwear, to move to the higher end of the market, where New Zealand can compete. We cannot compete at the low to middle end of the market over the long term unless we wish to be a low to middle end wage country.

Rod Donald: Will there be any adjustment challenges amongst her Ministers if it turns out that this new lot of trade deals is as bad as the Singapore one and results in New Zealand’s record $4 billion trade deficit getting even worse, or will it be only Kiwi workers who will pay the price for the so-called free-trade agenda of this Government?

Hon Dr MICHAEL CULLEN: I have no doubt that the current trade deficit would be much worse had it not been for the successful conclusion of the Uruguay round in terms of the World Trade Organization, and other agreements that New Zealand has entered into. Our present trade deficit in part, of course, is a long-term structural one, added to by the low level of the United States dollar. It is also partly due at the moment to high levels of importation of equipment for business investment purposes.

Keith Locke: Does she stand by her comments to the 1998 Labour Party conference that the then Prime Minister, Jenny Shipley, “prefers to build links to oppression while democratic voices are silenced in jail”; if so, why is she herself building economic links with the oppressive military dictatorship in Burma, while democracy campaigner, Aung San Suu Kyi, is further silenced by having her house-arrest extended for another year?

Hon Dr MICHAEL CULLEN: Contrary to what is being said in this context, the Prime Minister has already, since the conference, condemned the further extension of Aung San Suu Kyi’s detention, and there is no question that the Prime Minister has also raised the issue of human rights in the Vientiane conference. Were we to live in splendid isolation in a country of 4 million low-paid peasants, our voice would be worthless in the world.

Rod Donald: How can it be just, or right, for New Zealand to negotiate a preferential trade deal with the Burmese military regime, given that it is a brutal dictatorship responsible for forced labour, child labour, trafficking in prostitution, and the imprisonment of political prisoners, and that Burma is the world’s largest producer of illegal opium, or are there no ethical bottom lines in this Government’s trade policy?

Hon Dr MICHAEL CULLEN: Negotiations are with ASEAN as a whole, of which Burma is an extraordinarily tiny part in terms of gross domestic product. ASEAN itself is starting to raise human rights issues within its context, and close relationships with functioning and longstanding democracies such as Australia and New Zealand will no doubt assist the more progressive forces within ASEAN.

ACTION

• WRITE A SUBMISSION ON THE ASEAN DEAL. Here are some key points to cover, plus websites where you can go for extra information. E-mail your submission to tplu@mfat.govt.nz or send by post to:

ASEAN – Australia/New Zealand FTA Submissions
Trade Policy Liaison Unit
Ministry of Foreign Affairs and Trade
Private Bag 18 901 Wellington

Note: The 10 countries in ASEAN are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand and Vietnam.

A. Objections in principle

1. Human rights abuses

None of the ASEAN countries have good human rights records. Burma under its current military dictatorship is arguably worse than Iraq under Saddam Hussein. ( See http://www.burmaproject.org/abuses.html) The USA discourages its corporations from doing business with Burma, and a number of them have voluntarily chosen to disinvest and withdraw (see http://www.burmaproject.org/burmainvestors.html ) Economic sanctions, not preferential trading arrangements, would and should be the ethical international response to the plight of the Burmese people.

None of the other ASEAN countries have totally free and democratic political systems. All of them have had or currently have opposition politicians in jail on false charges, or without charge. Violent repression of dissent also occurs, including murders of non-violent political activists.

New Zealand is not a poor country. Does our Government really need to turn a blind eye to human rights abuses just so a few New Zealand exporters can make more money?

2. Labour rights abuses

Forced labour exists on a wide and terrible scale in Burma. In the rest of the ASEAN countries bonded labour is more common, and exploitation is rampant. Almost all the ASEAN countries encourage and condone sweatshops, and have a patchy record on ratifying the core ILO conventions on forced labour, child labour and the rights to organise and bargain collectively.

New Zealand can not force other countries to comply with humane employment practices, but neither should the Labour Government give preferential market access to countries which derive their trading advantage by exploiting their workers.

3. Environmental abuses

The cheapness of goods from the ASEAN countries is not only because those who produce them are underpayed and overworked, but also because the environment is exploited. In South East Asia the entire Mekong River system is under enormous stress and problems are already occurring. (See http://www.searin.org/indexE.htm for details on this and also on how it links to human rights abuses.) In the Philippines hundreds of people have died as a result of over-logging which has led to landslides. In Indonesia the over-logging of tropical rainforests and the subsequent burn-offs is an environmental disaster on a global scale. Pollution and waste from export manufacturing plants is a huge human and environmental health problem in many parts of South East Asia.

New Zealand is little better, disproving the claim that as countries get richer through trading they will protect the environment better. As the recent report by the Parliamentary Commissioner for the Environment (Growing for Good) shows, under the current regime of maximising the export of primary products the water and soil resources of New Zealand have become heavily polluted and in some cases exhausted or close to exhaustion. Native species are suffering from this exploitation, and the majority of New Zealanders have lost or are losing their birthright of access to clean and diverse natural environments in which to work and play.

Providing preferential access for goods which are produced unsustainably, and flogging our own environment to death to squeeze more dairy fat out of it, are both major drawbacks to free trade agreement with ASEAN, and need to be taken seriously.

4. Loss of food security

Forcing poor countries to engage in export-oriented agriculture and to accept food imports is jeopardising food security around the world. Poor countries have been forced to open their markets and agriculture has moved from the production of staple, durable foods (grains, root crops) to the production of perishable, luxury foods for export (coffee, fresh fruit and vegetables). This trade is controlled by global corporations, not by local producers. Women and children are the big losers of this shift, since they are the main producers and consumers of local foods in poor countries. The number of people in the world who do not get enough to eat is currently increasing, not decreasing, and trade liberalisation is a major factor in this increase (see the Zeist Declaration on Trade Liberalisation and the Right to Food at http://www.mcc.org/us/globalization/partners/zeist.html and also Common Concern 'Gender and Trade Liberalisation' at http://www.worldywca.org/common_concern/mar2004/gender.html )

5. Loss of sovereignty and democracy

Trade agreements are not made democratically in New Zealand or in the ASEAN countries – nowhere are they subjected to full public and parliamentary scrutiny. Exporting corporations and their lobbyists are given privileged access to negotiations and decision-making. In some of the ASEAN countries (e.g. Thailand), the government politicians making the decisions are themselves big businessmen and beholden to big business. The trade agreement decision-making is not democratic, and reduces democracy and sovereignty wherever and whenever it occurs, by creating one set of rights and privileges for global business and another set of local responsibilities and deprivations for local workers and citizens.

B. Objections in practice

1. Unfair competition

New Zealand manufacturers have to meet wage levels, labour and environmental standards which are higher than those in most ASEAN countries. It is unfair to put them out of business by importing tariff-free products made by exploiting labour and the environment.

2. Job losses

When those manufacturers go out of business, skilled workers lose their jobs and incomes, and New Zealand loses social capital as well as economic capacity.

3. Commodity dependency

New Zealand's dependence on primary commodity exports and manufactured imports has increased because of free trade agreements. Instead of diversifying, upskilling and becoming an exporter of high value, low volume quality products, NZ is moving in exactly the opposite (and wrong) direction by signing up to trade agreements. This attempt to get open market access for even more of our bulk commodity agricultural products abroad exposes us to a flood of sweatshop products from abroad.

4. Preferential not multilateral

The ASEAN FTA will not be a 'free' trade agreement, it will be a preferential one, as are the Thailand and Singapore CEPs. These distort trade, undermine a fair multilateral approach, and lead to the lowering by stealth of multilateral standards. They contain the worst features of the WTO (e.g. intellectual property rights provisions) without requiring even lip service to WTO rules regarding removal of subsidies and other desirable fairness provisions. (For a critique of preferential agreements and how they operate in this way from the perspective of an advocate of free trade see Professor Jagdish Bhagwati's testimony to the US House of Representatives Subcommittee on Domestic and International Monetary Policy, Trade and Technology, April 2003 at

http://financialservices.house.gov/media/pdf/040103jb.pdf )

ANALYSIS

• PM PUTS PROFIT BEFORE PRINCIPLES. Speaking in the General Debate on 1 December, Rod asked:

‘’ What has happened to Helen Clark? Where is that fiercely principled human rights campaigner we used to know and love? Why has she turned into a free trade zealot?

Time and again cynical people tell me that once a politician gets their hands on power, they sacrifice their principles. I always refute that claim, but our Prime Minister’s behaviour in recent times makes me a liar. Yesterday’s events at ASEAN marked the low point. On the same day that Myanmar military regime locked up pro-democracy leader Aung San Suu Kyi for another 12 months, Helen Clark said that Myanmar human rights abuses should not get in the way of free trade negotiations.

That is a far cry from the Helen Clark of old. Back in 1994 when she was the newly elected leader of the Labour Party, Helen Clark delivered an excellent speech on human rights and foreign policy to the Auckland University Centre for Peace Studies. In it she said: “The maltreatment of citizens of other nations because they hold differing views from those of governing elites is obnoxious to us. Torture and other forms of physical and mental abuse are anathema to us. Most of us expect our Governments to represent our views on violations of human rights wherever they occur, and to support appropriate international actions against the abusers.”

She went on to say: “The collapse of apartheid did not occur by the 1990s without significant international pressure. In the 1980s in particular that pressure built within the Commonwealth and United Nations, leading to effective sanctions. The systematic violation of human rights in South Africa was eventually taken very seriously by the international community, but it took many years for a combination of economic and other sanctions and diplomatic pressure to bear fruit.”

Was she right then? Yes, she was. Is she right now? No, she is not. I am sure she still holds by another excellent statement she made in that speech: “Respect for human rights is a widely shared value, irrespective of culture. The fact that it is not shared by authoritarian regimes and elites which sustain them, whether they be, for example, nominally communist, fundamentalist Islamic, or just plain autocratic, does not detract from that. I cannot believe that it is only those with so-called Western values who find repugnant the lashing of a teenager with a rattan cane in Singapore, or the years of house arrest of Aung San Suu Kyi in Burma. Inhumanity, including cruelty and unusual punishment, is something which must always be opposed.”

To her credit, Helen Clark has continued to criticise Ms Aung San Suu Kyi’s detention. But what impact will her diplomatic hand-wringing have when, in the next breath, she committed New Zealand to negotiating a trade deal with Myanmar’s oppressive military regime? Helen Clark should reflect on her own words to the 1998 Labour Party conference, when she said of Jenny Shipley, that like Sir Robert Muldoon before her she prefers to build links to oppression, while democratic voices are silenced in jail. The Green Party’s concerns about the ASEAN, Thai, and Chinese preferential trade deals go beyond fundamental human rights being sacrificed for free trade. We are concerned about the New Zealand manufacturing businesses that will go to the wall if they are forced to face unfair competition as a result of tariff cuts. We are concerned about the thousands of Kiwi jobs that will be sacrificed on the altar of free trade. I am not talking just about the end of the textile, clothing, and footwear sector - as important as that sector is. I am also talking about the likes of Fisher and Paykel, an outstanding enterprise - one of its elaborately transformed manufacturing businesses - that the Government champions.

If Labour removes the last 7 percent tariff on whiteware and New Zealand is flooded with cheap-labour fridges, stoves, and washing machines from Asia, we can kiss goodbye to one of New Zealand’s top manufacturers. Fisher and Paykel is not inefficient, it is not bloated by tariff protection, but it simply will not be able to compete against multinational corporations that pay Third World workers less than the cost of living and make them work in unsafe conditions. It cannot compete against regimes that tolerate slave labour or forced child labour. I say to Helen Clark to please reread her old speeches before she trades away her principles.’’

JustTRADE is produced by Christine Dann, Bronwen Summers and Rod Donald MP.

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