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The Free Trade Juggernaut - A Poisoned Chalice

arena P O Box 2450, Christchurch

25th April 2005


Last week saw both the signing of a Free Trade Agreement between New Zealand and Thailand and another round of negotiations with Chile and Singapore on a Closer Economic Partnership, (P-3) probably now 'successfully' concluded. "Yet few New Zealanders know about these agreements and their negative implications for many of the worst off citizens in all the countries involved", says the Action Research and Education Network of Aotearoa (ARENA)

Even Parliament is scarcely involved in these treaties that can affect all our lives, let alone the public at large. The total sham of submissions on the agreements was graphically shown in the Thai case by the government signing the deal before the Select Committee even had a chance to report back.

In the first three years of the Singapore New Zealand FTA, now being extended to Chile, New Zealand's exports declined by 37% (NZ$180 million) and the trade deficit with Singapore grew from $24 million to $323 million. So who benefits? Certainly not many New Zealanders. The Thailand agreementwill be no different. ARENA maintains that the real beneficiaries are foreign investors in land, forestry, mines, rivers, utilities, services, and intellectual property, even where they engage in grossly exploitive practises. They get enforceable rights that take precedence over the rights and needs of local peoples and communities.

The sham of consultations is reinforced in the P-3 with a refusal to release drafts until negotiations are completed. The fifth round of P-3 talks took place in Singapore last week and there is probably now an agreed text. When released it will be virtually a fait accompli - all political parties except the Greens support the free trade agenda so Select Committee discussion is merely cosmetic. Dissenting organizations have insufficient time to prepare fully researched opposing submissions - and they know they are wasting their time with the result predetermined.

At a mini-conference on Chile and New Zealand - Between competition and co-operation? on April 22, Chilean Ambassador Juan Salazar extolled the virtues of a strategic partnership to be provided by the P-3. But desirable technical, scientific, educational, and cultural exchanges can happen without the rest of the agenda. Important among such contacts are those between indigenous Mapuche and Maori many of whom are among those most opposed to the free trade juggernaut, with their lands, resources and intellectual property exploited and stolen by big business. In the P-3, services and investment clauses are the major concern, involving commitments pre-empting policy options for future governments. "The unprecedented 'negative list' means that all services except those explicitly listed would be covered by free trade rules and locked open for control by foreign transnationals. A negative list heightens the risk that future governments will be unable to guarantee the delivery of accessible, affordable and appropriate services essential to the lives of communities. "And we don't even know what is on that negative list", says Prue Hyman, for ARENA.

Chile/New Zealand are small players in each others' markets but the precedent of a negative list must be resisted. The P-3 will also entrench the open season for foreign investors proposed under the controversial Overseas Investment Bill now at Select Committee. "So we must resist any feelings of apathy that the lack of real democracy can engender", says ARENA. "We must look out for the details of the P-3, make our Select Committee submissions and protest publicly. We must show Government that there IS significant opposition.


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