Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

New Zealand Government On Horns Of Dilemma

Closing doors, burning bridges, and the search for a mythical holy grail. Bill Rosenberg con-siders the country's mad rush to more free trade.

New Zealand Government On Horns Of Dilemma

In the maze of international trade policy, opening one door closes others. The gov-ernment may well be closing more doors than it opens in its pursuit of a Free Trade Agreement (FTA) with the United States.

The US door has opened a crack. It is no more than a crack. All that the US Trade Representative, Robert Zoellick, has said is that he will be “soliciting the views of the Congress on this matter as we move forward with the Australia FTA.” We can only guess the price of the next tiny creak of the hinges.

Yet statements coming from the World Trade Organisation (WTO) suggest that other doors may be closing. At last week’s controversial Sydney mini-Ministerial, WTO Director-General Supachai Panitchpakdi, in the most diplomatic of language, ex-pressed concern that the rush of bilateral and regional trade agreements threatens movement at the WTO itself.

New Zealand governments have consistently advocated multilateral negotiations – the WTO. FTAs are second-best. US tactics reinforce the dangers present in bilaterals. It is abundantly clear that the US is using access to its huge market as a bribe for sup-porting its wider agenda – military, political and economic.

No country is guaranteed an easy entry. They are hard negotiators. New Zealand is being reeled in step by step before negotiations have even been offered, let alone be-gun. Each step requires further evidence of support for the wider US agenda.

In the process, the chances of a meaningful deal in the WTO are being undermined.

It is not just that FTAs divert countries from the complex, bitterly fought WTO nego-tiations. FTAs also allow the US to avoid recognising the increasingly insistent views of the WTO’s majority, its poorer members.

The FTAs encourage the US to test the water. Does it need the WTO at all? If FTAs can give it privileged access to others markets, with the added bonus of advancing its wider agenda, why bother?

New Zealand may well find that “success” means competing against an ever-increasing number of US free-trade partners. Its NAFTA partner, Mexico, is already losing market share following China’s entry to the WTO. Our entry price will have steadily diminishing returns, while the government’s ideal of a WTO agreement fades into irrelevance without the commitment of the dominant world power.

The returns at best will be small. The Minister of Finance Michael Cullen recently admitted that all New Zealand might gain is a once-only GDP increase of about one percent.

Even that estimate depends on a host of unpublished assumptions. The greatest is that New Zealand can achieve a first – demolition of the enormous barriers around US ag-riculture. Indeed, the US is heading in totally the opposite direction. Its 2002 Farm Bill raised next decade’s agricultural support to US$180 billion – 80% more than the 1996 Farm Bill.

The price for whatever part of the one percent we get will be high. Australia’s abject “all the way with the USA” foreign policy, plus US official documents including its recently published objectives for the Australian negotiations, give us some idea.

Certainly intensified political and military support for US actions will be required. That won’t end even once a deal is signed, just as it unilaterally told us we were no longer active members of ANZUS because of our nuclear policies, and just as it con-tinues to put trade and political pressures on NAFTA partners Canada and Mexico.

Its FTA negotiating objectives will include an end to the marketing rights of Fonterra, Zespri and other producer boards; to Pharmac’s work to hold down medicine prices; to the remaining restrictions on the sale of land to overseas buyers; to government buying preferences for local suppliers; to limitations on the release of genetically modified organisms and labelling requirements for genetically modified food; to par-allel importing of cheaper videos, music and software; to local content requirements for radio and TV; and to our remaining tariffs. One study predicts a two-thirds in-crease in textile and apparel imports from the US.

Conceding to these demands means “kicking away the ladder” of support and protec-tion that the now-powerful industrialised countries, including the US, initially used to build their own industries. The government is trying something similar with its “inno-vation strategy”.

The FTA presents multiple dilemmas – between bilateral and multilateral negotia-tions; between New Zealand’s pride in maintaining some independence in our foreign policy and the need to please the US; and between the domestic economic policies the government was elected on and the free-market demands of free trade agreements, whether bilateral or in the WTO.

We’ve gone down the wrong path in the maze. Let’s back out before it’s too late.

********

- Dr Bill Rosenberg researches and writes on foreign investment, trade and New Zealand's in-ternational economic relationships with development issues think-tank, ARENA, the Action, Re-search and Education Network of Aotearoa. He can be reached for comment at bill.rosenberg@canterbury.ac.nz

769 text words.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On National’s Rampant Pandering To The Farming Vote

What on earth has happened to the political parties n the centre-right? Once upon a time in the US, the party of Lincoln was a respectable political party before it devolved into the cult of Trump. Here at home, the National Parry used to be able to manage and administer the economic orthodoxy in a reasonably competent fashion. Now it can barely do simple addition and subtraction. Something must have gotten into the water, and not simply out on the farm... More>>

 

Winston Peters Speech: The Gathering Storm Clouds: Ihumatao

Frequently around New Zealand you hear people say that politicians are all the same. It’s a convenient way to dismiss any careful investigation of the truth of that statement. New Zealand First since its inception has been committed to ‘one law ... More>>

ALSO:

National Agriculture Policy: Will Restore Farmer Confidence And Pride

A National Government will reduce regulatory burden and give farmers confidence for the future. Leader of the National Party Judith Collins and Agriculture spokesperson David Bennett announced National’s Agriculture policy in Gisborne today. “Agriculture ... More>>

ALSO:

Shaw: Wealth Tax Not A Bottom Line For Green Party But They Will Push For It

Green Party co-leader James Shaw says one of his senior MPs misspoke under pressure when she said a wealth tax was one of the party's bottom lines. More>>

ALSO:

Government: More Border Exceptions For Critical Roles

The Government has established class exceptions for border entry for a limited number of veterinarians, deep sea fishing crew, as well as agricultural and horticultural machinery operators. “Tight border restrictions remain the backbone of the Government’s ... More>>

ALSO:


Gordon Campbell: On Last Night’s Leaders Debate

Do political debates change voter intentions, and cause voters to switch sides? According to a 2019 Harvard Business School study conducted across 61 elections in nine countries involving 172,000 respondents, the answer would seem to be a resounding ... More>>

ALSO:

Dunne Speaks: The Election Campaign Just Grinds Slowly On And On

With just over three weeks until the General Election, the release of the first major pre-election opinion poll this week confirmed what was already being reported about this year’s campaign. Although the gap between Labour and National has narrowed ... More>>

Electoral Commission: Candidate And Party Lists Released

17 registered political parties and 677 candidates will be contesting the 2020 General Election Nominations have now closed and the Electoral Commission has released the electorate and party list candidates for 2020 online at vote.nz . Advance voting ... More>>

National: Plan To Restore NZ’s Prosperity

National’s Economic and Fiscal Plan carefully balances the need to invest in infrastructure and core public services while also reducing tax pressure on Kiwi families and businesses. National Leader Judith Collins and Finance spokesperson Paul Goldsmith unveiled National’s ... More>>

ALSO:

NZ First: Party List

New Zealand First has a proven twenty-seven-year history of bringing balance and common sense to our government. Amid the continued setbacks of COVID-19 restrictions, New Zealand First has once again sustained its profile by selecting a strong team ... More>>


 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 


 

InfoPages News Channels