Our hands were tied over the Crafar farms sale

CHRIS TROTTER
Last updated 05:00 03/02/2012

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Chris Trotter

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OPINION: At the risk of being branded a "traitor", I'm declaring my support for the Crafar farms sale. Not because I like seeing productive New Zealand farmland pass into the hands of foreigners, I don't.

The reason I'm in favour is because I believe New Zealanders should keep their promises and fulfil their undertakings.

In 2008, this country ratified a free-trade agreement with the People's Republic of China. It was hailed as the most important foreign policy and trade achievement of the 1999-2008 Helen Clark-led government. Not only was it the first such agreement to be signed between China and a Western-style democracy, but it also offered New Zealand businesses immense economic opportunities.

Those opportunities were, of course, reciprocal. The Chinese have been merchants for the best part of 3000 years.

They needed no reminding that in this world you don't get something without giving something in return. And what we gave China was "most favoured nation" status.

In the context of the Crafar farms sale, MFN means: "If it's OK to sell New Zealand farmland to Americans, Englishmen, Germans and Indonesians, then it must also be OK to sell farmland to the Chinese." Under the terms of the FTA, China is legally entitled to no lesser consideration than that shown to the most favoured of our trading partners.

That's what Prime Minister John Key meant when he said "our hands are tied". It's what New Zealand's leading critic of the FTA, Professor Jane Kelsey, meant when she stated:

"If the New Zealand Government had declined the Shanghai Pengxin purchase of the Crafar farms it could have faced an international lawsuit for breaching its free-trade agreement with China. The Government cannot treat applications from Chinese investors differently from similar applications from other countries' investors under what is known as the 'most-favoured-nation' or MFN rule."

And that's not all. Had the application from Shanghai Pengxin been declined by the Overseas Investment Office that decision would almost certainly have been challenged in a New Zealand court. And rightly so. We'd have broken our own rules.

It was all the more perplexing, then, to hear Opposition leader David Shearer declaring his and the Labour Party's opposition to the sale. It's simply inconceivable that Mr Shearer is unaware of the MFN prohibition against denying China the same right to buy land as the nations that bought upwards of 650,000 hectares of our national patrimony exercised when Helen Clark was Prime Minister, and Mr Shearer's friend (and former boss) Phil Goff was the Minister of Trade.

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To avoid the inevitable charges of rank hypocrisy and populist opportunism, Mr Shearer needed to accompany his statement opposing the sale with an announcement that Labour was committed, immediately on regaining office, to repudiating the New Zealand-China FTA and tightening up the legislation regulating overseas investment.

I'm still waiting for those other shoes to drop. And, frankly, I think I'll go on waiting. Why? Because I simply don't believe Labour is about to abandon its long-standing commitment to free trade. Nor am I confident Mr Shearer is any more willing to court the fury and retaliatory trade restrictions of the Chinese government than Mr Key. Both are well aware that this country's future prosperity is inextricably bound up with China's.

If foreign ownership of our land was something successive governments wished to restrict, they should have legislated against it before they embraced the doctrine of free trade.

And if we, the people, were serious about preserving our patrimony, a majority of us would've voted for the political parties  the Alliance, NZ First, the Greens, Mana  which promised to do exactly that.

But, the closest the New Zealand electorate's come to voting against free trade (27 per cent) was the election of 1993. In 2011, the anti-free trade vote was just 19 per cent.

It's a little late, now, to shout: "Stop!"

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