Dubious trade deal

ROSS HENDERSON
Last updated 10:56 08/12/2012

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OPINION: This week the Trans-Pacific Partnership Agreement (TPPA) has been the subject of meetings between various governments in Auckland. It has hit the news headlines because of protests about it.

The agreement includes many Pacific countries, big and small, so we are lining up with the likes of the United States, Chile, Malaysia and others with populations much bigger than ours.

The TPPA has been billed as a free-trade agreement, but it is more than that, as far as we know. Actually, what we know isn't a lot, and this is one of the worrying features of the whole exercise.

As a country, we are party to plenty of free-trade agreements. These agreements usually have at their heart better access to markets for goods we produce.

For New Zealand, the priority has always been to get better access for agricultural produce, such as dairy, because these are products often protected by other countries through tariffs and other restrictions.

The obvious reason for this is that countries generally like to ensure they have a food supply, especially in times of worldwide conflict or tension.

Free-trade agreements were fashionable at the height of the neo- liberal tide of economic changes starting in the 1980s. Although they were sold as the way to improve access to export markets, they often had the effect of shifting production, especially manufacturing production, and the jobs that go with it to the country with the cheapest labour.

However, it's fair to say that shift of production and jobs has happened without free-trade agreements too.

The huge and rapid expansion of industry and services in China and India took place without many trade agreements in place.

Free-trade agreements have always been a difficult issue for the Left. We have two conflicting gut responses.

One is that we don't like to see good local jobs going, because another country allows its workers to be paid such low wages that they can make stuff more cheaply. It means locals lose jobs and the local economy is worse off because of the loss of business and skills.

On the other hand, we are internationalist in outlook and we want other countries, especially poorer ones, to have the opportunity to take up industry and increase their wealth, so their citizens can enjoy a higher standard of living.

The biggest free-trade agreements New Zealand is party to are the ones with Australia we have had for 30 years and the agreement with China.

The agreement with Australia has been beneficial for us, and the threat of job losses is low, because our pay rates are much lower, something the minister of finance seemed to think was a good thing earlier this year.

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In fairness, much of the effect of the agreement with Australia has been felt only in recent years as the economic relationship between the two countries has developed.

Now, when the Government calls a tender for the supply of goods, Australian companies are treated as if they are New Zealand companies.

The agreement with China has given much better access for our produce and probably been the saving grace for our economy during the downturn of the last four years.

The impact on manufacturing has been what would probably have happened without an agreement. So much for free-trade agreements generally.

Shouldn't we welcome the TPPA?

I am a lot more concerned about the TPPA because it is more than a free -trade agreement. There is a lot of secrecy about the TPPA that doesn't help. The agreement has been on the table for some years, starting life under the previous Labour government, and we are still not told about what is in its various clauses.

Some content has been either leaked or speculated about. For example, the US pharmaceutical companies want restrictions on the role of Pharmac here, so that we buy more of the expensive US drugs.

The issue that concerns me the most is what is called "investor-state" provisions.

The positive-sounding word "investor" is actually a reference to large corporates. Investor-state rules mean a large corporate can sue a sovereign government for government policies the corporate thinks will negatively affect its business.

It puts overseas business interests above the democratic wishes of the nation's citizens.

It's based on how the extreme Right sees government, and for that matter itself.

The reason giant corporates want investor-state rules is because they see governments as hostile to their own citizens, and the true champions of freedom and the public interest are the corporates.

We saw this style of thinking most recently when our Government capitulated to Warner Bros to change our employment laws to suit it for the making of The Hobbit.

Investor-state rules are bad for our democratic processes and we should stop them being in any trade agreement we sign.

- Taranaki Daily News

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