'Free trade' but not at any price

Few nations are as dependent on trade as New Zealand. We are small and isolated.

If we failed to specialise in our economic activities and could not export large volumes of goods and services, our standard of living would plummet.

For a start, we could not afford decent health services, nor could we buy $2.50 underwear.

Recognising this, New Zealand has been at the forefront of free trade, slashing import restrictions and tariffs well ahead of other nations. We have backed global wide attempts to free up trade, and with these failing, we have sought bilateral and regional agreements.

The latest deal, at present before Parliament, is with South Korea. It is not perfect, and the results for dairy are disappointing. So called ''free trade'' always comes with qualifications.

Overall, however, it is positive and will be especially helpful by eliminating kiwifruit tariffs. Both National and Labour support it, with the Greens ambivalent.

New Zealand, having unilaterally reduced trade barriers, has little to swap when it comes to negotiations. Nevertheless, it secured an impressive agreement with China which was pivotal in helping us through the great financial crisis.

New Zealand also has agreements with Singapore, Australia, Thailand, Malaysia, Brunei and Chile.

With world trade talks repeatedly stalling, attention turned to the proposed Trans Pacific Partnership (TPP) agreement, involving 12 Asia Pacific nations including the United States and Japan, the world's first and third largest economies.

Negotiations have been proceeding behind closed doors, and many people are suspicious.

The secrecy immediately raises a rallying point, and there are at least two major and understandable concerns, notably in what are called ''investor state dispute resolution'' procedures.

It is argued corporations would be able to sue the Government for actions which reduce their profits. Moves by a tobacco company to sue the Australian Government in its attempts to introduce plain packaging are cited as an example.

There will be much interest in the outcome and whether such options would apply to the TPP.

Companies do need protection in many parts of the world where the rule of law is at best highly suspect. New Zealand, however, must retain the right to make significant decisions, whether over live sheep exports or drug imports.

Pharmac and cheaper medicines must be protected, and New Zealand must retain the sovereign power to make decisions over environmental matters, in health policy, housing, labour and in other areas.

New Zealand has more to gain than most from freer trade because our border is already so open. We have already lost many manufacturing jobs and our agriculture is not threatened.

It is difficult to separate exaggerated alarm from legitimate fears. Some anti TPP activists, while making good points, may be willing to embroider any facts and arguments.

This is a cause celebre for so called ''progressives'' as they campaign against corporations and often even free trade itself. Equally, it is hard to have too much faith in Government pronouncements.

Although the trade minister can hardly consult on all aspects of a possible agreement as negotiations stutter along, it is always difficult to take a ''trust me'' approach with politicians.

Surely, there is a way where more of what is being discussed specifically can be made public. Surely, we do not have to rely on Wiki Leaks for partial information about drafts.

All the TPP debate might, nonetheless, yet be academic. United States President Barack Obama is struggling to receive the necessary Congress and Senate backing to give him the right to negotiate and finalise the agreement.

Without that, the TPP seems unlikely to go ahead anyway. Japan, meanwhile, is so protective of its trade barriers and agriculture that many wonder about the wisdom of its inclusion in a possible agreement at all.

New Zealand should in general terms be supportive of the aims of a TPP. At some stage, however, we will have to grapple with the detail and ensure our ability to make our own decisions in the public interest are not compromised.

Despite the potential benefits, we should not be ready to sign the agreement at any price.

 

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