New Zealand and European Union begin formal trade negotiations


Whilst most people were more interested in Prime Minister Jacinda Ardern’s baby girl being born, I was watching the arrival of the European Union chief negotiator Cecilia Malmstrom. Mrs Malmstrom is from and is visiting New Zealand to formally launch trade negotiations with a view to completing a trade agreement between New Zealand and the E.U.

I do have some reservations about the potential F.T.A. that the European Union is likely to seek. They include but are not limited to:

  • the concessions that New Zealand will be asked to make, and what we will be granted in return.
  • that the competing factions inside the E.U. will make it difficult for New Zealand to get a level deal across all of the E.U. member states
  • That provisions around the Euro will leave the New Zealand dollar at a disadvantage

In terms of the member states, there are 27 separate countries, each with their own agenda. Some like France will be highly unionized economies with a degree of reluctance to shed the protective cloak that tariffs and subsidies can offer sectors that are not performing so strongly – their propensity for a good riot when some decision or another goes against them is well noted.

I also wonder if Mrs Malmstrom is the best suited person for this job. The first is she had a major role in promoting the Transatlantic Trade and Investment Partnership (T.T.I.P.), which is the European equivalent of the Comprehensive and Progressive Trans Pacific Partnership. Like the T.P.P.A./C.P.T.P.P. it has run into significant opposition over issues ranging from enacting laws that are allegedly going to harm corporate profitability to human rights, the environment and international copyright laws. The second is that despite claims made by her that the European Commission for Trade has unprecedented transparency, it is not possible for many European politicians to read important documents.

The European Union, however, are serious. This is a serious chance for New Zealand to negotiate a trade agreement that can help the economic development of this country. The shared respect we have for human rights and environmental issues will hopefully help to undermine the concerns that are held about Mrs Malmstrom’s past record.

So soon after their role in negotiating the damaging Trans Pacific Partnership Agreement which will undermine New Zealand sovereignty, it is rather rich of National to be talking about the need for a “fair” agreement. This is all the more so when an interpretation of “fair” presumes to mean no undue concessions by either side, respect for the others negotiating position and understanding of public concerns. None of this was recognized by National or A.C.T. when they were leading the negotiations on the Trans Pacific Partnership between 2010-2017.

New Zealand is lucky enough that although we lack constitutional safeguards to stop the undermining of our natural sovereignty, we have a degree of transparency that is not enjoyed in other nations. Had we had the transparency of a country such as Singapore, a semi-authoritarian nation-state, I doubt New Zealanders would know nearly as much as they do because of the mechanisms that protect our right to know.

So, whilst there are potential opportunities for New Zealand, there are potential pitfalls as well. Due caution around these negotiations is well advised.

No winners when U.S. absconds on trade


A few days ago President of the United States, Donald Trump announced that he would be imposing trade tariffs on key allies including Canada, Mexico and the European Union. The tariffs which come as part of his hard line “America First” doctrine which puts American needs and wants over and above those of its allies were aimed at “protecting” America’s national security and infuriated those that have been affected.

The probability of a trade war resulting from the United States trying to bully other nations by slapping tariffs on them in an effort to protect American suppliers has increased substantially since Mr Trump announced the tariffs a few days ago. France, Canada and Mexico have all launched or are planning to launch retaliatory measures against the United States. Canada and Mexico are going one step further and launching legal action at the World Trade Organization citing what Canadian Prime Minister Justin Trudeau calls “completely unacceptable” measures.

11,000 kilometres from American soil, New Zealand should be concerned. Whilst not directly involved in the current round of trade tit-for-tats, it might get caught in the cross fire if some of our bigger trading partners, such as the European Union, Britain and China become involved in the fracas.

There are no winners in this nonsense. A lot of trust will be lost between America and  nations that are supposed to be good mates with the U.S. Divisions will be rent. WIth out doubt America’s rivals for geopolitical influence, China and Russia will be looking at ways of making those rifts widen and assert their influence in places that they currently have little to do with.

The Trump administration might well think that the tariffs address problems he has with how U.S. big business is being run. His primary concern is that trade with these countries somehow affects the national security problem that the United State finds itself confronting.

Yet the situation could not be more different. With Middle East allies fretting a major trade related conflict will eventually turn to and exacerbate overall tensions across Europe, Americans are being led up the Golden Path – perhaps to Dr Scrooge (from the programme “Duck Tales” and happily seen swimming in his vast fortunte. Flipping the bird at established norms, demonstrates that the very phenomena all countries fears in America is coming to pass.

Maybe it is time to stop being such close friends with the United States. Whilst the E.U. and so forth share much in common regarding security of the continent, the well being of its member nations America has always had demands emplaced at the last minute, which have left trading partners gnashing their teeth in frustration.

Trade wars do New Zealand no favours


United States President Donald Trump’s decision to slap tariffs on aluminium and steel imports from other nations was not surprising in itself. What was surprising was the nature of the announcement. It was an announcement that completely flies in face of the countries that America wants to negotiate trade deals with. It flies in the face of earlier comments from Mr Trump that America could rejoin a favourable Comprehensive and Progressive Trans Pacific Partnership.

I am in two minds about it. On one hand I have no doubt that this is a very destabilizing act by Mr Trump and the United States Government, which will help to stoke international tensions a a time when the world is already stressed by North Korea, the ongoing conflicts in Syria, Afghanistan and Iraq. Complicating an already messy trade picture, it will put trade negotiators on edge trying conclude deals already in progress and delay the start of any new deals that are planned.

On the other, New Zealand, despite our small size and vulnerability to being buffeted by the actions of larger players, has options. It is for example among the priority non-E.U. nations that the United Kingdom is interested in concluding a trade agreement with and trying to loosen restrictions on New Zealanders movements in and out of the U.K. New Zealand could also consider trying to negotiate some sort of agreement with Russia, which is something that has come up under the previous National-led Government of former Prime Minister John Key and his successor former Prime Minister Bill English.

Having said all of that, there are reasons for New Zealand to be very concerned. We have a weak framework in terms of domestic law for coping with the demands that international trade partners place on us, whilst not necessarily being fair or proper in what we get back. We need to work on a set of checks and balances that prevent C.P.T.P.P. type monstrosities from going through without the support of the New Zealand tax payer who will have to live with any consequences of one. This work needs to be done before we negotiate any more and thus needs to start quickly. But with New Zealand First having decided to support the C.P.T.P.P., which it so vehemently opposed in opposition, only the Green Party seems likely to attempt such a Bill of Parliament and they do not have the numbers in the House of Representatives.

All in all, there is little if anything to look forward though if a trade war does start. Our geographical location counts against us in terms of cost of transporting materials. Our relatively small economic stature limits our clout in places such as the World Trade Organization, where New Zealand would need to go to settle disputes, and despite it certainly enhancing our reputation there is not a lot we can do if other nations play dirty.

New Zealand First hangs in the balance: Is rural development its saviour?


For six years, New Zealand First was one of the biggest foes that the Trans Pacific Partnership had. It, along with the Green Party of Aotearoa New Zealand, represented a bloc in Parliament who wanted New Zealand to have nothing to do with what some called a corporate take over. It marched on the streets alongside the Greens and Labour M.P.’s. It assisted with petitions and introduced legislation to Parliament in an attempt to derail the T.P.P.A.

But in January this year, the Government, with New Zealand First standing proudly alongside, announced that they would support the Trans Pacific Partnership Agreement.

The response was swift and it could also be lethal. New Zealand First plunged in support from getting 9 Members of Parliament post election to being so low in the polls that it would not be back in Parliament if an election were held today.

There are a number of potential causes for the decline of the centrist/populist party that had in its ranks a growing number of younger people including myself.

The Trans Pacific Partnership Agreement u-turn that New Zealand First has done might be the final straw for a lot of people who see it as the ultimate betrayal of everything the party stands for. Up to the election it had campaigned steadfastly against the agreement in any form and got my vote for that reason. And whilst Fletcher Tabuteau’s Fighting Foreign Corporate Control Bill might still be potentially revived, is Mr Tabuteau still interested?

Internal strife in the party, whose Board seems to be sluggish and averse to communication, has not helped. In 2015, having managed to gain 3 new Members of Parliament New Zealand First was optimistic about its future. Members of the Party and Members of Parliament were saying they could double the number of M.P.’s at the 2017 election. None seemed to have made any allowance for a Labour resurgence. Nor did anyone reckon with “Jacindamania”, the phenomenon that swept New Zealand in the weeks following Jacinda Ardern being appointed Leader of the Labour Party/Leader of the Opposition and then, following the election and New Zealand First’s decision to support Labour, Prime Minister.

A third problem could be Shane Jones. The former Labour Member of Parliament left in 2014 after questions were raised about him approving the application of a Chinese businessman for New Zealand citizenship. In June 2017 he was confirmed at no. 8 on the New Zealand First Party list for the election, over and above a number of hard working loyal party members and candidates deserving of promotion.

But…

Could the party be saved from itself by the rural development fund? New Zealand First has long been a proponent of supporting the regions, which have been ignored in large part by the National and Labour parties, and are traditionally conservative. Part of New Zealand First policy at the election was a rural development fund that would support the rural communities that have faced long term decline from the closure of meat works, the centralisation of services such as the post office, banking, hospital and medical centres as well as schools and police stations.

Mr Jones is Regional Development Minister, and on 23 February 2018 he and Ms Ardern unveiled the N.Z.$3 billion rural development fund. This will fund a range of regional developments and the initial funding allows for investment in railways and totara forestry in Northland.

Given its struggles internally and externally, New Zealand First will be hoping that this enables the party to claw back some of the respect lost. This happened it announced it would support the Trans Pacific Partnership Agreement’s successor, the Comprehensive and Progressive Trans Pacific Partnership (C.P.T.P.P.).

Text of T.P.P.A. replacement to be released


A few weeks ago, New Zealand First betrayed its membership by deciding to support Labour’s attempt to advance the Trans Pacific Partnership Agreement. Many said that they would quit the party over it and the party has slumped in the most recent Colmar Brunton Poll to just 3%.

Prime Minister Jacinda Ardern has said that she will unveil the text of the Trans Pacific Partnership Agreement’s replacement, the so called Comprehensive and Progressive Trans Pacific Partnership (or C.P.T.P.P.)on Wednesday. Ms Ardern insists that the C.P.T.P.P. is a significant step forward for New Zealand trade development. New Zealand First Leader Winston Peters, who believes that his party can now support the agreement, says that the clauses that made the party oppose it have now been removed and he can tolerate it.

WRONG. The clauses have not been removed. They have only been suspended in an attempt to get United States President Donald Trump to back track on his withdrawal of the Trans Pacific Partnership Agreement a few days after he took office. No changes of substance have been made and the Trans Pacific Partnership Agreement is still the trojan horse it was before Mr Trump decided to withdraw the United States from it.

Nothing has changed in other words.

I support New Zealand developing strong trade relations with other nations. But there are checks and balances that should be in place before we have these agreements. The purpose of these checks and balances is to make sure that due process is followed and that the Agreement in whatever form it turns out to be, really will help New Zealand. For this to happen New Zealand First’s “Fight Foreign Corporate Control Bill should have been advanced instead of being shot down by National and A.C.T. on the grounds of being “anti-trade”.

There is a clearly defined difference between having a trade deal and undermining New Zealand so that it is more susceptible to corporate takeover. Having a trade deal means New Zealand can conduct trade with the nations that it negotiated the deal/s in question with. New Zealand respects them as nations and they respect us. Businesses are invited to submit concerns and suggestions at the select committee stage and the committee draft recommendations that are then agreed to or dropped. A corporate deal that favours multinationals and undermines New Zealand’s sovereignty does no such thing.

So I wait with baited breath to see what happens to this dastardly agreement in its latest phase. But this particular deal is not one New Zealand should be proud of or a part of.