Posted
26th June 2001
Dogma v Dogma
Divorces are almost always bitter ends to affairs. Never more
so than when a parting of ideologies. The below from a speech
by Rod Donald to NZ Parliament on Wed 20 June. Three years ago
the Alliance, including the Greens, led the charges against
the MAI, the WTO and Fair Trade and Investment Agreements. Now
that the Alliance is part of government, only the Greens are
holding the line against the proposed Hong Kong New Zealand
FTIA. Yesterday Jim Sutton said that substantive negotiations
are due to begin in July. Last month, MERT deputy secretary
John Wood, crowed that it will be signed, sealed and delivered
by Christmas. Last Friday at a consultation meeting I attended
in Christchurch, Foreign Affairs and Customs officials struggled
to identify tangible benefits to New Zealand of the Hong Kong
FTIA yet conceded both considerably difficulty in policing Rules
of Origin and the inevitable negative consequences to domestic
business and jobs in the textile and clothing sector. When push
comes to shove, logic in favour FTIA is lacking. It comes down
to fear of being shut out of trade blocks, a fallacious argument
if we don't drop tariffs Hong Kong might introduce some - and
a largely unshakeable belief that free trade "must be good for
you".
Time
and time again apologists for free trade fail to provide empirical
evidence of the benefits to New Zealand of making our domestic
economy more vulnerable and more dependent on the global marketplace.
It is increasingly apparent that FTIAs have become a form of
cargo cult somehow markets will magically open up all around
world as soon as we sign up to bilateral FTIAs. The Nats hold
that fixation with religious fervour and the disease now afflicts
Labour-Alliance Government even though, in their hearts and
heads the, Alliance knows better. Leaving aside for the moment
all the excellent arguments you would expect from the Greens
in opposition to FTIAs I would like to focus on the failure
of NZ businesses to effectively market our products and services
to the world and the false hope that FTIAs will some how replace
our lack of forward planning, appropriate investment and marketing
savvy. Richard Leary, managing director NZ Housing Exporters
Ltd, highlights NZ's failure to capitalise on our opportunities
in today's Independent. "In the 40 years I have known Hong Kong,
it has gone from stocking Kiwi foodstuffs almost exclusively,
to stocking virtually none. New Zealand is an unknown except
when we win with the rugby sevens. We don't even promote our
stuff at retail level as our competitors do. We need promotion
effort right now far more than the FTIA". Why aren't we effectively
marketing our 100% pure, clean green, value-added retail products
in Hong Kong right now? There are no tariff barriers. We are
only limited by our creativity, enterprise and initiative. Instead
a cargo cult mentality pervades our business sector.
One by one Leary exposes the other myths underpinning the proposed
FTIA. The best argument the MERT official could offer in favour
of the FTIA last Friday was that some consulting engineering
firms might benefit from it. Leary's response: "Get real. All
a serious global predator has to do is register an office in
Hong Kong under this FTIA and it can destroy our firms in our
own backyard. This goes for investment and other service industries.
That's the good news! Let's look at the bad news. The discussion
document on the Hong Kong Fair Trade & Investment Agreement
concedes at the outset that jobs and businesses will be destroyed
in the TCF sector if the agreement proceeds: "Apart from the
implications of tariff elimination for protected sectors, the
adjustment costs involved for New Zealand, would appear to be
minimal". That's code of wholesale job losses. Why sacrifice
the livelihoods of 20,000 people when there is not even a guarantee
that 20,000 new jobs will be created as a consequence of removing
tariff protection for TCF. The government maintained until this
week that it could police exports from HK to ensure NZ won't
be flooded with sweatshop clothing from China. But to quote
Leary again: "This is rubbish. Goods passing through Hong Kong
from all over the world can be freighted to New Zealand with
no check by Hong Kong authorities.
I have trekked all the Hong Kong ports some 20 of them, in an
area smaller than greater Auckland yet transferring 10% of the
world's seaborne freight and I see no controls that would serve
our interests. An New Zealand's Customs could not cope, nor
does it have the benefit of country-of-origin identification
rules." In response to my question in the house yesterday, Jim
Sutton has now conceded that "This is a key issue for New Zealand
and no deal will be concluded unless we are satisfied that the
agreed rules of origin address our concerns." I would like to
believe him but I can't because his last answer yesterday exposes
his true agenda, and therefore this Labour-Alliance government's
real intentions. Unwilling to face the facts the government
has tried to sell free trade by massaging the statistics in
their favour. But the whistle has now been well and truly blown.
Under the headline "Lies, dammed lies and Singapore statistics"
Bob Edlin in today's Independent exposes both the failure of
the Singapore FTIA to improve trade since it was signed and
the Government's desperation to find some figures to justify
their new right agenda.
Michael
Cullen in his budget speech enthused "trade with Singapore is
right now growing very rapidly". Jim Sutton and Jim Anderton
put out a joint press release a few weeks ago claiming a 27%
increase in exports to Singapore for the March quarter and only
a 11% increase in imports for the same period. The sales pitch
was `all gain, no pain' but the truth, according to Statistics
NZ, and highlighted by Bill Rosenberg in the Listener on June
9, is that since the FTIA was signed exports to Singapore have
actually declined, decreased, got smaller. What's more, because
imports increased at the same time the trade deficit is $36
million worse than last year. The April quarter figures are
even more disastrous. Exports are down 25%, imports are up 27%
and the overall trade deficit is $63 million. Compare that to
a $3 million trade surplus last year, before the Singapore FTIA
was signed.
So how did the Ministers get it so wrong?
As
Bob Edlin says "they can look you in the face, clutching the
Bibles, and swear they didn't get it wrong". These true believers
in free trade were so desperate to show their Singapore deal
wasn't stupid after all that they used Customs figures which
aren't accrued and include extraneous items, instead of Statistic
NZ figures. The sales pitch for the Singapore deal also lacked
substance, now the first quarter's poor accounts expose the
free trade lie. What government would rush headlong into a similar
deal with Hong Kong where the expected benefits are equally
ideological rather than substantial? The answer: only one which
lacks vision, initiative and common sense..
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