Should We Be Dismayed or Relieved?Today, Brian Fallow, economics editor of the Herald, asks "Should we be dismayed or relieved at the disarray the Trans-Pacific Partnership negotiations are in?" -I first wrote about this nearly five years ago and essentially nothing has changed since then.
Ninety-nine per cent of us should be relieved, though many won't be. Those that mistakenly believe this is primarily about freeing up trade will be looking at the parlous state of New Zealand's until-recently booming dairy industry and hoping beyond hope that the deal will give some relief by freeing up protected overseas markets in the U.S, Canada and Japan. Even if these nations were to give up protecting their markets -which they won't- Fonterra have already killed (or rather given away) the "golden goose" by investing heavily in joint ventures overseas that compete with New Zealand farmers directly and exascerbate price depression by removing demand from the global dairy market.
I absolutely believe that the "real trade" aspects of this treaty are little more than a cover-story for the small-print on the package. "Free trade" in tangible goods has,over the years, come to be seen as a "self-evident virtue", like Christmas and the Easter-bunny, although I have, for a long time, realised that this is a fiction, because although goods, services and capital may well be allowed to flow freely all around the world to the benefit of those who own them, there is no such "free trade"in labour. not only are the vast majority of workers constrained geographically, but the "right to work" itself is at the discretion of the employer, not the worker. But I digress....
The real intent this treaty is the prospect of extending the scope, reach and duration of "Intellectual Property" rights (this is the bit that nails Pharmac) and the establishment of"investor-state dispute settlement tribunals".
The characterictics of Investor-State Dispute Settlement:
- In the event of a government taking action that is likely to reduce business profitability (alcohol licensing laws or restrictions on tobacco or sugar for example) a domestic company cannot sue the government in a domestic court since Parliament has prerogative powers. Neither does that company have the right to use the ISDS process. However, an overseas company can use the ISDS process.
- ISDS allows corporations to to sue governments for decisions they may take that affect their interests but governments have no reciprocal right to take action against corporations.
- A government cannot "win" a claim against a sueing corporation, the best it can do is to "not lose".
- The (usually three) "arbitrators" on the Tribunal are not Judges appointed by any government. They are selected from the corps of lawyers engaged in public international law, and are thus also a part of the so called "transnational elite" They operate in a "revolving door" environment where they may be a judge in one case and be representing a client in another. Clearly there is conflict of interest between these two roles.
TPPA is a grand scheme to facilitate the ambitions of the "transnational elite" -a bona-fide modern phenomenon recognised by academia (Sklair 2001, Rothkopf 2008)- of which Groser (who has had a lifelong career in trade negotiation and diplomacy) and Key (international currency trader) are both members. It is quite understandable how, from their elevated viewpoint, they view national sovereignty as a quaint anachronism and an impediment to the world they inhabit, whereas for us lesser mortals who are required by law to inhabit a world defined by our national borders, sovereignty is our firewall and security no less than the walls and roof of our own home.
Too much sovereignty has been given away already -customs tariffs and excise duty are legitimate tools for any nation to use to create the society it wants as well as to raise revenue. Arguably "protectionism" is more virtuous than "free-trade" anyway, since business-owners and workers share in that protection equally, and parliament is at liberty to and has always from time-to-time altered tariffs and duty to reflect the political, economic and strategic demands of the country. Treaties binds future governments to commitments, not only beyond the life of the goverment that makes them, but beyond the life of any person living at the time it is made.
Thomas Paine (1791): "There never did exist a Parliament in any country, possessed of the right of commanding for ever how the world shall be governed, or who shall govern it; and therefore all such declarations by which the makers of them attempt to do what they have neither the right nor the power to do are in themselves null and void."
Tim Grosers Emotions Trump New Zealands Best Interests.Tim Grosers attachment to the signing of the deal- "not emotionally in the space of wanting to leave the party" (can't find the video sorry -I think it's been pulled) while understandable is quite deplorable. He has spent his entire career in trade and diplomacy and has been revolving in "trade-negotiation" circles for more than 35 years. Not only is this the biggest deal of his life, but at 65 years old, it will be his last. It is only natural that he wants to leave the party bathed in glory rather than as the "party pooper." Arguably it was precisely the goodwill resulting from long association with the global negotiations community that made him one of the "parachute squad" (Groser, Finlayson, Joyce) of "Johnny-come-lately" list MP's that have been inserted into high ministerial office . Not as talented as playing to the audience as "smiling assassin" Key -his strident comments about "bleating and moaning" and "breathless children" smack of arrogance and desperation.
John Key Bored and Irritated at Post-TPPA Press ConferenceThis clearly isn't the press conference john Key wanted to be having: PM: "We don't get rich selling things to ourselves". Reading deadpan from the paper to minimise the gravity of the situation, and with such haste, clearly wishing the pain and embarassment to be over -no sign of "gracious in defeat" stoicism to be seen here -however Key is too politically clever to indulge in the outright invective that Groser has resorted to.
It's probably just a coincidence that the sub-editor chose this phrase to title the video-clip, however the claim is worth a look since it is such a popular misconception. John Key looks so shamefaced as he trots out this "hoary old chestnut" it is clear that he knows it to be false and that he is liable to be called-out for spouting this "crock". Let's digress again for a moment:
The simplistic concept assumes that once money is spent it is "used up". Although this appears true if looking from a solitary viewpoint (hence its credibility with the layman), as soon as one looks from a community viewpoint the opposite is true. Money circulates continuously, and everytime it does so it adds value for those engaged in circulating it, as they are making, buying and selling things of tangible value or services that add to their quality of life using that same circulating money. Therefore "Selling things to ourselves" is very much the way to "get rich". The Jewish merchants, Indian merchants and the "Exclusive Brethren" have done very well as communities by precisely this mechanism -buy from one of your own community in preference to buying outside the community (in effect a self-imposed "trade tariff"), then sell to all-comers. this has the effect of concentrating wealth within ones own community. This model works equally well for a nation -all that is required is the collective will to adopt it!
The very best way to "get poor" is to suck money out of circulation by exporting profits to overseas owners and committing disproportionate amounts to loan repayments for overpriced real-estate. This is the present path. Meanwhile in the short term we sell our capital (land, houses etc.) for short term gain giving us the impression we are rich. In the longer term we become assetless and powerless tenants and minimum-wage-earners.
SEAN PLUNKET: Is the pendulum swinging against free trade?