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Ardern’s trip needs to deliver more on trade

Commentator on politics, aid and development Josie Pagani

Global trade was in trouble before Covid-19 threw a curve ball into supply chains and locked down markets across the world. New Zealand’s well-respected chief trade negotiator, Vangelis Vitali, used to warn of the end of the golden weather for international trade. He was right. Protectionism increased. Tariffs returned. Rules were broken with no consequence.

Big trade deals like the Trans Pacific Partnership (TPP) attracted attacks from the political left and right. Presidents Trump and Biden both refused to join. This was bad for New Zealand. A small country depends on its ability to sell stuff to the world with clear rules that all follow. The alternative is a trading world tilted to the powerful, where we’re forced to take sides and we survive by transferring wealth to our economic masters.

The world was run that way until decolonisation in the 1950s. Once the colonial order was swept away, global exports grew exponentially – until the global financial crisis. The explosion in trade mirrored almost exactly an unprecedented decline in extreme global poverty. Despite record levels of international trade last year, that pace of growth is slowing. Slower growth in globalisation has coincided with slower progress in reducing poverty.

This week New Zealand agreed to be part of Biden’s ‘‘new trade deal that’s not a trade deal’’ – the Indo-Pacific Economic Framework (IPEF). Its pointlessness was perfectly summarised in a photo of the launch, at which Jacinda Ardern was the only leader not pictured on screen, and her name was misspelled.

One witty American official called IPEF a ‘‘fried egg with no yolk’’. It’s a vegan sausage. We have agreed to ‘‘serious discussions’’ in ‘‘working groups’’ on stuff like supply chain resilience, common rules for the digital economy, clean energy, and anti-corruption. We need a formal agreement to talk about these topics like a vegan sausage needs a bicycle.

The IPEF is the CPTPP without the good bits – like tariff-free market access and proper, enforceable rules on subjects including the environment, labour rights and climate.

Instead of using her considerable international star power to charm Stephen Colbert on late-night TV this week, our PM should use it to persuade the US to come back to the CPTPP. We won’t sign your ghost trade deal until you sign our real one.

The TPP had to be rebranded as the Comprehensive and Progressive TPP (CPTPP) because Justin Trudeau in Canada and Ardern had won office on outrageous pledges not to sign it. However, the rose with another name smells as sweet. The prime minister should tell the US president that she had believed the terrible things about TPP too, but they never happened.

New Zealand’s Green Party warned, ‘‘Our rights and our Government’s ability to legislate to protect our people and our environment would be at risk’’ if we signed. Hasn’t happened.

New Zealand banned oil and gas and introduced legislation to reach net zero carbon emissions by 2030. Over the next 20 years, our energy-intensive heavy industry, including steel, wood processing, aluminium, fertilisers, and petrochemicals, will likely leave New Zealand (taking well-paid working class jobs with them), but none of those companies are suing under CPTPP.

The Government spent hundreds of millions buying back semi-automatic weapons, giving some indication of the loss in income of international gun makers. No-one’s suing us for that either.

The Greens also warned that TPP would ‘‘limit the ability of tangata whenua to exercise control over their own affairs’’ by transferring power to multinational corporations. Māori businesses have increased exports to TPP countries.

The bad stuff hasn’t happened. Here’s some good stuff that has – despite Covid, disrupted supply chains, and closed borders. New Zealand increased access to the CPTPP markets, particularly in Chile and Malaysia. We boosted exports of digital services like computing, professional, and engineering services that can be delivered online. Free cross-border data transfer and trade in digital goods is likely to increase.

Some of the poorest CPTPP members, like Vietnam, have made the most gains in GDP. They have also been compelled to eliminate child labour, and allow unions the right to bargain collectively.

There are now enforceable provisions to improve environmental protection in the region.

If the US doesn’t want to join the CPTPP, then we should support China’s bid to join – with the proviso: ‘‘Stop locking up your people in camps, respect human rights, and honour international borders, including Taiwan’s.’’

While we welcome the US commitment to security in the Pacific, there is a gaping lack of a real trade and economic agenda. Without market access, the US cannot hope to counter Chinese influence in the region.

In 2011, Josie Pagani stood for Labour in Rangitikei.

If the US doesn’t want to join the CPTPP, then we should support China’s bid to join . . .

Opinion

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2022-05-27T07:00:00.0000000Z

2022-05-27T07:00:00.0000000Z

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