• Can We Trust John Key to Fight Our Corner?

    Ask yourself a simple question. If John Key had come to power before our non-nuclear policy had been decided, would he have initiated it on his own account? Or would keeping in with the Americans have been his first priority?
    The question is worth asking because New Zealand Prime Ministers are constantly faced with striking the right balance between protecting our own interests on the one hand and pleasing powerful external forces on the other.
    The answer to the question is surely obvious. The Key government has shown itself repeatedly to be keen to meet the demands – whether commercial or political – of outside interests. Whether it be reducing the rights of New Zealand workers at the behest of Warner Bros – described by the New York Times as John Key being “bent to the will” of the film studios – or denying the right to protest on the occasion of a visit from the Chinese Vice-President, or following the US lead in abandoning the Kyoto Protocol, we can have little confidence that our government will stand up for us when they come under pressure.
    The issue arises again in the context of the negotiations over the Trans Pacific Partnership. Once again, we need to know whether we can rely on our government to resist the pressure to sell us short.
    Typically enough, the attempt is being made to define the debate about the TPPA in the black and white terms of being either for or against free trade. If only it were that simple. Most people, me included, would see – all other things being equal – considerable advantages in an extension of free trade. But we might also observe that many countries – especially smaller and weaker ones – have prudently avoided opening up their economies to powerful competitors until they are confident they can handle the challenge.
    It is sensible to ask, therefore, whether we are strong enough to face direct competition in our own backyard from the world’s most powerful economies; and, if there is doubt about that, should we not realise that what is presented as a free trade agreement might really just be a recipe for absorption into those selfsame economies?
    The TPPA also raises a number of specific issues. It is agreed by experts in international trade law – even by those who are in favour of the TPPA – that New Zealand will need to pay particular attention to at least three of those issues which, unless satisfactorily resolved, could adversely affect our interests.
    First, the powerful US pharmaceutical industry has attacked Pharmac – the state agency for drug purchase that has saved us billions of dollars – as a barrier to the kind of profits they want to see. The danger here is that, even if Pharmac is not targeted for actual abolition, its powers may be scaled down to make it less effective. On the same principle, other public and cooperative mechanisms, such as Fonterra and Zespri, could be challenged as unacceptable to the concept of “free”trade. And, ironically, the kind of tax sweetener we provided to Warner Bros could also be struck down as a distortion of trade.
    Second, it is recognised that attempts to restrain the buying up of our assets by foreign interests would be opposed as contrary to the “free trade” encapsulated in a TPPA. Nor would discriminating in favour of local New Zealand suppliers in preference to overseas companies be tolerated. When it comes under pressure on this issue, our government will be reduced to asking for special exemptions – something sure to be strenuously resisted by the Americans and others.
    A third area which warrants concern is the “investor protection” provision – typically found in this kind of “free trade” agreement – that allows overseas corporations to sue our government in special tribunals, even though they are not parties to the TPPA and even though a later government might have been elected to put in place a totally different policy on a given issue. Again, the unduly optimistic language in the face of this threat is that of the need for “mitigation”.
    The Herald’s advice – that we need not worry about these issues because we could always break the treaty if it turned out badly – is not guidance that should be offered to or accepted by a responsible government.
    No one disputes that the Americans will push these issues hard and will expect to win. Whether we can defend our interests will depend entirely on how strongly our government fights our corner, and whether it is prepared to say no.
    Hence the question with which I started. Do you have confidence that John Key will stand up to the pressure? I fear that the best we can hope for is a fudged outcome that will in reality be a capitulation on each of these issues. Our confidence cannot be helped by the fact that the negotiations are being conducted in secret and that, by the time we know the outcomes, it will be a done deal that cannot be changed.
    And all of this gambled on the hope that the powerful US dairy industry will welcome the tariff-free entry of our dairy products into the US!
    Bryan Gould
    9 December 2012