What’s the difference?

17/11/2020

When National promoted the Trans Pacific Partnership free trade agreement, Labour, New Zealand First, the Green Party and their followers were vehement in their opposition.

When Labour added a couple of words and made it the Comprehensive and Progressive Agreement for Trans Pacific Trade most MPs who had been so strongly against the TPP were just as strong in their support of the CPTTP and there was hardly a whisper against it outside parliament.

The Labour government has just signed the Regional Comprehensive Economic Partnership with 10 countries from the Association for South East Asian Nations (ASEAN) plus Australia, China, Japan and South Korea.

The Ministry of Foreign Affairs and Trade (MFaT) says this anchors New Zealand in a region that is the engine room of the global economy.

The 15 RCEP economies are home to almost a third of the world’s population, include 7 of our top 10 trading partners, take over half New Zealand’s total exports and provide more than half our direct foreign investment.

RCEP deepens our trade and economic connections in the Asia-Pacific region, an important part of New Zealand’s Trade Recovery Strategy. The agreement will help ensure New Zealand is in the best possible position to recover from the impacts of COVID-19 and seize new opportunities for exports and investment. RCEP is projected to add $186 billion to the world economy and increase New Zealand’s GDP by around $2.0 billion. . . 

New Zealand is too small to benefit much from bilateral trade agreements and has a lot to gain from multi-country deals like this one.

The government has done the right thing in concluding the work started under National but could be called hypocritical after the vehemence of its criticism of the TPPP.

And while some call Federated Farmers right wing and accuse it of being National in gumboots, it has given the agreement the thumbs up:

The prospect of reduced red tape from a single set of trade rules for the Asia Pacific is a major reason why New Zealand producers and exporters will give the RCEP deal the thumbs up, Federated Farmers says.

“Anything that takes us further along the path of ironing out border costs and delays, and reducing protectionist tariffs, for our exports has to be a good thing for farmers, and for New Zealand, Feds President Andrew Hoggard said.

A degree of scepticism has been voiced about how quickly our GDP would be boosted by the estimated $2 billion a year from the Regional Comprehensive Economic Partnership agreement signed at the weekend, given we already have free trade agreements in one form or another with all of the 14 other signatory nations. But new opportunities should eventually flow.

“This is now the largest free trade agreement in the world, covering nations with nearly one third of the world’s population. It includes clear mechanisms to us to address any non-tariff barriers put up against our exported goods by the other signatories,” Hoggard said.

RCEP delivers additional tariff elimination on a number of New Zealand food products into Indonesia, including sheepmeat, beef, fish and fish products, liquid milk, grated or powdered cheese, honey, avocados, tomatoes and persimmons.

The Green Party is the only one in parliament opposing the new agreement. Opposition from outside parliament has been muted and it’s not just on trade where the left is less vocal on issues than it was a few years ago.

When National was in power stories of homeless people and their plight were regularly featured in the news. Politicians and other groups on the left were happy to be quoted criticising the government and demanding action.

Homelessness and overcrowding are still be a major problem and, given the escalating price of houses, a growing one. But the stories of people living in cars and other suboptimal accommodation aren’t nearly as frequent.

What’s changed? Just the government.

Could it be that the people who advocate so loudly for the vulnerable when National is in power let their own partisan attachments get in the way of their political agitation when Labour is ruling?


Free trade falters

03/08/2018

Free trade is faltering:

The man who led the New Zealand team in key global trade negotiations says the world is seeing the worst rise in trade protectionism in 23 years.

Vangelis Vitalis, from the Ministry of Foreign Affairs and Trade, spoke to RNZ at a conference of the meat industry in Napier.

He said years of eased trade rules were in danger of being reversed, and this must be dealt with.

“We have seen 400 new protectionist measures to May have been put in place.

“We know that non-tariff barriers cost the wider agricultural sector of New Zealand up to $6 billion a year in restricted access. These have a profound impact.

“We are seeing the sharpest rise in protectionism since 1995, especially in the last six months.” . . 

This isn’t just a threat to exporters, it’s a threat to the whole economy.

Trade restrictions don’t just hurt businesses exporting to a country which imposes tariffs. They hurt businesses in the importing country trying to export to other countries which impose tariffs in response.

There’s no better illustration of that than this Trump Toon at Inquiring Mind.

By making it harder for businesses to sell their goods to the USA, Trump’s tariffs are making it harder for USA producers to export their goods.

Trump responded by giving subsidies which is a cost to taxpayers who are the consumers who are having to pay more for imported goods.

The inability to export will result in a glut in the domestic market which will depress prices. That might help consumers in the short-term but anything they gain in lower prices will come at their cost as taxpayers who pay for the subsidies.

I’m old enough to remember what it was like in New Zealand before we embraced free trade.

Tariffs were in effect a consumer subsidy for local industries which left consumers with less choice, often lower quality, and always higher prices on a whole range of goods from necessities to luxuries.

The whole system of tariffs, import and export licences, and subsidies was ripe for exploitation, manipulation and corruption.

It gave power to politicians, created work for bureaucrats and helped the favored few at the cost of the many.

The transition to an open economy wasn’t easy, but it has been worth it.

We are no longer producing low quality food in quantities too great to sell. Production is market led, aimed at what consumers want not political and bureaucratic whim.

There is little risk that New Zealand will close its borders again but we could be caught in the crossfire as trade wars between other countries escalates.


Rural round-up

12/11/2017

Westland Looks to Take Its Wastewater Out of the Hokitika River:

Westland Milk Products said today it is well down the path toward potentially taking its treated wastewater discharge out of the Hokitika River.

CEO Toni Brendish says that in September last year Westland re-opened its investigations into an ocean outfall for its treated wastewater discharge, which would take it out of the Hokitika River two years prior to the existing in-river discharge consent expiring in 2021. A final decision on whether to go with the option will be made early in 2018. The investigations are at the stage that the company is about to go back to the West Coast Regional Council for a minor variation to its existing permit. . . 

Challenging future facing livestock farming – Nigel Malthus:

The disruptive forces facing New Zealand agriculture could mean a tough future for livestock farming, says the new president of the New Zealand Institute of Primary Industry Management (NZIPIM).

Farm consultant Craig Osborne, from Oxford, North Canterbury, has been named to replace Guy Blundell, heading the institute for the next two-year term.

Osborne says that where NZ farming is heading is the “million-dollar question” and a tough one to answer because of all the competing forces gaining momentum globally. . .

WTO declines Indonesia appeal on ruling over trade barriers that hurt NZ beef trade –  Jonathan Underhill

(BusinessDesk) – The World Trade Organization has turned down Indonesia’s appeal against a ruling that trade barriers imposed since 2011, which hurt New Zealand’s beef exports, were inconsistent with global trade rules.

New Zealand had invoked WTO dispute settlement consultations with Indonesia in 2013 and 2014 over 18 trade barriers it said had resulted in an 80 percent drop in the nation’s exports to Indonesia of beef and horticultural products such as apples and onions. Prior to the restrictions, Indonesia was New Zealand’s second-largest market for beef, worth $180 million a year, and the accumulated trade impact was an estimated $500 million to $1 billion, according to the complaint. . . 

Icebreaker inks $100M 10-year supply contract for NZ merino wool – Tina Morrison:

(BusinessDesk) – Merino outdoor clothing company Icebreaker has signed the longest ever supply contract with growers of New Zealand merino wool, worth $100 million over 10 years.

The Auckland-based company, which announced this week that it is being bought by US-based VF Corporation, has inked agreements with New Zealand woolgrowers in collaboration with wool marketer The New Zealand Merino Company to ensure it has long-term supply of the fibre. Pricing will be at a premium to market prices to recognise long-term grower loyalty and to enable Icebreaker to use farm imagery and storytelling in its global marketing campaigns, Icebreaker said in a statement. . . 

Fencing best practice showcased – Sally Brooker:

Fencing industry folk from a large part of the South Island converged on a North Otago landmark on October 25.

The Fencing Contractors Association New Zealand ran a demonstration day at Parkside Quarries, the place where Oamaru stone is hewn from the hills.

More than 50 people attended – a mix of fencing contractors and practitioners, suppliers, and industry partners.

Motueka-based fencer and tutor John Noakes said the event showcased fencing best practice – both traditional and modern techniques. . . 

NZ  company Fifth Breath launches woollen yoga mat – Brittany Pickett:

It all started with the idea that traditional yoga mats didn’t align with yogi principles and now Fifth Breath has launched the first yoga mat made from wool.

Co-founders of the New Zealand company Dana McKenzie and Irina Arya have spent the last year working to develop the mat’s design and key technology elements, with the aim to retain the functionality expected by yoga followers.

Both of them are engineers by training and met during studying for a masters in business administration at the IMD Business School in Lausanne, Switzerland in 2008. Since then, they have both enjoyed corporate careers and growing families, yet a passion for wool and yoga prompted them to build Fifth Breath Ltd, a company with an ethos about offering naturally safe yoga mats. . . 


No “only” about .9%

23/02/2016

One criticism of the Trans Pacific Partnership is that it will add “only” .9% to New Zealand’s GDP.

Politik has the Ministry of Foreign Affairs and Trade’s response to  two economic studies quoted by Labour  using that figure to justify criticism of the deal.

MFAT Chief Negotiator David Walker says that 0.9% increase in baseline GDP in 2030 is equivalent to NZ$2.7 billion.

There is no “only” about $2.7 billion.


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