Signed, Sealed, Delivered: The signing of the China-New Zealand Free Trade Agreement was hailed as the Clark-led Labour Government's crowning foreign policy and trade achievement. It is simply inconceivable that the Labour Party has forgotten that agreement's "Most Favoured Nation" clause guarantees China the same rights as our other trading partners - including the right to purchase New Zealand farmland.
AT THE RISK of being branded a “traitor”, I’m declaring my support for the Crafar Farms sale. Not because I like seeing productive New Zealand farmland pass into the hands of foreigners, I don’t. The reason I’m in favour of the sale is because I believe New Zealanders should keep their promises and fulfil their undertakings.
In 2008 this country ratified a Free Trade Agreement (FTA) with the Peoples’ Republic of China. That agreement was hailed as the most important foreign policy and trade achievement of the Helen Clark-led government of 1999-2008. Not only was it the first such agreement to be signed between China and a western-style democracy, but it also offered New Zealand businesses immense economic opportunities.
Those opportunities were, of course, reciprocal. The Chinese have been merchants and traders for the best part of three thousand years. They needed no reminding that in this world you don’t get something without giving something in return. And what we gave China was “Most Favoured Nation” (MFN) status.
In the context of the Crafar Farms Sale, MFN means: “If it’s okay to sell New Zealand farmland to Americans, Englishmen, Germans and Indonesians, then it must also be okay to sell farmland to the Chinese.” Under the terms of the NZ-China FTA, the Peoples’ Republic is legally entitled to no lesser consideration than that shown to the most favoured of our trading partners.
That’s what Prime Minister John Key meant when he said “our hands are tied”. It’s what New Zealand’s leading critic of the NZ-China FTA, Professor Jane Kelsey, meant when she stated:
New Zealand government had declined the Shanghai Pengxin purchase of the Crafar farm it could have faced an international law suit for breaching its free trade agreement with China […] The government cannot treat applications from Chinese investors differently from similar applications from other countries’ investors under what is known as the ‘most-favoured-nation’ or MFN rule.”
And that’s not all. Had the application from Shanghai Pengxin been declined by the Overseas Investment Office that decision would almost certainly have been challenged in a New Zealand court. And rightly so. We’d have broken our own rules.
It was all the more perplexing, then, to hear Opposition Leader, David Shearer, declaring his and the Labour Party’s opposition to the Crafar Farms sale. It’s simply inconceivable that Mr Shearer is unaware of the MFN prohibition against denying China the same right to purchase land as the nations that purchased upwards of 650,000 hectares of our national patrimony exercised when Helen Clark was Prime Minister, and Mr Shearer’s friend (and former boss) Phil Goff was the Minister of Trade.
To avoid the inevitable charges of rank hypocrisy and populist opportunism, Mr Shearer needed to accompany his statement opposing the sale with an announcement that Labour was committed, immediately upon regaining office, to repudiating the NZ-China FTA and tightening-up the legislation regulating overseas investment.
I’m still waiting for those other shoes to drop. And, frankly, I think I’ll go on waiting. Why? Because I simply don’t believe Labour is about to abandon its long-standing commitment to free-trade. Nor am I confident that Mr Shearer is any more willing to court the fury and retaliatory trade restrictions of the Chinese Government than Mr Key. Both men are well aware that this country’s future prosperity is inextricably bound up with China’s.
If foreign ownership of New Zealand land was something successive New Zealand governments wished to restrict, then they should have legislated against it before they embraced the doctrine of free-trade. And if we, the people, were serious about preserving our patrimony, then a majority of us would’ve voted for the political parties – the Alliance, NZ First, the Greens, Mana – which promised to do exactly that. But, the closest the New Zealand electorate’s come to voting against free-trade (27 percent) was the election of 1993. In 2011 the anti-free-trade vote was just 19 percent.
It’s a little late, now, to shout: “Stop!”
This essay was originally published in The Dominion Post, The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 3 February 2012.