Tuesday, 12 August 2014

The Responsibilities Of Power

This Land Is My Land: Yes, but if we want to keep it out of foreign hands then New Zealand will have to abandon its 30-year adherence to the doctrines of free trade and unrestricted foreign direct investment. And that will cost us more than many of us may be willing to pay.
 
SO, LABOUR’S going to block the sale of Lochinver Station. The political party which proudly attached New Zealand’s signature to the People’s Republic’s first free trade agreement with a western nation is now proposing to slap the Chinese government in the face. Forgive me, but in the absence of a wholesale repudiation by Labour of its longstanding commitment to free trade, I just don’t see this happening.
 
At the heart of the free trade doctrine lie two fundamental and related provisions: Most Favoured Nation status and National Treatment. In a nutshell, these two provisions are about non-discrimination; about governments promising not to play favourites and undertaking to treat foreigners no better or worse than they treat their own people.
 
These provisions are fundamental to free trade policies for the very simple reason that free trade is impractical without them. Without a foreign government’s undertaking that your country’s exports will be treated no better or worse than those of the “most favoured nation” with which it currently does business, what possible incentive would your own country have to open up its markets to the products of foreigners? And why would anyone attempt to establish a business in a foreign land if it was immediately lumbered with obligations and restrictions from which local businesses are exempt?
 
David Cunliffe, David Parker and Phil Goff (especially Phil Goff) understand the vital importance of reciprocity in international trade relations. The idea that they will intervene to nullify Shanghai Pengxin’s perfectly legal purchase of Lochinver Station – thereby signalling to China and rest of the world that Labour is abandoning its longstanding commitment to the core provisions of international free trade is, frankly, laughable.
 
Why, then, have they given such an undertaking?
 
The answer, of course, is because all the indications point to the conclusion that New Zealanders are adamantly opposed to the idea of their country’s farms being sold to foreigners. With an election looming, and a potential coalition partner, NZ First, promising to ban foreigners from swallowing up New Zealand’s green and pleasant land, Labour’s strategists clearly believe they have no choice except to say: “Me too!”
 
Now there is nothing intrinsically wrong with a political party opting to embrace a more protectionist stance on trade issues. New Zealand’s was, for many years, a highly protected economy with import quotas and high tariffs to protect local industries. The rest of the world accepted this because, for the most part, the rest of the world subscribed to very similar notions of economic management.
 
But, times have changed.
 
Officially, the rest of the world no longer believes in protectionism. The IMF and the World Bank, not to mention the World Trade Organisation, take a very dim view of countries which persist with (let alone re-erect!) barriers to the free movement of goods and services around the world. The fact that many larger and more powerful countries (the USA, the EU, Japan, Russia, South Korea) still maintain substantial barriers to trade, especially in agricultural products, may be a sore point with the New Zealand government, but it is not one it can do much about. From the mid-1980s, successive New Zealand governments (beginning with the fourth Labour Government) have progressively stripped away all the impediments to free trade. As a very small country, determined to achieve unrestricted access to the world’s markets for its predominantly agricultural exports, we could hardly do less.
 
All of which makes it extremely unlikely that a Labour-led Government would do anything so foolish and provocative as to over-rule an Overseas Investment Office-approved sale of Lochinver Station to Shanghai Pengxin. Not unless they actually wanted to see New Zealand’s exports held up for weeks on the Chinese docks!
 
It is critical to the future prosperity of New Zealand that its political leadership, even at the risk of incurring the electorate’s wrath, remain steadfast in its adherence to the principles of open markets and open borders. And if that means rehearsing the arguments in favour of free trade, as well as pointing out the likely consequences of denying the benefits of Most Favoured Nation status and National Treatment to a trading partner as vital to this country’s economic interests as the People’s Republic of China – then so be it.
 
It is easy to secure the approbation of the masses by telling them what they want to hear. Much harder is the task of convincing one’s fellow citizens that the cost of the changes they are demanding is well beyond what most of them would be willing to pay.
 
Small parties without prospect of ever being in a position to formulate the core policies of the state are free to promise voters the diplomatically and economically impossible. The leaders of parties large enough to make a difference have a duty to accept the responsibilities of power.
 
This essay was originally published in The Press of Tuesday, 12 August 2014.

22 comments:

Draco TB said...

These provisions are fundamental to free trade policies for the very simple reason that free trade is impractical without them.

Free trade doesn't require the selling of the land, business or the free movement of money. It only requires that a country will allow another countries products to be sold in their markets. And that, to bring about the efficiency that the economists parrot on about, requires the same minimum wage, the same minimum health care, the same minimum environmental protections, the same… None of which we have and so free-trade can't actually happen.



The answer, of course, is because all the indications point to the conclusion that New Zealanders are adamantly opposed to the idea of their country’s farms being sold to foreigners.

All indications are that NZers never liked the idea of selling out to foreign interests but the politicians haven't listened to that voice - until now. And even then it's taken a long time for them to start doing anything about it other than making pleasing noises.

It is critical to the future prosperity of New Zealand that its political leadership, even at the risk of incurring the electorate’s wrath, remain steadfast in its adherence to the principles of open markets and open borders.

Bollocks. It's essential for NZ's prosperity that we diversify our economy and go back to producing everything we need.

The leaders of parties large enough to make a difference have a duty to accept the responsibilities of power.

So, you're saying that the government should just ignore the wishes of the governed? That we should go back to being a dictatorship ruled by the few?

Yeah, fuck off.

Anonymous said...

This is the worst article I have ever read here. We have no obligation to sell farmland to the Chinese. Free trade has nothing to with selling farmland. We can't buy land in China as they are not stupid enough to sell their land, but China would no doubt love to own New Zealand and use it as a giant farm to feed their people and provide employment. China are relying on corrupt political elite and naïve voters to get their way, and unless we get some people into power in NZ who are actually working on behalf of NZ, we will be a colony of China within a couple of decades. Seriously. Look how much NZ has changed just in the last decade.

I want a debate on Chinese immigration too. Spare me the cries of xenophobia. There is a difference between immigration and colonization. Lets get real here. The numbers of Chinese in Auckland are reaching colonization levels. I have had quite a bit to do with the Asian community, and haven't come across many whose first loyalty is not to China. This is even amongst the young NZ born Chinese. Chinese on the whole are not integrating, they are not becoming NZers, rather they are slowly making parts of the country Chinese. It's not because NZ won't accept them so they stick to their communities, from what I have heard and observed the Chinese look down on non-Chinese. Many of them can't/don't even bother to speak English. I grew up in Auckland, but it is a place I do not recognize anymore, it could be any city in Asia.

I think it is time we had a debate about the future of this country, rather than the place being altered forever by immigration quotas (we don't get to vote on those and yet they are changing the country beyond recognition) and the OIO. Are the majority of NZers happy to see the country change from a western democracy to an Asian country, and our culture and values be eclipsed?

Once there is a tipping mass of Chinese population here (and we can't be too far away) then it can only be a matter of time before the political landscape starts to change in favour of China getting what it wants. I think there needs to be a law that only NZ citizens can vote in elections. If you are an immigrant to NZ and you are loyal enough to the country to become a citizen, then yes you can vote. But if you have remained a citizen of your country of origin and are just a permanent resident here then you should have no rights to try to alter the way NZ runs.

China are playing a long game here, no surprises though as that is what they specialize in. First get enough of your citizens living here, and with NZs over generous immigration policies that wasn't hard. Once you get enough people here to have an influence politically, then start changing things to open the country up even further to Chinese interests. Then start buying up the place, and move more of your citizens here as workers in vertically integrated business operations. Then open the floodgates. China has the population to make non-Chinese NZers a minority overnight if the floodgates were opened to them. This is where we are headed if nothing changes soon. I personally don't want to be living in a colony of the PRC. All the human rights and things we fought for like a welfare system and superannuation could be gone, I find it a very frightening scenario.

Guerilla Surgeon said...

Are New Zealanders allowed to buy land in China? The thing is, that the whole world doesn't actually believe in free trade Chris. The Americans, the Europeans, the Indians, the Chinese are all protectionist, sometimes in the extreme. And in fact some economists believe that is the best way to pull your country up by its bootstraps when it's developing. About the only thing positive you can say about selling land is they can't take it away with them :-).

jh said...

So you are John Moore and Bryce Edwards Chris and other advocates of open borders. While claiming falsely to represent the interests of New Zealand Labour.
----------
"“Both in New Zealand and globally, the best of the leftwing tradition has always rejected small-minded nationalism, xenophobia and racism. In fact, leftists of an internationalist tradition have always favoured globalization and getting rid of national borders and barriers to migration. Progressive advocates of globalization of course do not defend a handful of rich imperialist countries, including New Zealand, dominating the world’s economy, but instead advocate an integrated and radically egalitarian world economy where production is based on social need and not on private profit. ”
http://liberation.typepad.com/liberation/2012/02/guest-blog-post-john-moore-leftwing-xenophobia-in-new-zealand.html

Victor said...

I assume this is an exercise in pastiche and dramatic irony.

Do I win a chocolate fish for being the first person to work it out?

jh said...

I think the tone of this post is disingenuous: you seem to be hiding behind obligation when your position is open borders (without a condom).

Anonymous said...

Labour adopted this policy in 2011 as I understand it, so your argument is based on a misunderstanding.

Debbie Sullivan said...

Guerilla Surgeon....."the only positive thing you can say about selling land is they cant take it away with them".....tell that to the Aussie mining industry.

Guerilla Surgeon said...

Debbie. Except here they're buying farms.

jh said...


"The Responsibilities Of Power"
Despite overwhelming objection to foreign farm sales,(going by the Campbell Live poll) someone, (who knows best) should over-ride the masses.
The liberal elite are not turned off by that proposition; in fact, it is like mountain climbing to them The mass of humanity is a lump that needs to be improved (having a secret agenda doesn't bother them for that reason).
Robert Putnam, having found that diversity leads to people turning inwards and away form civic engagement, sat on the results for five years. He now implores his fellow liberals:
"As I made clear in my article “E Pluribus Unum: Diversity and Community in the Twenty-First Century,” immigration brings a host of benefits to the United States, far beyond introducing cultural and gustatory diversity." And: "As you will see when you read “E Pluribus Unum,” my intention is not to argue against diversity and immigration but to point out that if we do nothing, the reweaving of our communities may take half a century, judging from our past experience. By focusing concertedly on bolstering social solidarity in the decades ahead, we can dramatically shorten this
period."
So it could take 50 years but hell, it's worth it!
The liberal elite dominate the news media. E.g they studiously avoided reporting the bombshell Savings Working Groups findings on immigration policy only presenting positive views (such as those of the NZIER).

Simon said...

Good luck to the "Chinese" who ever they may be.

Productive people have more in common with other productive people regardless of race or background.

"t's essential for NZ's prosperity that we diversify our economy and go back to producing everything we need."

Lol. Got nothing in common with the "New Zealander" who wrote this economic gibberish.

Anonymous said...

@ Simon
your argument seems to allude to economic efficiency: manufacturing goes to China , we have cheaper goods and the extra cash (otherwise spent on expensive local shoes) is invested in some new enterprise. The reality is we hock off farms and real estate. Growth over the past few years has been in construction not Sir Paul Callaghan type enterprises.
The 8000 jobs *claimed* to compensate for the sale of NZ farmland are apparently development jobs driven by population growth (government policy).

Chris Trotter said...

Close, Victor, but no chocolate fish.

My intention in writing this piece was to raise the general level of voter scepticism that either major party will find the courage (or be allowed) to mess with New Zealand's current commitment to free trade and lightly regulated foreign direct investment.

Simply jumping on the populist/economic nationalist bandwagon in the midst of an election campaign is not enough to pull off an economic re-orientation of such magnitude.

To break out of the current neoliberal model Labour would need to embark on a forceful, coherent and sustained campaign of public persuasion every bit as comprehensive as the "New Right" campaign that convinced us pre-1984 New Zealand was a basket-case. (Rather than a country doing its best to cope with the inflationary surges and general economic instability that followed the second OPEC oil-shock of 1979).

Clearly, this has not happened and so there is a very high probability that Labour will not follow through on its economic nationalist promises - or, at least, not in its first term.

Debbie Sullivan said...

no chocolate fish required as I,m on a diet, but would suggest the wholesale turning from this path wont occur in any foreseeable parliamentary term until the a major economic grouping decides the current model isnt working for THEM....only then will NZ be allowed to turn its back on this path, irrespective of the colour of the government.

Anonymous said...

My intention in writing this piece was to raise the general level of voter scepticism that either major party will find the courage (or be allowed) to mess with New Zealand's current commitment to free trade and lightly regulated foreign direct investment.
......
I don't suppose the public were aware at the time that Helen Clark's Fifth Labour Government was putting farmland on the block? Ah "the responsibilities of power"!

Debbie Sullivan said...

Anonymous.....I dont suppose the public were aware that during the terms of the Helen Clark government that this was merely another symptom of decreasing Government control over policy direction.

Draco TB said...

Got nothing in common with the "New Zealander" who wrote this economic gibberish.

Not economic gibberish at all. It is always cheaper to produce what we need here importing and exporting as little as possible. The reason why this is true is because it uses less resources otherwise known as being more economical. It is only our monetary system that makes it seem otherwise and when our monetary system clashes with the real world then it is the money system that should lose out.

Our money system is delusional and that makes our economics delusional as well as our entire economic system is based upon our monetary system.

Masterman said...

"If you remove power from the nation and put it in the global arena without compensating for that power taken away from the nation, will the equivalent power for the citizen also be transferred to the international level? If you transfer the power without the power of the citizen, then you're not weakening the nation, that's really a secondary thing. You're weakening democracy. Superficially it's true there's never been so much democracy in the world, there's never been so many governments calling themselves democratic. The reality is year by year over the last couple of decades we have actually been weakening the reality of the democracy"

Anonymous said...

Anyone who changes their vote to Labour based on this policy would be the mug that the Labour policy makers take them for.

My opinion is that IF someone has Land Sales policy as the prime reason for casting their vote THEN casting it for Labour would be a wasted vote. Labour would prevaricate for another 3 years and the current Land Sale policy would not change.

Sadly, the only way, I believe, to make the larger parties take notice would be to cast a vote for NZ First this time around.

Victor said...

You're a hard man, Mr T

But, essentially, I agree with you.

All too often, the choice twixt Right and Left is characterised as a choice between hard-headed, economically responsible common sense and waffly, if well-intentioned, distributist idealism.

It will take more than one term in office to convince the public that a less wholly market driven approach is actually the more hard headed and economically responsible.

And I doubt whether Labour is fully up to the task of advocacy.

Anonymous said...

To anonymous at 12 August 13:57
Agreed: "Free trade has nothing to with selling farmland. We can't buy land in China"

There has been bugger all public debate about the full pros and cons of our current policy. Many immigrants are poorly informed, (The Chinese language media is absolute drivel), are given PR or a passport and their investment money taken, but are otherwise given bugger all support. Public services in Auckland are really being seriously stretched...to the detriment of ALL here, and at a cost to the rest of the country.

Cries of 'xenophobia' are usually attempts to shut down the debate on immigration, yes.

You do realise that a Chinese who becomes an NZ citizen will have their PRC passport cancelled - they cannot go back. Many Chinese I know who have made this decision consider NZ to offer them and their children a better future.

Unsurprisingly, immigrants tend to stick together too. I lived in Taiwan for 8 years, the very best place for me to live is Howick in Auckland, because I have access to the best of Taiwan,China and NZ there - it is not about "not integrating" sorry.

Many Chinese do have an unconscious racism, somewhat like many pakeha NZers had until the 80s or so...but the younger ones are Kiwis, like it or lump it, and Auckland schools have a huge variety of cultures present.

There are many Chinese grandparents looking after their grandchildren while the parents work in NZ (or China or Taiwan, or travel constantly)- I don't think many NZers appreciate how difficult learning another language can be, especially when one is over 50. One can now get by without learning English in Auckland. It is perfectly possible to get by in any country without learning the local language, I got by on a one year working holiday visa in Japan for a year without learning any Japanese language at all. People's motives for learning or not learning a language are more complex than you might think.

Have you lived in a big Asian city? I can personally assure you that Auckland is nothing like Tokyo, Taipei or Hong Kong for sure - you can breath the air in Auckland for starters...

I know many Chinese immigrants who are just as disgusted about Donghua Liu and his and the Nats and the Chinese elites dirty dealings as any "Kiwi" is. They came here to get away from that kind of behaviour.

I agree that the PRC is already throwing its weight around regarding Tibet, Taiwan, the Senkakus etc. NZ will feel this, just as we feel the weight of the USA currently.

Regarding voting: permanent residents can vote, and they pay taxes and run businesses too. I think that is fair actually - and as I already said, the PRC does not allow dual citizenship.

The PRC government IS thinking long-term, in the same way the US's 1% does, but I think you are making a mistake in conflating the views and aims of Chinese in NZ with those of their government. As I said, many are to get away from that government.

You say: "start buying up the place, and move more of your citizens here as workers in vertically integrated business operations" - you mean just like what the British, Australians, Americans and Japanese have been doing for years? NZ is still NZ for all that.


Since we are currently an economic colony of the US and Australia, so I'm not convinced the average struggling Kiwi would notice much difference with China - they're being screwed already

You say: All the human rights and things we fought for like a welfare system and superannuation could be gone" - that is happening now, under National - and they were largely elected by middle-class pakeha - little connection to China there...

jh said...

You might be interested in thise Chris

"In the same vein that Robert Putnam explored decaying community and social capital in American in his work, Bowling Alone, Brian Bethune discusses how the decay of Western communities shapes our health and political realms.
http://www.macleans.ca/society/the-end-of-neighbours