Friday 11 October 2013

Trading in "Free" For "Fair"?

But Will Labour Make It? With David Cunliffe announcing the return of "Red Labour" following a rank-and-file instigated "revolution from below", the Party's 30-year adherence to the Neoliberal "free trade" ideology may be coming to an end.

LABOUR’S 30-YEAR COMMITMENT to “free trade” may be coming to an end. The test will be three weeks from now when the party gathers in Christchurch for its annual conference.
At last year’s conference, delegates were willing to offer only the most qualified support to the Trans-Pacific Partnership (TPP) negotiations – and it required repeated interventions from former Trade Minister, Phil Goff, to secure even that limited endorsement. This time Mr Goff may not be so successful at fending off the TPP’s opponents.
Labour’s “Free-Traders” face some very substantial obstacles. The greatest of these is that the party’s commitment to trade liberalisation, like its commitment to the Reserve Bank Act, is emblematic of Labour’s 1980s embrace of Neoliberalism.
Throughout the 15-year reign of Helen Clark serious public criticism of these neoliberal shibboleths was verboten. Goff struggled (with limited success) to keep the ideological disputation in-house. David Shearer could not manage to do even that.
Had the news media paid a little more attention to the revolution that was taking place on the floor of last year’s annual conference at Ellerslie, and devoted a little less effort to chasing non-existent leadership challengers, they may have noticed the explicit repudiation of “Rogernomics” included in the 2012 Draft Policy Platform.
It is a measure of the intensity of the behind-the-scenes ideological battles that have been raging in the Labour Party since Ellerslie, that last year’s passionate condemnation of Rogernomics has been dropped from this year’s Draft Policy Platform.
How much of the document’s watering-down is attributable to the intervention of Grant Robertson, the preternaturally cautious chair of Labour’s policy council, is far from clear. But even in its new – and ultimately binding – iteration, the document registers an unmistakably leftward shift:
“Labour holds that government must play an essential role in managing and developing the economy. We reject the notion that free markets on their own will deliver either long-term prosperity or just distributional outcomes.”
When spoken by the new party leader, David Cunliffe, this is the sort of anti-neoliberal rhetoric that brings Labour’s newly empowered rank-and-file and affiliates to their feet a-whooping and a-hollering.
Considerably less inspiring is the Draft Policy Platform’s statement on international trade:
“Labour will support international trade and investment agreements that promote New Zealand’s economic wellbeing and support fairness, transparency, sovereignty, and sustainability.”
But even in this rather colourless sentence there’s more than enough to cause political problems for those caucus members determined to preserve the bipartisan consensus on free trade by backing the TPP.
Mr Cunliffe sent shockwaves through the trade liberalisation lobby even before he clinched the party leadership on 15 September; by warning that the TPP posed a “quite difficult and complex issue for New Zealand”.
His concern over such “fish hooks” as the future of Pharmac and the sovereignty-threatening potential of “investor/state disputes”, coupled with his doubts about the genuineness of the promised agricultural opportunities, must have made TPP boosters worry that Mr Cunliffe had just come from a briefing with Professor Jane Kelsey!
Small wonder then that business columnist, Fran O’Sullivan, whistling loudly in the dark, wrote glowingly of Mr Goff’s undimmed enthusiasm for a TPP agreement.
“Labour’s Phil Goff is back in business, adding his strong and rational voice to New Zealand's advocacy for the completion of the Trans Pacific Partnership.”
Like so many of her journalistic colleagues, Ms O’Sullivan has yet to grasp how fundamentally the rules of the political game have changed.
Mr Cunliffe and Labour’s rank-and-file are now locked in a radical embrace. If Labour’s new leader decides to consummate their “red wedding” by promoting “fair”, rather than “free” trade (which would ease Labour’s relationship with the Greens considerably) then there’s nothing Mr Goff, or the other fading Rogernomes of the broken ABC faction, can do about it.
Mr Cunliffe’s keynote speech to the Christchurch conference will undoubtedly make Labour’s new political trajectory much clearer. Expect to hear something on free trade. Just don’t expect it to be business as usual.
This essay was originally published in The Dominion Post, The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 11 October 2013.


Anonymous said...

Do we actually know what's in the TPP? It seems a little difficult to get information about the actual provisions. What is certain is that Japan and the U.S. are almost certainly not going to instantly de-subsidise their farmers. It's funny considering that Douglas at al were always blagging on about transparency. They just isn't any any more. I can't think of one local body politician in our area for instance who is anything other than an "independent". That used to mean "I'm National but I don't want to say in case you don't vote for me." Now it's everyone, and I refuse to believe that everyone is National. Personally I think that the 2 political commentators on Kathryn Ryan's program got it right the other day when they both agreed (yes scary I know) at the whole thing would descend into a face saving shuffle. That it would never actually come to fruition. Especially after the risible U.S. Australian deal :-).

Wayne Mapp said...

Well it might be easy for Labour to vote against the TPP if it comes before parliament next year in the knowledge the Govt has the numbers.

But in the event that Labour wins in 2014, and the TPP has not gone through Parliament to the extent it has to, I suggest it will be a vey big call for Labour to have NZ opt of an agreement that included Australia, Japan, the US, Mexico and Canada.

I know this is the dream of the Hard Left, and seemingly yourself, but it might be a pretty hard sell to middle NZ. Because of the economic effects it is unlikely to be sen in the same light as the nuclear free policy.

Dave Kennedy said...

It was interesting to note that during the political panel at the CTU conference that while the Greens and New Zealand First made strong statements against Free Trade agreements, Andrew Little spoke strongly in support.

There is little evidence that free trade agreements work in favour of the smaller partners and it was interesting to hear that Australia has no FT agreement with China but their exports have grown faster than New Zealand's.

Unknown said...

Interesting post indeed. How far will the labour Party go in promoting fair trade over free trade? The TPP doesn't appear to have much to do with promoting NZ - more with continuing the neoliberal past of the last 30 years - ripping out the guts of working class support and shooting down any support of unionism. My personal explanation of the so-called benefits of the trickle down theory is peeing on ones shoes. Will Labour reject free trade in favour of fair trade. It would become a quantum leap in change here.

Anonymous said...

It seems to be the dream of the hard right to tie us into as many idiotic free trade treaties as they can, and make it is difficult as possible to get out. That's Roger Douglas tactics :-).

Jigsaw said...

Some confusion in the comments here about 'free trade' and 'fair trade'-surely it's about the fomrer and the protectionism that is it's opposite. As the people who recall the dreadful protectionism of the 1960's and 1970's dwindle I suppose it is inevitable that some will be ignorant enough to want revisit this idea. They probably wouldn't believe that jackets made in NZ-the only ones you could get and were so poorly made that they fell to bits and were 14 pounds each-a week's wages. People bought 5/- postal notes, just one allowed per day and bought jackets from Hong Kong-no amazon or credit cards in those days.Cheap and they lasted.Full employment but at what cost? I wonder how tight a Labour/Greens government could tighten the noose and if they possibly imagine that people would tolerate it? Pull up the drawbridge.....

Anonymous said...

The TPP is not about trade, it is to enable the corporate elite to remove regulations such as safety, quality and clear labelling that might hinder marketing. A similar elite to that which financed the National Socialist party in Germany in order to install a regime that would ignore the restrictions placed on Germany after the first world war.

Chris Trotter said...

I'm not sure how old you are, Jigsaw, or what the age of those you ordinarily address might be, but you really can't get away with nonsense like this when you're dealing with an audience that actually lived through the period you so dishonestly deride.

The clothes made in New Zealand in the post-war era in small towns like Levin were actually of extremely high quality. This was hardly surprising since most of the designers and many of the workers came from the UK and modelled their products on "the very best of British".

The emphasis on quality was necessary because they were relatively costly. But, higher prices for many consumer items was a trade-off most Kiwis at that time were happy to make in order to maintain full employment and preserve New Zealand's generous welfare state.

Protective tariff barriers and import licencing were what made it possible for small-scale businesses, with necessarily small production runs, to flourish.

Pay a visit to towns like Levin today and all you will find to mark the era when New Zealand made most of its own stuff are the shells of little factories - now standing alongside big red barns full of imported clothes from the sweatshops of Asia that really do fall apart after a few weeks.

This is the reality, Jigsaw, that your propagandistic fabrications are intended to mask.

Those of us who were around at the time see right through them. Those who were born later - "Rogernomic's Children" - should be very wary of believing anything the defenders of the neoliberal counter-revolution tell them.

If young people but knew how sweet life in this country was for ordinary people in the years before they were born, they would waste little time in consigning neoliberalism to the dust-bin of history.

Roll on the day!

Anonymous said...

I too have some experience with the stuff that was made in New Zealand up to 1984. It did tend to be a bit clunky, it didn't necessarily have all the bells and whistles that you got overseas, but by god it lasted. I'm still using the odd appliance that was made then. My latest washing machine has lasted 2 years and one month. Just out of its warranty period interestingly enough. I've just junked to electrical lawnmowers that lasted just over a year each. God knows how old my spare food processor is, but it's still going, where as all the new ones just last a few years – and when you complain, you get a certain amount of sympathy from some of the company representatives, but they just say "built to a price" expected to break. Not saying there wasn't poverty then, but it tended to be hidden – rural, and often Maori. But in spite of the fact that we had to save for things, we still had enough by way of wages to put food on the table and clothes on our backs, in contrast to many people these days.

Anonymous said...

Dammit did I leave the correct link?

Jigsaw said...

Older than you Chris and the picture you paint is seen through rose/red glasses I fear. Clothing and shoes and indeed most consumer goods were incredibly expensive and there was no choice. We could debate the quality but saying that just because they were british made they were good is simply imaginary. They were 'White Stag' jackets made by Lane, Walker Rudkin and were rubbish. No one complained because we knew no different. I recall the first jackets I saw that came into Christchurch with Deep Freeze and they were like nothing we had seen before. Shoes for us kids were major expense in the 1940's and 1950's. Besides my arguement is not about your memory or mine but if the NZ populace would be prepared to go back to those days of inefficent tiny factories in Levin.I would be interested to listen.
Incidentally holding up british postwar workers as some sort of benchmark of quality is a joke right?
to hear an arguement that says they would.

Anonymous said...

Chris - at 12:02 pm today, 12 October 13:
"Pay a visit to towns like Levin today and all you will find to mark the era when New Zealand made most of its own stuff are the shells of little factories - now standing alongside big red barns full of imported clothes from the sweatshops of Asia that really do fall apart after a few weeks."

You are so right, Chris, and it reminds me how many pairs of "cheap" Chinese made shoes I bought at one of those "red sheds", who lasted only between 6 to 12 months. I only bought them, because living on a benefit does not allow to spend too much, which better quality would cost.

Shoes and clothes made there and in many other low wage places are no longer made to last. They may be cheap, but adding up the costs of replacing them after short times actually makes the expenditure higher in the long run.

And much of the money spent goes into the pockets of corporate manufacturers, traders and their shareholders, while the locals in those countries work 12 or more hours a day, at low rates, and live in dormitories and the likes, where no New Zealand worker would volunteer to sleep and rest.

What is left as being made in NZ these days? One struggles to think, and milk powder, baby formula, cut logs and raw fish come to mind. Just yesterday Independent Fisheries in Christchurch announced it will have to close, given cheap processed seafood products from China make it impossible for them to compete. The fish gets caught off our shores and sent to China for processing, and then is sold back to us. This is total madness.

Also I find jam and marmalade made in Poland and other places, sold under a cheap local brand in our supermarkets. Surely such products could and should be made here.

We are sold lies, lies and endless lies about the "free trade" benefits. Make it fair and to some degree protect local manufacturers, that is the bottom line.

Anonymous said...

I'm afraid Jigsaw that your picture of today is just as rose tinted. You've obviously never been out of work. British quality? I've still got a pair of British shoes (many times repaired) I bought in 1969 :-).

Davo Stevens said...

Jigsaw my friend, you are so wrong on many fronts! Yes, at that time things were not perfect nor are they now. In fact things are far worse today!

NZ made goods, by and large, were of good quality and in the latter years pay was about 14 quid/week. I still have one of my original payslips from back in the early 60's. 1 pound, 4 shillings and 4 pence ($2.44c) for the week. Out of that I could pay my board, buy a packet of tobacco (I smoked then) a couple of beers, and I could still save a little too.

Houses could be bought for 3,500 quid and one didn't have to mortgage themselves for life to pay for them. They were solid three bedroom houses on a 1/4ac section not the opulent palaces you see today. Cars were noisy, smelly things that broke down occasionally but you could afford to get them fixed. Today you need and Advanced degree in Rocket Science just to open the bonnet!
Petrol was 2/6 (25c) a gallon (4.5lt).

Everyone who could work had a job and those that couldn't, for whatever reason, were taken care of.

The oil shock in the 70's put paid to much of that. The price of fuel went through the roof and that started a wage/price spiral that went out of control!

No, not everything was perfect but in the most part things were stable and one could plan out their life without much trouble.

Davo Stevens said...

You can get an indication of what in in the TPP here:

Jigsaw said...

Davo-God knows what you were doing in the early 1960's! I was a teachers' college student paid 9 pounds ten shillings and threepence a fortnight and couldn't live on that. Labourers got at least 18 pounds a week at that time.I recall teaching on the West Coast a pupil who left at the end of Form 2 and got more in the bush than I got teaching.Those who talk about British quality should recall what happened to the British motorbike and car industry through the 1960's and 1970's. They had good tradesmen but zero innovation and eventually fell by the wayside. Innovation and clever industries as in IT are the answer for NZ not small factories in Levin making clothing that people are forced to buy because there is no choice. British boots-oft repaired-my father had an axe like that........

Anonymous said...

Oh Chris.
You are suffering from severe nostalgia. A common complaint. More specifically, the assumption that the time you grew up in was ideal, or typical.

NZ had more or less full employment from the war until the early 70s when Britain joined (what is now the) EU, and the oil shock occurred.
We had full employment because Britain (and the US, during the war) would buy pretty much everything our farms could produce. Having guaranteed buyers meant the govt could be almost as inefficient as it wanted. And so could the unions. And so could the farmers. This all changed in 1973 when Britain joined the EU. It just took the country about a decade to catch up.

Do you really want to go back to the government controlling almost every aspect of economic life, even if it were possible? In this time you look back on so fondly, you needed foreign currency to buy a car. The government controlled the import of almost everything. The government controlled all the telecommunications. Extremely inefficiently. Do you remember how long it took to get a phone connected in those days? I do.
Railways was run as a branch of social welfare (as were most government departments). And you had to use it for long distance freight, if you wanted to or not. .
Do you know who was the (last!) master of this system? R D Muldoon.

If you did try to go back to this system, most of the young skilled people would leave, even more than now. Cheap travel and electronic communications mean they know what the rest of the world is like.

In any case, automation is continuing it's march in taking over manufacturing. So you'd have to ban it. The government would have to control everything.

It's a common left wing dream that if you just controlled everything, you could create the perfect little utopia. On our isolated little island. It just ain't so.

Free trade has been shown time and again to be fantastic at generating wealth. It may not be so great at distributing it, but that is a different problem. Or would you rather have is all poor and (allegedly) equal, and under government control.

Of course, we must assess the TPP , and only sign up to it if the benefits out weigh the drawbacks, and not because of any ideological reasons.

Unknown said...

Gnossienne said...

The bales of clothing overruns now dumped into product barns amd malls in New Zealand are not only badly cut and put together but are extremely ugly.
As in New York and many, many other places the interesting culture of a localised garment industry has been erased.
Womens clothing made here in the fifties, sixties, seventies and early eighties was well designed and made from beautiful fabrics which have it seems, now disappared off the face of the globe.
Shoes, knitwear, underwear, summer and winter clothing made in New Zealand were generally of very good quality and attractive.
There is now two tier marketing world wide with anything remotely well designed and of good fabric marketed as luxury for a high price while the majority are offered truly repulsively ugly mass maufactured sludge from the most hideously ugly fabrics one has ever seen.
No wonder so many troll the second hand shops to find something of worth from another age.
Some oldies are even reverting to making their own garments from carefully hoarded fabrics which seem by comparison like something out of Alladin's cave.
Neoliberalism is globalised trash.

Anonymous said...

Actually the world had unprecedented economic stability from 1945 until 1975 under economic regulation. Quite a long period without a major depression. And there's a difference between shoes and axes. Mistakes like that is what's wrong with economics today :-).

Loz said...

The leaked draft of the Trans-Pacific Partnership has 29 chapters of which only 5 deal with trade. As always, "Free Trade" is merely a hollow slogan. It really means increased regulation but in favour of corporations instead of the citizenry. The remaining 24 chapters of the document prevent governments in placing restrictions on the activities of corporations.

The TPP is being plugged with the dishonest label of "Free Trade". Our morally bankrupt governments continue to deceive in attributing the prevention of public debate and disclosure of treaty details to an inherant sensitivity thats part of all negotitions. What isn't mentioned is that over 600 corporate advisers, representing the largest companies on the planet are being provided draft versions of the treaty for review and comment. With that number of parties being consulted, witholding details from the public can only be viewed in the most cynical light.

Most critically, the treaty creates secretive "Investor-State" tribunals that allow corporations to sue governments over legislation that may impact potential profits. Democratic laws for the protection of the environment, labour conditions, freedom of speech, freedom of the internet or the protection of citizens will be made subservient to unelected panels.

Davo Stevens said...

Yep Jigsaw some pay was better. At that time (early 1960) I was an apprentice Builder. Left that in the third year and went to Uni (free!). Got a Bach degree in structural engineering and never looked back!

NZ had a closed economy then and it was the same throughout most of the world. I recall getting a pair of Sargoods Work shoes and they lasted me for 6rs! I have a pair of Bata (NZ) dress shoes, 5yrs old and still going strong. I look after them though.

As I said before, nothing is perfect and some things then weren't perfect either but by and large people were much better off then than they are now.

What so many don't understand is that for a "Free Market" to function there must be 10% of the able workforce (industrial surplus - do a search for it) out of work and actively searching for a job. That keeps wages low and profits high. When the un-employment figures get less than that wages increase. That is why it's so important to have structured un-employment as part of our economy.

Why do you think that our Paula is forcing people to go out and look for jobs that don't exist?

It also makes a blatant lie by our dear leaders that they want to catch up with Aussie. No, they don't and Billy 'Dipton Dipstick' English has said so many times.

Anonymous said...

Let's face it, corporations are trying to weaken not only the nation state but also democracy. Already they have the power to shift their money easily from one country to another, and to shift manufacturing to where it's cheaper. But now they want the ability to override political and economic decisions made by democratically elected governments. This is creating a huge change in the balance of power between capitalists and ordinary people. We should be very afraid.

Robert Miles said...

There is little immediate possibility of TPP or in the medium term of NZ being part of it. Grosser is just playing games as usual pretending to be even handed in developing relations with the US and China. In reality Grosser and MFAT are very left and only interested in primary relations with China and secondly Russia and India- in other words the triple alligned Moscow axis with subs with Club sizlers. Our weakness is shown by our pathetic appeasement to each Chinese headshake and Putin growl.
So all the talk of TPP is just tactical, Grosser is anything but a real free trader or market person- his version of it is just another form of Utopian communism and nothing to do with the elite dominated view in Moscow, Washington or Shanghai all societies in which only the 40% with youth, money and brains are citizens. And their dead right. Grosser is just a most useful idiot. Priceless in fact. The sort of shit you can only get out of Scottish slums. (erasing the last sentence y/n the editors perogative).

Anonymous said...

Grosser a socialist???? God what does that make you :-).