Saturday 1 August 2015

Be Careful What You Wish For: What If The Government Rejects The TPPA?

Grim Faces And Patriotic Words: With a few, well-chosen, words, Key could place the 2017 General Election beyond the Opposition’s grasp. The Left has been clamouring for New Zealand’s negotiators to reject the TPPA in its current form. But what would happen if they did?
TWENTY YEARS New Zealand has been pursuing this dream. Twenty years of plotting and scheming to secure a genuine free trade agreement with the USA. Twenty years of being rebuffed, fobbed-off, and quietly advised to wait in line until the time was right. And all for what? To be kicked in the teeth by Tokyo (with Washington’s tacit approval) and told to bugger-off home if we don’t like playing with the Big Boys?
The question is: Will we go on playing with the Big Boys? Will we humiliate ourselves by remaining on Maui; gathering whatever crumbs and scraps of concessions the Big Boys condescend to toss into our begging-bowl; and call whatever we’ve managed to collect by the time the Trans-Pacific Partnership negotiations are wound up – a victory for New Zealand diplomacy?
The Opposition parties better hope so.
If John Key and Tim Groser are obliged to lay on the table of the House of Representatives a TPPA that commits the New Zealand people to decades of inflated pharmaceutical costs; a draconian intellectual property regime specifically designed to enrich the largest US corporations; and an Investor-State Dispute Settlement process which makes a mockery of this country’s sovereignty – but which includes almost nothing in the way of immediate and tangible economic benefits for New Zealand’s exporters – then this government will be dog-tucker.
Andrew Little, Winston Peters, Metiria Turei and James Shaw will be able to collectively hang a “bad” TPP agreement around the Government’s neck like the Ancient Mariner’s albatross. Doctors and pharmacists will blame the National Government for the health system’s inability to supply those in need of life-saving drugs. Struggling farmers and manufacturers will condemn it for failing to achieve the promised access to US, Japanese and Canadian markets. Constitutional Lawyers will lament the truncation of democratic authority. Youngsters will resent the lengthening reach and growing ruthlessness of copyright enforcers. By 2017, that TPPA albatross will have swollen into a stinking invitation to vote National out of office.
So why on earth would John Key and Tim Groser sign it?
Well, it’s possible that John Key is just so enamoured of the United States and its President – his good golfing buddy, Barack Obama – that the idea of saying “No” to the TPPA is simply unthinkable. He may believe that his stock of political capital with the New Zealand public is still so huge that signing up to a crappy TPPA, while costly, will not put him in deficit. It may even be the case that the New Zealand ruling class lacks the moral resources to stare down the emissaries of global capital. If so, then National is lost.
But just imagine what the political effect would be if John Key and Tim Groser came home from Maui with grim faces and patriotic words. Picture them on the stage of the Beehive theatrette answering questions from a clamouring crowd of journalists. Consider the impact of Groser intoning, in that irritating professorial manner he has perfected:
“Look, in the end, it just wasn’t good enough. Perhaps we were a little naïve. I was certainly stunned by the blank refusal of the Japanese to negotiate seriously on the question of dairy access. They as good as told us to go home if we didn’t like what was on the table. And here we are.”
Then it’s John Key’s turn:
“It has always been my position, and the position of my government, that a TPPA which failed to deliver real gains for New Zealanders was not worth signing. We’ve waited 30 years for the world to open up its borders in the way New Zealand opened hers in the 1980s, and if necessary we will wait another 30 years. This country will not be bullied into signing an agreement contrary to the interests of its own people. We were not willing to sacrifice Pharmac. Nor were we prepared to compromise this country’s sovereignty. Obviously, we’re disappointed. But there a some lines that a government does not cross.”
With a few, well-chosen, words, Key could place the 2017 General Election beyond the Opposition’s grasp. The Left has been clamouring for New Zealand’s negotiators to reject the TPPA in its current form. But what would happen if they did?
Be careful what you wish for.
This essay was originally posted on The Daily Blog of Saturday, 1 August 2015.


Anonymous said...

They will not reject or walk away, NZ is about trade. Labour is incapable of understanding this.

greywarbler said...

An interesting scenario Chris, and seems very realistic. And viewpoints, as you suggest, will be radically influenced by whether people with strong political leanings are more interested in getting and having political power over NZ than in what measures are good for the futures of all the NZ people.

It actually will require a large element of statesmanship from all the political class and a change from voters concentrating on narrow, personal advantage and sympathetic to big-business ideology. They have long been on a fun slide to lower or no taxes, and profiting from mendacious tenders, allowing an easy-peasy road and tilted playing field towards their own profit corner. For those who have limited imagination and outlook, they should consider it is time for a team huddle and a new smart, appropriate game plan, and less sledging of the opposition.

Brendon Harre said...

If John Key did develope a 'hard inner core' wrt TTPA what would he do next? What would be his vision for NZ? That would be the question for the 2017 election and I don't believe John has an answer.

But I don't believe it will come to that. At a fundamental personal level John Key is weak. He has not been able to stand up to his own constituents who have been making money hand over fist through the housing crisis. Despite the wider costs to NZ's economy and society.

Likewise, he will not be able to stand up to his globally connected constituents who will demand the signing of the TTPA. Despite the wider costs to NZ's economy and society.

Chris Trotter said...

To: Anonymous@10:21

If Labour really was incapable of understanding that NZ is about trade, one would not have expected a government led by Labour to have negotiated the immensely successful NZ-China Free Trade Agreement - would one?

For goodness sake, Anonymous, it was only 7 years ago! Do you not possess a functioning historical memory?

Davo Stevens said...

@Chris 11.53: Right wing thinking Chris, they are completely incapable of thinking outside of the square.

For an indication of how a Free Trade Agreement with the Yanx works one only has to inspect the NAFTA. Canada still can't get access for it's Dairy into the US and their grain is a no-no as well. They have a slightly better access for timber and oil that's all. Likewise Mexico, NAFTA gave access to Mexico for the Yanx agricultural products which are very highly subsidised and in doing so, completely destroyed Mexico's agricultural sector. That's where most of the people who are jumping the Rio Grande are coming from. They were mostly the people who were employed in the farming sector.

In this deal NZ would be similar to Mexico.

Anonymous said...

Chris, My comment was made to "the left are urging rejection in current TPPA negotiations" in your article. I stand by my comment.

pat said...

reverse psychology Chris?

Harry said...

The implication of this post, Chris, is that those who oppose the TPPA place more value in having a future left-wing government than it does in having current left-wing policies. I don't think that the current political parties have diverged from one another sufficiently that this holds true. It is not, despite occasional rhetoric, a moral imperative that we drive National out and give the reins to Labour. Most left-wing issues are also issues National is willing to confront, or at the least, put to a conscience vote.

The issue most people have with National is their current policy direction. If that direction were to change according to their demands, they'll accept the changes with joy, perhaps even voting for the (reformed?) National. The cry for a Labour government isn't a cry for Labour, or even for Labour's policies; it's a cry for rejection of the current direction of corporate and foreign pandering. If National were to firmly and solidly demonstrate that it does, at its core, have what people perceive to be New Zealand's welfare at the forefront of its mind, as rejecting the TPPA would do, people's trust in them would skyrocket and possibly win them the election. But y'know what? I'd be fine with that. Because it'd mean I'd be getting policy that I approve of.

peterlepaysan said...

Key is a Washington/Wall Street / Hollywood stooge. He will sign.

The US has already annexed Aust. as an outlying State (Howard saw to that).
Key's rise to power from nowhere has been very well bank rolled.

The US is very keen to circumscribe The influence of China, Russia and aggressive Islamists in the Pacific.

There will be a lot of window dressing and wall papering.

The US needs Canada and Japan more than NZ (especially that Aust is in the US back pocket already.)

NZ is superfluous to US power interests.

Key will sign, he is already a US resident, most of his business interests are US based. He is NZ Minister of Tourism and spends his holidays in Hawaii.

Key is a US stooge. So what if the Nacts lose the next election? Key would have done his job, delivered NZ as another vassal state to the White House and Pentagon, as he was ordered.

He will then resign and retire to his US home.

Trade has little to do with the deal. It is all about international power plays.

fegimon said...

I would rather the hypothetical situation eventuate, ie the government walks away from the TPPA and claims credit for saving kiwis from mean Corporations than we as a nation being locked into some horrid agreement that materially compromises our sovereignty and the right to make policy and laws in the public interest. If the government sells us down the sewer by ratifying the agreement in its current form, the damage done will be too great for any subsequent progressive government to rectify - the horse would have truly bolted then ...

Guerilla Surgeon said...

There is no WAY the government will sign unless the farmers get something. Farming is still pretty much their base. If they sign without some form of dairy agreement farmers will be angry. They'll never vote labour, but they might decide not to vote. Or maybe vote for Winston :-). Personally I can't think of anything that we could offer the Americans in return for access to their dairy market. Nothing economic anyway. Which leaves politics. Now that's a can of worms.

Anonymous said...

Your excellent article is given a real boost now that talks on TPPA have badly faltered.

Davo Stevens said...

No sign off this time. Canada is methodical, Japan is inscrutable and Mexico is excitable, so now they will call a new discussion junket somewhere else and around we go again.

John Key is a US Citizen not just a Resident and also is a Director of the Bank of America, Michelle Boag head-hunted him back in 2000 - '01. Promised him the Kingship if he came back here.

His old company Merryl Lynch is now part of Goldman Sachs (that name keeps popping up in the oddest of places) and one of the architects that crashed the economies of the world.

Key is an all-round not-very-nice fella indeed.

greywarbler said...

TPPA. We keep hearing about how it's dairy access we want. We already are over-producing, using resources inefficiently and scooping up a valuable resource with what we 'churn out'. It's a commodity - it has no special features and mass production leads to NZ easy peasy attitudes on handling and quality.

Can NZs find a space in their brain to choose new politicians that don't waste the country for their own benefit, and then announce it's to our advantage! Or are we affected by some drug that has been put in our favourite drinks, milk and beer. Time to sharpen up the grey cells.

I fear the fog of complacency and lazy thinking, unable to review and critique itself and ignore the loss of our national lifestyle and respect for each other, even if some were annoying. Now its FU I'm okay, textspeak. That's not good enough thinking for a country on the edge of being developed, largely reliable on primary produce and selling the country to others in various forms, not the enterprise of first world countries. We are being out-maneouvred politically and financially by foreigners, none of whom have our best interests at heart.

But do we know what our best interests are, or care to apply our minds to such difficult issues? Watching television or playing games transfers attention from these issues. Or tossing off on blogs the current meme that one's groupthink regurgitates all the time doesn't amount to an individual's democratic critical analysis.

And Davo, further to Canada and USA free trade agreement. You say they do manage to get oil into the USA. I seem to remember at one time there was a move to use it carefully, conserving Canadian stocks for their future. But I think the USA wanted it, and took legal action against them to prevent them withholding it from the market. You probably know more than I do about this.

The Veteran said...

Heh guys ... the Key disarrangement syndrome is alive and kicking in many of you. Read CT's penultimate para again and weep ... because that's how it is.

Wayne Mapp said...


I know the Left, especially the Hard Left hate TPP, and at least in the latter case, are apparently against the whole idea of free trade.

But there is another counter-factual you have to take account of in your scenario. Consider an outcome where most of the TPP negotiating parties are in, but New Zealand is out, presumably because not enough was offered on agriculture. How will New Zealand fare then?

The US and Australia would have better access to the Japanese market than New Zealand, even under this supposed inadequate deal. Similarly Australia would have better access to the United States market than it has now. In my view the result would be that New Zealand would actually loose its current market share to the TPP parties. We might also see the pharmaceutical companies play especially hard ball with Pharmac during our short (relative to TPP states) patent period.

So being out of TPP is a very high risk game for New Zealand. It would, in my view, mean that New Zealand would end up going backwards, relative to our largest trading partners (China excepted) in economic terms.

So in my view while New Zealand needs to play tough during the negotiating stage, it cannot afford to walk away from the deal altogether.

It is a bit like the negotiations over a difficult business deal that both parties want to conclude. They negotiate as hard as they can, because they know once agreed, it is agreed. You cannot then get better terms.

Or perhaps a more recent international negotiation, the Iran nuclear deal is a better example. The Republicans apparently want total capitulation from Iran, as if they had been defeated in a war. But Iran has not been, so you negotiate as hard as you can, but you know you cannot get what you really want. You have to settle for what you can get, consistent with your original objective.

So I just don't see your scenario happening. Tim Groser and John Key will not take the risk of being out of TPP.

Davo Stevens said...

Yep you're right about Canada Grey. The US sued the Canadian Govt. to get access to all of it's oil and the Canucks folded on it. Steve Harper is another John Key too.

The problem we have now is that it's almost 2 generations since Little Rogie did his dastardly deeds and it is becoming ingrained in the mind-set of the latest generation. Nothing will change until we get an Opposition party that is not joined at the hip, the shoulders and the head of National. In other words, a genuine opposition party. I am reserving my judgement on Little Andy, time will tell.

Chris Trotter said...

Well, Wayne, I can see the US diplomats who monitor this blog being extremely grateful to you for alerting them to the fact that New Zealand's objections are nothing but bluff, and that, in the end, we will sign up to the TPPA, no matter how bad it is, out of pure fear of not being a part of the "club".

Well done.

Guerilla Surgeon said...

Wayne, interesting to hear you say that the hard left hate free-trade. Difficult to see that the hard right like it, considering the amount of subsidy and protection that goes on all over the world New Zealand excepted perhaps. I say perhaps because it seems to me that is a fair bit of corporate welfare here as well. If the right love free-trade so much how come agriculture is protected almost everywhere? Everywhere there's a right wing government :-). Or is agricultural protection and subsidy actually free-trade in disguise?

pat said...

am curious to know how you can lose access to markets you are already effectively shut out of ...

Wayne Mapp said...

Seriously Chris,

I am not remotely connected with the negotiators. I have no more knowledge than you do. If I did have an insight into the negotiations that was not available to others I would hardly be commenting on a blog.

But it is interesting thought that we as citizens should be self censoring ourselves because our particular views could conceivably aid other parties, even if such views are no more than our personal speculations that we arrive at when sitting on front of the computer.

And in any event I would have thought the PM has said on Morning Report this morning pretty much what I speculated on last night. And I am pretty sure that none of this would be news to the other parties, unless of course they have no imagination at all.

pat said...

"The parties have apparently agreed that all documents except the final text will be kept secret for four years after the agreement comes into force or the negotiations collapse. This reverses the trend in many recent negotiations to release draft texts and related documents. The existence of agreement was only discovered through a cover note to the leaked text of the intellectual property chapter."
...and no parliamentary vote..but Key and Grosser are soooo confident we will think it wonderful when weve signed....pity all their actions point to the opposite being true....its said talk is this case id suggest it is either worthless or exceptionally costly.

greywarbler said...

@ Wayne
First, I'm being a pedant here when I point out the spelling of 'loose' and 'lose'. Two very different words with nothing dividing them! It comes up surprisingly often in comments.

Then the comment about our existing markets. We are always concerned about building existing ones, and not doing enough diversifying. Are we doing enough research to ascertain where else we could sell ourselves? Can't hang round on the same street corner for years, and as we are getting older we need to get wiser. Let's start directing the enterprise instead of having to take the going rate for the night.

So a deep knowledge of the competition is good, but we need to stop relying on others. First Britain, which found is too heavy to carry into the EU as did France with her colonial territories.

And fair treatment to us is a given, if we get into TPPA. It won't happen. I remember when our lamb exports to USA were slapped with the same high tariff as were Australian, because of their breach of an agreed quota for lamb. We were within ours, good little traders, but we suffered because they had taken their opportunity to get rid of an over-supply, because of a drought I think. There are all sorts of ways to stymie (good USA word) our opportunities to earn our national income, in the countries of the TPPA area. Fighting unreasonable controls takes years but perishable product deteriorates while waiting to get distributed for sale.

So being out of TPP is a very high risk game for New Zealand. It would, in my view, mean that New Zealand would end up going backwards, relative to our largest trading partners (China excepted) in economic terms.

I don't understand your worries about going backward. Surely it is obvious that this is the norm world-wide now. There is no avoiding the difficulties while we labour under this tsunami washing our national wealth, living conditions and opportunities away. There is so little real business and enterprise to invest in, and so much money sloshing around that it is houses in practically every country that investors are clutching to their chests. There is no risk in predicting this, it is a certainty, but not my favourite.

It is a bit like the negotiations over a difficult business deal that both parties want to conclude. They negotiate as hard as they can, because they know once agreed, it is agreed. You cannot then get better terms. It is not a bit like the negotiations over a difficult business deal, this is all about how we arrange our lives, our nation, our future.

Iran has been screwed by the USA with much antagonism from both sides, and has persisted in dealing with them making as good a deal as possible. We must deal with the USA, and being subsumed by them which will continue whether we enter TPPA or not. As well we have our mercurial Chinese trade partners which the USA, funded by their financial finagling and debt-driven economy, wishes to contain. My prediction, we will be meat paste in the middle of a sandwich of hamburger bun and sticky rice, and we must learn quickly to diversify, lift our game and entertain in the fusion cuisine style.

Unknown said...

Boag is a very influential individual. Chris howzabout a column or two on the machinery and people that created National as it is today?

Unknown said...

The PM said this morning that he is still confident the TPP will go ahead. To quote House of Cards, "Well he would say that wouldn't he?" Now November at the earliest, lots of extra opportunity time for John to resell to a very dubious electorate dont you think?

Unknown said...

You are onto it Grey. If we had diverged from being a commodity based economy to selling goods that had demand value trade barriers would mean little. Lets face it people everywhere war Rolexs and in my ignorance I have no clue where they are made.
Or alternatively we could have restricted immigration severely and had fewer of us share the commodity earnings.

As it is here we are on the periphery of financial empire like we always have been. We unlike Australia have known this forever; they just found out the same as the mining stopped dead. That stuffs us even further.

Guerilla Surgeon said...
This comment has been removed by the author.
Guerilla Surgeon said...

Couple of points Wayne. Firstly you can't self censor anyone BUT yourself :-). Secondly, I see your avoiding the difficult questions :-). Were you by any chance a politician?

Guerilla Surgeon said...

Nick, we have been promised a high skill high wage economy since 1984. It hasn't happened yet, and we're still selling the same old stuff – we tend to be price takers. Unlike the Swiss who make Rolexes :-). PS, I can't believe you didn't know they were Swiss :-). Now they got that sort of thing sorted years ago. They will still be afloat even though very few people wear watches these days. Make something expensive enough, and people will beat your door down trying to buy it, it seems.

Pasquino said...

As the climate continues to crash exponentially, impinging similarly on agriculture and causing the market for foodstuffs to continue to rise, worrying about access to the stomachs of fat Americans and fixated Japanese is really rather short-sighted.

Neither of their economies is strong. As the perturbation of the jet stream continues and northern hemisphere agriculture continues to decline, it would pay us to wait until they are knocking on our door in real hunger, with a genuine need.

Right now it is 70 degrees C (165 F) in Iran and 50 C in Iraq - shades of things to come....

There is little point as Leonard Cohen said for striving to be on the side of ghosts and kings, lost in the past.

The real problem we face is that Messrs Key & Co. are mentally dead in the water and don't quite understand that fact yet.

As Anzacs, the one thing we should never forget is the very real danger of dim leaders stuck in the past.

pat said...

a link for Wayne

greywarbler said...

For the witless people in government, 70o in Iran is an opportunity to develop new technology export for internal climate control. That's over there and not in Orewa or Hawaii (that was obtained by bullying, sleight-of-hand and coercion to become a state of the USA).

The tunnel-visioned elite, who usually only succeed from being successfully programmed at home and school, concentrate on the small area around them and useful to them, with all other factors factual, or plausibly possible scenarios, being irrelevant.

I have noticed recently how similar our behaviour is to ants, and I fear there we have a default to primitive brain thinking that, if not diverted by reasoning, can slide to some deep primordial instinct. (For interesting ant colony archaeology look up the story about leaf cutter ants tunnel under Brazilian city.)

greywarbler said...

Looking at the Gordon Campbell link on Scoop supplied by pat I saw an interesting statement on NZs psyche, which I think is true but largely unadmitted. And then he relays the latest game-playing at the TPPA poker table, which as I have deserted TV and refuse to buy a foreign-administered local paper, and haven't paid sufficient on-line time to, is usefully informing. Thanks Gordon and Pat, and Chris for informing and enabling discussion on TPPA and our Dance of the Seven Veils.

Classic. Once again, the rest of the world has misread our national penchant for passive aggression, as being a gesture of compliance. In fact, the reasons for last weekend’s breakdown in Hawaii were about as entwined as a bowl of spaghetti.

Briefly… New Zealand had wanted the North Americans (US and Canada) to significantly open their dairy markets as compensation for the costly concessions being asked of us on intellectual property in general, and on the patent terms for medicines in particular.

Therefore, and in tandem with Australia – which wanted inroads into the heavily protected US sugar market – New Zealand stalled on medicine patents in order to pressure the Americans to lean on Canada, Japan and its own farmers over dairy (and sugar) access.

pat said...

the problem Pasquino is when it comes to that they will be knocking on the door with a hellfire missle and wont be bothering to negotiate a fair price for our (hopefully) still abundant commodities.....for once we may be very grateful we are an insignificant cluster of isles so far from our markets that most in this world are unable to locate on a map....that is if we havnt destroyed the place by selling boltholes to the rich and famous first.

Richard McGrath said...

I would be surprised if the shade temperature outside urban areas, and without heat reflected off the sand, has ever been close to 70 degrees in Iran. The highest recorded temperature is 56.7 degrees, in Death Valley California - in 1913. The long standing high of 58 degrees in near Tripoli, in Libya, in 1922, has apparently been discredited due to issues with the thermometer.