Over at the Daily Blog, Jane Kelsey summarises
The bad news is that the Labour government has endorsed the Trans-Pacific Partnership Agreement, with the suspension of a limited range of items, at the ministerial and leaders’ meetings in Da Nang, Viet Nam.
The good news is that the meeting failed to conclude the new deal – rebranded the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). There are four outstanding issues. The Canadian government of Trudeau – also elected after the deal was concluded by its predecessor – said it was not going to be rushed into a decision that would have a major impact on its future. Yay, Canada. Why couldn’t the Ardern government do the same?
The basic problem that has always existed with the TPP still applies. As far as I’m concerned, it does nothing for NZ except to further enrich some already affluent largely rural rentiers, but it imposes effective direct and indirect costs on to everyone else. So what is this ‘trade’ agreement for? The very few making a profit?
NZ population is one of the most urbanised in the world, and that is where almost all of the employment lies. If you look at the effective incomes including housing costs in places like Auckland, Wellington and Christchurch, except for a very small minority, there has been a significiant drop in disposable income by any measure. At the 2013 census in just these 3 urban areas alone were 2,343,900 people in a population of 4,242,048 – more than 55%. The effect of that is spilling out over into the smaller centres as the property values
So in the TPPA, TPPA-11, CPTTP, or whatever name is added to it, where are the opportunities for higher wages for the many in this crock?
That question is not only here in NZ. The same applies across most of the countries in potential agreement. As far as I can see there are no benefits for the majorities in most countries with this agreement.
Now I’m not exactly anti-trade nor commercially illiterate. Unlike almost all of the parasitical cheerleaders that seem to flood around this undead agreement, my background is completely in private business and almost entirely in exports. The latter is exclusively where I have worked for the last two decades.
I have a MBA from Otago so I can easily read economic ‘analysis’ from the likes of MFAT and NZIER and know it for being indistinguishable from the inadequate trash written by a PR firm. Having to hawk around complete bullshit like that merely diminishes the case that this is an agreement that has anything to do with trade.
In the face of almost all evidence on the last three decades for various projects, for instance the 1990s deregulation of building industry and electricity networks to the Auckland super-city in 2010 (to take just a few examples), similar ‘analysis’ persist in the same delusions.
Even some of the analysis on the 2000’s Chinese FTA was like this. In that case it was fortunately tempered with some actual realistic analysis – even if that mostly identified risky areas.
Over optimistic and hyped analysis seem to assume that any benefits will somehow trickle indirectly down, and that any costs will be just direct ones with few side-effects. Somehow they always seem surprised when the profits are sucked up by the finance interests as interest in capital injections and speculative booms, and the obvious indirect costs come around and cause problems.
So like Jane Kelsey, who I have to say has been doing a splendid job of highlighting potential flaws, I also want some real analysis. As she says…
So, what happens now? There is no timeline for the next meeting of the CPTPP parties. That means there is now time for the new government to conduct in-depth consultations over its proposal to adopt the deal. It also needs to commission the robust analysis that Labour called for in opposition, independent of MFAT and consultants like the NZIER who basically rubber stamped the previous shonky modelling. They need to make sure it uses realistic models that also cover the broader economic implications, especially for jobs and income distribution. If the economics don’t stack up, as Labour said they didn’t with the original TPPA-12, then they have no basis for arguing that the CPTPP should proceed. Their independent review also needs to include non-economic impacts on environment, health, human rights and the Treaty of Waitangi.
But before it does that work to advance a deal they previously refused to ratify, the new government needs to give priority to its proposed full and participatory review of trade policy. All existing and future negotiations must be frozen until that is done.
The whole of the TPP negotiations has been exactly the kind of ad-hoc half-arsed decision making that I abhor. I want real risk analysis, consideration of possible downsides, and a cessation of unreasoned unclear PR driven ‘momentum’ based wankfests like the TPP and the flag referendum that it so resembles.
If someone tries to sell me on a deal that is too good to resist and needing to be closed soon before the opportunity disappears, then I assume someone is running a scam and that shortly my pocket will be lighter. I want to know why this is a good deal for all parties and where the gotchas are likely to lie.
In the case of the Chinese FTA in the mid-90s. That was what happened as far as I was concerned. That was a far bigger deal than this one for areas across the whole economy and one with a lot more of a risky approach because of the complete unknowns. No-one knew exactly what the impacts of opening up those markets would be to either side. But there were some pretty good risk analysis going on that those who were interested could access.
In this agreement for realistic public analysis, we only have Jane Kelsey and a few others like her. That is a hell of a problem for people across the spectrum because it means that the only effective analysis before the agreement is signed, sealed and delivered comes from people working off fragments. Effectively there will be no informed consent and only some commercial illiterates in parliament and MFAT will even get a look at the full deal before it is imposed upon us.
I had quite a lot of quibbles with the downstream effects of the Chinese FTA. But I was confident that I had a good idea of the risks and benefits, and that it would offer new opportunities to diversify our exports and to enhance and strengthen our economy. It did. However there were side-effects like the excessive intensification of dairying on unsuitable soil and drainage areas, plus the flood of money into the safe speculative investments intensifying an existing housing shortage.
But during the leadup to the CFTA, there simply wasn’t the level of stupid concealment, salesmanship, and the desperate smell of scamming going on. That appears to be a hallmark of the Key government that somehow managed to spill over into the TPP as they expanded it from a normal small trade agreement to the behemoth it is still is now.
The new government, if it is interested in proceeding with something like the TPPA, should at the very least stop hunting for momentum and concentrate on transparency and analysis. Because if you can’t convince me that this agreement is anything other than a scam, then you won’t be able to convince many on the ‘left’.