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Winston and the FTA

Written By: - Date published: 11:04 am, April 9th, 2008 - 27 comments
Categories: economy, International, nz first - Tags: , ,

New Zealand First’s opposition to the China FTA is no surprise but it is interesting to reflect on the grounds for it that Winston Peters has laid out:

a) the deal is not good enough. A pretty weak argument when the other option is no deal.

b) the immigration provisions are bad and shouldn’t be part of FTAs anyway (also the CTU’s position). Also not strong arguments, we’re only talking 1800 Chinese and there’s no inherent reason why limited movement of labour shouldn’t be in an FTA.

c) the opposition to the FTA is a protest vote against New Zealand’s ‘hands off’ export policy. Peters is on stronger ground here. If we didn’t have a neoliberal, inflation-myopic monetary system with a floating currency (we are one of the smallest economies in the world with a free-flaoting currency, it puts us at the mercy of speculators), we could keep the exchange rate lower, which would deliver far greater increases in export earnings than even the China FTA.

Those who say that Peters’ opposition to the FTA would impair his ability to be Foreign Minister because it confuses foreigners know nothing of how diplomacy works in the real world. Other countries find our arrangement unusual but, just like us, they have found it doesn’t really matter that the Foreign Minister is not a part of the Government and doesn’t always vote with the Government in Parliament. And like us, they will just get on with the job of diplomacy, political quirks aside. Countries know that when they deal with New Zealand they can trust us to work in good faith and keep our side of agreements. How the Foreign Minister votes in Parliament doesn’t matter.

Finally, it was good to see Key on Breakfast refusing to use this issue as a club to beat the Government, despite Paul Henry practically begging him to do so. Key even said Peters could still be Foreign Minister in a theoretical National-led Government. The worst Key could say was the ‘optics’ are bad for foreigners (see paragraph above). Not that Key’s position was principled. As he admitted himself, Key just can’t risk getting (more) offside with Peters when he might need to deal with him post-election.

No doubt, Peters has done well here. He has put his critique of our entire export policy to centre-stage, he has avoided criticism from either major party, and his party and himself are in the limelight with a message that will resonate with many voters.

27 comments on “Winston and the FTA”

  1. Matthew Pilott 1

    Did anyone watch Peters on Campbell Live last night? What an embarrassing affair – Peters needs to grow up. his line of “by the time Chinese tarriffs have been removed it will have been 36 years since we dropped ours” is patently stupid.

    What would you do Winston, delay the FTA a few years to make it an even 40?

    Cutting your nose to spite your face. Still, it might resonate with some folks, his reasonijg seems a bit too weak to wash though, I found it juvenile.

  2. infused 2

    What I love is recently the acupuncture school of New Zealand recently applied for a grant as there was a shortage of workers in New Zealand. It was denied as the need could not be found.

    What do you know, 200 extra acupuncture works are going to be bought in under the FTA.

    Nice one govt.

  3. infused 3

    Matthew Pilott: He is right. China have been throwing our goods at us for years. We sign the agreement and we STILL have to wait.

  4. Matthew Pilott 4

    http://tv3.co.nz/video/CampbellLiveinterviewsWinstonPeters/tabid/367/articleID/51851/Default.aspx?ArticleID=51851#video

    If you can stand his arrogance for long enough. Campbell doesn’t exactly shine, but, he’s interviewing the foreign affairs “face” of NZ for christsakes!

  5. Matthew Pilott 5

    Infused, as I said, would you prefer to delay the FTA and wait a bit longer? not have it at all because of teh delay? I fail to see a more reasonable alternative, and when you look at the forecast benefits, they’re in out favour several times over.

  6. Matthew Pilott 6

    Infused, if the need isn’t there, they won’t be able to get the jobs, and therefore won’t be allowed into the country. OTOH, we will get extra nurses and workers other trades that currently have actual shortages – nice one govt…

  7. Steve Pierson 7

    Matthew, we’re hoping to put the vid up in a bit i actually think that Peters shows one way to cope in an interview when you’ve got a weak position to defend – yes he was juvenile in a way but by taking the fight to Campbell he didn’t have to be defensive all the time, not for a moment did he seem unsure of himself or stumble umming and ahhing, compare that to how Key deals with interviews when he is defending a weak position or one he does’t really believe in. Plus, there are a lot of people who don’t like journos either and enjoy seeing them being given a hard time.

    Is it adult or good for the level of political debate? No. Is it clever handling of the media? yes

  8. infused 8

    300m of benefits pfff. Like most manufactures say, who gives a shit. We have lost more than gained on this IMO. Not just from a money/job perspective, but from bowing down to China. We look like idiots. Tibet, who gives a shit.

  9. higherstandard 9

    SP

    What was unprincipled about Key’s comments this morning – one of my colleagues told me all he was blandly present the reality of MMP politics and that he wasn’t at all surprised by NZ First and Peters position.

    Regarding Winston he is a political animal, one should be under no illusion that Brown’s comments last week and Winston’s performance last night are all just the start of his campaign to be Kingmaker again after the election and add to that Winston stealing Labour’s position as protector of NZ’s assets – you have to admire the pure political animal in him.

  10. Steve Pierson 10

    hs. It’s unprincipled that Key doesn’t think what Peters is doing is acceptable (as he said when he talked aobut bad opitics) but won’t criticise for base political reasons.

  11. Tane 11

    infused, as I understand it manufacturing tariffs were due to be reduced anyway, and for many manufacturers the FTA has actually extended the protection of tariffs for another couple of years.

    Manufacturers have many reasons to complain about policy settings – the MEA in particular has made some good points about the Reserve Bank’s narrow focus on inflation. But they also have a tendency to moan.

    [captcha: King Noriega]

  12. higherstandard 12

    I thought he said it would look odd to someone from outside NZ but that it’s part and parcel of MMP – I’m sure he’d like Winston and NZ First gone after the election but MMP means you have to be pragmatic mus as Labour will be privately seething about Winston but publicy saying exactly the same as Key.

  13. Phil 13

    In defence of the RBNZ… many manufacturers are more than happy to moan about the exchange rate hurting export revenues, but they refuse to acknowledge the beneficial impact of the exchange rate on two of their major import costs – fuel and steel (or, metals in general).

    Swings and roundabouts…

  14. Pablo 14

    That’s an excellent post Steve, cheers

    Key is merely playing realpolitik the way that Clark has had to do. He can’t slag off the FTA if he will be PM in 8 months, so he is playing the game in the only way open to him. Interesting about him conceding that he might have to play with Peters after the election, I thought the National startegy was to win 50% of the party vote?

    Peters is just playing to his audience isn’t he? No problem there, I’m sure that he & Clark have discussed how it will play out for months. Like you say, overseas governments aren’t idiots, they know that politics is a game of horse-trading. Peters’ role might be unusual, but it appears to have workedand, in many ways, made it easier for Key to deal with him post-election (ie by giving them a framework whereby both parties reach a deal without losing face).

  15. higherstandard 15

    Pablo

    Like you say, overseas governments aren’t idiots, they know that politics is a game of horse-trading. I wonder aht would have happended to s politician in the same position in Mainland China.

    Perhaps the way the dealt with their head of state FDA might give us a clue –

    http://www.cbsnews.com/stories/2007/05/29/health/main2860989.shtml

    NoW if we could only have something similar in place for senior civil servants in NZ.

  16. Policy Parrot 16

    Should we take Key’s endorsement of Winston Peters so soon after such vile comment from NZFirst as a sign that [National] implicitly approves of such an agenda?

  17. higherstandard 17

    PP

    Indeed but only as long as you do the same honour for the incumbent government.

  18. Joker 18

    Can you tell us Steve P of your extensive international diplomatic credentials that make you elegable to comment on “how diplomacy works in the real world”?

    At the time of Winstons appointment international publications were editorially scratching their heads over how one can be a minister whilst outside of Government.

    This latest episode will only serve to reinforce what inconsequential little weirdos we are.

    Captcha: fist overated
    Sounds like something that our education minister might say.

  19. Phil 19

    Steve, I refer to this comment;

    “… monetary system with a floating currency (we are one of the smallest economies in the world with a free-flaoting currency, it puts us at the mercy of speculators), we could keep the exchange rate lower, which would deliver far greater increases in export earnings than even the China FTA.”

    This is totally wrong.

    Firstly, size doesn’t matter. Its well known and accepted that being ‘small and open’ is an afwul lot better than being ‘small and closed’ when the shit hits the fan internationally. The spreading and management of ‘risk’ in its many forms lies at the heart of free trade.

    Secondly, having a free-floating exchange rate does not put us at the mercy of speculators at all. It does put speculators at the mercy of other speculators, but that is a world of difference. If you really weant to get technical about it, it is speculators (through arbitrage) who keep global exchange rates in the reasonably harmonious state we have enjoyed for most of the last two and a half decades.

    Thirdly; “we could keep the exchange rate lower” Yes, we could, technically. However, this requires the selling of NZD by a central authority (be it govt or central bank). How do you sell dollars you dont have in reserves? You have to print more, and more, and more, and end up like France post-revolution, like Germany post-both-wars, or like the SE Asian economies in the 90’s.

  20. Steve Pierson 20

    Phil. Small economies in Eastern Europe have done very well with currency boards keeping the exchange rate within acceptable bands relatively to currency baskets. It has prevented big currency swings, the risk of which scare off investment, and allowed imbalances to be actively managed, rather than hoping the market will sort it out eventually without too much of a crash.

    You seem to be the expert: can you tell me of another economy in our size range with a totally free floating exchange rate, including having a central bank that doesn’t take an ideal exchange rate, as well as an ideal inflation rate, into its considerations when setting interest rates?

  21. Draco TB 21

    This latest episode will only serve to reinforce what inconsequential little weirdos we are.

    No, what it does is prove that the rest of the world isn’t quite as advanced in their understanding of democracy as we, one of the oldest democracies in the world, are.

    How do you sell dollars you dont have in reserves? You have to print more, and more, and more, and end up like France post-revolution, like Germany post-both-wars, or like the SE Asian economies in the 90’s.

    But that’s what we do anyway. Its just that it’s done through private banks so they can make a profit from doing nothing rather than through a central agency. There’s nothing to stop it coming crashing down which, by the looks of things, it’s about to do anyway (the global credit crunch is a direct result of these monetary practices).

  22. Richard 22

    That interview last night was a great prelude for Boston Legal later on. The old champ Denny/Winny pulls it out of the bag when you thought he was gone. It was just classic Winston, Campbell just got so wound up it was hilarious.

  23. higherstandard 23

    Delicious

    http://www.nzherald.co.nz/feature/story.cfm?c_id=1501819&objectid=10503174

    In his informal comments to business people, Mr Goff described the situation as “bullshit”.

    captcha – also prudently ….obviously not

  24. r0b 24

    Don’t get too excited HS – “Mr Key yesterday reiterated his position that it was conceivable that Mr Peters could be foreign minister in a National-led government”. Criticism that the Right hurls today might come back and haunt them tomorrow.

    I think it’s 2 parts BS to 1 part sophisticated MMP politics myself.

  25. higherstandard 25

    rob

    Agreed – it’s just refreshing that Phil Goff can leave politics aside and call it for what it is – in hindisght I expect Key probably wishes he had called it bullshit as well – might have done something to counter his blandness regarding the politics of the situation..

    Perhaps we could offer Winston a position with the All Blacks during every World Cup year ….. as he pops up once every four years stirs up the shite but does at least tend to manage to get over the line every time – worth considering surely.

  26. Matthew Pilott 26

    HS – I agree fully regarding phil Goff. I take it more that it’s not so much his opinion of Winston’s ‘two hats’ but what Goff thinks of his actual opinion on the FTA.

    Also good point about the world cup – the man is like clockwork, I was waiting for the Asian/Immigrant/Beneficiary bashing to begin this year, it was inevitable! “Peaks” at the right time…

  27. r0b 27

    I don’t like Winston, but he can be funny: “Apparently there was a constitutional crisis in New Zealand last week but fortunately it was confined to a word processor in the parliamentary press gallery.”

    http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10504196

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