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Trade with Burma - don't cry over spilt milk

Today I will be attending the rally in support of the Burmese pro-democracy movement, organised by the Solidarity Union, and supported by the CTU and Amnesty International.

We need to call for the New Zealand Government to apply more pressure on the autocratic murderous regime currently running the country they have renamed Myanmar. We also need to question our Government as to why they are negotiating a free trade agreement with a group of countries that includes Burma.

In 1990 the Burmese people overwhelmingly voted to oust the military in favour of the National League for Democracy, led by Aung San Suu Kyi, but the military refused to give up power.

In 1996 the National League for Democracy called on the international community for trade sanctions and a boycott. Instead, Myanmar were allowed entry into ASEAN (Association of Southeast Asian Nations) in 1997. New Zealand and Australia are currently negotiating a free trade agreement with ASEAN.

In November 2006 the International Labour Organisation announced it planned to prosecute members of the ruling junta for crimes against humanity - including forced labour of its citizens.

Instead of giving the regime legitimacy by negotiating a trade agreement with them, New Zealand should apply trade sanctions.

New Zealand exports to Myanmar for the year ending June 2007 was $5.8m, with imports from Myanmar totalling $1.4 million. New Zealand's exports were primarily dairy, sugar and steel, and our imports were mostly forestry and forestry products. Given the nature of the regime how can we be sure Myanmar exports are not the work of slaves, or consist of the South East Asian rainforest?

Even the US applied trade sanctions in 2003. Sanctions will cost us a lot less than the political damage such sanctions will do to the regime.

Sure Fonterra will be unhappy if New Zealand stops it selling its dairy wares, but given the nature of the Burmese regime this is not the time to be crying over split milk.

A free trade deal with the US - at what price?

What concessions would New Zealand have to make to get a free trade deal with the United States? Any rational analysis of any proposal for a free trade agreement should consider this question, yet the media continue to pedal meaningless Pollyanna that there are only gains to be made. Quite frankly, it defies crediability to make a US FTA sound like a never ending gobstopper that will not lead to any tooth decay.

New Zealanders are very poorly served by their media when it comes to coverage of trade issues - I have written a little on this issue before.

Ironically the US publishes a report ever year on 'Foreign Trade Barriers' where it lists the laws and regulatory mechanisms of other countries the US Trade Representative considers 'significant barriers to US exports'. The 2007 report on New Zealand can be found here. So when those concerned about the negative impacts of free trade say they are concerned that the US has New Zealand's GE and other environmental legislation they have a credible source - a branch of the US Government itself. Apologies for the long quotes from the above document - but I think Uncle Sam makes an admirable case as to why a free trade agreement with the US is a bad idea, and even for those who support free trade, I think it shows it is a deal New Zealand could do without.

US-NZ FTA will weaken environmental laws
Despite New Zealand having far from a complete ban on genetically modified organisms, the US regards our current environmental protection laws, including the Environmental Risk Management Authority (ERMA) as a "trade barrier".
"ERMA...an independent body, reviews applications for the release of new organisms, including biotechnology products that contain living organisms. ERMA assesses applications on a case-by-case basis and can issue three types of approvals: contained field test, conditional release, and full, unconditional release. The Ministry of Agriculture and Forestry (MAF) enforces compliance of field tests and conditional release approvals. To date, ERMA has only approved a small number of contained field tests. There have been no applications for either a conditional or a full release of products derived by the use of biotechnology in New Zealand.... Meeting New Zealand's biotechnology food labeling regulations can be extremely burdensome and is especially relevant for U.S. agricultural exporters who deal primarily in processed food."

The US is also complaining about our "Sanitary and Phytosanitary Measures". These are regulations to minimise the risks to our agricultural industries of a disease being introduced that could lead to a widespread infection of New Zealand livestock or plants. I could be cheeky here and describe this as the US wanting to remove the 'trade barriers' on the introduction of mad cow disease!

A US-NZ FTA could even hit your ipod
In negotations for a free trade agreement, the US would aim to stop New Zealanders making a digital copy of music they have bought legitimately. I quote again.
"The U.S. music industry opposes a proposed amendment to the New Zealand Copyright Act that would legalize the duplication of sound recordings in other formats for a purchaser's private use."

US-NZ FTA means you will pay more for healthcare
The US also want to ensure New Zealanders pay more for their medications. The New Zealand drug buying agency Pharmac, which describes its primary role as "to improve the value of expenditure by DHBs on pharmaceuticals". Pharmac has been in the US sights for some years, as they regard the agency as a block on the ability of its pharmaceutical corporations to make even larger profits.
"The U.S. Government continued to raise concerns about New Zealand's support for innovation in the research and development of innovative pharmaceutical products. New Zealand's Pharmaceutical Management Agency (PHARMAC), a stand-alone Crown entity, administers a Pharmaceutical Schedule that lists medicines subsidized by the New Zealand government. The schedule also specifies conditions for prescribing a product listed for reimbursement.... New Zealand does not restrict the sale of non-subsidized pharmaceuticals in the country. However, private medical insurance companies will not cover the cost of non-subsidized medicines and doctors are often reluctant to prescribe them to patients who would have to pay the cost themselves. Thus, PHARMAC's decisions have a major impact on the availability and price of non-subsidized medicines and the ability of pharmaceutical companies to sell their products in the New Zealand market."

Even though its not explicitly stated above, one way to encourage the use of non-subsidised medications would be to remove or limit the subsidies. Greater privatisation of health care services would no doubt help too.

The US Trade Representative then talks about the efforts of Peter Dunne and United Future, during coalition negotiations with Labour in 2005, to make the world a safer place for the US drug multinationals.

Despite complaining about the monopolistic nature of the operation of Pharmac, the US also want to maintain and extend patents so their corporations can enjoy monopoly profits for longer.
"United States pharmaceutical companies have expressed concerns about a prohibition of patents for methods of medical treatment in New Zealand’s draft patents legislation. The industry also is concerned by the Cabinet's decision in mid-2004 to halt a study on the economic impact of extending patent terms for pharmaceuticals. The draft patents bill fails to address the issue of patent term restoration for pharmaceuticals."

Maintaining pharmaceutical patents for longer can only mean one thing - New Zealanders will pay significantly more for their health care while the US pharmaceutical corporations make larger profits.

US-NZ FTA means yet more American sitcoms
The US dislikes local content broadcast quotas either even when such quotas are voluntary. They clearly do not think we get enough of a dose of Americana on our TV screens. Perhaps the US wants to impose more reruns on Friends et al. Ironically one reason Labour could not introduce a mandatory quota as per their election pledge in 1999 was that this was contrary to a 'commitment' made under the General Agreement on Trade and Services by the National Government in 1994. Its a clear example of how so called trade liberalisation agreements can be profoundly undemocratic.

Despite New Zealand's laws on foreign investment in land and businesses being among the most liberal in the world, the US still regard any screening mechanism (even if it is a monkey with a rubber stamp) as a threat to its economic interests.

So next time you hear an activist marching down the street about how a free trade agreement with the US will written by US corporations, don't write it off as a conspiracy theory, go look up what the US Trade Representative is saying. It took me one simple Google search to find this - its a shame the mainstream media appear to be so hesitant to look up something so obvious.

Free trade policies lead manufacturing out to dryer: Assessing the NZ-Thai free trade deal

Kiwi whitewear manufacturer Fisher and Paykel announced on Friday it was moving production of washing machines and dryers to Thailand. This seems like a good time to ask the question - was the free trade agreement with Thailand really such a good idea?

Well, that's one question that the Ministry of Foreign Affairs and Trade will never ask, as they have a documented history of only considering the "benefits" of such trade deals - la-la-la. (see my article here)

The so called Closer Economic Partnership Agreement between New Zealand and Thailand came into force on the 1st of July 2005.

Fisher and Paykel chief executive John Bongard said free-trade agreements with countries such as India, China and Thailand being sought by the Government were unhelpful to the manufacturing sector. "I guess the loss of the CER duty preference into Australia early next year was kind of the straw that broke the camel's back," Mr Bongard said.

I took a look at the NZ-Thai free trade agreement. Prior to its signing, washing machines and dryers made in Thailand attracted a 7% tariff when imported into New Zealand. This dropped to 5.5% once the agreement was signed in 2005, with the tariff to be completely phased out by 2010. I have no doubt this also influenced the decision of F&P to move to Thailand - as the NZ-Thai trade agreement allows the company to profit from cheap labour and then import their machines back into NZ at little cost.

New Zealand currently has a trade deficit of $560m with Thailand(1), meaning that we import far more from Thailand than NZ exports to that country. This deficit has improved of late - but the overall pattern since the negotiation of the Thai deal has been a ballooning of imports into New Zealand with a significantly smaller increase in NZ exports to Thailand.

At the time of the signing of the Thai deal in 2004, CTU President Ross Wilson expressed concern at the large number of "free trade" agreements promoted by the Labour-led Government. "There is a risk these deals will permanently damage New Zealand’s manufacturing base. There is also (the risk) that the phased elimination of tariffs will expose some sectors, such as whiteware and clothing, to unfair competition" (Press, B5, 2/12/04, "Business keen on Thai deal")

Now the whitewear is off to Thailand.

For Helen Clark to claim such closures are the "way of the world" is just an excuse to hide the fact the neo liberal free trade policies of her Government are killing off New Zealand's manufacturing base. A similar argument was advocated by Roger Douglas, as in TINA (there is no alternative).

While Helen Clark stated in 2000 "We have unilaterally disarmed ourselves on trade but very few others have been so foolish", for the last six and a half years in government Helen Clark and Co have continued to do exactly that. Labour's economic/trade policies has changed very little from the time of the Forth Labour Government, despite the efforts of some Labour activists to exaggerate the differences between the two governments (2). Clark and Co are now promoting the 'Jeremy Moon' model, where products are designed in New Zealand and made offshore - but how long is it before the design team is off overseas too? Neither is it an answer to focus purely on services - as this ignores the fact the local manufacture of merchandise creates greater demand for the service sector.

Sleepyhead managing director Graeme Turner has called for more Government help for exporters rather than leaving them to the vagaries of the currency. Well the way I see it this is due to Roger Douglas's removal of all exchange controls and the continued support of both major parties to the highly economically reductionist Reserve Bank Act. I get the strong impression the Turners would prefer to stay here.

The end of Kiwi made Fisher and Paykel washing machines is just the latest example of how the pursuit of neo-liberal "free" trade policies undermines the aims of the left for sustainable economic and industry development. It is also environmentally irresponsible, as bulky heavy washing machines are not the kinds of products the world wants transported long distance if it is reasonably practical to make them locally(3).

(1) Figures from Statistics New Zealand, Overseas Merchandise Trade, year ending March 2007
(2) Sure its a good thing Labour have halted the widespread sale of state assets, but what I am talking about here is the continued agressive attitude to 'trade liberalisation' and overall legislative structure of the economy (eg Reserve Bank Act, Fiscal Responsibility Act etc) which Labour have failed to change into something more recognisably social democratic. Labour are attempting to use a relatively low tax neo-liberal economy to create money for greater social spending, but this will become a self defeating project as soon as the economy retracts - just watch them retrench!
(3) Moving a heavy washing machine around a flat is difficult enough, as I can recently attest. And the amount of packing that came with my new machine suggests washing machines are brittle things to transport.

Peaceful WTO protesters win $1 million compensation

It is nearly eight years since the 'Battle of Seattle'* where over 40,000 people converged on the city to show their opposition to the global neo-liberal agenda of the World Trade Organisation.

During these demonstrations 175 people were wrongly arrested for peacefully protesting the WTO in downtown Seattle's Westlake Park. That was 1 December 1999. After 7 long years, the 175 have finally won justice.

In January a civil court jury found the City of Seattle liable for violating the protesters' Fourth Amendment Rights. This legal win follows seven years of determined work by the Public Justice legal team. Facing further litigation for damages, the Seattle opted to settle the case.

The City of Seattle will now

• pay $1 million to compensate the protesters for the violation of their constitutional rights.
• seal its own records of the arrests, and will formally request other agencies expunge any records they may have received or maintained regarding the December 1 arrests. One wonders if the NSA/CIA will also obey the law in this instance.
• Incorporate key rulings from the case into police training. These rulings make it clear police lacked probable cause to arrest the peaceful protesters at Westlake and others arrested outside the 'no protest zone'.

Following a day of widespread but largely peaceful protest Seattle's Mayor attempted to make the downtown area near the WTO meeting off limits - a 'no protest zone' in all but name. Many of those arrested in the zone were held for four days, which just so happened to coincide with the end of the WTO conference. No police officers were reprimanded or disciplined by the City.

This week in New Zealand former National chief of staff Richard Long wrote in a column how he approved of measures to protect visiting Chinese Premier Jiang Zemin from protesters in 1999 because otherwise it might have cost us a free trade agreement. Long and the ex-Seattle Mayor appear to be singing from the same songsheet.

PS: * I nearly avoided the phase 'Battle of Seattle' as I see it as a phrase coined by a media with a far too ready tendency to focus on any apparent 'conflict' as a means of ignoring the real issues raised by the protesters. And talking of a battle discounts the contribution of the majority - those who chose to protest peacefully. But then I found out that the Battle of Seattle also refers to an event in 1856 when native Americans launched an attack on the settlement of Seattle, as they were angered by treaties imposed by Territorial Governor Isaac Steven. Given that the WTO is also criticised for weakening the rights of indigenous peoples worldwide, referring to the events of 1999 as the Battle of Seattle has more meaning than might be first apparent.

Rod Donald

It was an absolute shock to hear of the death of Green party co-leader Rod Donald on the car radio this afternoon. It is the sort of news you just don't believe what you are hearing.

As someone who lost a close family member (my father) very suddenly a little under two years ago, my heart goes out to Rod's partner Nicola, their three daughters and my Green friends. It is such a surreal experience to lose somebody like this. Its a real emotional rollercoaster, but eventually the ride smoothes out and you are left with happy memories :) Aroha and *hugs*!

As the spokesperson for the electoral reform coalition in the early 1990s Rod played a key role in advocating for the change to the MMP electoral system. I also respected Rod's work on trade issues, as he provided a worthwhile perspective on the negative impact of so called 'free trade' deals. Rod bought a healthy dose of pragmatism to such debates - at times he seemed to be one of the few MPs to actually care about the trade deficit (Have current Labour MPs ever heard of a guy called Keynes?). On these issues, the loss of Rod Donald is a loss to the New Zealand Parliament.

I very much hope other MPs will take up the mantle and warn of the potential costs involved in any proposed free trade agreement - for democracy to work we need to hear both sides of the argument.