Should the Greens weaken their policies to gain greater political support?

Pablo over at KiwiPolitico has an interesting post looking at whether the Greens should consider "a more nuanced and less ideologically rigid, but no less idealist in principle, approach to New Zealand’s foreign affairs". While I do not agree with his general thesis, I believe Pablo has identified some of the tension points that may arise if the Greens ever become part of a Government.

I posted the following as a comment over at Kiwi Politico.

The problem with the idea that the Greens should moderate their politics in order to become more of a mainstream party is that I can’t think of examples where such a strategy has been successful. I also don’t think it takes into account the impact of MMP and the need for parties to maintain a distinct political brand.

Reading your post I could not help but think of the fate of the German Greens, who watered down their foreign policy stance, particularly with Joschka Fischer serving as Foreign Minister. While their 2002 result was slightly higher than 1999, they also lost a lot of their core support. This hardly demonstrates that softening their policy stance will gain the NZ greens significantly greater political support.

A similar story could be told about efforts of Anderton and his cronies to weaken the policies of the Alliance between 1999 and 2002. Their strategy can now be judged, as it describes the policy direction of the Progressives - its ended up with Jim as a single MP.

I also fear you are following the business press when you equate opposition to open economies and current free trade agreements with ‘a generic opposition to trade’. Given the evidence of the many nasties contained in ‘free trade’ agreements, its reasonable to oppose this model while advocating for reform of multilateral institutions and considering trade within a wider economic strategy that considers economic development and the environment. Equating this with opposing trade full stop is a straw man argument aiming to shut down opposition to the free trade agenda. I should clarify that I do not wish to imply you are doing this personally - its more a comment on the free trade proponents who don’t even want to admit there might be negatives to a particular trade deal.

I also agree with what Rich had to say in the comments.

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.

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.

Live 8, Gates and Green Day

Rather tired at the moment. But I did stay up late last night watching Live 8.

While it was an enjoyable concert I was disappointed the TV interludes about poverty and Africa, supposedly explaining what the event was about, were not more substantial. Like the appeals for money during Live Aid, the commentary focused on large figures, emotion and sentimentality (the short film about the 'no food diet' was probably the best of the lot).

Given that Geldoff wanted this to be a political event, rather than a telethon I thought the commentary could have been a heck of a lot more political.

But even the moderate commentary was excised in some parts of the world. In the US, MTV consistently cut away from the political speeches and cut many of the songs to screen advertising. One disgusted MTV viewer - "there are more adverts than concert footage".

Most of the TV interludes reduced issues to simply quoting large (and shocking) figures and calling for something to be done. Why not give a short history of third world debt, the causes of global poverty and give some quick fire examples of why the current trade rules are unfair? But that would mean pointing the finger at the West for pushing a lot of debt onto Africa, and of encouraging exports of food _out_ of Ethiopia during the 1980s famine. It would also highlight the hypocrisy of "free" trade. None of the G8 countries developed their economies though a doctrinaire adherence to "free markets" and privatisation - so insisting that third world countries can do is an almighty bullshit pill. It also might lead people to question why they put up with the same bullshit at home.

While such a message would have been a heck of a lot more politically effective, perhaps even a tepid critique of power would have upset Geldoff's new friends, such as Blair, Brown and Bill Gates.

For me, the appearance of Gates was the most sick inducing moment of the whole shebang. Despite Live 8 not being about phillantropy, Geldoff introduced Gates as the "greatest philanthropist of our age". Yet no one mentioned he made his money as head of Microsoft, a corporate who aggressively defends its copyright, and supports extending the provisions of WTO trade agreements such as TRIPS to provide better protection for copyright holders. Yet this same agreement has been one of the key reasons why Africa could not access AIDS drugs - as it lacked the money to pay off the multinational drug companies, and TRIPS forbade them from producing cheaper generic drugs. While provisions were added to TRIPS in 2001 to allow for forms of compulsory licensing during 'national health emergencies' (such as AIDS) it is still very much a live (death!) issue - especially as some nations have been reluctant to enforce these provisions for fear of jeopardising the supply of aid and investment (and brand-named AIDS drugs) from wealthy nations.

While the Bill and Melinda Gates Foundation has given a lot of money to assist AIDS projects, this work, like Geldoff's, can only be a sticking plaster if it ignores the underlying power issues that lead to humanitarian disasters.

Thankfully the appearance of Green Day soon after rehabilitated Live 8 back into what is should be - a political event with lots of rock and roll. First song - American Idiot - "Well maybe I'm the faggot America. I'm not a part of a redneck agenda. Now everybody do the propaganda. And sing along in the age of paranoia.". Billy Joe reminded Berlin of the power of democracy "And remember one thing, regardless of the powers that be are, remember one thing, you're the fucking leaders, you have the power, don't let these bastards dictate the rest of the world or dictate your fucking life, allllrighhhhht!". Green Day then concluded with "We are the Champions" - a song that also doubled as a tribute to Freddie Mercury and Queen - the standout act of the original Live Aid.

The Phony Free Trade Debate

Despite the fact a good deal of media attention is devoted to trade issues, New Zealanders are very poorly served by the so called debate over 'free trade'. The vast majority of politicians and the media appear to live in a pollyanna idealised land where there are only benefits to be had from trade liberalisation deals, whether they be bilaterals or through the WTO. But every government action has costs as well as benefits, and to suggest otherwise is ridiculous.

The Minister of Trade Negotiations consistently tells New Zealanders to 'debate the benefits' of free trade. What sort of Orwellian nonsense is that? Only debating the benefits can never be a genuine debate. In April 2004 MFAT released a document called "A Joint Study Investigating the Benefits of a Closer Economic Partnership (CEP) Agreement between Thailand and New Zealand". Only potential benefits of the deal are considered - there is no discussion of any costs or risks to either New Zealand or Thailand.

Just think of the uproar if any other Government department attempted to pull a similar politically motivated swifty. What would happen if the Ministry of Education put out a document that only stated the benefits of removing all public funding from independent schools. Right wingers would scream bias and would understandably have no faith in the results. Why do we put up with pollyanna nonsense from MFAT and the Minister for Trade Negotiations?

This does not allow an informed public debate, as Christine Dann points out.

It is particularly galling for citizens who contest the free trade hype to be told that we should produce evidence to prove our case, when our taxes are going towards paying "experts" who have skills to do economic Cost Benefit Analyses but who are not directed to do so, or who are told to look only at the private commercial benefits and not at the public economic costs.

Sure enough, the minimal discussion of the "Disadvantages of entering into a CEP with Thailand" included in MFAT's National Interest Analysis (NIA) is shallow and politically loaded. While it acknowledges the negative impact of the removal of tariffs for the clothing, textile, carpet and footwear (CTCF) industries, MFAT says NZ was going to remove these tariffs anyway, which completely begs the point. While Thailand may currently account for around 1% of NZ CTCF imports, surely a competent NIA would include an estimation of the expected increase of such imports, and the real likelihood of jobs being lost in some of New Zealand's poorest communities (such as Porirua). Its simply not enough to tell these workers to get other jobs, as their skills may not be transferable to other industries, meaning that they will be forced into even lower paid employment.

Dangers in the addition of an 'Investment Chapter' to CER

On Thursday this week the Minister of Finance Michael Cullen and his Australian counterpart announced “solid progress” towards the creation of the ‘Single Economic Market’ between Australia and New Zealand. “ Ministers also decided to investigate the possibility of adding an investment component to the Closer Economic Relations (CER) agreement.”

Thus the idea of an ‘investment agreement’ was floated again, with no analysis or explanation of what an ‘investment’ chapter of CER would entail. Perhaps Cullen gave nothing away because giving such an explanation would reveal an ‘investment chapter’ as a direct threat to democracy.

The benchmark for ‘investment agreements’ is the infamous ‘Chapter 11’ of the North American Free Trade Agreement (NAFTA). These provisions give multinational corporations the right to sue governments for compensation or reversal of laws/regulations that threaten their profits.

For example, the Canadian Government placed a ban on a toxic petrol additive, MMT on the grounds it caused nervous system damage and interfered with car emission control systems. In response, the producers of MMT, the Ethyl Corporation, used the provisions of the NAFTA to sue for $250 million, claiming lost Canadian profits and damages. Faced with lengthy court action, the Canadian Government was forced to revoke the ban in 1998, pay the company US$13 million damages and issue an apology. There are many other similar examples. As Bill Rosenberg (2001) has noted, even the threat of such proceedings acts as a break on a government acting in the interests of its citizens. Mary Lou Malig (July 2004) reports;

Canada had good reason to want to avoid a large damage reward. Since the implementation of NAFTA, the total amount of damages claimed by foreign investors has been a total of $US13 billion - $US1.8 billion from US taxpayers, $US249 million from Mexican taxpayers and $US11 billion from Canadian taxpayers"

These provisions are a direct threat to democracy, as they give foreign investors the right to challenge the mandate of governments to implement policies in the public interest; even in the case such policies formed part of a successful electoral platform.

A likely model for the CER investment agreement is the ‘Investment Promotion and Protection Agreement’ (HKIPPA) New Zealand signed with Hong Kong in 1995 (signed by National’s former Don, Don McKinnon that is). This agreement contains equivalent ‘expropriation’ clauses to those found in NAFTA, which aim to also cover Government actions that have an ‘effect equivalent’ to direct expropriation. In NAFTA this has been interpreted to include loss of an investment’s value through loss of profitability.

It also must be noted that the Government's new Overseas Investment Bill, currently before the house, allows the Government to further liberalise investment law by regulation (such as the threshold for business investments and the definitions of associated land). In the context of negotiations over the extension of CER or any other 'free trade' agreement this would allow the government to make further concessions largely free of parliamentary scrutiny (the RR committee is not sufficient!).

While at present it may seem unlikely that an Australian investor would make such a claim, it does beg the question why overseas investors are being given greater rights than local citizens or businesses. Consider the clearly signaled, high profile policy of the Labour party in 1999 to renationalise ACC. ‘Investment protection’ agreements could have affected or prevented the implementation of this policy following the election of the Labour/Alliance Government, especially if private insurance companies had a legal presence in Hong Kong. In this case, it was probably lucky the private ACC market had not been going for very long.

To give a contemporary example, any attempt to further regulate the privatised electricity market created by Max Bradford and embedded by Pete Hodgson could be met by a challenge by the new Australian owners of Contact Energy, who could claim that Government actions negatively affected the profitability of their ‘investment’.

Given the NAFTA experience of Canada and Mexico, perhaps such challenges are not so unlikely after all. Any proposals to include NAFTA or HKIPPA like clauses in CER, or any other ‘free trade’ agreement, should be steadfastly exposed and opposed. Such provisions are a direct threat to democracy as they could prevent our Government from implementing policies given a democratic mandate by the New Zealand people. And that, at the end of the day, is what democracy is all about.