I see a looming preferential trade deal with the United States is enough for Matthew Hooten to declare Phil Goff New Zealander of the year. High praise indeed. Although US trade deals don’t seem to have worked out quite so well for the much bigger economy of Australia (bigger than New Zealand that is, not the US!):
Australia is one of the few industrialized countries that have a deficit in its trade with the U.S., and that deficit has worsened significantly since the pact was enacted. During 2005, the first year of the FTA, U.S. exports to Australia increased to US$15.8 billion, up from US$14.2 billion in 2004. Yet Australian exports to the U.S. dropped slightly to US$7.3 billion, from US$7.5 billion in 2004. Last year, the deficit worsened, as U.S. exports to Australia grew about US$2 billion to US$17.8 billion, but Australian exports to the U.S. increased only to US$8.2 billion from US$7.3 billion a year earlier.
Anyway for a summary of the issue we now face in these upcoming negotiations you can’t go past No Right Turn’s succinct analysis:
Labour is patting itself on the back over the announcement that it will begin free-trade negotiations with the USA. Meanwhile, the rest of us might like to ask how much it will cost and what we will have to give up in order for New Zealand farmers to make a bit more money. Fortunately, the US Trade Representative compiles an annual report on “Foreign Trade Barriers”, which is quite informative on the issue. Here’s a list of New Zealand policies the US considers to be unacceptable barriers to trade, culled from its New Zealand report [PDF]:
- Restrictions on GM crops;
- Our current pathetically weak labelling scheme for GM products (informing consumers is a barrier to trade!);
- Import restrictions on potentially diseased food (stopping people from getting BSE is a barrier to trade!);
- Sane copyright law which recognises the rights of customers;
- Voluntary local content quotas for TV and radio (customer preferences are a barrier to trade!);
- The Overseas Investment Act (requiring that investment actually be beneficial is a barrier to trade!);
The question we should all be asking is how much, if any, of this we are willing to surrender so that farmers can get richer. My answer is “none”.