Gorging on imports
A while back, I blogged about how boycotting sweatshop labour can improve the working conditions of the people in the sweatshops. Another problem with the Government’s free-trade-at-all-costs agenda is that the benefits of the agreements they’re negotiating just aren’t eventuating.
Rather than opening up markets for our exporters to sell goods, they’re actually causing New Zealand to be flooded with foreign goods, to the detriment of Kiwi businesses. We’re importing much more than we’re exporting, and that has economists worried. Reports the Dominion Post:
Gorging on imports may eventually leave a nasty after-taste of a falling dollar and the risk of higher interest rates, economists warn.
A $192 million monthly trade shortfall announced yesterday was the worst for March and forced the annual deficit to a monster $4.3 billion.
This is quite a surprise, because our exports should be booming because we’re at the height of the export season for primary produce. Rather, despite our reputation as the food basket of the South Pacific, food and beverage imports accounted for one of the largest increases over the past three months.
Free-trade agreements were meant to help our companies export their goods overseas. They haven’t. Since New Zealand signed a free-trade agreement with Singapore in 2000, our exports to that country have actually decreased from $487 million to $336 million. Why? Well, because our goods can’t compete with those made in substandard labour and environmental conditions. That’s just not a level playing field.
Indeed, the Government’s dogged ideological pursuit of free-trade agreements isn’t benefiting and won’t benefit Kiwi businesses. It’s benefiting, and will benefit, the multinationals who own the sweatshops in Singapore, China, and Thailand. Meanwhile, government agencies are suggesting Kiwi businesses move their manufacturing capacities overseas because they can’t compete if their products are made under New Zealand law.
There are other options, of course, starting with a concerted Buy NZ Made campaign…
May 1st, 2005 at 11:38 pm
It makes sense that we currently have a trade deficit. Our dollar is high, meaning that our dollar is benefitting importers, and harming exporters. When this drops, then exports will rise.
Moreover, the idea of a floated exchange rate is that the current account deficit is sorted out by changing exchange rates. In this respect, current account deficits are largely defunct economic terms reminiscent of the days of government control.
Well… in the mind of a 1st year economics student anyway.