Thursday, May 23, 2013

Stephen Franks: FTAs inevitable for loan-dependent NZ, but expect one way enforcement

I've just listened to Nathan Guy talking down concern about Chinese blocking of meat imports on Radio Live Drive, before Andrew Patterson interviewed me on the topic. My firm has paid particular attention recently to the way FTAs (Free Trade Agreements) can effectively over-ride Parliamentary sovereignty (our legal self determination).

I've acted for meat industry clients since 1980 and still do. I'm not sure how much they know of what is actually at issue. It is in the interests of all to keep this from blowing up, so neither side makes public claims or explanations that make it more embarassing to settle eventually. If the Chinese government, or some elements in it are just  telling us who holds the whip hand, no one is admitting it.

The explanation could be that simple. And because we have allowed ourselves to become dependent on their market (and, directly or indirectly their loans to the West) we'll just have to suck it up.

It is  a reminder that we should not be na├»ve signing agreements with the Chinese (or the Indonesians, or any number of other countries).

We will do what we say we’ll do in international agreements, because we believe in the rule of law, and doing what we’ve promised to do, mostly. I suppose we should recall John Key intimating  that it didn't matter that we'd signed up to the daft and dangerous Declaration of Rights of Indigenous People, because it would not mean anything. Michael Cullen had the wisdom to refuse to sign up to it.

We're also keenly aware that as a small country we have a strong interest in large countries adhering to rules, and not simply acting on ‘might is right’. More significantly for our long term, we’ll adhere to our agreements because once we’ve signed up, however stupidly, they have the clout to force us to do what we’ve signed up to, even if  it is then against our interests, and even if we’ve come to realise that it could continue to go mostly one way.

Many of the countries we sign deals with think promises and contracts are for complying with for so long as it works for them, and there is no shame in many countries in dorking a foreigner.

So New Zealanders are right to be wary of the deals we've been stitched into by Helen Clark and her predecessors, and the Key government’s eagerness to stitch us into more.

But we should not blame these leaders. At the bottom of all this is our weakness. This kind of thing either does not happen to Singapore or Switzerland or other strong small countries, or if it does they can wear it more easily.

Our leaders are given little choice about signing up. Our core problem is that the floating voters in our democracy keep electing people who promise to let them keep spending more than we earn, and not to make any hard choices to end living off borrowing.

So we’ll be bullied more and more by other countries because they can.

That could be turned around. But it will not while we spend most time arguing about fairness and who gets what, and boasting to ourselves about our special ingenuity and special capacities and a committment to " excellence". We are no longer valuably outstanding on any of those measures. Our creditors will be much more aware of continued pandering to personal irresponsibility and laziness and excuses for crime and non-performance.

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