Tuesday, September 23, 2008



The cost of free trade

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!);
  • Pharmac.
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". All of these policies serve a real purpose; they all benefit New Zealanders by protecting us from disease, giving us information about products, ensuring that products actually work, and allowing us to have a public health system. If we can have an FTA with the US without having to compromise on them, great. If not, they can fuck off. Free trade with America is not worth having to swallow their absurd intellectual property laws (which allow companies to sell broken products so they or their IP partners can make more money, and bar consumers from fixing them). And it is not worth ripping the ground out from under our public health system.

Of course, if there is a change of government, National will be more willing to give ground to the US (since they care more about farmers than the rest of us). And that could cost us dearly in the long run.

(Hat tip: Joe Hendren, who looked at this last year)