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Posts Tagged ‘Free Trade Agreements’

Letter to the Editor: The threat of law-suit over plain-packaging – a clear warning!

12 February 2014 1 comment

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FROM:    "f.macskasy" 
SUBJECT:  Letter to the ed
DATE:     Wed, 12 Feb 2014 12:48:25 +1300
TO:     " Dominion Post" <letters@dompost.co.nz> 

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The Editor
DOMINION POST

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John Key is reluctant to pass the government's own Plain
Packaging Bill, which removes glossy advertising on
cigarette cartons, citing the current lawsuit across the
Tasman, between the Australian Government and tobacco giant,
Philip Morris (Hong Kong Branch).

Key is afraid that the NZ government might be sued by global
tobacco companies.

Just as the Australian government is being sued in court
through a free trade agreement with Hong Kong. Hence why
Philip Morris - a multinational company - has instigated the
lawsuit via it's Hong  Kong branch.

This should serve as a clear warning that free trade
agreements such as the mooted Trans Pacific Partnership
Agreement (TPPA) also leaves New Zealand open to law suits.
FTAs restrict the right of democratically-elected
governments to pass legislation if they affect a
corporation's profits.

Whilst the CER free trade agreement binds the Australian and
New Zealand governments to free trade - it does not bind
individual corporations.

This was clearly illustrated when Aussie supermarkets
decided to remove NZ-made goods from their shelves, in
favour of locally-made products.

No wonder John Key does not want to release the text of the
proposed TPPA until the National government signs it.

What is he hiding, I wonder? 

-Frank Macskasy
(Address and phone number supplied)

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Additional

Daily Mail Online: Cigarette giant Philip Morris sues Australian government for billions over plain packaging law

Radio NZ: Plain packaging bill passes first hurdle

NZ Herald:  Most MPs set to back plain-package smokes

Smokefree Coalition: The health effects of smokingbill/#sthash.gNpkdBl0.dpuf

Previous related blogpost

Some thoughts on the Plain Packaging Bill

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A lesson in free market economics for ex-National MP, Katherine Rich

12 February 2014 4 comments

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Milo's Week Invisible Hand

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It seems that our Aussie cuzzies are taking matters in hand and implementing their own “Buy Local” policies. A few overly-zealous supermarket operators have even taken to removing New Zealand-made products from their shelves,

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Supermarket stoush sours CER

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According to Tracy Watkins’ story in the Dominion Post, Key will raise the problem when he meets Australian PM, Tony Abbott in Sydney, later this week.

Raise what, precisely?

This is capitalism/free market/whatever at work. Supermarket owners can stock whatever goods they like. If an owner took it upon him/herself to stock goods only from Outer Mongolia – that’s his/her call in a free market.

In fact, like the Scottish Shop in Dunedin, some retailers are very specific in what they stock.

Food and Grocery council CEO,  Katherine Rich, complains that this policy “undermined the spirit of CER and risked a backlash in New Zealand as well”,

‘‘It’s an issue we’re watching closely because both major supermarkets, Coles and Woolworths, have come out with a very pro-Australia stance. There have been some high profile delistings of some New Zealand brands for no other reason than that they are not Australian.’’

Which is supremely ironic as Ms Rich was a one time member and National Party minister from 1999 to 2008.

So she should know how the free market, capitalist system works. It’s a bit too late in the day to start whinging that another nation’s private companies have adopted their own, specific retail policies.

After all, this is something the “invisible hand of the free market” will work out. According to neo-liberal dogma, if consumers want to purchase New Zealand goods, they will go elsewhere, to other retailers. Or buy via the internet. Or hop on a flight to do their grocery shopping here in New Zealand, at a Pak N Save.

That is how the Free Market works, right?

In fact, as Ms Watkins correctly reported, CER binds governments – not private companies;

One option would be for the Government to lodge a formal objection but sources say the situation is complicated by the fact that CER is a government-to-government agreement, and it is not ‘‘straight forward’’ whether supermarkets are captured by that process.

Very astute.

After all, wouldn’t it be a form of “communism” to bind private companies to buy certain goods?!

On the other hand, free trade agreements such as the CER, or the China-NZ FTA, or the impending TPPA, do bind governments in the way they must purchase goods and services.

A New Zealand government wanting to implement a procurement policy that favours locally produced goods and/or services would immediatly be sued by other nations or foreign corporations, via the World Trade Organisation. (In fact, New Zealand sued Australia at the WTO, over the latter’s refusal to allow New Zealand applies into that country. We won.)

So free trade agreements bind governments – but not private companies (those Kiwi apples can be exported to Australia – but no law can force an Aussie retailer or chain-stores to stock them).

This is something that New Zealanders might consider as the issue of the TPPA nears resolution; signatory governments – like our government – would be bound by a TPPA. But private companies would not (or only in peripheral ways) be bound.

As for Katherine Rich?

Tough luck, lady. This is the capitalist system at work.

Suck it up.

Welcome to  the corporatisation of human civilisation.

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References

TV1: Sweet success after bitter battle over NZ apples

Fairfax media: Supermarket stoush sours CER

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Why I am a Leftie

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 5 February 2014.

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Detroit – neo-liberalism’s “Grand Success”

29 July 2013 3 comments

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Detroit files for bankruptcy

Source: Radio NZ – Detroit files for bankruptcy

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America’s grand experiment in neo-liberal capitalism has claimed it’s third bloody sacrifice; Detroit (after Jefferson County, Alabama, and Stockton, California).

Detroit now owes US$18.5 billion in debt. It has declared itself officially bankrupt – the largest US city ever to do so.

There are no doubt several reasons for Detroit’s current economic decline and its inevitable urban decay, but it is a dying city nevertheless,

The governor painted a picture of a city in collapse. Citizens wait 58 minutes for the police to respond to calls, compared to a national average of 11 minutes. Only a third of ambulances were in service in the first quarter of 2013. There are approximately 78,000 abandoned buildings in the city. The unemployment rate had nearly tripled since 2000 and the homicide rate was at its highest level in 40 years, he said. Detroit is unable to meet its most basic obligations to its residents, let alone its creditors.

Source: UK Guardian – Detroit becomes largest US city to file for bankruptcy in historic ‘low point’

Jobs in the industry have dropped by 40 percent since 2000, from 1.3 million to 800,000“, wrote Evan Soltas for Bloomberg.

Michael Snyder, writing in theeconomiccollapseblog.com, posted  17 Facts About The Decline Of The U.S. Auto Industry That Are Almost Too Crazy To Believe,

#1 The average age of an automobile in the United States has gone up more than 50% since 1990 and is now sitting at an all-time record of 10.8 years.  The average length of a marriage in the United States that ends in divorce is only 8 years.

#2 Germany made 5.5 million cars in 2010.  The United States made less than half that (2.7 million).

#3 When you add up salary and benefits, the average auto worker in Germany makes $67.14 an hour.  In the United States, auto workers only make $33.77 an hour in salary and benefits.

#4 Back in 2000, about 17 million new automobiles were sold in the United States.  During 2011, less than 13 million new automobiles were sold in the United States.

#5 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts with the rest of the world of $110 billion.

#6 Japan builds more cars than anyone else on the globe.  Japan now manufactures about 5 million more automobiles than the United States does.

#7 In 2010, South Korea exported approximately 12 times as many automobiles to us as we exported to them.

#8 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to new tariffs.

#9 U.S. car companies are spending hundreds of millions of dollars building shiny new automobile factories in China.

#10 In 1970, General Motors had about a 60 percent share of the U.S. automobile market.  Today, that figure is down to about 20 percent.

#11 The combined U.S. market share of the “Big Three” American car companies fell from 70% in 1998 to 53% in 2008.

#12 Detroit was once known as the “Motor City”, but in recent decades automobile production has been leaving Detroit at a staggering pace.  One analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job during 2008.

#13 Today, only Chrysler still operates an automobile assembly line within Detroit city limits.

#14 Since Alan Mulally became CEO of Ford, the company has reduced its North American workforce by nearly half.

#15 Today, only about 40 percent of Ford’s 178,000 workers are employed in North America, and a significant portion of those jobs are in Canada and Mexico.

#16 The average Mexican auto worker brings in less than a tenth of the total compensation that a U.S. auto worker makes.

#17 In the year 2000, the U.S. auto industry employed more than 1.3 million Americans.  Today, the U.S. auto industry employs about 698,000 people.

Item #9 is off particular relevance to New Zealand, because we are doing precisely the same thing;

U.S. car companies are spending hundreds of millions of dollars building shiny new automobile factories in China.

As Forbes posted in May 2010, in an article  U.S. Companies That Invest Big In China,

General Motors and Volkswagen have invested billions in China, starting more than a decade ago. Ford is rushing to catch up by adding production capacity and expanding its dealer network in China. Ford and its joint-venture partner, Chang’an Ford Mazda Automobile, plan to start producing next-generation Ford Focus models at a new, $490 million plant in Chongqingin 2012.

Essentially, the United States car manufacturing industry has been busy exporting it’s production facilities and jobs to other low-wage  countries – China and Mexico to give two examples.

Here in New Zealand, we’ve done pretty much the same thing; gutted  our manufacturing sector by  busily exporting it to China (and elsewhere) where wages are low, in comparison to New Zealand workers*,

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Rakon blames job cuts on high dollar

Source: Radio NZ – Rakon blames job cuts on high dollar

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This, essentially, is the end-result of eliminating tariffs with so-called “free trade” agreements. Except, these agreements are not  “free” at all. They cost jobs.

For every pair of cheap Skellerup  “Red Band” gumboots you and I buy at The Warehouse – New Zealander’s jobs were sacrificed,

The first pairs of Red Band Men’s gumboots retailed for twenty five shillings and 11 pence. Red Band gumboots continued to be made at Skellerup’s Woolston factory in Christchurch until the late 1980s when economic considerations forced the company to move production offshore.

Source

So how cheap are those gumboots made in China?

The economic cost of  people out of work is astronomical: $805,759,000 for the 2012/13 period alone (Unemployment Benefit and Emergency Benefit (M63) – Vote Social Development – Estimates of Appropriations 2013/14)

The social cost is beyond a dollar value.

And yet, it was not always like this. Once upon a time, we had full employment.

In 1973, the numbers of registered unemployed (not including overall jobseekers) stood at 2,321. (source)

By June 2008 the number of registered unemployed (not including overall jobseekers) had increased to 17,710. (Pre Global Financial Crisis recession.)(source)

Forty years later, by June this year, after de-regulation, free trade treaties, abolition of tariffs, and the dismantling employment legislation and the trade union movement, the number of registered unemployed (not including overall jobseekers) increased to 48,438. (IBID)

The actual numbers of jobless, according to regular Household Labour Force Surveys, is much higher (currently at  146,000). (source)

It could be said that the cost of those  cheap, foreign-made Redband gumboots (and other consumer goods)  is costing taxpayers $805,759,000 per annum.

Conformist middle class consumers, if they read this, would probably shrug and dismiss it from their minds. Such matters as Detroit and the pernicious consequences of  the “free” market (which, as I have shown, is not “free”) on our employment, economy, and social fabric is beyond their ken.

It doesn’t affect them directly so they blot it from their minds.

They simply look at a pair of  Redband gumboots and see the printed pricetag.

After all, the capricious nature of neo-liberalism such as the fate of Detroit could never happen here, right?

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Wellington Dying - John Key - 7 May 2013

Capital a dying city says Prime Minister – Dominion Post – 7 July 2013

Source: Dominion Post (scanned hard-copy)

Related story: Dominion Post – Shearer slams PM over capital dying quip

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* Yes, there are other serfs in the world paid less than Kiwis.

This blogpost was first published on The Daily Blog on 24 July 2013.

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Taiwan FTA – Confirmation by TVNZ of China pressuring the Beehive?

17 July 2013 7 comments

On 24 May, I blogged about an apparent trade crisis between New Zealand and China, as our meat shipments were held up at  Chinese borders – ostensibly  for “incorrect” paperwork;

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whats-the-beef-guv-blogpost-frank-macskasy-frankly-speaking

See previous blogpost:  What’s the beef, guv?

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Minister for Food Safety, Nikki Kaye said,

We’ve got MFAT officials and MPI officials working around the clock to resolve this,” says Minister for Food Safety Nikki Kaye. “We’ve been providing technical documentation through to Chinese authorities and we remain confident that this will be resolved in the near future.”

Acknowledgment: TV3 –  Meat held up in China costing NZ industry

It’s interesting that TV3 report stated,

The problem is believed to have arisen after the Ministry of Agriculture and Fisheries recently became the Ministry of Primary Industries and Chinese border controls aren’t recognising the new names and logos on the export certificates.”

Acknowledgment:  IBID

Other media also repeated the official government line – that this was a bureacratic “paper work problem”. Ministers were even muttering  dark threats at disciplining MPI staff  who might have been responsible for this  “incorrect paperwork” mess.

However, I found this excuse to be weak and unbelievable. Why?

Because as I wrote on 24 May, the  MAF (Ministry of Agriculture & Fisheries)  became the MPI (Ministry of Primary Industries,  well over a year ago.

So why had this crisis arisen only now?

My contention is that the meat export problem was politically motivated. A free trade agreement was in the process of being negotiated between Taiwan and New Zealand,

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NZ close to Taiwan free trade agreement

Acknowledgment: Fairfax Media – NZ close to Taiwan free trade agreement

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China was flexing it’s political muscle over a free trade agreement being negotiated between New Zealand and Taiwan – a state which China regards as a “renegade province”.

China was reminding  New Zealand  “who’s boss”.

On 10 June, TV1 News reported that the free trade agreement with Taiwan had been concluded and signed.

However, the news story was curiously reported from  two different angles. The TVNZ website reported a purely trade-driven story,

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NZ signs trade agreement with Taiwan

Acknowledgment: TVNZ – NZ signs trade agreement with Taiwan

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There was no mention of any political dimension in the about report. China (mainland) was not even mentioned, even in passing.

Contrast that to the evening news story on the same day; July 10,

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NZ signs trade agreement with Taiwan - tv report

Acknowledgment: TVNZ – NZ signs trade agreement with Taiwan – TV Broadcast Report

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The relevant story starts at 5:20.

The newsreader, Melissa Stokes opened with this introduction,

New Zealand has signed a free trade agreement with Taiwan. It’s likely to save our exporters at least $75 million a year, but it’s China’s influence  on the agreement that’s raising questions.

It was pointed out that no government Minister attended the signing of the Taiwan-New Zealand Agreement – a marked contrast to the much-hyped signing of the China-New Zealand FTA in 2008. Or National’s signing of an FTA with Malaysia in 2009,

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PM hails signing of Malaysian deal

Acknowledgment: Fairfax Media:  PM hails signing of Malaysian deal

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The journalist covering the signing, Brian Boswell, asked the Taiwan representative an obvious question,

Brian Boswell:  “Would you like a Government minister [to be] here?

Elliott Charng (Taipei Economic and Cultural Office) replied:   “Yes. Of course.

Indeed he would.

But this blogger believes that China made it abundantly clear to the Beehive that any agreement signed with it’s “renegade province” had to be a ‘low-level’ event,  without the presence of any government Ministers or MPs present.

As Boswell remarked,  “ But there were none. This agreement was kept under wraps until the last minute despite Taiwan being our eight largest export market.”

Stephen Payton – from the NZ Commerce and Industry Office – appeared to be the most senior representative of the New Zealand government present at the signing.  His comments were illuminating,

This agreement is signed in terms of New Zealand’s One China policy. And so we have to observe certain contraints around how we deal with Chinese Taipei.”

Indeed!

To drive the point home to viewers, Boswell added,

China doesn’t recognise Taiwan as being independent and pressures other countries to do the same.”

“Pressures”?

Such as blockading millions of dollars of our meat exports at Chinese ports?

Green MP, Kennedy Graham, a former diplomat, said,

Credit as it sees it and some economic progress out of this deal. But at the same time it’s genuflecting politically to one of the world’s superpowers,  and probably being orchestrated behind the scenes by the same super power.”

Boswell finished his report with this remarkable comment,

It’s taken more than a year of negotiations. Sources have told One News that China was extensively briefed about the deal and told about the signing.”

This story puts the May blockade of our exports into context and sheds new light on what really transpired.

It now appears that negotiations with Taiwan originally excluded China – which put a few noses out of joint in Beijing – and which provoked a hidden diplomatic incident. This incident was carefully masked by both Beijing and Wellington as a “bureacratic mix up”, as it served neither government’s interests that this become public.

After all, it had been over  year that the new MPI documentation had been in use, so it is inconceivable that all of a sudden such a trivial issue could interfere with millions of dollars of  trade.

This blogger posits the following;

  • Beijing noted the free trade agreement being negotiated between Wellington and Taiwan.
  • Beijing demanded that it be consulted and “certain contraints around how we deal with Chinese Taipei”  observed.
  • Someone at MFAT disregarded China’s demands.
  • China insisted.
  • MFAT ignored it – or fobbed them off.
  • Big mistake on our part.
  • Beijing reacted with a partial blockade of our exports.
  • Ministers – who had been kept out of the loop, or fed minimal information – were caught out in surprise.
  • The Beehive failed to react quickly enough, as Ministers tried to figure out what was going on.
  • Beijing tightened the screws.
  • The Beehive tried to negotiate.
  • No negotiations, responded Beijing, and insisted it’s demands be met.
  • As our exports languished at Chinese ports, pressure mounted on Key’s ministers – who eventually capitulated.
  • Upshot: any agreement with Taiwan would be at a  low-level; with minimal governmental recognition; Beijing would be kept fully appraised; and diplomatic recognition would not be permitted.

It was a stern lesson in super-power muscle-flexing  delivered to the Beehive in a way that no New Zealand politician would ever be likely to forget  in a hurry.

Meanwhile, as I predicted in May,

On Radio NZ, Primary Industries minister, Nathan Guy stated,

“I’m very disappointed in my officials – issuing export certification is really their core business. And I’m disappointed in how this issue has come to bear. Normally, we have a very strong system and this is very unusual.”

However speaking on Radio New Zealand’s Checkpoint programme, Nathan Guy refused to be drawn on whether any disciplinary action will be taken against staff for the blunder.

Mr Guy said that was a matter for MPI director-general Wayne McNee.

“By and large, MPI do fantastic work and we’ve had an issue here, and I’ve asked the director-general to get to the bottom of it.”

What’s the bet that this entire issue sinks quietly out of sight and nothing is ever heard about it again?

Has anyone heard “whether any disciplinary action was be taken against staff for the blunder “?

Nope.

It kind of  sank quietly out of sight.

This blogpost was first published on The Daily Blog on 13 July 2013.

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What’s the beef, guv?

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COMPOSITE

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The recent spectacle of our meat exports to China stuck at their ports raised eyebrows, hackles… and a few questions.

The news broke on TV3 on 17 May,

New Zealand’s beef and lamb is still being blocked from entering China.

The meat industry says it’s a huge concern and is already costing a lot of money.

The issue was revealed on 3 News last night and it’s understood the problem arose because Chinese authorities weren’t informed of the name change of a New Zealand government ministry.

The meat is not allowed into the country and hasn’t been now for nearly a week.

Acknowledgment: TV3 –  Meat held up in China costing NZ industry

The reason given, at the same time the story broke was that there was confusion over “paperwork”,

The problem is believed to have arisen after the Ministry of Agriculture and Fisheries recently became the Ministry of Primary Industries and Chinese border controls aren’t recognising the new names and logos on the export certificates.

The Government says they are working hard to resolve the issue.

“We’ve got MFAT officials and MPI officials working around the clock to resolve this,” says Minister for Food Safety Nikki Kaye. “We’ve been providing technical documentation through to Chinese authorities and we remain confident that this will be resolved in the near future.”

Acknowledgment:  IBID

It’s interesting that the TV3 report stated, “The problem is believed to have arisen after the Ministry of Agriculture and Fisheries recently became the Ministry of Primary Industries and Chinese border controls aren’t recognising the new names and logos on the export certificates“.

Why?

Because MAF (Ministry of Agriculture & Fisheries)  became MPI (Ministry of Primary Industries,  well over a year ago,

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MAF to become Ministry for Primary Industries

Acknowledgment: Beehive – MAF to become Ministry for Primary Industries

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Note the dates in the Beehive media release: 30 April 2012. One would assume that all forms, letterhead, and other paperwork would have been re-printed in time for the 30 April launch of the new  Ministry of Primary Industries? Government departments and ministries are noted for spending considerable sums on new stationary.

It seems curious then, that the Chinese authorities have only now realised that the MAF had been replaced by a completely different name, acronym, and logo? Why now?

If I was of a suspicious mind (and why should anyone be suspicious of this National government?), I would be wondering if this recent event had anything to do with the blocking of our meat exports to China,

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NZ close to Taiwan free trade agreement

Acknowledgment: Fairfax Media – NZ close to Taiwan free trade agreement

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The above story goes on to state,

Officially, both Taiwan and China claim sovereignty over the other, a situation which has maintained since the Communist Party took control of mainland China and established the People’s Republic of China in 1949.

China makes adhering to a One-China policy a pre-condition of diplomatic relations.

New Zealand’s relations with Taiwan are now maintained through an office of the Wellington Employers Chamber of Commerce of Taipei.

Sources say the issue of free trade with Taiwan was raised when Prime Minister John Key led a major trade delegation to China in April, as part of an established ”no surprises” policy of keeping Beijing informed of our relations with China.

Trade Minister Tim Groser declined to comment.

Acknowledgment: IBID

Mainland China claims full sovereignty over Taiwan, which it regards as a “renegade province”. Had it not been for US support, China would have re-occupied the island as it did with Tibet in the 1950s – over which it also claims suzerainty.

A suspicious mind would wonder if something has gone awry between China and New Zealand, and the former was flexing it’s super-muscle to remind the Beehive just who’s boss around here.

It just seems to much of a coincidence that the blocking of our exports happened at a time when NZ officials are negotiating a free trade agreement with Taiwan.

It’s interesting that, as the above report states,  “New Zealand does not officially recognise Taiwan as a country“.

If so – then did Beijing demand a voice in any FTA deal with Taipei?

And were NZ officials (or politicians) foolish enough to dismiss those demands?

On Radio NZ, Primary Industries minister, Nathan Guy stated,

“I’m very disappointed in my officials – issuing export certification is really their core business. And I’m disappointed in how this issue has come to bear. Normally, we have a very strong system and this is very unusual.”

However speaking on Radio New Zealand’s Checkpoint programme, Nathan Guy refused to be drawn on whether any disciplinary action will be taken against staff for the blunder.

Mr Guy said that was a matter for MPI director-general Wayne McNee.

“By and large, MPI do fantastic work and we’ve had an issue here, and I’ve asked the director-general to get to the bottom of it.”

What’s the bet that this entire issue sinks quietly out of sight and nothing is ever heard about it again?

This blogpost was first published on The Daily Blog on 24 May 2013.

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References

Beehive: MAF to become Ministry for Primary Industries (6 March 2012)

Fairfax Media: NZ close to Taiwan free trade agreement (19 May 2013)

TV3:  Meat held up in China costing NZ industry (18 May 2013)

Radio NZ: Minister blames officials for meat blockade in China (23 May 2013)

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