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Posts Tagged ‘North American Free Trade Agreement’

TPPA: Doomsday scenarios, Critics, and flights of fancy

6 December 2012 9 comments

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TPPA - Trans Pacific Partnership Agreement

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The debate of the Trans Pacific Partnership Agreement (TPPA) is hotting up.

Recent pieces in the NZ Herald by Professor Jane Kelsey and right wing columnist, Fran O’Sullivan, gave opposing views on  the current secret negotiations.

As usual, Professor’s Kelsey’s column was a reasoned, critical analysis of the potential consequences of  a TPPA on our society, and economy. Kelsey deals in facts and her writing did not disappoint. (See: Jane Kelsey: Pacific deal masks bigger plan)

By contrast, O’Sullivan’s pro-TPPA piece was a bizarre rant and whinge as to why Auckland University was not promoting pro-TPPA arguments. As if it was compulsory for Universities to promote and advance right-wing, “free” market ideology and agendas?   (See: Anti-trade camp running debate)

Another piece in the Herald, by lawyer Daniel Kalderimis, assured us that  disputes between investors and states were  real, but could be addressed.

No one would sanely deny that there aren’t risks.  But the key question is are those risks a deal breaker or can they be mitigated? I think they can be mitigated.”

See: TPP risks can be mitigated – expert

Well, he would say that, wouldn’t he? Kaldermis is a trade lawyer who makes his living  from “mitigating”  international investor-nation disputes.

(The vultures are circling already…)

Another somewhat equally ludicrous pro-TPPA piece came from Stephen Jacobi, executive director of the NZ US Council and the NZ International Business Forum, on 18 Ocober,

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Stephen Jacobi - TPP - more trade, less conspiracy

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Jacobi’s statements demand a critical de-construction…

A recent survey of 1018 New Zealanders found that over 60.5 per cent believed New Zealand needed to do more to connect with global markets. While 85.7 per cent could not name the deal under negotiation with the United States and other Asia Pacific economies, when prompted 51.6 per cent said they had heard of the Trans Pacific Partnership (TPP). 56.3 per cent said they supported TPP and only 13.4 per cent said they opposed it. 30.4 per cent said they had no view or didn’t care. “

It’s hardly surprising that the issue of the TPPA does not rate more highly in New Zealander’s consciousness.

With few exceptions, our media has been woefully lacking in promoting informative debate on complex issues faces this country.

Fairfax media has been gutted, as sub-editors and other reporting staff numbers have been seriously cut back.

Even television current affairs programmes ( The Nation, Q+A, and Think Tank) are relegated to early morning time slots on the weekends.

The only in-depth, serious  coverage on radio is by Radio New Zealand.

This blogger recently had an opportunity to listen to what passes for “News” on ‘The Rock‘ – a Wellington radio station. It’s two-minute long hourly “news” programme consisted predominantly of crime stories. Items of a political nature or social issues are rarely, if ever,  canvassed.

Talkback radio? Idiot voices screaming at other idiot voices on issues that idiots know little about.

No wonder that the most critical trade agreement in our history is about to be passed, and “30.4% said they had no view or didn’t care“.

If New Zealanders realised that our medicines might increase by 50%, 75%, 100%, or X% – then perhaps more New Zealanders might care.

I know! Let’s put it into terms that even the most dimmest low-information voter can compehend,

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TPP could quash film funds

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Amokura Kawharu said her conclusions were based on the leaked text of the investment chapter.

“If that is the final form for the TPP then there will be an extensive provision in there prohibiting what are called ‘performance requirements’.”

It prohibited incentives for supporting local industry.

See: IBID

So there we have it; no government subsidies = no movies = we can kiss bye-bye to our little hairy-footed mates if the TPPA goes through.

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The Hobbit Banned

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That should grab our collective attention by our short’n’curlies.

Returning to Mr Jacobi’s written piece in the Herald,

The Government will need to decide what best meets New Zealand’s interests in this area but it is more likely to do so in the context of domestic policy processes rather than a trade negotiation.”

That is either highly disingenuous – or Mr Jacobi has an almost quasi-religious faith in our government.  Which is strange, as neo-libs generally have very little faith in the State and are constantly railing that private enterprise “does it better” than governments.

At any rate, the last 30 years of de-regulation, resulting in thousands of jobs being lost to overseas nations with cheaper labour costs, prove the lie to that claim. If governments’ policies were truly determined by “ what best meets New Zealand’s interests …in the context of domestic policy “, neo-liberal de-regulation would never have been implemented on such a wide-ranging, destructive scale in this country.

Successive governments since 1984 have been hand-cuffed to de-regulated marketplace and fiscal policies.

That’s also why this process needs to take place behind closed doors, at least until consensus is forged.

This is not the same as secrecy – it’s no secret TPP talks are taking place in Auckland in December.

Wha-???

A process taking place behind closed doors is not the same as secrecy?!?!

Since when was the definition of secrecy re-written without anyone’s knowledge?

What other definitions has Ms Jacobi re-written, on the sly?

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So let’s not forget; for TPPA supporters, something taking place behind closed doors is not the same as secrecy.

”  At that time any public stakeholders who register their interest will be able to meet with negotiators as they have done in every other negotiating round. “

Meaning what, precisely? Will that allow journalists; members of Parliament; and other interested parties the right to full disclosure of information regarding  the TPPA?

If not, then Mr Jacobi’s comments are meaningless drivel.

” Those on all sides of the TPP debate will do so and they should, to ensure negotiators are aware of their concerns. New Zealand negotiators are extremely open to this and meet regularly with those for and against TPP.

Ok, now Jacobi is of into La La Land, on a Jet Star flight of fancy…

I wonder who, precisely,  New Zealand negotiators are meeting regularly, who are “against the TPP“?

Once their job is complete the fruits of their labours will need to be presented to Parliament for ratification and all New Zealanders can participate in the select committee process.  That’s how we make treaties and change laws in this country.  “

Yes, Mr Jacobi, that is precisely “ how we make treaties and change laws in this country” – on Planet Key.

Unfortunately, things are not quite so rosy and wonderfully democractic in New Zealand, Planet Earth.

For example; public submissions on the issue of partial privatisation of our state assets numbered 1,400. Less than 1% were in favour of privatisation.

National has ignored the remaining 99% of submitters and is proceeding with asset sales. (See:  Asset sales protest gears up)

Where is the “participation in the select committee process” that Mr Jacobi speaks of?

The bigger picture behind all this is why New Zealand needs to participate in trade negotiations at all. The answer can be found in the difficult economic environment in which we find ourselves today. All around the world governments and citizens are asking what can be done to boost economic growth, create jobs and meet the expanding social needs of our communities.”

Mr Jacobi is being hopelessly naive if he believes that free trade agreements “create jobs”.

Well, they do, actually. They take jobs from countries such as New Zealand – and create them in low-wage countries such as India, Pakistan, Fiji, China, etc.

In fact, the United States seems to have not done very well out of a previous free trade agrement called NAFTA (North American Free Trade Agreement),

NAFTA’s opponents attribute much of the displacement caused in the US labor market to the United States’ growing trade deficits with Mexico and Canada. According to the Economic Policy Institute, rise in the trade deficit with Mexico alone since NAFTA was enacted led to the net displacement of 682,900 U.S. jobs by 2010.  Critics see the argument of the proponents of NAFTA as being one-sided because they only take into consideration export-oriented job impact instead of looking at the trade balance, also known as net exports. They argue that increases in imports ultimately displaced the production of goods that would have been made domestically by workers within the United States.

The export-oriented argument is also critiqued because of the discrepancy between domestically produced exports and exports produced in foreign countries. For example, many US exports are simply being shipped to Mexican maquiladores where they are assembled, and then shipped back to the U.S. as final products.  These are not products destined for consumption by Mexicans, yet they made up 61% of exports in 2002. However, only domestically produced exports are the ones that support U.S. labor. Therefore, the measure of net impact of trade should be calculated using only domestically produced exports as an indicator of job creation.

According to the Economic Policy Institute’s study, 61% of the net job losses due to trade with Mexico under NAFTA, or 415,000 jobs, were relatively high paying manufacturing jobs.  Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana, and California were significantly affected by these job losses. For example, in Ohio, Trade Adjustment Assistance and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico. Similarly, in Pennsylvania, Keystone Research Center attributed 150,000 job losses in the state to the rising U.S. trade deficit. Since 1993, 38,325 of those job losses are directly related to trade with Mexico and Canada. Although many of these workers laid off due to NAFTA were reallocated to other sectors, the majority of workers were relocated to the service industry, where average wages are 4/5 to that of the manufacturing sector.

See: NAFTA’s effect on United States employment

An increase in domestic manufacturing output and a proportionally greater domestic investment in manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply reflect greater automation and higher productivity. Although the U.S. total civilian employment may have grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the same time period.  Furthermore from 1994 to 2007, net manufacturing employment has declined by 3,654,000, and during this period several other free trade agreements have been concluded or expanded

See: North American Free Trade Agreement

And our free trade agreement with China is resulting in similar loss of jobs,

An announcement today 430 jobs are set to go at Fisher & Paykel Appliances’ Dunedin factory, virtually spells the end of the line for whiteware production in New Zealand.

F&P is following the lead of New Zealand garment manufacturer Icebreaker which does design and research in New Zealand but manufactures in low-cost China.

See: Fisher & Paykel move ‘damages iconic brand

How many jobs were “created” in Dunedin’s Hillside railway yards, when contracts to build locomotives were awarded to Chinese manufacturers? See: Dozens of railway workshop jobs to go

How many jobs were “created” by Rakon Industries, as they shifted their production to China? See: Rakon blames job cuts on high dollar

How many jobs did Dynamic Controls “create” when they shifted manufacturing to China in 2007? See: Jobs to go in closure of Dynamic Controls wing

And the list goes on… 40,000 manufacturing jobs lost, since 2008.   ( See: National’s Hands-Off Approach Failing New Zealand)  Many of those jobs have been ‘exported’ to China, since the FTA was signed between that nation and New Zealand on 7 April 2008 and came into effect on 1 October of the same year. (See: New Zealand–China Free Trade Agreement )

So is Mr Jacobi lying or woefully ignorant of the facts? Let the reader decide.

Next, from Mr Jacobi,

A conservative estimate is that TPP could add $2.1 billion to the New Zealand economy by 2025 or just under 1 per cent of GDP.”

Really?

Who gets that $2.1 billion, Mr Jacobi? Is it workers? Local businesses here in New Zealand? Or corporate shareholders somewhere else?

And how many more unemployed, Mr Jacobi?

Who pays for thousands more unemployed? The taxpayer no doubt.

Meanwhile, that $2.1 billion heads of to Never Never Land

But the strangest, most laughable comment from Mr Jacobi comes when he admonishes TPPA critics with,

Rather than giving in to doomsday scenarios we should listen to New Zealanders who instinctively know that trade works and this country’s economic livelihood is to be found in global markets.”

Yeah, we can’t have “doomsday scenarios”, eh, Mr Jacobi. Like the muppet who made this moronic comment,

No one wants to see prices go up or the internet collapse.”

See: Stephen Jacobi: TPP – more trade, less conspiracy

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Previous related blogposts

Citizen A – 29 Nov 2012 – TPPA Special

TPPA: Business launches propaganda campaign

Additional

Gordon Campbell on the NZ Herald’s attack on Jane Kelsey (29 Nov 2012)

Gordon Campbell and a Canadian analysis of the TPP (3 Dec 2012)

Gordon Campbell on Tim Groser’s ‘political projectile vomiting’ about the TPPA (4 Dec 2012)

 

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TPPA: Business launches propaganda campaign

3 December 2012 12 comments

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scaling the heights of  capitalism

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When it comes to misguided, New Zealand does it very well.

If the actions of 50+ businesspeople, professional lobbyists, and an ex-politician are anything to go by, some folk have yet to learn the lessons of the last thirty years of failed orthodox neo-liberal economic dogma.

Fifty people today (3 December)  put their names to an open letter to the Prime Minister, in support of TPPA negotiations. The letter was signed by former prime minister Jim Bolger and fortynine others. (See: Open letter to Prime Minister)

Firstly, this blogger supports the right of freedom of expression for these 50 individuals to write to our Dear Leader.

Just as I have a freedom of expression to tear their letter apart and reveal it to be dangerous, naive BS, with little thought for our future or consequences.

The letter started with,

We, the leaders of major New Zealand companies and leading business organisations, write to underline the importance of international trade and investment for New Zealand and to express our support for the Trans Pacific Partnership (TPP) negotiations now underway amongst eleven APEC economies.”

Economies“?!

Don’t they mean “countries”? Or “nations”?

The use of “economies” was prevalent  in the 1980s when neo-liberalism took hold around the world. It suggested that, as Margaret Thatcher maintained, there was no such thing as “society”. There was only the Individual; the family; and contractual transactions.

All pure ideological claptrap, of course.

Try taking the concept of society away from  social creature like humans and the result is predictable,

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We are conscious that TPP is a work in progress and that judgement about the final outcome needs to be withheld until negotiators have finished their work.”

Now this really gets my goat.

How can these 50 intelligent, well-educated, highly experienced and business-savy men and women profess to support a document they have not read and  suggest that  ” judgement about the final outcome needs to be withheld until negotiators have finished their work”?!

How many contracts have these 50 people supported and signed without first reading the text?!

It beggars belief that businesspeople who run million-dollar (or billion dollar!) enterprises, are endorsing a document, sight unseen?

Because very few people in this country – or any other country – have read the proposed TPP Agreement.  In fact, out of 29 chapters, we are privy to only five – and only because they were leaked.

Our aim in writing is to endorse the effort now underway and to outline our conviction that this effort should continue in the interests of building a more prosperous and sustainable Asia Pacific region and of ensuring that business can play its full part in the region’s continuing recovery and future economic growth.

I’d still like to know how these 50 Esteemed Gentlemen and Ladies know that “that this effort should continue in the interests of building a more prosperous and sustainable Asia Pacific region“.

Their faith is almost bordering on the religious. Have angels been whispering in their ears?

We note that the treaty ratification process requires there to be consultation on the negotiated outcome before its adoption by Parliament.”

Which, by then, may be too late. Especially if – as many suspect – Key will sign up up to some horrendous agreement that,

  1. Undermines the viability of Pharmac to buy cheaper, generic drugs,
  2. Results in New Zealand being vulnerable to investor lawsuits should Parliament pass any law that “damages” their profitability (See previous blogpost:  Dispatches from Planet Key)

How can there be democratic oversight by the public and Parliament if a completed Agreement is presented to Parliament as a fait accompli?

This may suit business – but then, businesspeople and National supporters tend not to support democracy as much as the rest of the country might like.

This will assist economic growth and job creation in New Zealand.”

Rubbish. It will do no such thing. In fact, if the NAFTA (North American Free Trade Agreement) is anything to go by, we can expect more jobs to be lost, exported to overseas manufacturers which ‘enjoy’ a cheaper labour force.

NAFTA’s opponents attribute much of the displacement caused in the US labor market to the United States’ growing trade deficits with Mexico and Canada. According to the Economic Policy Institute, rise in the trade deficit with Mexico alone since NAFTA was enacted led to the net displacement of 682,900 U.S. jobs by 2010.  Critics see the argument of the proponents of NAFTA as being one-sided because they only take into consideration export-oriented job impact instead of looking at the trade balance, also known as net exports. They argue that increases in imports ultimately displaced the production of goods that would have been made domestically by workers within the United States.

The export-oriented argument is also critiqued because of the discrepancy between domestically produced exports and exports produced in foreign countries. For example, many US exports are simply being shipped to Mexican maquiladores where they are assembled, and then shipped back to the U.S. as final products.  These are not products destined for consumption by Mexicans, yet they made up 61% of exports in 2002. However, only domestically produced exports are the ones that support U.S. labor. Therefore, the measure of net impact of trade should be calculated using only domestically produced exports as an indicator of job creation.

According to the Economic Policy Institute’s study, 61% of the net job losses due to trade with Mexico under NAFTA, or 415,000 jobs, were relatively high paying manufacturing jobs.  Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana, and California were significantly affected by these job losses. For example, in Ohio, Trade Adjustment Assistance and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico. Similarly, in Pennsylvania, Keystone Research Center attributed 150,000 job losses in the state to the rising U.S. trade deficit. Since 1993, 38,325 of those job losses are directly related to trade with Mexico and Canada. Although many of these workers laid off due to NAFTA were reallocated to other sectors, the majority of workers were relocated to the service industry, where average wages are 4/5 to that of the manufacturing sector.

See: NAFTA’s effect on United States employment

An increase in domestic manufacturing output and a proportionally greater domestic investment in manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply reflect greater automation and higher productivity. Although the U.S. total civilian employment may have grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the same time period.  Furthermore from 1994 to 2007, net manufacturing employment has declined by 3,654,000, and during this period several other free trade agreements have been concluded or expanded

See: North American Free Trade Agreement

We are already losing thousand of manufacturing jobs. A TPPA will worsen the situation,  as  local businesses make use of cheaper labour elsewhere. This means more unemployment for us;  further downward pressure of wages; and more of our taxes spent on welfare.

A prime example is our current Free Trade Agreement with China.

Thousands of jobs have been lost in New Zealand as manufacturers such as Fisher & Paykel have relocated their assembly plants to China, where labour is much cheaper.

In April 2008, we lost 430 jobs to China,

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Fisher & Paykel move 'damages iconic brand'

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All due to our FTA with that country. Now imagine this scenario multiplied ten-fold.

As ABN Amro analyst Dennis Lee said,

They are moving their production to low-cost countries. It’s a world-wide trend. The indication is quite clear. They have to find the place that can provide them with the lowest cost production.”

So the promise of  ” job creation in New Zealand ” is utter garbage.

It will certainly increase profits for shareholders.

But more jobs? Don’t count on it.

Local and worldwide experience – especially in the United States where cities such as Detroit have had their manufacturing hollowed-out – should serve as a clear warning (See:  Police: “Enter Detroit At Your Own Risk”). Free trade agreements are not about jobs; they are about strengthening corporate power and maximising dividend returns to shareholders.

It’s just a shame that the fifty people who put their signatures to the open letter to Dear Leader couldn’t be more honest about it.

The open letter ends with this,

We stand ready to assist negotiators in this effort and to participate with other members of civil society in a dialogue about how TPP can contribute to what is best for our country, its people and the people of the wider region to which we belong.

A good start to ” how TPP can contribute to what is best for our country ” would be to make the negotiations public and reveal the contents of the proposed Agreement.

That would be a jolly good start.

Addendum I

A lawyer, Daniel Kalderimis, assures us that  disputes between investors and states are real, but can be addressed.

No one would sanely deny that there aren’t risks.  But the key question is are those risks a deal breaker or can they be mitigated? I think they can be mitigated.”

See: TPP risks can be mitigated – expert

Well, he would say that, wouldn’t he? He’s a trade lawyer specialising in international investor-nation disputes.

Interestingly, Mr Kalderimis also commented that,

While people pointed to the possibility that Philip Morris could sue New Zealand over tobacco laws, “Philip Morris can already sue New Zealand“.

See: IBID

Yes, that is true. Just as Philip Morris Asia Ltd  sued the Australian government last year.

The one difference that Mr Kalderimis conveniently forgot, in a John Key brain fade moment, is that such corporations can only currently sue within our own jurisdiction, under our own laws.

Under the TPPA, an investor-nation lawsuit will be conducted using  secret, foreign tribunals.

This is what National is negotiating to achieve.

And this is what 50 short-sighted, self-serving, and misguided people are supporting.

Addendum II

The TPPA is perhaps the single most important political policy National is undertaking.

If anything in this blogpost concerns you, I encourage you to do the following,

(1) Write to the Prime Minister and express your concerns. Email him at: john.key@parliament.govt.nz

(2) Share this blogpost with your friends, family, workmate, etc. The more folk who know what is going on, the more chance we have of stopping this dead in it’s tracks.

(3) Write a letter to your local newspaper and demand to know why the TPPA negotiations are being held in secret. What are they hiding? Why are they hiding it? If it’s so good for us – wouldn’t the Prime Minister be the first to tell us?

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nikki kaye - yeah right

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Sources

NZ Herald: Businesses launch PR campaign to fight TPP ‘scare-mongering’

NZ Herald: Open letter to Prime Minister

NZ Herald: TPP risks can be mitigated – expert

NZ Herald: Jane Kelsey: Pacific deal masks bigger plan

Additional

U.S. To Consult Internally On Ag Export Competition; Next TPP Round Set For New Zealand

Groups

Pro TPPA: Trade Works

Anti TPPA: It’s Our Future

Office of US trade Representative: Outlines of the Trans-Pacific Partnership Agreement

NZUS Council: Kiwi businesses out in support of TPP negotiations

Wikipedia: New Zealand–China Free Trade Agreement

Wikipedia: North American Free Trade Agreement

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