KEY POINTS:
Although we can't precisely measure the impact of the New Zealand-China free trade agreement it's clearly a major calamity for working New Zealanders, a slap in the face for Chinese workers and a disaster for the future of our economy.
The agreement will grow our economy but no
matter how it's spun there's nothing but more pain and suffering for New Zealand workers.
Back in the late 1980s New Zealand enjoyed a trade surplus with China. We exported more than we imported but when tariffs were reduced or dropped our trade surplus turned into a billion dollar deficit. By the time the Government began negotiations for a free trade agreement in December 2004 the deficit with China was $1.5 billion. A year later it had grown to over $2 billion.
The Ministry of Economic Development has estimated 16 jobs are lost for every $1 million of imported products we could make here. A simple calculation shows about 50,000 New Zealand jobs lost so far to Chinese imports alone.
As more tariffs are phased out under the free trade agreement we can expect as many as 20,000 more New Zealand workers to lose their jobs, mainly in manufacturing.
These jobs will be replaced with low-paid jobs in the service sector. Instead of making shoes New Zealand workers will be on the minimum wage stacking the shelves of The Warehouse with more bargains. But these bargains carry a very high price and many more New Zealand families will be driven below the poverty line.
We all know why China is so much more efficient at making things than New Zealand. We can't compete with child labour (over five million Chinese children under the age of 15 working 16-hour days for 50c per hour) or forced labour (an estimated seven million prisoners, including political prisoners, working for no pay).
China has repeatedly refused to sign up to even the most minimum labour standards of the International Labour Organisation. The country is a vast slave-labour economy. Why would New Zealand give preferential trade status to a regime like this?
One of the reasons suggested for New Zealand being the first developed country to be offered a free-trade agreement with China is that we were the first to recognise China as a market economy. China welcomed this but what it really means is New Zealand was the first to turn a blind eye to the abuses of human rights, the struggles for democracy and independent trade unions.
Some time back this would have worried the Government. Here is a quote from 1994: "I am very concerned that the National Government has chosen a path of ingratiation with those in Asia whose human rights record is poor."
And another from 1998: "That is why Mrs Shipley is simply absurd to claim that Apec is unrelated to issues of human rights and democracy. Neglect those issues and your economy will not reach its full potential.
"Like Sir Robert Muldoon before her, she prefers to build links to oppression while democratic voices are silenced in gaol. She has brought shame on our country."
No prizes for guessing these statements come from Helen Clark, who spent the 1990s quite rightly castigating the National Government for doing the very things she herself is now championing.
Helen Clark has put aside even the most minimal commitment made in the speech from the throne in 1999 when the newly elected Labour Government told us that "legitimate issues of labour standards and environmental concerns need to be integrated better with trade agreements".
And what about the Tibetans? The Government said it was very concerned at the reports of repression and violence in Tibet. Helen Clark said she was waiting for more information.
It was a way of buying time and praying the Chinese Army would crush the Tibetan struggle quickly so that story would drop from the headlines long enough for her to buzz into Beijing with her 150-strong delegation as the deal-making queen of international trade.
As we did with South Africa, New Zealand should be building links with those struggling for democracy and freedom rather than with their oppressors.
For New Zealand, outsourcing our manufacturing to China is plain stupid. It narrows our economic base, increases our reliance on primary products and increases our vulnerability. The foolishness of this is barely believable.
What will happen here when countries such as China shift their production to domestic consumers ahead of international trade? What will happen when high dairy prices slump in the face of cheap imports from countries where labour and land are much cheaper?
What will happen when the price of fuel rises so exporting to the other side of the world becomes uneconomic? What will happen when global warming makes the cost of sending protein products around the world unsustainable? Or makes much of the country unsuitable for current farming practices?
Future-proofing the country and our economy means developing much greater self-reliance. We should be developing an economy which is as independent and diversified as possible. Instead we are putting ourselves in a position of greater reliance on the brutal Beijing regime.
We are in hock to China and giving the regime international respectability from a country which once would have stood much firmer on human rights.
The last word here should go to the late Green Party leader Rod Donald who summed it up in two sentences.
"The real winners from these free trade deals won't be the Kiwi shopper who pays slightly less for a shirt or the farmer who sells a bit more milk. The real winners will be the multinational corporations and Asian entrepreneurs who make their money off the backs of children, political prisoners and sweatshop labour.
* John Minto is spokesman for Global Peace and Justice Auckland.
