Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: Anti-trade camp running debate

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Academics who understand liberalisation are not often quoted publicly to provide a contrasting voice.

The University of Auckland employs highly-experienced academics who have studied in some depth the impact of global supply chains on international trade. Photo / Thinkstock
The University of Auckland employs highly-experienced academics who have studied in some depth the impact of global supply chains on international trade. Photo / Thinkstock

A university as dominant in New Zealand's intellectual life as the University of Auckland should surely be ensuring a counter-balance to Kelsey's activism. Here's a question for University of Auckland vice-chancellor Stuart McCutcheon. Why don't you encourage some of your expert business academics to take an open stance on trade liberalisation instead of allowing debate to simply be dominated by law professor Jane Kelsey and her NGO mates?

Kelsey has joined up with other anti-trade activists such as Lori Wallach, from Public Citizen, and Sanya Reid Smith, from the Third World Network, to host media seminars in Wellington today and tomorrow in Auckland.

The media seminars - no photographs please - are to hear from "International Experts in New Zealand for the 15th round of TPPA Negotiations".

Others who will front include Burcu Kilic (Global Access to Medicines Programme, Public Citizen) and union leaders.

A range of other NGO players will take part in various public events next week designed to question the TPP process and shine a light on some potentially negative outcomes.

Don't get me wrong, I have a lot of respect for Kelsey.

I have debated with her over the years and shared an occasional single malt in five star hotels elsewhere in the Asia-Pacific on the sidelines of international forums such as Apec. Regular readers of this column know I am in the pro-trade camp (with provisos) and - declaration right upfront here - have actively promoted New Zealand's engagement in free trade agreement negotiations with nations such as the US and China.

There are plenty of others in this pro-trade camp - businesses, academics, farmers, politicians and foreign affairs officials.

But for some reason academics who are deeply across the major market liberalisation moves in the Asia-Pacific - such as the Trans-Pacific Strategic Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) - are not often quoted publicly to provide a contrasting voice to the anti-trade lobby.

Kelsey - who, according to the latest bunch of publicity, is also now associate dean (research) - talks a good game.

But I've yet to read any Kelsey works that support open markets or come up with concrete suggestions about how New Zealand can deal with the impact of trade diversion if it stays out of the negotiations, which will result in deeper economic integration in the Asia-Pacific.

A university as dominant in New Zealand's intellectual life as the University of Auckland should surely be ensuring a counter-balance to Kelsey's activism. Particularly if it cherishes its reputation.

The university does employ highly-experienced academics such as Rob Scollay (long-time head of the Apec Study Centre) and Hugh Whittaker, from the Business School, who has studied in some depth the impact of global supply chains on international trade.

But they should merely be the nucleus of a big bunch of academics who are sufficiently versed in New Zealand's trade agreement platforms and right across our myriad agreements, to be seen as "go-to" commentators on trade issues.

It is a fundamental problem because there are issues relating to the TPP which do need to be debated.

The Prime Minister has said New Zealand won't sign up to the Trans-Pacific Partnership free trade deal unless it includes an agreement to progressively abolish tariffs on agricultural products exported to North America.

Key also told his post-Cabinet press conference on Monday that it would not be a "good look" if New Zealand made concessions that undermined the status of its drug-buying agency, Pharmac. It's highly unlikely that New Zealand would concede these areas in the first place.

It would make a nonsense of its history of mainly signing up to top-quality, comprehensive bilateral free trade agreements, or regional trade deals, if New Zealand allowed itself to be pushed about on this score.

The negotiations will be tough when it comes to reducing high agricultural tariffs.

Canada's dairy tariffs are as high as 300 per cent. Canada will argue - yet again and falsely - that Fonterra is a state trading enterprise.

The agricultural upside will be considerable if the TPP goes through and tariffs are removed over lengthy phase-in periods.

But the real issue - which is not adequately debated - is the intellectual property component of the TPP.

New Zealand's concentration on agricultural liberalisation might be blinding negotiators to the potential impact of adopting the US IP platform. The US - like Singapore before it - wants to set the rules for what is in effect a major economic integration of the Asia-Pacific.

Our companies in the ICT and high-tech manufacturing space have mixed views on what is proposed.

First problem is they don't know enough of the TPP detail.

Second problem is an emerging sense that not enough intellectual thought has gone into studying the upsides and downsides of the proposed IP framework or into exactly what platform New Zealand should be pushing to enable its own companies to thrive in 21st century trade regimes.

This is important.

Victoria University has done some work in this area.

But I would argue that this is fruitful territory for the University of Auckland.

Key said on Monday that for New Zealand to do a deal, "It has to be a deal on our terms".

Trouble is, not enough open work has gone into determining what those terms should be for industries other than the agricultural sector.

Let's face it: Fonterra has not taken advantage of all the concessions New Zealand scored for dairy in the China FTA (such as for infant milk formula).

But the dominant business voices on trade are mainly from agriculture.

It is not too late to ensure NZ's interests on the IP front are advanced. Stuart McCutcheon take note.

- NZ Herald

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