Editorial
Just before Waitangi Day last year, New Zealand hosted the signing of the world's next big step towards a global trading environment based on agreed rules and the principle of non-discrimination against foreign competitors. That principle has never been popular, most people instinctively think it a very good idea to
discriminate against foreign competitors.
Small countries can see the value of free trade more readily than big ones. Self-sufficiency in the production of all the good things of modern life is not a realistic option for a nation of New Zealand's size. We know from bitter experience it means protecting local manufacturing and incurring high costs of living that made our competitive exports more costly overseas and sent our economy into decline.
After lowering our trade barriers, floating the dollar, discovering we can survive in real markets, enjoy world prices for consumer goods and attract investment with good, consistent government by both our leading political parties, it was natural that New Zealand was a co-founder, with Singapore, of the project that grew into the Trans-Pacific Partnership.
Since its signing a year ago, a catastrophe in American politics has put the TPP, and all progress towards free trade, under threat. But Donald Trump is adept at exaggerating his own importance. He won the presidency by a whisker in three swing states and lost the nationwide vote. He will do great damage to world trade by putting up the shutters to such a large economy but ultimately the greater damage will be done to the US economy. Protection favours established business from all competition, making it less agile, less innovative.
No other leaders are taking Trump's path to protection. Britain's new Prime Minister, Theresa May, has made it clear she wants Brexit to be a route to global trade liberalisation. The European Union has also responded to Brexit by doing a free trade agreement with Canada and wants to do something similar with New Zealand. Even China's President spoke like a new convert to free trade at the annual Davos retreat last month.
