It’s hard to separate last week’s contrasting media images of scuffles by pro-Tibet protesters from those of a proud NZ government delegation kowtowing to the beaming Chinese trade mandarins. So does anyone really believe that the freshly inked free trade agreement (FTA) will bring a flood of economic opportunities to the doorstep of the average New Zealander? China’s determination to protect the image of the Olympic flame at the cost of other nations’ sovereignty is instructive. They built the Great Wall for a reason didn’t they?
I’m not surprised that details of the agreement were kept under wraps until the day of the signing ceremony, some of the concessions made are real shockers. For starters the dairy products component is phased in over 10 years and China even then has an ejection seat clause should they decide that their own dairy industry is threatened. Estimates of the dollar value benefit for New Zealand vary, but appear to be in the vicinity of $200 million per annum, which frankly seems like peanuts in the face of a massive $3.7 billion trade deficit.
Secondly, since when did an FTA ever proscribe rules on migrant labour? “Working holiday” and general category visas for sought after trades are to be broadened immediately for Chinese entering NZ, but there is no reciprocity. Not that I would want to live and work in the most polluted nation on Earth, but tell me how this is fair. However, I look forward to reports of a flood of highly experienced plumbers, hotel chefs and software developers gushing forth from China eager to plug critical gaps in our labour force. The Qualifications Authority will have a field day navigating the rules on equivalency. Given the number of migrant doctors, lawyers and university professors already prowling Queen Street in taxis, one has to wonder where this new influx will actually end up.
So at first glance the FTA looks a bit like it was cobbled together rather more with a sense of urgency than any overriding economic logic. But wait there’s more! It turns out that, having already signed the agreement, our parliamentarians now finally get the chance to discuss it in Select Committee and debate it in The House. What happens if the bill doesn’ t pass? What if the weight of public submissions is against the Bill? Talk about potential for losing face.
The FTA is certainly a historic document and I agree that it will open other doors in the future and (probably) bring a net gain in export trade value to New Zealand, as advertised. As well, a ratchet clause levels the playing field if any other nation negotiates a better deal, therefore going first is not neccessarily a disadvantage. And if the WTO round falls flat, it is highly likely that APEC will set about developing a regional FTA that will now have to favourably include New Zealand. So perhaps I’m being a little unfair. The FTA seems very much like a strategic neccessity. But in our haste to supplicate Beijing could we have possibly overlooked too much detail?
On the technology front, the Prime Minister has curiously fingered software exports to China as a growth opportunity for New Zealand under the FTA. But industry leaders have indicated that the ICT sector is not thinking that way at all. Unless the FTA somehow enshrines and guarantees the protection of intellectual property, China is about the last place I’d be wanting to export software to right now. So if our much hyped knowledge based goods and services are out of the equation, that just leaves us with flogging dairy commodities to China’s burgeoning middle classes. Great stuff, but how can I personally share in that opportunity? Oh right – Fonterra still hasn’t gotten around to listing – bugger!