Moore – Free Trade Agreements for NZ

On Monday October 3, the Asia Society sponsored a ‘Diplomatic Dialogue’ at the New Zealand Embassy in Washington, DC with Ambassador Mike Moore. As the keynote speaker, Ambassador Moore discussed the current state of US-NZ relations as well as an update on the NZ economy and the Pacific region. Mr. Moore stressed the historical emotional and defense bonds between the US and NZ and focused on bilateral and multilateral trade Ambassador Moore was optimistic despite NZ’s recent credit rating downgrade and the fall in the Kiwi dollar. Despite growing local and international movements against free trade, the US and NZ press on toward a more connected Pacific economy.

As the former head of the World Trade Organization (WTO), Ambassador Moore did not hide his bias for multilateral trade pacts and the WTO in particular. While being passionate about future WTO discussions and deals, he expressed his disappointment in the Doha Round of talks and the ‘unfinished’ business remaining from the Uruguay round. Ambassador Moore offered bilateralism as an alternative solution, with regionalism being the next step forward.

“New Zealanders,” according to Moore, “are natural traders. We can’t eat all our meat, can’t spin all our wool, and can’t drink all our wine.” Because of stalling and lack of agreements made at the WTO and the Asia Pacific Economic Cooperation forum, NZ pursued bilateral trade agreements. Most notably, New Zealand concluded trade agreements with Australia, ASEAN and China. According to Moore, trade with China has nearly doubled in two years since the conclusion of the NZ-China Free Trade Agreement. Furthermore, NZ is starting trade talks with Russia and India. “Otherwise,” Moore stated, the economy would be in decline and “New Zealand would perish”.

Touting the ease of doing business in New Zealand, Ambassador Moore reiterated the government’s strong belief in the power of free trade and the future of the Trans-Pacific Partnership (TPP). The National government aims to move the TPP swiftly forward and “clinch a deal” that would provide an impetus for future multilateral talks in Geneva. The aim of the TPP according to Moore is to improve the global supply chain, whereby goods are ‘made in the world’ instead of a single country. However, there are movements and critical responses against the TPP in New Zealand, Japan and elsewhere in support of local workers and industries.

Trade can be exploitative, and global trade in particular has the potential for damaging smaller producers. Ambassador Moore left out any harmful effects of free trade on the New Zealand economy, particularly how it might impact local workers. As an agricultural-based economy with exports that are mostly primary goods, New Zealand must be cautious when entering trade negotiations with larger states including the US. While Fonterra may benefit from greater access to the US market, there is always a potential for US industries to flood the Kiwi market with cheaper subsidized goods. Free trade can be a double-edged sword and the governments involved must closely examine the potential impacts on domestic industries and create alternatives or offset the impact for those who may be squeezed out of business at least in the short-to medium-term.

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