Capitalist tool, or the road to untold riches?

He's a fan, she's a critic - two Apec-watchers with very different views on where it's taking us. Jan Corbett talks to Mike Moore and Jane Kelsey.

There would be few observers in the Apec media tent who have monitored the organisation as closely as Auckland University law Professor Jane Kelsey. Even fewer have nailed their colours so firmly to the anti-Apec mast.

There would be few politicians as passionate about free trade and Apec as Labour's former external relations and trade minister Mike Moore. As the new head of the World Trade Organisation, he stakes his future on it.

Together, Moore and Kelsey represent the two poles of opinion on Apec.

Kelsey's problem is not with the idea of co-operation among member economies.

Rather, she says Apec has been hijacked as a vehicle for promoting the brand of New Right economic policy that has already ripped the heart, soul and livelihoods from the urban poor and from small communities dependent on single industries which were once protected.

To those who believe the unfettered free market is an unquestioned good, "then Apec is an unquestioned good," she says. "For those of us who say it has damaged the social fabric of the country, it's an unacceptable agenda."

Moore may be a devout disciple of Apec and free trade, but he agrees that its dogma should be questioned.

"It should all be debated and voted on in Parliament," he says. "Nothing forces us to sign up. We should do so only if it suits our needs."

He argues that New Zealand is a trading nation, with one in three jobs dependent on some other country buying the meat, wool or timber we cannot use ourselves.

Our problem, he says, has been open access to lucrative markets. Without Apec-style agreements, the big powerful economies make the trading rules to advantage themselves and disadvantage small vulnerable trading nations like New Zealand.

"If we can get a better deal for forestry, fisheries and tourism, this means more jobs in our provinces such as the East Coast and West Coast," says Moore.

Kelsey disagrees. Rather than delivering greater prosperity, she says the type of economic experiment which began here in 1984, and which is intrinsic to Apec dogma, has not resulted in any notable benefit to the nation's hip pocket. Instead it has decimated provincial towns, causing massive social dislocation.

Not only will the dogged pursuit of free trade allow big business to make bigger profits on the backs of exploited workers, she argues, but it will also block Maori attempts to regain control of resources under the Treaty of Waitangi.

She also says it threatens the environment because of the pressure to reduce protection standards to attract industry.

Those are "sinister and silly accusations," says Moore. He doubts that the Treaty of Wai-tangi is affected by Apec's goals or that they are a threat to a public health system, for example, or the welfare state.

Apec critics, he says, "are the same people who opposed closer economic relations with Australia, saying New Zealand would be wiped out. They were wrong. Jobs, growth and income have risen on both sides of the Tasman. New Zealand has been the winner."

Not only that, he also argues that open economies provide better jobs, a cleaner environment and better human rights.

"Where Europe is integrated it's a force for good," says Moore. "Where primitive and tribal attitudes persist we have Kosovo."

Countries like North Korea and Burma with their fortress mentalities, he says, "are the countries that are closed to ideas of freedom and human rights."

Kelsey complains that New Zealand is taking a harder line than any other Apec country when it comes to removing tariffs and exposing local industry to international competition. Yet, she says, Apec stifles the debate on that difference.

"New Zealand is out on a limb trying to make economic rhetoric into economic reality - the others haven't done that."

The theory is that removing tariffs will kill off inefficient industries and redirect investment to those that will earn and employ more.

Kelsey acknowledges that high tariffs are undesirable, but also says the prevailing view among economists is that tariffs under 15 per cent cause minimal market distortion.

The social costs of cutting tariffs below 7 per cent outweigh any benefits, she argues.

"The problem with Apec is its singular commitment to one model of economic development with no room for discussion of other models.

"Its approach to economic development has not been people focussed. The focus has been on the needs of international capital."

"Of course the system is not perfect," says Moore. "Yes, we must be sensitive to social issues, yes we must advance our self-interests. But what are the alternatives? Our mission must be jobs, a better education, health and social environment. Apec doesn't guarantee that, nothing does, but if we can get progress, that has to be good for New Zealand and the peace and progress of our region."

Kelsey doubts that vision will be realised. She describes how Apec is stalled in a tangle of its own internal tensions. The Anglo-American bloc wants freedom to invest

in Asia. The Japanese-dominated Asian bloc already has that regional investment, but wants technological co-operation to advance its more controlled style of capitalism.

Those tensions were exacerbated by the collapse of Asian economies which fuelled a desire by each country to protect itself, rather than expose its economy to the winds of free trade.

The problem, says Kelsey, is that Apec members have very little in common other than geography.

But that does not concern Moore. He says Apec will never be a political union such as the European Community.

"Rather, it is a group of diverse countries that are attempting to lower barriers and promote growth, jobs and thus tax income for health and education."