Fran O'Sullivan: David Parker pushes fair deal for all in free trade bargaining

David Parker's theme was on-song with the challenges that ABAC (Apec Business Advisory Council) is grappling with. Photo / File

Trade Minister David Parker set the scene for last weekend's meeting of Asia-Pacific business powerbrokers in Auckland by quoting French economist Charles Piketty as he underscored the free trade dividend has to be about much more than "benefiting the one per cent".

"It's time to change the political discourse on globalisation: trade is a good thing, but fair and sustainable development also demands public services, infrastructure, health and education systems," related Parker in his published comments.

"In turn, these demand fair taxation systems."

He challenged the ABAC members (three business people per economy especially chosen by the leaders of the 21 Apec economies) to help build a consensus for trade that would expand the traditional ambit of 'free trade' agreements to cover labour, small business, women, the environment and take account of climate change imperatives.

"I believe quite strongly that if modern societies are going to forestall public concerns about inequality and lean against the sentiment that we've got in this rising opposition to trade and support for increased trade barriers than we've got to both recognise and address these concerns."

Parker's theme was on-song with the challenges that ABAC (Apec Business Advisory Council) is grappling with.

Papua New Guinea will host the 2018 APEC Leaders meeting in Port Moresby later this year - but ABAC chair, PNG's David Toua asked New Zealand to host the first of the four meetings of the business representatives.

Toua stressed that growth is clearly an essential but not a sufficient condition for secure and prosperous communities.

"Harnessing inclusive opportunities is a key mantra for this year."

It is fair to say that there was some nervousness within ABAC circles about the impact of the new Labour Government and its approach to trade when it took power last year just weeks ahead of a pivotal APEC meeting in Vietnam which was to sign off on the TPP-11, which the predecessor National Government had been working towards. Particularly, whether the government would endorse the TPP-11 or walk away from the deal.

But despite its left-leanings, Jacinda Ardern's government did ultimately sign up to the subsequently renamed CPTPP (which does not include the US) in what ABAC members clearly see as an indication of a pragmatic streak.

Sir Rod Eddington, who is Australia's senior member of ABAC and heads its regional economic integration working group, is a case in point. I spoke with Sir Rod on the outskirts of the meeting.

Sir Rod – a former British Airways CEO who now chairs J.P. Morgan's Asia Pacific Advisory Council - said ​that what finally evolved with the Trans-Pacific Partnership after President Trump pulled the United States out, was a "coalition of the willing".

"It is terrific that New Zealand is part of the TPP-11 given that it was one of the original TPP's strongest supporters and the first to embrace it," Eddington said.

"It is a positive sign that the new government has embraced TPP. There was some discussion that might not necessarily be the case. But they have put the politics to one side - rightly so.

"It would have been extremely difficult for the world-class agricultural industry New Zealand has if they weren't part of TPP and they didn't have preferred access to markets like Japan ... that would have been a retrograde step."

Parker would add (of course) that he (and PM Jacinda Ardern) were successful in getting some "progressive" changes to the regional deal which were in line with Labour's election commitment.

He spelled these out in his formal speech notes.

Sir Rod acknowledged Parker's focus on the issues of distribution and the concern about concentration of the globalisation dividend.

He stressed those concerns aren't unique to New Zealand and business needs to take those concerns seriously.

My own sense is that while the Labour-led Government has managed to skilfully navigate local concerns over TPP, if the US does subsequently ask to join - which President Trump has floated - that might prove more difficult with the activist community here. Already Professor Jane Kelsey has challenged the Ardern Administration to rule that option out. This tension may come sooner than later.

Sir Rod reckons Trump's "thought out loud" comments at Davos - where he floated the potential to take another look at joining the trade group - demonstrates that there are leaders within the US business community that recognise by not being in TPP-11, (or CPTPP), America will find itself at a disadvantage, particularly when it comes to countries like Australia and New Zealand.

"For example, their agricultural products will have better access to the Japan market as a result of being inside the TPP tent."

ABAC's regional economic integration agenda now goes much further than mere trade in goods. Services is a big part of the jigsaw and also digital business - both as a driver to efficiency and providing a larger-scale market for SMEs.

Notes Sir Rod, the TPP-11 is also a path towards APEC's ultimate goal of the FTAAP or free trade area of the Asia Pacific; a regional free trade deal that links the 21 Apec economies. As to Parker's emphasis on delivering good social outcomes, Sir Rod says industries here in New Zealand will be keen that the Government's trade policy will provide opportunities that will clearly take account of the social issues.

"But if you want to deliver strong outcomes for your communities, you don't do that by weakening the economy.

"So there has to be a link between a social programme and an economy that is resilient and robust enough to deliver the resources you need.

"At the end of the day a strong economy is the best bulwark to social disadvantage."