Between the lines: Government backs down on trade - sort of

By BRAIN FALLOW

New Zealand and Hong Kong have agreed to disagree on the issue of trade and labour.

So they have agreed that labour standards will not be included in the closer economic partnership agreement being negotiated.

And there will be what Prime Minister Helen Clark calls a "parallel discussion, which is unlikely to bear fruit in the final agreement."

Business may take comfort in this early indication that the issue will not be allowed to derail an opportunity for trade liberalisation.

But the union movement may wonder whether the Government is prepared to do anything more than pay lip-service to its concerns in this area.

Government policy, as expressed in the speech from the throne, is that "legitimate issues of labour standards should be better integrated with garde agreements, but these concerns should not be used as devices to protect against fair competition from developing countries."

Hong Kong, like China, is adamant that labour standards have no place in trade deals and should be left to the International Labour Organisation.

As it happens, Hong Kong applies more of the International Labour Organisation's core conventions than New Zealand does, and insists that it enforces them rigorously.

We may discover if the ILO agrees with those assurances when it reports in June on compliance.

The labour movement's reason for wanting to bring labour within trade agreements - that the sanctions provisions of those agreements could then be used to enforce labour standards - is a double-edged sword.

If, hypothetically, our trading partners had excluded New Zealand-made goods during the era of the Employment Contracts Act - claiming that it breached core ILO conventions on freedom of association and the right to organise - local workers would have been ill-served.

We are not entitled to conclude that Hong Kong's stance that trade and labour should be kept separate is not, as they say it is, a principled one.

The cynical view would be that Hong Kong is interested only in preserving the comparative advantage of Hong Kong-owned sweatshops in China or elsewhere.

But the equally cynical view in the other direction is that rich countries are interested only in labour standards as a pretext for protectionism.

As New Zealand rails against protectionism in agriculture it cannot, with any consistency, then unlock the back door for the same evil somewhere else.

There is still the question of what possible point there could be in "parallel discussions" on labour standards outside the main trade talks between New Zealand and Hong Kong.

Perhaps we should wait to see the outcome, if any.

If international exchanges were held only when there was a realistic expectation of changing the other party's views or behaviour, there would be a lot fewer of them.

But it is not obvious that the world would be a better place.

Mutual understanding is never a waste of effort.