Gehan Gunasekara: Heavy price for place in US good books

Gehan Gunasekara. Photo / Supplied

Cosying up to the United States carries costs that must be weighed against the costs of being independent.

The ripple caused by the release of the WikiLeaks cables has finally reached even distant New Zealand. It would appear that some politicians and commentators - including former Prime Minister Helen Clark and Herald columnist Fran O'Sullivan - have got themselves into quite a tizzy over their implications, in particular the so-called "bizarre" cable dividing New Zealand into pro-US "first worlders" and anti-US "other worlders".

The implications of this labelling are obvious - the "other worlders" must be either irrational or motivated by ideology and blind dislike of the US. It is therefore instructive to set out the arguments put forward by the first worlders to examine if they are indeed more rational than the arguments of the other worlders - in whose camp this writer belongs.

First, consider the economic implications. A free-trade agreement with the US has been the Holy Grail for both major political parties, but would it be a panacea for our economy as some have suggested?

A quick reality check would reveal that the Australia-US agreement has not yielded the results Australians had hoped for and considerable resentment now exists in that country as a consequence. It is not surprising that the terms of such deals inevitably favour the larger party.

We would do well to take note of the fact that the Australia-US free-trade agreement has required Australia to make major changes to its intellectual property law (not the other way around) to accommodate powerful US commercial sectors.

In New Zealand we have become accustomed to cheap parallel imports, yet this is anathema to US negotiators and we would undoubtedly have to give them up. Likewise the monopoly enjoyed by the drug-buying agency Pharmac would be seriously challenged by US pharmaceutical interests.

Purchasing monopolies such as Fonterra would also be questioned.

What we would obtain in return is less certain. The recent difficulties of US presidents in obtaining Congressional ratification points to vulnerabilities where strong vested interests are concerned makes it far from certain that any agreement would give unrestricted access to our dairy and beef products.

To be fair, it should be noted that the free-trade agreement with China has thus far not proved to be a bed of roses, either, and has yet to deliver its promised benefits. However, the Chinese economy is growing at more than twice the rate of the US economy even during the US heyday, whereas in its current sickly state the US market is both stagnant as well as saturated by imports.

As the "first mover" in China (thanks to the Clark government's initiative) New Zealand has considerable leverage still to exert there.

Secondly, do we really need to again become a US "ally"? First worlders refer to "non-alignment" in derogatory terms but it has served the likes of Sweden well.

Blind military allegiances are what led to World War I and now that the Cold War is over we ought to be wary of participating in similar follies. The boil might well have been lanced as far as our anti-nuclear policy is concerned but is it possible to be allied to a superpower while ignoring its nuclear arsenal?

And what of the much-cherished "shared values" that are bandied about? Does this include the sanctioning of torture, assassination using pilotless drones and extraordinary rendition (aka kidnap), much of which has continued under the current US Administration, according to the WikiLeaks disclosures?

It is doubtful many New Zealanders share these values. It would also appear that, where the US is concerned, freedom of speech merely amounts to the freedom to agree with its policies, not to dissent publicly from them.

Finally, the US economy is today held afloat by the exports of its enormous military-industrial complex (we would of course be expected to pay our dues). And by the goodwill of the rest of the world in extending it credit (on the same dubious "too big to fail" logic the US Administration has taken towards bailing out its ailing banking and automotive sectors).

If the US government was a corporation, the receivers would have been appointed a long time ago. Is it sensible for us to invest in a market that is in such a parlous state?

This is not to suggest we should not strive for better relations with the US, as indeed with any other large power. However, such relations should be based on mutual respect and recognition of differences. We are quite capable of fighting terrorism without having to sign up to the "war" against it.

The "with us or against us" rhetoric ought to have been buried with the Bush Administration. It is the "first worlders", not the "other worlders", who are in irrational thrall of the US.

- Gehan Gunasekara is a senior lecturer in commercial law at the University of Auckland Business School.