Dialogue: Why Alliance rejects Singapore trade deal

By JIM ANDERTON*

"We cannot reduce tariffs only for the benefits to accrue to the stronger partner. Integration that causes destructive movements of capital, skills or labour defeats our purposes. Balanced development and equitable trade relationships must be our watchwords."

- Nelson Mandela in a speech to the World Economic Forum, Harare, May 21, 1997.

The Alliance will vote against the proposed closer economic partnership with Singapore. International agreements should include measures to improve the standard of living of New Zealanders and to protect the environment, as well as providing for the protection of our economic sovereignty.

We are a trading nation. The exchange of goods and services with other nations helps to create the jobs, lift income levels and provide the development we need. Therefore, trade and investment that increase employment, raise incomes and boost development without harming the environment are good.

But trade will not necessarily bring unequivocal benefits if other nations compete by exploiting workers or the environment.

For example, New Zealanders support free trade with Australia. Australia has a similar economy and social structure to ours. It features a similar minimum wage, social security services, democratic government, rule of law and environmental protections.

On the other hand, it is easy to see that we wouldn't be so relaxed about free trade with a hypothetical country that had no minimum wage or social security; or with one that exploits workers or the environment.

Countries should compete by being better at doing things, not because they exploit their own people or the environment. Trade arrangements should be organised to lift trading nations and their citizens up rather than to impose a race to the bottom.

In practice this would mean building provision for improvement in minimum standards into international agreements.

The most important feature of the Singapore agreement, according to most of those associated with it, is that it will kickstart a round of regional trade and investment agreements.

If there are going to be others built on the Singapore agreement, then it is even more important to include in the agreement minimum employment and environmental standards.

In addition to removing trade protection between New Zealand and Singapore, the proposed agreement locks in very free investment rules. As a sovereign country New Zealand should retain as much control as possible over its own economic, social, environmental and cultural destiny.

The proposed agreement restricts the ability of a future government of New Zealand to make laws protecting New Zealand's economic sovereignty.

Overseas investment should be supported where it is in the national interest - for example, where it helps to create jobs, introduce new technology or boost exports without negative environmental effects.

But investment can also sometimes mean the loss of jobs, the withdrawal of technology or the destruction of the environment.

We have been relatively relaxed about the sale of the first few thousand hectares of our land and the first 60 per cent of all publicly listed companies. But it is possible to imagine that New Zealanders may be more protective of the sale of the last square centimetre of New Zealand to an overseas owner, or the last share in the last public company.

Of course, it is inevitable that there will always be some trade-off between the desire to protect our own sovereignty and our desire to influence the conduct of other nations. We sign international agreements renouncing torture in exchange for an undertaking from other countries similarly to restrain themselves from barbarism.

But international agreements designed to improve the level of human rights across all countries are quite different from granting foreign citizens the same rights as citizens of New Zealand to unlimited commerce on our own shores.

It is unusual for members of a government to publicly oppose a trade agreement before signing. However, we are following historical Westminster precedent and the mechanisms specifically agreed to by the Labour-Alliance Coalition for dealing with Coalition differences.

New Zealand's procedures for dealing with such differences have been carefully developed since MMP was introduced. The Labour-Alliance Coalition Government put in place a mechanism for differentiation by agreement in December last year. The cabinet has since explicitly agreed on a process for dealing with the proposed agreement.

It will be put to a select committee for public discussion and comment. Then it will be brought to the House for full debate and there will be a vote.

In the past, governments would sign these agreements without ever committing them to Parliament except for necessary legislative amendments. It is a triumph for democracy and MMP that Parliament will be able to have its say before obligations are entered into.

Once the vote is taken, the Alliance will accept the decision of the House. If the House votes in favour of the agreement, the Alliance will not use its special position to frustrate the decision of the majority of Parliament.

Although not formally binding in practical terms for this proposed agreement, the House vote will settle the issue. It is inconceivable that the cabinet would ratify the agreement against the wishes of the House.

The Alliance campaigned on a fair-trade platform at the last election. We will faithfully represent that policy in our vote in Parliament. Some of our critics are mystified that a party could say something before an election, then honour its commitments once in office. In keeping our pledge to campaign for fair trade, the Alliance is showing how it can be done.

In voting separately on this issue but remaining cooperative, the Coalition partners are demonstrating that the Government doesn't have to fall, and parties do not have to abandon their principles, just because Coalition partners have different policies on an issue.

*Jim Anderton is Deputy Prime Minister and leader of the Alliance.