Trade deals

The consequences of Britain leaving the EU have exposed the complexity of one country’s economic relations with its partners.

I have found Brexit rivetting. As a piece of Econ 101, it is straight forward. (OK, I simplify; it is rare for first year students to study in any depth the implications of intra-industry trade, supply chains, the economies of scale and of agglomeration in international trade.)  But first year economics courses teach little about institutional underpinnings.

Comparative advantage is rarely important in modern trade deals, such as TPP11 (CPTPP). Why bother?

Economics students have ‘comparative advantage’ drummed into them. The intuition seems commonsense; specialise in what you (or the country) do well and exchange the surplus for what you are not as good at.

Can Trump wreck the world trading system?

New Zealand is such a small country that it is very easy to be internationally bullied. Much of our diplomatic effort aims to minimise such bullying, but fear of it lurks behind concerns about what a Trump administration might do, not only to us but the rest of the world. Could the US, big enough to be hard to bully, disrupt the world trading system?

It’s time for opponents of the TPP to stop the gesture politics and answer some questions - like what is the alternative you propose? Do you really believe we can stay out of the TPP on our own? And do you want to pull out of the agreement after it is signed?

Despite a summer of opportunity to read every clause of the Trans-Pacific Partnership, opponents of the TPP have failed to produce a clause showing the agreement requires each of us to surrender our first born to the corporate masters of neo-liberalism, and nor have they discovered any other nugget that sustains their vilification of the trade pact.

While TPP – any trade deal – compromises sovereignty it does not mean we cannot respond constructively to unsatisfactory aspects such as those involving intellectual property. 

The stupidest thing said about the TPP deal – thus far – is the claim that it does not reduce New Zealand’s sovereignty. Of course it does. Agreeing to it will mean New Zealand will not be able to do things it currently can do. How important this reduction in sovereignty is is a proper matter for assessment for there are gains as well as losses.