Last week, the WTO had a chance to haul itself out of the dreary post-Doha doldrums in which it has been languishing for years. Back in the day, with Uruguay Round exuberance echoing around the world, business coalitions and free trade activists would meet to discuss tactics and opportunities to grow the global economy. Now they shake themselves out of a state of torpor to brood over an organisation that is slowly sliding into irrelevance. It can’t even manage to do that quickly!
A politically impotent Pascal Lamy has been trying to navigate solutions but it’s hard to navigate anything in a sinking ship with an apathetic crew and a confused idea of what the destination looks like. Pascal Lamy could be slotted into a wonderful verse from Lewis Carroll’s ‘Hunting of the Snark’ where it was said of the Bellman…
“He had bought a large map representing the sea,
Without the least vestige of land:
And the crew were much pleased when they found it to be
A map they could all understand.”
Anyone who knows anything about trade knows that there are really two things that can drive positive outcomes: momentum; and clever compromises that can be dressed up to be politically tenable – which takes political will. Lots of political will. Both of these require aggressive leadership, an intricate knowledge of detail, an ability to get the schizophrenic traders (e.g. India, Brazil, Korea, Japan, the U.S.) existing in a common reality. It also requires a passion for achieving an outcome.
Few New Zealanders will have focused on the fact that Trade Minister Tim Groser was campaigning for the chance to lead the WTO. Most journalists and commentators have, predictably, referenced little more than his understandably inflated travel budget. This is evidently a better media story than a true analysis of what is wrong with how world trade is framed at the global political level and how one New Zealander had a vision to fix it.
After a complex process involving petty regional politicking and subversive self-interest on the part of trade agnostics, Tim Groser has now dropped out of the race. This is a shame. Because, for all of his idiosyncrasies, our Trade Minister is brilliant. When he says something as remarkable as “I’ve been reflecting on this intractable problem and I’ve come up with two solutions, both of which are astoundingly clever,” those that don’t know him crack up laughing and those who do know him listen.
Trade policy must be about the dullest subject ever to torpedo a dinner party. And yet it’s fundamental to New Zealand’s economic health and there should be more of a national discussion about it. Nutty anti-business elements in academia (I suppose you uncorked a bottle of champagne when you heard the WTO leadership news – Jane Kelsey) and the Green Party talk about globalisation and the international movement of goods as if the concept is a disease. Something to be fearful of like Avian Flu. Well, take the often maligned dairy industry exports out of our economy and then see what the welfare budget looks like. Cork the wine trade and see how those hospital waiting lists are faring. Let those protectionist Europeans whine our chilled sheep meat out of French supermarkets and, while you’re at it, make a list of all the schools you’d have to close.
The issue of global trade leadership should not be about which countries have had the job in the past. And it should not be about which region is most deserving. It certainly shouldn’t be a pissing
match between people who don’t want the organisation to succeed in the first place. Yet the process has been all of these things. The remaining candidates are marginally “okay.” But, with Tim Groser out of the race, the world has missed an opportunity.
So the Trans-Pacific Partnership, with Japan now tentatively on board, must now gain even more national focus. People in rural New Zealand harvesting wool and making products for export – you should care. People cultivating honey bees and sending Manuka around the world – you should care. Innovative companies making baby products that have become “trendy” overseas – you should care. The world-leading medical devices industry – you should care. And the list goes on.
TPP should not be a partisan issue. When he was Minister of Trade, Phil Goff was proactive, pragmatic and he understood the relevance of opening markets to a much greater degree than most of his colleagues. Winston Peters is firmly New Zealand First but even he must understand that if you want to drink imported whisky you’ve got to sell something to pay for it. Maori enterprise is flourishing and iwi leaders must appreciate the fact that TPP is about exports, investment, expansion, influence and growth. As for the Greens – their thinly veiled café-latte communism might forever preclude them from adopting anything approximating a tenable trade strategy but someone should respond when Russell Norman spouts scaremongering rubbish about trade.
With the WTO likely to remain in its compromised state for the time being, New Zealand needs to focus on TPP. We have an excellent team of negotiators who understand the balance between concession and regression and negotiate accordingly. TPP just got more important. Really important. It is a window into a cluster of important and lucrative markets. It’s a gateway to linking the Asia Pacific economies and, if it’s done right, it will be a model for the rest of the world. And the rest of the world needs a model right now because something needs to compensate for the lack of global leadership.