Labour on India FTA
July 4th, 2011 at 6:53 am by David FarrarJohn Hartevelt at Stuff reports:
Labour has been accused of “trying to have it both ways” on free trade, after one of its MPs raised concerns over the outsourcing of labour to India.
On her Twitter account yesterday, Labour MP for Dunedin South, Clare Curran, posted the question: “Wonder what we’ll hand over. More labour outsourcing?” alongside a link to a media report on negotiations for a free trade agreement with India.
Labour leader Phil Goff last week said Labour supported an FTA with India.
As trade minister in 2007, Mr Goff launched a feasibility study for the deal, which he said at the time “would have significant economic benefit for New Zealand”.
“We went into it, we laid the foundation, and were supporting this government building on that foundation,” he said last week.
Ms Currankeep said she did not have concerns about an FTA with India and that her statement had been particularly in relation to the outsourcing of contracts to countries like India.
Oh dear. So Clare is saying she is against free trade, if it involves a contract.
We own Phil Goff and Helen Clark a debt, for keeping Labour away from going down the failed path of protectionism. The FTA with China is a huge credit to them.
My concern is once Goff goes. Labour have already started backsliding on issues such as monetary policy, and my fear is that post-Goff they will join the Greens as an anti-trade party.
I hope not, as trade should be as bi-partisan as possible – and largely has been for the last 20 years or so. But it obvious from Clare Curran’s comments she doesn’t in fact support free trade, and she would not be alone in the Labour caucus with that view. To be fair, I suspect there are a few protectionists in National also.
Related posts:
- India FTA negotiations start
- Labour abandons monetary policy bipartisanship
- Labour comes out against S92A
- A welcome u-turn from Labour
July 4th, 2011 at 6:58 am
Curran should be exiled to South Africa and forced to wear a Lions jersey for the rest of her miserable life. What a tosser!
Vote:July 4th, 2011 at 7:58 am
There seems to be all manner of command economy protectionists about just now. Bernard Hickey sounded like the candidate for Social Credit on Radio Live earlier this morning. “Deposit your money with local banks,” Hickey said. “You mean KiwiBank?” Marcus Lush asked him. “No, they’ve been involved in the offshore hot money market, borrowing money from Europe … I mean TSB and Heartland.” “But don’t they have inferior credit ratings? Should people really be putting their money there just because they’re local?” Bernard: “[cough, splutter, ummmm]” The line went oddly quiet after that.
Vote:July 4th, 2011 at 7:59 am
We’ve “outsourced” hundreds of thousands of our own over the last forty years and the trend continues. As usual Clare is worrying about the wrong problem.
She might also want to check out the capabilities of the NZ population: outsourcing to Indians is probably not just about cost. Of course that might lead to further questions about our public education system – and we can’t have that.
Finally – and this is a vain hope – she might want to have a think about what a future Labour government can do to get NZ companies selling products and services to India that are further up the food chain than milk powder. Something other than “Knowledge Wave” conferences that is.
Vote:July 4th, 2011 at 8:04 am
DPF is overcooking this one. Although I’m no fan of Curran, she was referring to outsourcing contracts, such as for Kiwirail wagons, that could have been retained in New Zealand. Her comments were not opposed to free trade. The Greens, who are opposed, have sought political capital from this by making the “can’t have it both ways” comment.
[DPF: Clare linked the issue to the India FTA though. It is that link which is the issue]
Vote:July 4th, 2011 at 8:14 am
Of course. The abyss approaches and we’re running out of ideas. You should check out the latest piece from Oram and some other clown. A couple of the lefty blog sites were very excited about its ideas for a capital gains tax – it will be an incentive you see. We may see a return to the idea of a carbon tax also, instead of the ETS: a carbon tax will also be an incentive to fabulous new “clean and green” industries.
Amazing how having a government sticking it’s nose into an ever widening circle of business transactions and to an ever increasing degree, can somehow push businesses to do better. Taxes-as-incentives sounds even better than government-spending-as-”building infrastructure”.
Vote:July 4th, 2011 at 8:28 am
Most people reading this blog probably automatically assume that ‘protectionism’ is an evil sin. A conditioned response but without much thought going into it.
What, actually, is wrong with trying to protect an economy from being gutted and stripped of its value and chucked out to dry like a dead fish on the beach?
Our manufacturing capability been all but destroyed and now our service industries are being outsourced at a rate of knots. We don’t even seem to have the capability any more of answering the phones for ourselves. How is this good?
[DPF: Mainly because it does not work - there is a wealth of evidence to back this up. It is all about comparative advantage, and comparative advantage is where one can generate more wealth]
Vote:July 4th, 2011 at 9:04 am
Much like lunch, there’s no such thing as a free trade.
Vote:July 4th, 2011 at 9:15 am
That’s a level of snark more typical of a Standard-style lefty than you Dave. Any number of commentators here appear to have read their Hayek, not to mention Sowell, Friedman and others. Those who have done so will have concluded that “protectionism” is bad on a theoretical level and – if they lived in NZ in the 70′s/80′s – on the level of practical experience. Neither response is unthinking or “automatic”.
Well it almost always leads to things like this: quoting from a Kiwiblog sage:
You think a government that’s picking and choosing which industries (let alone companies) to protect and choosing which methods by which to do so (subsidies, tariffs?) is going to be less meddling, less idiotic and less wasteful of government expenditure? Not to mention borrowing.
Did we not run this theory to its reductio ad absurdum in the Muldoon years – or are we going with the arguments of polemical, class-warfare clowns like the character “Sanctuary”, who infests left-blogs with denials that NZ was a “Polish shipyard” in that time?
What manufacturing capability?. You mean the manufacturers who I’d otherwise still be paying through the nose to for cars, TV’s and even spanners – with money I had to earn in competition with the rest of the world – all to keep some Jim Anderton apparatchik in the tariff-protected lifestyle to which he had become accustomed?
Vote:July 4th, 2011 at 11:12 am
Its a stupid, unthinking and dog whistle type comment that we really should expect from the morons within Labour. For example, Im involved in two businesses:
1. IT Consulting: I run process and solution improvement projects, centered around discovery processes and workshops. I write screeds of notes. At 6PM I get them scanned and sent to a service in India, next morning they are waiting for me in my email inbox, beautifully typed, cheap as chips, very reliable, third of the cost I coould get it done for here. Commodity.
2. ECommerce web build: We provide a high spec scope, design, build manage service for organisations around the world. Currently we have 10 sites we have built and manage for large corporates internationally, all done from here in NZ, with 3 more in development. Each site is billed for the start up phase in the order of $USD 50,000, with ongoing monthly revenue.
So, Clare you brain dead idiot, which would you prefer? Would you prefer that those internationals didnt outsource to a NZ firm that employs Kiwi’s? Or I got my typing done here. Unbelievable. And they want to run the country. Pissup, brewery.
Vote:July 4th, 2011 at 11:16 am
That you cant do it without costing us more than “we” “save”. Plus what tom hunter said.
It is horrendously hyprocritical for someone who is reflexively opposed to free trade to accuse others of holdings their position without thought. Protectionists still exist because it is easy to think why it should work. THAT is the default position, the conventional wisdom. It is the first thing you think of when you see a job being done overseas, that could be done locally.
Free trade is counter-intuitive, and is routinely rejected out of hand by people who have obviously not thought about the issue.
Vote:July 4th, 2011 at 11:33 am
On Q&A on Sunday morning, Guyon Espiner interviewed Anand Sharma, India’s Commerce and Industry Minister. The topics covered related to New Zealands F.T.A. with India, in paticular tariff protection and child labour.
Vote:Both topics arroused indignation with Anand Sharma who was reluctant to elaborate on India’s position with regards to child labour. Mr Anand Sharma said that New Zealand needs to understand India’s complexity, and not to mock them.
Mr Sharma terminated the interview not long after being asked questions about child labour.
July 4th, 2011 at 11:35 am
So, KevinH, given our abysmal record as a nation of looking after our children, should India tell us to rack off as well?
Vote:July 4th, 2011 at 11:39 am
Funny how the quasi-communists are all for international brotherhood of the working classes until it comes to actually putting it into practice.
Vote:July 4th, 2011 at 11:51 am
I think Clare has got rats in her ceiling.
Vote:July 4th, 2011 at 11:54 am
- Expected to be heard from a Labour voter any minute now.
Vote:July 4th, 2011 at 12:08 pm
What, actually, is wrong with trying to protect an economy from being gutted and stripped of its value and chucked out to dry like a dead fish on the beach?
An economy is a living thing and like a living thing its always shedding dead skin and growing new cells.An economy is doing something similar by shedding the unproductive and wasteful and introducing the innovative and the more productive.Protectionism is like nursing dying skin when the best thing for the whole organism is to ditch it and go with the fresh and new.There’s a book ‘Bio-economics” that explains this process very well.
Vote:July 4th, 2011 at 12:29 pm
Guyon Espiner is a stupid incompetent git on Q&A.
Typically stupid so called interviewer, usually found on TVNZ.
He was rude to a senior overseas guest in New Zealand. Needs to be censured but TVNZ haven’t the guts.
Vote:July 4th, 2011 at 12:32 pm
We need to be smart about it, but NZ has a small pool of labour, particularly ‘technical’ talent. Our universities churn out lawyers, commerce, media and arts graduates, but few scientists and engineers. Probably a consequence of lazy students going for softer subjects and difficulty obtaining and retaining math teachers. In addition we underinvest in research and development (R&D); and if we did invest we would struggle to find the people to do it here.
India however pumps out technical graduates at a huge rate of knots. If we can leverage that talent for our R&D needs we can really start to shift our economy into a higher gear. Particularly in the IT development side where distance to market matters much less. As a nation we have been stagnating too long, relying on our commodities sector (which has been performing fantastically -thank God). The rest of us need to pull our weight and bring in export dollars. We will only do this if we have something to sell that others don’t have and this comes from initial investment in R&D before delivery to market.
This doesn’t mean exporting all R&D jobs, just leveraging our limited talent pool to manage a vast talent pool available in India. Everybody wins – India gets export revenue helping their economy to develop, and we get a higher value export revenue that can make us more competitive with the bigger players in Europe and the US. As we grow and establish an R&D base, more jobs for scientists and engineers in such areas will become available here, keeping this talent at home.
This is nothing to do with child labour. But we as consumers should hold our businesses to account to ensure textiles for instance come from reputable sources in India that treat their employees well. Many high street clothing shops in the UK do this – such as M&S & Topshop.
Vote:July 4th, 2011 at 12:43 pm
Mmmm, NZ produces lawyers and business grads, but India produces technical grads from science and engineering schools.
Maybe it is because the soft courses are easier and NZ students are lazier. Or maybe NZ students view the technical degrees as workaday peasant work?
Maybe the sheer number of Indians means that even a large change in the NZ distribution of degrees (improving the tech to soft ratio) would have little impact on the relative number of technical grads between India and NZ.
Vote:July 4th, 2011 at 12:56 pm
Yes, yes, and yes.
Vote:July 4th, 2011 at 1:19 pm
Kimble, Manolo I can’t let that go.
I am reliably informed (by overseas sourced students) that NZ engineering degrees are highly prized internationally as are NZ engineering graduates.
I agree with your premis that many NZ students are, like most low paid workers, basically lazy but certainly not all, I doubt even a majority.
Vote:July 4th, 2011 at 2:13 pm
OK guys…. I take on board your arguments against my comment, and I particularly liked James’ explanation (12.08pm) about the dead skin. I run a small business (well, two actually) and I have been to India a couple of times (love it) and my wife is an Indian who goes there to train graduates to take jobs away from New Zealanders, so I do have some small experience of what I am talking about.
This having been said, I realise that what I am about to write might seem to be shooting myself in the foot…. but how is a country of 4+ million people, most of whose children leave school barely able to read or write, going to survive economically on a ‘level playing field’ with India as we stand now?
Despite all the fancy posturing about the knowledge economy and IT etc, these techspert types are in a tiny minority in this country. The basis for an economy is the actual production of tangible goods and services which should theoretically boost all kinds of secondary enterprises, suppliers and so on which grow (feed, if you will) along with these productive industries. Like when we used to actually make things….. you know, the engineery types, technical people and subsidiary industries.
Right now we have killed all our manufacturing, we are shit-scared of the greenies so we won’t develop any productive or even power generation industries, growth is tantamount to a swearword and even our primary producers are under attack for ‘polluting the environment’ at every turn. Add to this the fact that we can’t seem to even write our own letters(!!!) or answer our own telephones. What kind of a mess is this?
What is the basis on which New Zealand is going to pay for all its cheap shirts and fancy electronic toys in the future? Will we be able to progress by making beds and cleaning out motel rooms for the thousands of wealthy Chinese who we hope will visit us to watch our quaint indigenous stage shows or jump off bridges with elastic bands tied to our ankles? I don’t think so, mate.
Vote:July 4th, 2011 at 2:14 pm
MT_Tinman I can’t let that go.
I dont think most low paid workers are lazy. Nor do I think that NZ students are lazy for doing ‘soft’ courses.
I am trying to think of reasons why the decision of NZ students to do the “wrong” courses might be rational. It might have more to do with the use of university degrees as signals to the market, than an exercise in gaining useful knowledge. It would be interesting to see a chart of the annual growth of tertiary graduates in tech vs soft courses. If you assume tech grads are doing the only ‘real’ courses anymore, then you could get an idea of the degree to which the signalling impact has gained in importance.
In any case, my last point was that it probably doesnt matter. Even if we were a nation of engineers (what a horrible thought), India would still be producing a degree of magnitude more than us each year.
Vote:July 4th, 2011 at 2:20 pm
Dave, if NZ manufactures things more expensively than some other country, then surely we would be worse off if we were forced to do so, rather than expend our resources on another activity and purchase the cheaper overshore manufacturates.
You are missing the opportunity cost of domestic manufacturing.
Vote:July 4th, 2011 at 2:25 pm
Oh, and we can. We choose not to.
And for the same reasons we;
: use sewing machines rather than needle and thread
Vote:: use powered air compressors rather than manual pumps
: laser scanners at the supermarket rather than forcing the checkout girl to type in each price by hand
: etc
July 4th, 2011 at 2:51 pm
Kimble, your argument doesn’t hold water. In all your three illustrations a PERSON is using some sort of TOOL to increase his PRODUCTIVITY.
In the case of hmmokrightitis who can’t even seem to write his own notes there is a nett loss to the economy rather than an increase in productivity. This, in microcosm, is exactly why we are headed for the scrap heap. Some secretary person or service business is not going to have a job because of this, are they? Multiply this illustration by 100,000 and you’ll quickly see the problem we are facing. What are all the skilled and semi-skilled workers going to do in this environment? – Pick one from the list of answers below:
- Become international fashion designers, forex dealers and back-end web systems analysts
- Clean hotel rooms and greet tour buses with a winning smile
- Go on the dole and be supported by Mr Key’s borrowing until the credit runs out
Vote:July 4th, 2011 at 3:03 pm
I never meant they weren’t. My own son is a proud engineer (from Canterbury University). By the way, I’m also an engineer.
I said a good percentage of today’s students go for soft degrees, since they are easier to attain (the proof is the number of youngsters pursuing two or more degrees.)
Vote:July 4th, 2011 at 3:56 pm
Dear Dave Mann,
Fuck you, fuck you very much.
I chose a smart solution that allows me the flexibility I need. If you cant see that, thats probably why I do what I do, and you fail to understand basic concepts. Why the hell would I pay an excessive amount for a commoditised service? Do you pay a premium for branded milk? Think about it for half a second.
Semi skilled and unskilled workers can still exist, but whatever happened to the old educate yourself concept – and if you dont want to work hard, do not expect me to pick up the slack.
Vote:July 4th, 2011 at 5:35 pm
My argument holds an ocean.
They are using the tool for the same reason we use the overseas labour. That was the point. hmmokrightitis uses the overseas service to type up his notes because it costs less than it is worth to him. His productivity is increased because he is using fewer resources (less time/money) while not reducing his production.
You are seriously arguing that we are heading the scrap heap because hmmokrightitis does not use his valuable time doing something of very low value?
If hmmokrightitis had to pay a New Zealander to do the same job it would cost so much that he wouldnt bother. So no, they would not NOT have a job just because of this.
That persons salary is that of someone much more productive than a simple transcriber. Their skills are better applied elsewhere. Protectionists such as yourself would have them using their valuable labour doing low value work.
Vote:July 5th, 2011 at 12:14 pm
Kimble: Agree 100%. Thank you
Vote:July 5th, 2011 at 6:34 pm
. . .. and once again Curren farts in public and DPF rushes in with a lit match. Why on earth are we taking this political airhead so seriously?
Vote:July 5th, 2011 at 6:39 pm
Which one, DPF or Curran?
Vote: