The benefits of free trade agreements

November 6th, 2013 at 9:00 am by David Farrar

chinatrade

 

Sam Morgan tweeted this graph.It shows the huge change in out trade balance with since the FTA was signed.

Ironic that NZ First and Greens opposed it, considering NZ First claims they are pro exporters and Greens always harp on about the current account and trade deficits. They should apologise for their opposition to it.

I just hope that Labour don’t go down the anti trade path, as the unions want them to with TPP.

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22 Responses to “The benefits of free trade agreements”

  1. Cato (1,095 comments) says:

    Haven’t you heard? Being a Green MP means never having to say you’re sorry. How else do you explain the most consistently wrongest party in Parliament getting such a free ride from the press?

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  2. dave53 (96 comments) says:

    I may be wrong as it was some years ago, but I seem to recall it was Labour that negotiated this agreement.

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  3. kowtow (8,945 comments) says:

    As with any boom, while it’s good it’s very very good ,but how prepared is anyone for the inevitable bust?

    Diversify or die.

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  4. nickb (3,696 comments) says:

    The Greens must be close to inventing a perpetual motion machine such is their economic reasoning.

    Green Economic Growth Policy:

    Confiscate all mining and farm land. Establish KiwiCaffeine, a state-owned coffee-shop chain. This will import only fair trade organic coffee and will sell for $20 a cup due to inflation. Cease all mining and farming activity, serve lattes on former mines and farms. Beanbags, guitars and sheesha free complimentary.

    Give increased benefits and pensions to those who cannot afford $20 cups of coffee. Raise taxes and government debt to fund increased welfare spending. Raise top tax rate to 75% on income over $50,000 (Green MPs to be exempt due to the use of family trusts). Express surprise when migration to Australia triples. Blame everything on people earning over $50,000.

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  5. flipper (4,332 comments) says:

    But hang in David….
    Kelsey and Kelly cannot be wrong.
    All those stats that are favourable must be an illusion.
    The MSM, if they ever deign to publish them, will of course seek expert comment from Kelsey, Kelly and the red melons et al.

    But as Tim “The Tack” Groser said recently: “Kelsey has opposed every trade agreement, and she has been wrong each and every time. Kelsey is the last person I listen to. ”

    Oh well, our tax dollars at work paying for Kelsey’s crap.
    Now what about the Union of Taxpayers chasing down all this cracdemic research crap??????

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  6. KiwiGreg (3,279 comments) says:

    Not sure how much is due to FTA. Almost all our exports to China are milk powder and uncut logs.

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  7. NK (1,259 comments) says:

    As with any boom, while it’s good it’s very very good ,but how prepared is anyone for the inevitable bust?

    Diversify or die.

    China has more than one billion people and the largest and fastest growing middle class in the world. Its size is its strength in terms of trade. There will not be a bust.

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  8. itstricky (2,027 comments) says:

    DPF – is anyone opposing it on grounds that it will not bring financial benefits?

    Surely the opposition is about the fish hooks in it. I am sure you were sitting in that room of a few hundred when the InternetNZ chair suggested TPP was a giant trojan horse. How about some debate/info on all that? (sorry if you have already posted on such topics. I habe not checked)

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  9. Simon (785 comments) says:

    This is more to do with Chinese money printing than any FTA wankfest agreed between States.

    In 2009 as the centrally planned western economics were crashing the Chinese stepped up and said to the West we will print to cover you until you get your shit together.

    The vast money print in China from 2009 onward means in part record commodity prices and countries like NZ have benefited.

    The problem is the West is still in the crap and Chinese money print has to come to an end. Inflation is getting out of hand and the CCP is having problems with the plebs.

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  10. kowtow (8,945 comments) says:

    NK

    Economics 101 .A bust always follows a boom. And the bigger the party the bigger the headache.

    Follow Chinese history at all? Not at all stable.

    That growing middle class will be the down fall of the People’s Republic and the Party won’t take it lying down.

    Despite all the China cheer leading going on by our treacherous political class that place has one of the most repressive regimes on Earth,it won’t end well.

    Who’ll buy all that milk during the next civil war there?

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  11. greenjacket (486 comments) says:

    Kiwigreg: “Not sure how much is due to FTA. Almost all our exports to China are milk powder and uncut logs.”
    Massively due to the FTA. The FTA reduced a lot of NTBs and opened doors.
    While about half the exports are WMP and relatively unprocessed timber, the other half (meat and other processed goods, etc) is almost entirely due to the removal of tariffs and general opening doors into China that the FTA brought about.
    I work in a company which exports to China, so I am biased, but the China FTA was the best thing that happened to NZ for several decades, and the Clark government deserves thanks for that.

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  12. duggledog (1,628 comments) says:

    Look how it bottomed out at the end of Helengrad and then skyrocketed over ensuing years.

    Like everything else, such as the gap between rich and poor, power prices, mortgage rates, everything turned to shit under Labour, the only good result was paying off debt, well congratulations Cullen you genius you paid off debt by increasing my taxes. Give that man a knighthood that he said he was against until he got one

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  13. flipper (4,332 comments) says:

    greenjacket (252) Says:
    November 6th, 2013 at 9:54 am
    ****

    AGREED.

    But THAT was when there was a bi-partisan trade policy.

    The only thing that has changed is Groser, who was a lead FTA negotiator when Goff was Minister, was always straight with his Minister, and with the Nats.

    That built trust.

    Groser now briefs Goff. Goff believes him based on knowledge and work history.

    But Cun*liffe (aka Kelley/Kelsey ) says he is not prepared to accept Groser’s word.

    Labour/red melons/ Patersparty2 – Fuckwits incorporated.

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  14. kowtow (8,945 comments) says:

    The Clark govt deserves……

    Shipley’s crew worked to prepare the ground work on it.Both parties were donkey deep with the Chinese comrades on this.

    How quickly do we forget that the right to protest in Aotearoa formerly New Zealand was severely curtailed during Shipley’s tenure to keep a Chinese President happy during a visit while the negotiations were ongoing?

    Our media have been very silent on that and on the directorships etc that seem to go with being “onside” with the Comrades.

    kowtow, kowtow to the Celestial Emperor in Peking!

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=122717

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  15. Yoza (1,927 comments) says:

    I just hope that Labour don’t go down the anti trade path, as the unions want them to with TPP.

    Why would anyone mindlessly support a secretly negotiated trade agreement. Oh, … wait, this is a National party blog, mindless acceptance of establishment dictates is mandatory.

    Sam Morgan tweeted this graph.It shows the huge change in out trade balance with China since the FTA was signed.

    Would this be the son of Gareth Morgan? And if he is, doesn’t that make him a filthy communist sympathiser by association?

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  16. Jack5 (5,286 comments) says:

    The dairy industry and its Chinese market have delayed an economic reckoning, but probably only delayed it.

    Our current account balance for the year ended 31 March was a $9.5 billion deficit.

    If the Chinese banking system collapses under out-of-control internal debt, as some fear, and/or the world dairy bubble pops, what happens to NZ?

    Pray for big strikes of gas and oil.

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  17. NK (1,259 comments) says:

    Would this be the son of Gareth Morgan? And if he is, doesn’t that make him a filthy communist sympathiser by association?

    Don’t know if he is a sympathiser. But I do know you are a knob making statements like that.

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  18. NK (1,259 comments) says:

    NK

    Economics 101 .A bust always follows a boom. And the bigger the party the bigger the headache.

    Really? Economists, trained and skilled, predicted a bust that in the Auckland property market for the last 5 years. How is that coming along?

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  19. BlairM (2,340 comments) says:

    Trade balances are interesting, but ultimately they mean nothing in terms of who is making money. We don’t speak of households having trade deficits just because they buy $100 worth of groceries every week and don’t sell anything in return. The trade balance doesn’t reflect what sources of income each country is receiving, or other forms of investment.

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  20. Jack5 (5,286 comments) says:

    Re Blair M at 11.09:

    You posted:

    Trade balances are interesting, but ultimately they mean nothing in terms of who is making money. ..

    I don’t know who else may have mentioned “trade balances”, but I was talking about the big deficit in the current account balance. No family could run a continuing current account deficit as NZ does.

    And if you think trade balances mean nothing in terms of who is making money, you obviously and illogically think China’s and Germany’s vast trade surpluses have nothing to do with their prosperity.

    The financial wizards can create wealth out of thin air, can they, BlairM?

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  21. Ross12 (1,488 comments) says:

    Jack 5

    This is an interesting read for you. Note the comments from the EU bureaucrats.

    http://www.spiegel.de/international/business/complaints-about-export-surplus-of-germany-unfounded-a-931607.html

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  22. Simon (785 comments) says:

    “Chinese leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand, a Cabinet statement said Tuesday, in a sign previous orders to cut overcapacity were ignored.

    The rapid overexpansion of industrial capacity also was fueled by Beijing’s multibillion-dollar stimulus in response to the 2008 global crisis, which was based on higher spending on building highways and other public works. That sent a flood of money to suppliers of steel, cement and other raw materials and helped them resist pressure to merge or reduce production.”

    There you go sheeple.

    http://abcnews.go.com/Business/wireStory/china-warns-local-leaders-cut-industry-bloat-20784642

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