Kiwiblog

I was also on ZB today, and was asked about National’s position on Winston as Foreign Minister. I said that I was disappointed in the response in that it missed an opportunity to differentiate National from Labour in terms of how far one would compromise good Government just to keep the numbers together.

What I would have liked John Key to say in response to the question of whether one could have Peters as a future Foreign Minister is:

“Look no one is ruled in or out of a portfolio in advance, but what I will say is that in a Government I lead, you will not be able to be Minister of Foreign Affairs unless you support the Government’s foreign policy, which obviously includes trade agreements”

Key was not wrong to not rule Peters out. The sad reality of MMP is you can’t rule most things in or out until you have the elction results. But I do think he missed a real opportunity to make it clear that while he could not rule a person (Peters) out, he could rule out unacceptable behaviour (the Foreign Minister saying he will criticise a trade agreement while overseas, and campaigning against it in NZ before the ink is even dry).

This whole episode shows us the problem with the ever increasing removal of collective responsibility. It has gone too far.  I am not saying it needs to go back to the days of every member of the Executive having to support the Government on every issue. But when you are having a debate about whether or not it is okay for the Foreign Affairs Minister to be personally heading up a newspaper campaign against a major foreign policy achievement with China, then things have gone too far. There shouldn’t even be a debate.

I mean we have the Foreign Affairs Minister campaigning on his opposition to trade with foreigners, his opposition to Asian foreigners being able to live here, and his opposition to people being able to sell property or shares to foreigners. Does Helen not think this might slightly undermine his ability to be an effective and respected Foreign Minister?

The Government is, to be blunt, lying when it says there is no need for the Foreign Affairs Minister to support the China Free Trade Agreement because trade agreements are somehow seperate from foreign policy.

To rebut this preposterous claim, let me quote the Rt Hon Helen Clark who just six months ago addressed the Oxford Union on the topic of “New Zealand Foreign Policy“:

A successful WTO round is our top trade priority. For it to succeed it must deliver on opening up agricultural trade. That is also in the interests of the developing world. But New Zealand has strong interests in negotiations on industrials and services too, and is looking for an outcome which delivers more openness across the board.

Meantime in our own region we are forging new trade links with APEC partner economies. Our first free trade agreement was with Australia over 24 years ago. Now we have FTAs with Singapore and Thailand, and a sub regional FTA with Chile, Singapore, and Brunei. We have completed fourteen rounds of FTA negotiations with China. Negotiations for an FTA are also going on between ASEAN and Australia and New Zealand.

Clark makes it absolutely clear trade policy is a subset of foreign policy. It is not a separate issue as Clark now tries to claim. It is like arguing overseas aid is not part of foreign policy.

To quote Helen Clark some more, in 2000 she said “As I have indicated, multilateral trade policy will continue to be a key focus of our foreign policy.”

And Dr Cullen in 2005 in Hansard said:

Hon Dr MICHAEL CULLEN: Yes, the Minister of Foreign Affairs accepts that seeking a free-trade deal with China is one of our highest foreign policy goals.  …

Cullen points out that Goff is Trade Minister, not Peters. But he very clearly states that the China free-trade deal is “one of our highest foreign policy goals”.

Now Clark yesterday has tried to pretend it is not foreign policy, but trade policy only, as reported on TV3:

She did not believe that China or anyone else would find it strange for the foreign minister to attack trade policy.

But as Dr Cullen and herself and Goff have said on many occasions, it is a key foreign policy goal.

Now even worse, Peters has said he will criticise the deal when overseas as Foreign Minister.  So the NZ Government will pay for their Foreign Minister to fly to other countries, and if asked about the China FTA, to say it is a bad deal which does not deliver enough to NZ. He will even say this to the Chinese Foreign Minister he claims.

Peters is also running advertisements today in newspapers attacking the China FTA.  These ads were placed *before* his Caucus claimed to have decided their position yesterday. That tells you something.

So in summary, we have multiple statements from the Government that the China FTA has been and is one of their top foreign policy goals. And you have their Foreign Minister:

• Stating he will criticise the FTA when overseas as Foreign Minister if asked
• Attacking the deal while the PM is still in China
• Basically attacking his own colleagues and MFAT staff as having failed to get a good enough deal
• Claiming not to have made his mind up on the deal as he hadn’t seen details, yet drawing up advertisements in newspapers attacking the deal before it had even been signed!
• also heading a party campaigning against Asian immigration to NZ

Now it is possible Peters is trying to get sacked.  Since he was re-elected to Parliament in 1984, he has never gone into an election backing the Government of the Day. He could have just announced his party will vote against but he will abstain in recognition of his responsibility to the Government he is Foreign Minister of.

But Clark’s credibility is one the line if she thinks it is not an issue that the NZ Foreign Affairs Minister is campaigning against the Government’s foreign policy, and allows him to do so.

What would we think if the US Secretary of State opposed the foreign and trade policy of the US Government? Or if any Foreign Minister anywhere in the world denounced and ran advertisements against their own Government’s foreign policy?

The “agree to disagree” clause in the agreements between Labour and NZ First can not and does not extend to the Foreign Minister able to campaign against and denounce overseas the foreign policy of the Government. It is the equivalent of the Finance Minister voting against tax cuts in the Budget (something Cullen probably wishes he could do) on the grounds tax is a matter for the Minister of Revenue, not the Minister of Finance.

Peters can not continue as Foreign Affairs Minister and be sent by the NZ taxpayer to countries around the world, where he will then criticise and attack the New Zealand Government foreign policy and achievements (by way of giving personal opinions on questions) rather than advocate on behalf of the Government he is the Foreign Minister for. That is a bauble too far.

Ben Thomas in the NBR takes a look at the double standards when you look at the China FTA (which I support and Govt does) and the Canadian proposal to purchase some shares off existing private owners in Auckland International Airport, with a maximum 25% voting strength (which I support, but the Govt will turn down):

There’s one footnote to FTA. The two internationalists, Clark and Goff, know that back in New Zealand, there are politicians who are less expansive in their views on free trade and other cultures.

They are ready to stir up xenophobia to take advantage of the electorate’s insecurities, and boost their polling chances.

Your correspondent refers, of course, to Michael Cullen. The finance minister this week will be waiting with baited breath for the decision of his junior ministers (David Parker and Clayton Cosgrove) on whether the Canadian Pension Plan Investment Board can buy 39.5 per cent of Auckland International Airport shares.

Cullen was the driving force – or at least, the public face – of government opposition to the possibility of the Canadians acquiring a “strategic asset” like the airport.

He fronted the decision to amend the Overseas Investment Agency’s test to make the Canadians’ bid for 39.5 per cent of the airport (now only 24.9 per cent of votes) more difficult.

Why does Dr Cullen oppose the Canadian deal so vehemently?

Perhaps one concern is Canada’s poor record on human rights: the country only passed entrenched human rights legislation in the late 1970s.

Perhaps it is the Canadians continued oppression of their French-speaking minority, and refusal to grant the outlying province of Quebec greater autonomy.

Or perhaps, to paraphrase Enoch Powell and more latterly New Zealand First’s Peter Brown, Dr Cullen fears that opening the door to Canadian investment will lead to cultural disharmony and “rivers of maple syrup” in the street.

Very good points. The Govt gets full marks for the FTA, but their behaviour over a mere 25% voting strength in what is already a privately owned airport is petty political posturing.

Mike Moore makes some excellent arguments:

There are some who oppose New Zealand’s trade deal with China, and want a boycott of the Olympics. It’s precisely because China depends on the global trading system that world opinion on human rights now matters to the Chinese.

Thirty million people perished during the cultural revolution and Mao’s great leap backwards. World opinion didn’t matter to the Chinese then. Now it does, and that’s a good thing.

China is going through the same process as Japan, Singapore, and places like Taiwan. As living standards rise, a middle class emerges that seeks out better social outcomes. Wages in the Pearl River delta in China rose 13 per cent last year.

Seven thousand factories will close this year because wages have moved up and these jobs will head inland, or to Vietnam, even Africa. This is the virtue of free markets and globalisation.

For the first time the Chinese Government is answerable to its own laws – you can now sue the Government.

It’s no longer an atheist state; there are the beginnings of freedom of religion. Over 10,000 Chinese Muslims were allowed to go to the Haj in Mecca. Christians sued the Shanghai Government for wrongful arrest when they expressed their religious beliefs. This is an imperfect and uneven progress that should be celebrated.

All this is healthy and Prime Minister Helen Clark has hit the right note. …

The New Zealand /China trade deal is to be welcomed. Would our competitors turn it down? In fact, our advantage will last only a few years, if that, as others sign up.

All this exposes something else about New Zealand’s political process. Our Foreign Minister, Winston Peters, says he’s not a member of Government except when overseas and may not vote for it. How is this possible?

Peter Dunne has said he will vote for the deal but has the Chinese shaking in their boots by saying he won’t go to the reception. The Maori Party has taken different positions, but one MP said we shouldn’t trade with countries that pay lower wages than NZ. That means we can’t trade with Samoa, forcing them to pay more for goods from anywhere else.

At last the adults in the Labour and National Parties have taken control for a short time and done what is right for New Zealand. This deal is worth a few hundred million dollars to New Zealand, small compared to the Uruguay Trade round, and tiny compared to what this country will get from the Doha Trade round.

Why is it so small? Because the terms of China’s accession to the World Trade Organisation collapsed tariffs in agriculture by 90 per cent. Isn’t it a good thing that China is now inside the WTO and answerable to its rules, obligations, and binding legal disputes system? The WTO and the Doha Round is still the biggest global game.

But New Zealand can do a deal with China and advance the WTO. It’s a melancholy fact the best thing I ever did was leave New Zealand to run the World Trade Organisation. China joined the WTO and the Doha Trade round was launched in my time. Modesty prevents me from pointing this out.

Completing the Doha round would be a better achievement, but to be fair to Moore he can’t be held responsible for that not happening!

NZ First have confirmed they will vote against the Free Trade Agreement with China.  So the NZ Government is going to have its own Foreign Minister vote and advocate against their most important foreign policy achievement.  What next? Will Helen Clark allow the Minister of Finance to vote against the Budget?

NZ First are saying there are not enough concessions from the Chinese side. This is absolute nonsense. Professional negotiators such as Tim Groser are saying that it is one of the cleanest (ie few hold out areas) FTAs around.  Considering our relative sizes, NZ has negotiated a great deal.

Anyway NZ First have made their decision, which puts the ball in Clark’s court. Does she regard it as acceptable her Foreign Minister votes against and advocates against her Government’s most important foreign policy achievement?

NZPA reports some minor criticism of the FTA with regard to Working Holiday Visas:

Under the agreement up to 1000 Chinese aged between 18 and 30 can enter New Zealand for a temporary time to work in the tourism industry or other work.

The scheme is similar to that offered to a number of other countries that New Zealand is keen to build links with.

In China’s case this deal has not been offered in return.

Miss Clark said China has a legal framework did not make that possible.

“That hasn’t been largely of concern to us,” Miss Clark said.

“Where we think it is in New Zealand’s interests to have a working holiday scheme with another country we will do it unilaterally, as we have with the United States.”

Miss Clark said it was possible China could reciprocate in the future, but New Zealand had found that with such schemes there had been greater interest in young people from emerging economies coming to work in New Zealand than the other way round.

This was probably due to the fact that developing economies paid lower wages than young New Zealanders could earn in other countries.

The PM is dead right in this regard. I can’t imagine there are great numbers of Kiwis wanting to do a working holiday in China, because the amount they will earn would be so limited.

I think it is vital NZ tries to expand working holiday opportunities in Europe and North America especially. The moves by the UK to remove traditional working rights for young New Zealanders is of great concern. But the lack of a formal programme with China is not.

Whale Oil has started a caption contest, so I am extending it here. You can submit here or there. As usual, entries should be funny, not nasty. Photo is from NZ Herald.

If Winston Peters wants to vote against the free trade agreement with China, then he must resign as Minister of Foreign Affairs.

The arrangement he has with Clark where he is Foreign Affairs Minister, but not formally part of the Government, has already stretched the concept of collective responsibility. But this is about more than semantics.

The China FTA is not just a trade agreement – it has been and is a major foreign policy goal for the Government. Just listen to Helen:

Prime Minister Helen Clark and Chinese Premier Wen Jiabao described the agreement as a major step that would deepen New Zealand’s relations with the emerging economic superpower.

How the hell can Peters remain Foreign Minister if he votes on the record against an agreement that deepens our relationship with such an important country and trading partner?

This isn’t about voting against a minor policy in an unrelated policy area. This is about voting against a policy which will help define our future relationship with China, and sits at the heart of foreign policy.

Can Peters credibly represent the NZ Government to China, if he goes and votes against this agreement? Not at all, especially when combined with rhetoric from his deputy leader about how horrified he is about a horde (1,600 skilled workers) of Chinese flooding the country under this deal.

Details are now flowing via NZPA:

• Tariffs on 96% of exports to China to be eliminated
• On 1 October 2008, tariffs removed on $200 million of exports, making 35% of exports tariff free
• By 2013, 66% will be tariff free
• By 2019 all but $80 million will be tariff free
• If any future trade deal gives a country better access rights, we automatically get those also
• All NZ tariffs on imports to be gone by 2016
• 1,800 skilled Chinese workers can be in NZ at any one time (poor Peter Brown!)
• Those workers will be in areas where we are lacking skills such as mandarin language teachers, Chinese chefs, nurses and plumbers

The time taken for some barriers to go is slower than many would want, but for me it is the end position which is most important, and that is having 96% of exports tariff free.

UPDATE: The Govt website on the FTA is now live.

Today’s signing of a free trade agreement (at 3.30 pm NZST) with China is a very good day for New Zealand. And while there are many many people who have contributed to its successful conclusion, the two primary ones are Helen Clark and Phil Goff.

Goff deserves our thanks for being the primary negotiating Minister, and never dropping the ball on this. This is a highlight of his nine years as Foreign and Trade Minister.

Clark also should be praised by supporters of free trade. Those on the right instinctively support free trade. On the left it has always been treated with far more scepticism, or often hostility. Clark has led her party away from its protectionism instincts and has embraced globalisation rather than tried to fight it like King Canute. The political risks for her has not been insignificant, especially in terms of doing a deal with China – a country so easy to criticise for so many things. She deserves our thanks for putting NZ’s interests first. Her legacy will be not just the FTA with New Zealand, but a modern Labour Party not stuck in the protectionist past.

Why is this free trade deal a good thing – both economically, and politically? My reasons:

1. It will removes tariffs on 95% of NZ exports to China, saving exporters $115 million a year.
2. The tariff reduction is projected to increase exports to China by $225 to $350 million a year.
3. The vast majority of Chinese imports to NZ already have no tariffs on them.
4.  Consumers will benefit with cheaper prices in those areas where tariffs are to be removed.
5. While employees in some areas which have protection removed can and do experience short-term pain, moving capital and labour into areas where we have a competitive advantage is good for employers and employees in the medium to long term.
6. Industries can become more wealthy with the loss of protection. When we used to have large duties on wine imports, the NZ wine industry produced cheap low quality wine as no imported wine could compete on price. As protectionism was removed, the wine industry generally went from trying to compete on price in the domestic market only to competing on quality globally. From 1987 to 1997 exports as a percentage of production went from 3% to 29%, and both production and staff levels increased. This has continued today with exports of wine in 2007 totalling 84 million litres selling for$760 million.
7. Free Trade lifts people out of poverty. I am amazed that people argue against free trade agreements on the grounds that (for example) it means people in China are working for say NZ$1 an hour. Do they think that if we refuse to trade with them, that that person will be better off on NZ$0 an hour earning nothing? China has reduced the proportion of its population in absolute poverty from 64% in the 70s to 10% in 2004 and India has gone from 51% in 1978 to 28% in 2005. have between them lifted  . Think how many people in Africa could be lifted out of poverty if the EU did not spend 50% of its budget on agricultural subsidies, if Japan did not spend US47 billion on agricultural subsidies (four times its foreign aid) and the US did not spend $4 billion a year subsidising cotton growers.
8. We are first. China is a growing economic super-power and being the first developed country to sign a free trade agreement strengthens economic ties for the future.
9. Dialogue and trade is better than the alternative. Yes the Chinese Government is a repressive regime, and has little regard for fundamental human rights. But a policy of shunning China is not likely to be effective, or help the Chinese people (why punish them for a Government they do not get to choose). And while there are still a million miles to go, China is gradually becoming a more free, not a less free, society. Exposing China to trade, to information, to market economies is more likely (no guarantees) to help bring about gradual improvements than refusing to deal with them, because we disapprove of their human rights record.
10. NZ can criticise as a non threatening friend. I believe that the closer economic ties, will put NZ in a position where we can have some influence, precisely because we are so small and insignificant. When the US or Australia criticise China, they react with hostility as they regard those countries as having ambitions of influence globally or regionally. If a “friend” such as NZ is also there saying “Hey this is not a good idea, and makes it hard for us to deal with you”, I think that voice is listened to as we do have an excellent international reputation.

So I do regard this as a very good day for New Zealand (and China). And while I have many many things I disagree with the Government on, I do praise Clark and Goff especially for their leadership on this issue. As a small trading nation, we need barriers to trade to be lowered, and this is a great step forward.

The Greens raised in Parliament yesterday the case of Capital Chinese News editor Nick Wang, who had been denied a visa to cover the signing of the China FTA by Helen Clark.

Wang is a critic of China’s policies, and in a shameful display last year was evicted from a press conference hosted by Cullen, after Chinese authorities objected to his presence.

If the Government is willing to let China dictate policy for press conferences in NZ, I suppose it is no surprise they will not object to China setting policy for press conferences in China. Still – would have been nice to at least stand up for the Kiwi journalist.

But instead Dr Cullen says this:

Cullen said: “No New Zealand citizen has a right to enter China. China, like every other country, reserves the right to withhold entry across its own borders.

“New Zealand does exactly the same thing, and indeed this Government … declined to give a visa for the entry into New Zealand of David Irving in the past.”

David Irving is a vile holocaust denier. The comparison of Nick Wang to David Irving is appalling.

Raybon Kan in the SST:

But let’s agree on a fact. China is a repressive country without free expression. The Chinese government censors news from its people. They censor the internet. And the foreign media can’t report from within.

Much the way I don’t think the North Korean government should run North Korea, I believe China shouldn’t run Tibet. Also, I don’t think the Chinese government should run Guangzhou or Beijing or Tiananmen Square. Maybe I’m just hung up on that whole voting thing.

Shooting people for expressing dissent, is the problem.

It’s not just a domestic matter for China.

Pretend the Chinese government was shooting pandas. Imagine the outcry. But monks, well. They’re not endangered.

And we know deep down why we’re being quiet. For the free trade agreement. With a country that isn’t free. For the moola.

Good grief. We close shops at Easter and prosecute the shops that open for the sake of some execution 2000 years ago. Yet, while people are being executed right now, we shut up about it because we want to open shop with China.

He has a point.

It is good to see the Government has invited National MP (and former trade negotiator) Tim Groser to the China FTA signing. A bipartisan approach to trade policy is commendable.

Never thought I would be approvingly quoting from a Judy Turner speech, but hers was the highlight regarding China and Tibet. Turner is the second United Future MP. Some extracts:

However, it is sadly obvious that the Labour Government has bigger fish to fry than to uphold an oppressed people’s political freedoms and fundamental human rights. Worst still, it appears to the world New Zealand’s timid response has simply been bought by Chinese Yuan.

Ouch – and remember this is from a party which supports the Government.

The first response of the Government was to stall, saying more information is needed. Hopefully it will blow over, they are thinking – maybe if the People’s Liberation Army can crush the dissension quickly enough we might be able to sneak over to Beijing, sign on the dotted line and still gain the plaudits for being the first country to sign a bilateral free trade agreement with China.

The initial response was pretty appalling. To be fair the Government’s later position was much better as they talked about the right to peaceful protest.

As a proud New Zealander the very least I would expect is for the Prime Minister to summon the Chinese Ambassador and in no uncertain terms express our nation’s disappointment and disapproval. Or are we so subservient in this relationship that we cannot even do that?

Maybe we just emailed them a press release!

UnitedFuture leader Hon Peter Dunne hosted the Dalai Lama last year, an honour made strange by the fact that the Prime Minister refused to meet with the Tibetan leader. At the time, not a lot was really made of this.

Maybe now we are truly seeing which side of the fence this Labour Government sits on.

Again, this is from a Government ally whose Leader is a Minister.

I don’t go as far as the Greens in calling for there to be no FTA with China, because of what has happened.  Let’s be honest – the Greens are against an FTA with anyone – this is just an excuse to oppose the FTA.  But by that I don’t mean they are not sincere on the Tibet issue – they have a long and good record on that issue.

We should complete the FTA. But we shouldn’t let the desire for an FTA mean that we self-censor ourselves on fundamental issues such as the right to peaceful protest. Now again this doesn’t mean we get up and call the Chinese Government a bunch of bloody killers – rhetoric like that doesn’t tends to be counter-productive.  But we should communicate our views directly to the Chinese Government, and have public statements that clearly support the right of peaceful protest, and condemn the use of force to stop such protests.

China claims that the violence was caused by the protesters.  Well that is possible but the trouble is that there is no way to verify this, because of the media restrictions. If they allowed free movement of media, then one could judge independently what has happened.  Without that media freedom, it is dangerous to assume the Chinese Government is telling the truth.

UPDATE: John Armstrong also likes Turner’s speech.