Free Trade

Former WTO Head Mike Moore writes in the Herald how the multilateral trading system has underpinned the most successful 50 years in history with life expectancy up 20 years, infant mortality rates down 80% and the countries that have done the best are those with the most open societies and economies.

However still a long way to go with rich countries spending $1 billion a day on subsidies that make food dearer and reduce choice.

The forces against free trade are most of the EU, the protectionist lobby in the United States and of course the Greens. Russel Norman writes about how undemocratic it is that the WTO can “over-rule” decisions by democratically elected Governments.

Norman is both factually wrong and hypocritical.

The hypocrisy comes from the Greens slavish adherence to every daft resolution and convention he UN has produced, and their constant demands we fall into line with UN Convention X. It’s only when the multi-national body is the WTO that they have a problem – because they hate trade.

The factual inaccuracies is that the WTO does not have power to over-ride domestic law. NZ has decided to trade under WTO rules. As part of that there are mechanisms for determining breaches of said rules, and remedies.

Generally what happens (and to date we have won I think every case we have taken – these rules actually help small players against large players) is the WTO rules that say the US had no right to restrict lamb imports from NZ. The US then has the choice of removing the restriction or facing a sanction. If they do not remove the restriction then other countries will be allowed to place restrictions or tariffs on US goods as a penalty.

Having a rules based trading system benefits small countries like NZ. In the old days if the US or EU acted unfairly we could do nothing about it, as it was just us vs them.

I’m also amused to see that Norman actually defends the US for wanting to ban Internet gambling, and how the nasty WTO makes this harder. Good. Trying to ban Internet gambling is ridiculous and impossible.

No system is perfect and the WTO system is not. But it is a hell of a lot better than anything we have had in the past.

I do wish the Greens would be honest about their opposition to the WTO. It isn’t about TV quotas, or whether the US can ban Internet gambling. The Greens as a party do not believe in trade, except when absolutely necessary. They see trade as bad because it damages the environment to ship goods from country to country. Jeanette even has railed against overseas air travel. I think their nirvana is a few years before the industrial revolution.