No, that was not a reference to the latest release from the Reserve Bank on investor finance restrictions. We do deserve better from them, but I’ll elaborate on that later.
Somewhere along the line I must have signed up for releases from the Minister of Trade, Tim Groser. I don’t recall doing so, but this release turned up earlier this afternoon
Good afternoon Michael
There’s been a lot of debate recently about the proposed Trans Pacific Partnership (TPP).
The TPP aims to create a regional free trade agreement involving 12 Asia Pacific countries, including Australia, Japan, the United States, Canada, and New Zealand. These 12 countries have combined a GDP of US$27 trillion (NZ$40 trillion).
If we are able to secure a deal, this would deliver massive benefits to the New Zealand economy. It will help to create more jobs for New Zealanders and lift incomes.
“Massive benefits” sounds good, if perhaps implausible (few things governments do actually deliver “massive” benefits). Whatever the deal, it probably won’t create more jobs either – higher returns for the jobs we have, and perhaps some different jobs as we gain from more trade, but you can have full employment under tight controls (New Zealand in the 1960s) or under free trade.
Trade is incredibly important to New Zealand. As a small, island nation we need to trade with other countries to ensure we are not left behind. We can’t get richer by selling stuff to ourselves.
The reason the Government hasn’t released much detail to date is because the negotiations are still underway. Just like any normal business deal and other free trade agreement New Zealand has reached, these negotiations are always conducted with a degree of discretion.
The words “extreme understatement” spring to mind in response to that last phrase.
This is about getting the best possible deal for New Zealand, not a deal at any cost. We are confident we will reach an agreement that is in the best interests of New Zealand
Good to know, but the paragraph no longer has the tone of delivering “massive benefits”.
If we are able to secure a deal, New Zealanders have an opportunity to review it and provide feedback. Any deal will require examination by a Parliamentary Select Committee where members of the public will be able to make submissions. Legislation will also need to be passed, which will involve further scrutiny by Parliament, before it takes effect.
As I’ve already mentioned, we will not be signing a deal that’s not in New Zealand’s best interests. I firmly believe the TPP will be hugely beneficial to our country if we are able to secure a deal.
Since the Minister doesn’t seem to know whether a deal will yet even be possible, how can he be sure a deal will be “hugely beneficial”? It is plausible, perhaps, that a deal might offer huge benefits, but surely a deal that is only just good enough to sign must also be possible – otherwise he wouldn’t be uncertain whether there would be a deal at all. And given the uncertainty about any estimates about the impact of micro reforms, a deal he initially thought to be beneficial to New Zealand could turn out later not to have been so. Or vice versa.
I suppose ministerial missives like this are simply meant to lift the spirits. In this case, I can’t see how it works. If he has nothing concrete he can say, perhaps he should just stick to “we’ll be working hard to reach a deal that will benefit New Zealand”.
And the case for an intensive independent review of the costs and benefits of any deal by, say, the Productivity Commission remains strong.