www.oocities.org/ubinz/press/1999C01HeraldKelseyWTO.html

Dialogue, NZ Herald, 1 Dec 1999

This week's ministerial meeting of the World Trade Organisation in Seattle aims to set the agenda for a new round of multilateral trade negotiations. The WTO's Director-General, Mike Moore, faces an uphill battle getting members to agree.

There are huge divisions between the major players - notably Europe, the United States and Japan - over what their declaration should include. Many poorer countries are resisting the very notion of a new round.

Already Mr Moore has resorted to the secretive "green room" process, by which major players stitch up deals and then bully the rest to agree. Any resulting "consensus" will be fragile and transparently thin.

On the outside, mass protests will besiege the meeting in Seattle, backed by mobilisations of farmers, indigenous peoples, workers, environmentalists and anti-debt and anti-poverty campaigners in Europe, India and else where. Those are bound to continue, in New Zealand as well.

Lockwood Smith will be in Seattle representing New Zealand, claiming to have a "free hand." Jim Sutton, Labour's likely new Minister of Agriculture, will be there, too. The same approach was used in 1990, when both Mr Moore and Jim Bolger attended what was supposed to be the closing ministerial meeting for the Gatt Uruguay Round (negotiations continued for another four years) immediately after the election.

Criticising free trade during that period was tantamount to treason and the Government's claims about its benefits escaped any sustained scrutiny. Mr Moore's former press secretary, Ian Wishart, described how projected gains of $400 million from the Uruguay Round were simply plucked from the air in 1986. Unsubstantiated claims by Dr Smith that the Uruguay Round has brought $1 billion worth of benefits to New Zealand should be treated just as sceptically.

New Zealand may have been a star performer at the WTO, with its unilateral removal of subsidies, tariffs and other supports for domestic agriculture, industry and services - the scorched earth policies which typified the 1980s and 1990s. But New Zealand voters seem much less impressed. Free trade is a central creed of the neo liberal agenda which New Zealanders resoundingly rejected at the weekend.

With the evangelical Mr Moore out of the way, the election result suggests that Labour should rethink its commitment to free trade and the WTO. The Alliance clearly believes so. Its policy calls for "fair trade" and explicitly opposes "the version of 'free trade' espoused by the OECD, the World Bank and the WTO." Jim Anderton has already signalled his opposition to the proposed millennium round.

Labour is committed to "continue to seek and promote free-trade agreements based on fair and sustainable rules" through the WTO. But that position may well become unsustainable. Its agriculture policy insists that the future for farmers depends on other countries opening their markets. The same line was run throughout the Uruguay Round.

Yet, despite the hype, the deal that was finally reached on agriculture actually allowed major players to increase their then prevailing levels of subsidies. In recent years, prominent farming leaders, such as former Dairy Board chairman Dryden Spring, have observed how little the Uruguay Round practically achieved.

As the American imposition of lamb tariffs showed earlier this year, the chances of major concessions in the next few years seem equally remote. Meanwhile, the US can be expected to mount a sustained attack on state-enterprise monopolies, notably the producer boards which Labour promises to retain. If it succeeds, the beneficiaries will be American agribusiness, not New Zealand farmers.

In industry, Labour says it will aggressively promote the reduction in tariff/non-tariff barriers imposed by our trading partners. Yet, faced with the economic and social costs of National's push for zero tariffs in the motor vehicle, textile, clothing and footwear industries, Labour has already begun to retreat from that free-trade line.

It now promises that remaining tariffs will be frozen at year 2000 levels for at least five years, or until key trading partners match those levels. If, as seems likely, none of them do, presumably Labour would continue to retain tariffs at their 2000 levels.

The WTO is not just about agriculture or industry. Labour's promise of compulsory labelling of genetically modified foods and new powers for the Environmental Risk Management Authority to impose conditions on genetically modified crops would inject New Zealand into the battle that sees Europe accused by the US of erecting disguised barriers to exports from its huge agribusinesses.

Labour's biosecurity policy, which requires mandatory decontamination and inspection of such high-risk imports before they leave for New Zealand, risks falling foul of the same rules.

There are similar conflicts with services. Dr Smith says Labour's proposal to impose local content quotas in broadcasting services would breach New Zealand's commitments on audio-visual services under the General Agreement on Trade in Services.

That agreement's commitments also require foreign providers of education to receive the same or better treatment than local private providers. Under National's market-driven tertiary education policies, that means the same treatment as public ones.

Labour's aim to restore the nation- building role of tertiary education implies that New Zealand and foreign education "suppliers" would have to be treated differently.

The WTO is not just about agriculture. Nor is it benign. It fundamentally affects the capacity of New Zealand governments to determine and implement domestic economic and social policy. It is time to move beyond the free4rade rhetoric and embark on a well-informed, broad-ranging debate about the costs and benefits of the forthcoming WTO negotiations for New Zealand.

The election result puts the onus on Labour to do so.