4 July 1999 Sunday Star-Times, Auckland

Now is the hour for Lockwoodfs glory

National Affairs Editor, Pattrick Smellie

With all the grace and aplomb of a Loxene Golden Disc Awards finalist circa 1972, Trade Minister Lockwood Smith look to the stage at last Tuesday nightfs gala dinner for Apec trade ministers radiating an almost an almost toxic level of bonhomie.

As Deputy US Trade Representative Richard Fisher said of the chair of last weekfs crucial scene-setter for the Apec leadersf summit in September: gLockwood Smith has a smile that would light up the darkest of rooms.h

Grasping his mike in a delicate, slightly Cliff Richard manner, gLockieh enthused about the wine hefd chosen himself, the menu hefd chosen himself, and eventually introduced the cringe-worthy Sir Howard Morrison who, tragically for the easily embarrassed Kiwis present, Smith had presumably hand-picked for the occasion.

Itfs worth noting although Australians, Canadians, New Zealanders, and Mexicans (who were sniffy about his Spanish accent) took a dim view of Sir Howardfs sometimes off-colour and mildly racist patter, Asian delegates were either unfazed or uncomprehending.

By the accounts of one regular attender at other such dinners, cross-cultural take-offs are the stock in trade of many an Asian comic and no one turns a hair.  gThe Asians love that sort of thing,h suggested one official, unguardedly.  With culturally typical abruptness, however, The Australian newspaper dealt curtly with our entertainment icon by noting delegates had been gserenaded by a boofheadh.

Meanwhile, the sight of Prime Minister Jenny Shipley warbling Pokarekare ana was defended officially as an antipodean take on the karaoke art-form.  What it boils down to is this: just like mortals, the worldfs movers and shakers find being silly together leads to the kind of bonding from which global trade deals are brokered.

Thatfs why Smith worked so hard to bludgeon his international colleagues into a convoy of golf-carts at the most surreal of all last weekfs venues: Gulf Harbour country club on the windswept end of the Whangaparaoa Peninsula.

Standing like something from the set of that old television show The Prisoner, Gulf Harbourfs nouveau riche weirdness seemed the perfect backdrop for the unreal world in which the truly powerful move.

As the saying goes: gItfs lonely at the top, but you sure eat well.h

For many of the Auckland elite who attended the sumptuous dinner in the penthouse banquet hall at the Heritage Hotel later that evening, this was a place of fond memories, being the old Farmers Trading Company tea-rooms.

Many a latter-day chief executive would remember racing around up here in the pedal-cars, or sitting on Santafs knee wearing a new pair of ill-fitting, locally made Wyndham-brand trousers from the boyswear department.  In a small example of the free trade agenda the dinner celebrated, tariff cuts in the last 15 years have allowed better made, far cheaper clothes to pour in from lower waged economies, putting paid to Wyndham pants and the jobs of the New Zealanders who stitched them together.

Indeed, explaining why that is a good thing was one of the topics upper-most in the trade ministersf minds.  They may have succeeded last week in heaving the 21 member countries of Apec back onto some kind of free trade track – a solid achievement which demonstrates how far Asia has recovered from its crisis and how much of that recovery is attributed to open economies.

However, governments of all hues in countries at all levels of wealth are finding increasingly their populations have very mixed views about the benefits of free trade.

A whole dayfs seminar was set aside to consider how best to communicate with ordinary citizens on these matters, especially as the World Trade Organisation gears up to start the so-called Millennium round of free trade talks in Seattle, in November.

Among the most pointed advice came from focus groups in China, Thailand, and New Zealand, which showed words like gglobalisationh and gliberalisationh were either meaningless or scary to many people.

Such sentiments, it found, were strongest in comparatively highly developed New Zealand.  They were weakest in China, where the thirst for choice, quality, and better-priced goods remains almost insatiable.  In all countries, however, there were fears about foreign control, job losses, and threats to local industry by multi-national competitors.  Political messages and, more to the point, domestic policies which sought to build security and peace of mind would be crucial to sustaining popular support for globalisation, the meeting was told.

However, no one was listening.  Apec press conferences were littered with in-house jargon which never attempted to explain what was going on to any but the initiated.  As the trade minister for Mexico, Luis de la Calle, put it: gInternational trade has never been that popular.  The problems are the same as 250 years ago.  The benefits are diffuse, and the pain is concentrated.h


From New Zealand Herald, Auckland, 30/06/99 

Glimpse of big gains for NZ on horizon

By John Armstrong and Warren Gamble

Apec trade ministers have glossed over their differences regarding tariff cuts by shunting the sensitive subject off to world trade talks, thus avoiding another credibility-eroding scrap.

An afternoon retreat at the exclusive Gulf Harbour country Club ended with ministers putting on a show of unity by reaching a broad consensus on what should be discussed at the world talks later this year.

They agreed to support industrial products being included on the World Trade Organisation agenda, widening the negotiations from simply agriculture and services.

The deal avoided any detail over which range of goods and services should be given priority when the talks begin in Seattle in November.

But more bickering over how fast to cut tariffs would have further crippled the regional trade groupingfs credibility following the feuding at last yearfs summit in Kuala Lumpur.

Getting industrial products on the agenda at the WTO could have a big payoff for New Zealand in the long term.  Other countries – particularly the Europeans – would find it easier to trade off cuts in agricultural barriers in return for lower tariffs on their manufactured exports.

Under WTO rules fishing and forestry are classed as industrial goods, providing a potentially huge boost through more open access for New Zealand exports.  However, any tariff reductions are likely to still be years off.

The Minister for International Trade, Lockwood Smith – who is chairing this weekfs trade ministers meeting in Auckland – described the consensus as a global breakthrough.

Although Apecfs voice has now been added to calls for a wide-ranging WTO round, the G8 grouping of world industrial powers, including Apec members Japan and the United States, had already reached that position.

Despite that, Dr Smith pronounced Apec had moved a big step forward.  Australian Deputy Prime Minister Tim Fischer echoed the mood, saying the meeting had got off to a flying start.

Another plus was that the ministers had agreed the coming WTO round should be completed within three years.  However, the time limit may be optimistic given that the last world trade negotiations took nearly twice that period.
The meeting also agreed to send the final six of 15 sectors identified in an Apec initiative for early tariff reductions on to the WTO.

Dr Smithfs buoyancy followed earlier signs that the two-day meeting might have become bogged down over reluctance by individual member countries to move on specific tariff cuts ahead of the Seattle meeting.

Analysts will have to wait until the release of the meetingfs communique today to judge whether Dr Smithfs enthusiasm at his post-retreat news conference matches the feelings of other countries.

Editorial, New Zealand Herald, Auckland, 30 June 1999

Do us all a favour

Free trade is not a phrase that wins popular applause, and no wonder when a representative of the worldfs foremost trading nation presents its openness as a favour to the world.

United States Deputy Trade Representative Richard Fisher attempts to excuse imminent levies on New Zealand-Australian lamb imports with the reminder that the vast American economy has carried the world through the Asian crisis.

He is right, as far as he goes.  But nothing does more harm to the public view of free trade than the suggestion it is a one-way benefit.  Trade between individuals, companies and countries benefits both sides; it does not happen unless both buyer and seller gain something each desires.  If that is obvious in transactions between individuals and companies, why is it not as obvious when trade crosses national boundaries?  Because it is only then that politics comes into play.

Politicians, who for the most part know very well that trade multiplies wealth overall, are cast in the role of commercial negotiators.  In forums like that in Auckland this week, Governments deal in offers and concessions as though they were giving away something from sheer national generosity.  It is all a bargaining pose, just as a canny individual or company representative will feign agony over the fairest of prices.

Whatever success the pose may have in private transactions, it has a powerful influence on public trade policy.  Comments such as those of the United States envoy can only reinforce the myth that free trade is a favour and that New Zealanders are gmugs,h in the word of Alliance leader Jim Anderton, to be offering other countries so much unfettered access to this tiny market.

The mug is Mr Anderton if he belives a country of this size has more to gain by protective bargaining than by embracing world prices and promoting maximum trade at every opportunity.  It is easier to recognise the benefits of external trade from the vantage point of a small economy than it is in the United States.  But even there, it ought not be impossible to acquaint voters with the fact that they are doing themselves a favour in buying from abroad.

The United States did not carry the world through the recent crisis out of kindness.  Its own interests were indistinguishable from those of the global economy.  Those entrusted with the monetary and trade levers in New York and Washington did not see much future in a fortress of internal prosperity.  They have been less successful of late against the sectional interests that are always seeking protection, as New Zealand lamb exporters seem certain to learn.  But Mr Fisher is right that exceptions should not be mistaken for the rule.

Protectionism is not resurgent.  The occasional setbacks for trade liberalisation of late are patently not accompanied by a chane in political philosophy.  They are accompanied instead by sorry excuses from foot-shuffling officials and lame politicians who do not pretend to be acting from any sort of principle. The progress of Asia Pacific Economic Cooperation might not be much advanced when the trade ministersf meeting concludes in Auckland today because the prospect of a larger initiative looms in the World Trade Organisation.  Thatfs politics, a poor way to trade.


New Zealand Herald, 2 July 1999

Moore the performer preaches Apec gospel to the converted

By Brian Fallow

WELLINGTON – It was a bravura performance.  Mike moorefs passionate defence of free trade yesterday may have been an exercise in preaching to the converted – the diplomats and scholars attending the Institute of International Affairs symposium on free trade in the new millenium.

But the contrast in syle between Mr Moore and his rival for the leadership of the World Trade Organisation, Dr Supachai Panitchpakdi, could not be starker.

Dr Supachai, who may well be as committed a free trader as Mr Moore, was in Auckland this week for the Apec trade ministers meeting.  The dessicated, technocratic style which has won him the nickname gDr Super-dryh was on display, ironically, at a seminar on bridging the gap, that is, communicating the benefits of trade liberalisation to a sceptical or indifferent public.

Mr Moore was resolutely unforthcoming yesterday about the impasse over the WTO director-generalfs job or the proposal to resolve it by splitting the term between him and Dr Supachai.  No-commenting was a new and rather liberating experience, he said.

His speech was an ardent defence of free trade, not just as economically sound or politically liberating, but as the best hope of the worst-off.

gIn many countries, including my own, there are an increasing number of citizens who feel locked out, forgotten, angry and hurt, believing falsely that globalisation is the cause of all their problems.  They sit waiting for a train that may never come, their faces pressed against the window, easy victims to old and dangerous songs that yesterday was better.h

While most countries had seen incomes rise, the gap between haves and have-nots had also risen.  gPeople are appalled and dismayed when they see the few living in splendour and the many in squalor, with half the world dieting and the other half starving.  They are not impressed by being told that on average they are better off than before.h

But this was not the fault of the world trading system.  It was an argument for making it fairer and stronger.  gThose countries that have liberalised have done the best and we ought to say so,h he said. gThe point is not that the global economy is somehow perfect or that the widening range of public concerns are without substance or validity.  The point, rather, is that the challenges we face can only realistically be addressed inside this global system.

gIf people, especially young people, say that unemployment is too high, they are right.  If environmentalists say that growth must be sustainable and not destroy the planetfs essential equilibrium, they are right.  When developing countries say they are not getting fair access and justice, they are right.h  But none of those problems would be resolved any more easily by restricting trade, closing borders or undermining the rule of law as embodied by the WTO.  Just the opposite.

Mr Moore argued for a more integrated approach to trade and development so that countries could take advantage of open markets, bridging the gfalse separationh between the work of the WTO and other world bodies like the United Nations, the International Monetary Fund and the World Bank.  Many smaller countries were in effect excluded by being unable to afford to have representatives in Geneva, or just overwhelmed by the technical details and thousands of pieces of paper.

Equipping smaller economies with the technical and research capacity they needed in order to engage in the WTO negotiating process could not wait.  gThatfs the downpayment they want now, this year.h

New Zealand Herald July 2 1999

Ex-US trade boss: WTO talks will miss deadline

By Brian Fallow

WELLINGTON – There is no way the next round of world trade negotiations will be completed within the planned three years, says Clayton Yeuitter, who was the United States top trade official during the Uruguay Round.  gThe chances are zero.  It will probably take five or six years at a minimum,h Mr Yeutter, a former US Trade Representative and Secretary of Agriculture in the Bush Administration, said at a Wellington symposium on free trade yesterday.

Apec trade ministers this week added their collective voice to calls for a comprehensive round of trade negotiations to be concluded within three years.  The round is due to be launched in Seattle in November.  The Uruguay Round turned into a seven-year marathon.

Information technology advances since then might speed up the logistics, Mr Yeutter said, but the political processes and challenges remained the same.  Progress would be further delayed by the fact that next year is an election year in the United States.

Congress was also likely to continue withholding fast track authority – depriving US negotiators of the freedom to negotiate – until early 2001, the honeymoon period of the new presidential administration.  Within the US, the proponents of free trade were attacked from the right over sovereignty issues and from the left on labour and environmental issues.  Regrettably the middle ground had shrunk, Mr Yeutter said, and enlarging it again would take strong presidential leadership.

gBut my view is that the American public is as free-trade oriented as any in the world and likely to remain so.h  Over the next few years there would be more debate in the trade arena over food safety issues than everything else combined, Mr Yeutter predicted.  There was an imperative case for harnessing biotechnology in agriculture, he said, but people were frightened and unsettled by the sheer pace of change.

Dr Lorenz Shomerus, State Secretary at the German Economic Ministry, said future trade negotiations would increasingly be about harmonising national regulations.

gMore and more disputes are about the effects of things like safety requirements and environmental policies.h

While tariffs would remain on the agenda, they would increasingly be joined by issues about things like standards, intellectual property and Government procurement policies.

gIt is very difficult to grow a world class industry in conditions where world class competition is excluded,h Dr Schomerus said.  gAnd as a European I should say that also applies to agriculture.h  The OECD estimates that last year developed economies spent $US 274 billion on agricultural support of one kind or another.


Back to Home Page