Thursday, 18 June 2015

Pacific Trade Options

With the US putting the Trans-Pacific Partnership talks on the backburner, what are our options? 

Well, given the pessimism you're expressing there, this could be it. It could be sunk, couldn't it?

Groser: Well, according to the negative view, it's not going to happen in the next two years. Whether it happens beyond that time, that's more speculative. The basic point is this: the United States, unfortunately, is in a position where the lack of support for a pro-trade agenda could see them watching as bystanders. I mean, it's an unbelievable situation. And there is a parallel we've just seen on this new Chinese-led Asian infrastructure investment bank where, again, the Chinese, growing in power, come along to the United States and say, 'We want more say in the World Bank and the IMF,' and then to cut it to simple terms, the Congress stops the quota expansion that would be necessary to do this. So what do the Chinese do? They set up their own institution, so the United States... And then first New Zealand, it was the first OECD country to say, 'We will go with this new bank,' and then later the Brits, the Germans, the other big Euros join, leaving the United States high and dry on the beach. So, I mean, this is not a theoretical issue here, and it's a very strange situation for the world's number-one economy, but that's the sort of calculation... By the way, what I'm saying is understood by a lot of people in the US Congress, cos I know cos I've talked to them, but not enough of them.
I read this as Groser saying that there will be a China-led Pacific Free Trade area unless the US pulls its head in, and that NZ will be in it.

As New Zealand already has a strong FTA with China, we have there less to gain than if we could get a strong FTA with the US. But it's less likely that a China-based free trade area would require us to lock-in a 1923 watershed for public domain works.

But I can share Groser's amazement that the less-than-serious people in Congress would prefer a China-led Pacific.

1 comment:

  1. Totally agree with you regarding what AMI should have done. Another option was ask each member to put more capital in. At the least, I expected as an AMI policy holder/owner - to be asked what I thought or was prepared to do. But I do not recall the courtesy of that either.