What does the TPPA mean for NZ?

Tonight I went along to observe a fledgling democracy at work. First of all: I’m not a fan of democracy. Democracy to me is a brothel and extortion racket where people pay money to be entertained and to ‘self-harm’. It’s a group of people with high hopes of being among a majority to extort some influence, or to win some concession. It’s a cesspool that is ultimately disrespectful to the individuals, who don’t really sanction it or its principles. They have long given up on its principles, and today ‘they just want things’. They are forced to comply whether they vote or not. They are forced to ‘want illegitimately’. Its akin to finding oneself in a gang bang where people tell you; unless you bang this girl/guy, we are going to do you next….so people do it.

Tonight’s speak was Fletcher Tabuteau, the list MP for Rotorua, representing National First. He was condemning the upcoming legislation supportive of a Trans-Pacific Partnership Agreement (TPPA) that seeks to develop a protocol for trade in products, services and ancillary issues like Intellectual Property protection and enforcement, must wanted by the US, but ultimately raising questions of fairness given the scope of the agreement.

What I don’t like about these events is the structure of them. I think they don’t educate. There is nothing more misleading than a speaker with an agenda, and this is what this was. I’m told that Chester Burrows was invited, but decided not to appear to represent the National Party. He might argue ‘all in good time’. Given the balance of power, you might wonder why David Seymour was not invited. These politicians are perhaps cynical about the political open-mindedness of the audience, or maybe there is sufficient numbers of disengaged persons in the broader populace for them to warrant attending. MPs do work hard, and if you are a young MP in a minor party like Fletcher (NZ First), then if you are tired of teaching, and if you are a ‘political irrelevant’, then you really need to earn your place at the bargaining table. The way to do that is to practice your extortion techniques. So what tools he Fletcher employ today:

  1. Unsubstantiated scaremongering – unemployment was used to scare people. The reality is that there has not been any academic work done on TPPA simply because it’s too soon for anyone to have done it.
  2. Appeals to proven ideas – like democracy. The reality was that there was nothing ‘democratic’ about this ‘one horse contest’.
  3. Reactive rhetoric – There is no depth of conviction to their thinking. There was no deeper value system. i.e. How can you ‘scaremonger’ people with the threats posed by the TPPA and be indifferent to the fact that:
    • This is not new action. Govts have for decades been enacting these types of law which alienate. Why are people offended now? Is it because their interests are threatened? That’s the extortion part.
    • No solution offered. NZ First are not offering a solution. In fact, they are as much a part of the problem as any of the political parties; just more desperate.

Fletcher Tabuteau was encouraged by the turnout. He was discouraged by the lack of political engagement. But you are not going to be properly engaged by a single-sided argument.

Denise, the organiser said, “We need to think as individuals”, but if one is presented with a one-sided argument, then its ultimately a ‘show’ for vested interests, and a betrayal of individualism.

What was most annoying about Fletcher Tabuteau MP was his ‘appeal to authority’. He argued that he was an expert in economics, on the premise that he was a lecturer in economics, and previously a school teacher. Well, judging by his displayed understanding of economics, he was not terribly convincing, but he did have some points, so let’s consider them. He argued:

  1. “Govts are ramming TPPA down our throats” – Actually I believe the argument is that they are not; that they are ambushing us. I’d make the argument that they are giving their policy the best possible exposure. That they are releasing it to the public now.
  2. He made mention of people’s distrust of corporate interests; mentioning the movie “The big short”, however it seemed lost on him that govt was behind that crisis, as it is behind the TPPA. After all:
    • Clinton was the president who allowed the banks to enter into investment products, prompting the securities crisis.
    • It is National, Labour, ACT and Dunne who are destined to support the TPPA through the legislature. Moral relativism will ensure that it goes through. If you get everyone joining together; who wants to ‘miss out’. Being at a party has its merits, even if its not a great party. You live in hope that the next party will be better. But if you don’t show up, whose going to invite you. Such goes the logic.
  3. Conducted in secret – This is only to a point. There is every reason to expect that the National Party will disclose the legislation. The reality is that NZ and Australia are likely to be beneficiaries. In any case, the well-being of a nation has more to do with its terms of trade and underlying cost structure, and not its TPPA terms. After all, the laws are equally applied, and whilst they will impact people differently, the currency is ultimately a ‘balancing mechanism’. Let’s assume NZ is short-changed by 5%. Then it is simply a case that equilibrium will be restored, all things being equal, by the NZ currency falling 5%. Of course the other big factor is the sustainability of the terms of trade, and the RBNZ’s job is to manage the interest rate to balance the current account. On this point, the dogmatism is apparent. That assumes a ‘bad affect’, and I’m inclined to think that NZ will benefit from access to Japan, where the cost structure is very high. Japan is paying a lot for rice farmers not to farm. Japan would like to see these farms taken over by corporate interests, as at present 70% of farmers there are >65yo.
  4. He argues “corporations can sue the govt”. They have to sue in NZ courts. Have had 5 corporations sue already. Tribunal not a court room. Conflict of interest? Can be conducted in secret. 90% of the time not public. Even govt doesn’t get a transcript. No right of appeal. This is a reasonable point of objection; however, I would argue that this is a criticism you could make about the entirety of government. In fact, he alluded to an example of it in his argument. He said there was a Germany power utility who sued the German govt when the it subsidised solar generation. He argued later when questioned that, they could pursue through the local courts, not the tribunal, but that’s not really the issue. The issue is that govts intervention in the economy sabotages property rights and interests. People are maligned by govt intervention.
  5. The problem with the NZ First position is that it is not intent upon establishing objective, universal laws to facilitate trade. Its in fact ‘mercantilism’ itself. Its about ‘people mercantilism’ or parochialism rather than the usual ‘corporate mercantilism’. So whilst NZ First can accuse National of being beholden to corporate interests, they are really engaged in a ‘scare campaign’ to elicit a populist, non-discerning vote. This is what happens when you have debates where there are no adversaries. He talks of ‘democracy’ but where is the adversarialism that underpins it. He is going to debate someone in Auckland. Maybe that’s the proper forum for it.
  6. The notion that this TPPA gives “power to other govts” is a bit ridiculous when you consider that the point at issue is that it’s not a good framework for law or regulation. But such is the foundation for govt intervention in anything. So why is NZ First not advocating a winding back of government in all areas? That is because NZ First are scare mongers with no consistent agenda. They will pop up on whatever is fashionable. If they can conceive of a problem. They argue that a corporation “just has to show a loss of profits” to sue the NZ govt. Yes, they have to prove it. Now, this is loss of sovereignty. True. But whose? Surely it’s the NZ corporations; many of whom support the legislation. The real threat though is the lack of discernment of such legislation. The problem is the way these corporations are engaging. The issue is not ‘no trade regulation’ but objective principles to govern such trade. Admiralty Law is such a provision.
  7. He argued that “You are pretty much committed to the TPPA once you sign up”; that nations lose their sovereignty. He alluded to the idea that a country needs “20-25 years notice to pull out” (????). That is the nature of any contractual undertaking. The issue is the collectivism. If this is the concern of NZ First, why are they against individualism? That is the only possible defence for them? NZ’s elected party is supporting this legislation for NZ. That’s democracy. If you don’t like that, then you shouldn’t like NZ First, you should:
    • Support Andrew Sheldon as an anarcho-capitalist in his contempt for democracy (aka extortion racket)
    • Support ACT Party or some other libertarian party to avoid a collectivist, extortionary sanction of dubious government policy that continues the legacy of rampant ‘statutory overreach’.
  8. He made the argument that Bernie says “it will compromise jobs in the USA”. He argues therefore that NZ will lose jobs if they sign up for it. He argues GDP will increase by 0.5%…..but he argues that others have said 7000 jobs will be lost. I suspect he just made that up cuts….I would expect that entry of NZ into the Japanese, US, EU and Asian markets would create 20,000 jobs, though there are other issues related to water access that will be important, as well as cost, terms of trade factors driving exchange rates. Given the weak NZD against the USD, there is every reason to expect access, and for this to buoyed the NZD. Why do I say that? Well, Asians are not developing their agricultural markets. They are walking off the farm in preference for factory work.
  9. Inequality is not an issue that is really destined to be a factor with this policy, however it does have an appeal for a ‘leftist audience’, who feel victimised. Going back to my last point, the inequality issue is because ‘Asia is gaining equality’ having been oppressed for 2-3 decades. We should be happy for these Asians that they can now earn $300/month rather than live in poverty. That said, I’d hope for free ‘common law’ regulated trade, rather than ‘statutory regulation’ of trade, supported by National. Even NZ First would not deride such ‘managed trade’. It only appeals the lack of disclosure, secrecy and the lost sovereignty. But people gave away their sovereignty a long time ago. NZ First didn’t help then. So, might we cynically conclude that NZ First is the ‘scare monger of the moment’, filling the shoes of Labour, who are deciding to back farmers.
  10. So we might conclude that NZ First is “Not against managed trade”, oft concealed as ‘free trade’, but it’s not that. Their distaste is purely for the loss of sovereignty….but they don’t make an issue of that with any other issue like taxation, used to pay their salaries. It was not an issue for anything else govt does, which violates people’s sovereignty, even as a member of a majority. i.e. Even majorities disagree on the detail, as the TPPA is a lot of detail. If you look at this agreement, there are benefits. The problem is that people are forced to balance the interests of farmers off against their ‘rights’ as copyright violators or producers. Why? Because farmers are ‘good for biz’ and ‘copyrighters don’t make much of anything’ for NZ. i.e. Lorde will probably live in California. There should be ‘no balancing’….it ought to be a question of applying ‘principles to any specific context’. This is how statutory law turns people’s lives on their heads. Its political context-dropping dogma that alienates people. It leaves people with ‘false dichotomies’. It leaves them making choices that they should not have to make….just to get an incrementally better deal for someone; plausibly not themselves. That’s mercantilism, and that is what the National Party, Labour, NZ First, and even ACT Party support. ACT might well disagree, but its supporting the legislation. Why? Net gain for NZ.
  11. Fletcher suggested that Obama was using the issue to isolate Chine. Really? Of course the US will have geopolitical objectives, however the US would warmly welcome China if it reduced subsidies, quotas, adopted standards befitting a trading nation. The biggest reason why the US would isolate China is on intellectual property. China is a rampant violator of IP. Fletcher ignores this issue, yet professes to be an ‘economist’. Clearly NZ First doesn’t think IP is important, or its ‘trained economist’ is disingenuous.
  12. He conceded that some NZ industries are supportive of the TPPA, like the meat industry. He wondered why when the US beef industry is heavily regulated. Probably because they don’t see entry into the US market as its target, but perhaps Japan, Korea, et al.
  13. Fletcher conceded that the existing free trade agreement between NZ and China was initially bad for NZ, however bilateral trade has improved for NZ since the slow start. You might wonder how is he measuring it? Is he simply looking at the value of trade? Well, companies might preferentially import components from ‘cheaper China’ now because of the FTA, so it’s easy to be seduced by misleading numbers if you want to win a debate. Logic would tell you that NZ wins from access to cheaper products. If NZ business does better by moving biz to China, then so be it.
  14. He concedes that there are anti-dumping provisions.
  15. He argues that Fonterra can be sued as a monopoly. US corporations can break them up. Are Fonterra against the agreement? I think not. Scaremongering to be sure. Made the businessman behind me laugh though. A national monopoly is not a ‘global monopoly’. It is a global market for milk. If there is going to be any law suits for Fonterra being a monopoly it is going to be in NZ. It will fail because the local NZ price of milk is the international price. Moreover, when NZ pays too much for 10% of NZ milk output, it means Asia is paying too much for 90% of milk output. So that is scaremongering.
  16. An attendee was concerned with food milk filler…. Compromised food standards under the TPPA. i.e. US beef is full of steroids…. Source not required …you can be penalized for placing source. These issues are problems today, and TPPA will not make any difference to it. Moreover, if China is not part of the deal.
  17. Nice they said “Some people disagree….”. That’s me. But actually I agree in part. The part that says government ought not be establishing the rules for trade. They did wait until I left before they said they were waiting for my debate. Fletcher did suggest I might struggle to befriend him on Facebook J for a debate.
  18. He argued that National are probably only interested in GDP growth. I would happy to agree with that argument….to the same extent that he was only interested in the superficial ‘balance of trade’ with China, and not in the reasons why it is what it is. He was only interested in using the issue to elevate his political power, and not to make a difference to NZ. Why? Because that takes personal integrity, and his advocacy showed no depth….only reactionary misinformation.

In conclusion, I will say:

  1. I agree that the TPPA is a bad agreement, however I don’t think it’s the right place to start arguing in favour of sovereignty. I think ‘national sovereignty’ is about as defensible as ‘rights for old people’. It begs the question – why must I be forced to finance these politicians? Why much people’s personal interests be ‘nationalised’ to orchestrate attacks upon other nation’s interests. Better to be individuals vetting terms, so we have a choice. You might ask ‘how would that happen’ given individuals cannot ‘defend borders’. The answer is that they need state borders, but they a rational standards. We have ‘state borders’ not to imprison us by to defend common interests. This legislation is an assault on the interests of some for the benefit of others. That is not fair; that’s extortion, and democracy is all about extortion. NZ First is not against extortion. It supports the existence of a legislative assembly. It simply against the temporal ‘secrecy’ and ‘details’. It is not going to protect people. It will use the issue to win some influence and make cosmetic changes, and people will be undermined by it. They would have accepted NZ First on faith.
  2. I’d think it’s a tolerable trade deal for NZ, and a 20-25 year commitment is probably its life anyway, before it fails for other reasons. i.e. the collapse of democracy.
  3. One cannot argue that this is ‘free trade’. It is ‘managed trade. Free trade is not regulated by governments, but private agencies. Arbitration, as adopted under this protocol is actually a good approach. The issue is not the ‘protocol’ by whether politicians are ‘good custodians’ of their national sovereignty. I’d argue they are not…so I’d want them to step away from every public advocacy…not just the ‘secret ones’. After all, there is nothing secret about taxation…but it has a pervasive impact on the NZ economy. It rests on the ‘threat of a gun’ rather than ignorance or secrecy.
  4. I support ‘free trade’ to the extent that it means ‘common law’ style regulation of trade, and not ‘packaged govt arbitrary, context-dropping regulation, that serves some interests at the expense of others.
  5. The ‘selectivity’ of this legislation will result in more winners than losers. I just don’t think markets should function on those terms, however this is not the sole example of that, i.e. The currency is a ‘relativist’ distinction that prompts the fabled J-Curve. It’s a free market mechanism at all; it’s a form of credit subsidy. i.e. A central bank has to lower their interest rate to make their economy more ‘competitive’. In fact, interest rates ought to be ‘fixed’ on a risk-adjusted basis; not subsidised. That’s how we got the financial crisis, because in 2001, the Federal Reserve subsidised credit. That is not however NZ First policy, however they did not repudiate it. i.e. They didn’t understand it.

Andrew Sheldon: “Do you think the interests of one sector of the economy should be traded off against another sector because they are bigger and more beneficial to that country? Do you think states ought to be sued for their mistakes, and you pay the price? It does reduce property right violations if ‘consequences’…IF IF IF it was the politician’s money…but it’s yours -the taxpayer. Let’s see how that works out. It might all balance out. i.e. All taxpayers of the world get screwed….oh corporations win”.

Labour and the Maori Party are destined to oppose TPPA. There is pressure on David Seymour (ACT) and Peter Dunne to acquiesce. In Australia, the Labor Party is supportive I understand, but the Turnbull Liberal-National Party coalition is strangely opposed I have heard. I will need to confirm this.

TPPA

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