Imagine you’re a shopper in Tokyo. New Zealand lamb is for sale in the supermarket beside Australian lamb. Both products presently have a 38.5 percent tariff applied to them. Those who enter the TPPA will have that reduced by 9 percent, then eventually eliminated.
If Australia enters TPPA and New Zealand doesn’t, the Australian lamb is about ¥2,000 a kg, the New Zealand lamb is ¥2,800 a kg. Price sensitive shoppers will buy Australian lamb while foreign income and New Zealand jobs are lost. This is the simple equation we face if New Zealand is not in TPPA.
Lots of protesters chant slogans and wave their banners without any idea of what is in the agreement. They say things like:
- It will erode our sovereignty: Rubbish. It’s our sovereign right to withdraw from any trade agreement at any time, there is no one holding us to any of them. However there is a reason that we tend not to leave; we’d have to give up the benefits which far outweigh the costs.
- It’s bad for Māori: Also rubbish. New Zealand is the only country that specifically recognises its indigenous people in the agreement and provides for the protection of the Treaty commitments we had made.
- It’s bad for PHARMAC: A very small number of pharmacy items will have their patent lives extended from 5 to 8 years. The annual cost is estimated to be around 2 to 3 million dollars per annum and the users of those drugs will not see any increase in cost. The small extra amount the taxpayer has to pay will be overwhelmingly covered by the extra revenue gained by greater trade.
- Companies can sue the Government: Well they can now, and the interstate dispute mechanism is there to protect countries like New Zealand not attack it. Many of the protestors mention French company Veolia suing the Egyptian Government over its decision to increase the minimum wage. This is incorrect. Simply Google the issue and find out what is actually happening in Egypt.
This is an excellent trade deal for New Zealand. We must be in it and the costs of not being so are high. I cannot help getting the feeling that the major opposition from the Labour Party, who say they support free trade and signed the largest free trade deal we have with China, is in opposition because they are not the ones signing the agreement.