[asia-apec 1494] NZ Herald -

[notoapec at clear.net.nz]

10/05/00 - <i>Dialogue:</i> Economic partnership with Singapore rather one-sided 
						By JANE KELSEY*

For much of the 1990s, the champions of globalisation held a position of ascendancy in New Zealand and much of the world. Today, there is a sense of desperation.

Political speeches, editorials, official documents and think-tank reports repeat the mantra that globalisation is inevitable and irreversible, and dismiss its critics as simple-minded or neanderthal, as if that will make the challenges go away.

They have faced a lot of setbacks lately. Successive financial crises have hit East Asia, Eastern Europe and Latin America and people are waiting for the latest speculative stockmarket bubble to burst.

All the international institutions are in crisis: negotiations on the Multilateral Agreement on Investment at the OECD collapsed; Apec is paralysed; World Trade Organisation members failed to give a mandate for a new round of negotiations in Seattle; the IMF and World Bank face constant pressure to justify their existence.

The causes extend far beyond the protests that recently filled our television screens. Unregulated markets are proving unstable and potentially self-destructive. Poor countries, based on bitter recent experience, are rejecting paternalistic claims that globalisation is really good for them and challenging forums where they have no effective say.

Citizens in individual countries are objecting to supranational policy-making by undemocratic institutions such as the WTO and IMF, and free-market policies that visibly serve the elite. Others condemn the damage that policies designed to maximise profit are causing to indigenous people, the environment, workers and local communities.

To date, the official solution to the so-called wobbly bicycle is to ride it faster, adopting a detour, where necessary, to reach the finish line.

To defuse criticism, they are making the map more transparent and working harder to sell the destination. But this bicycle is on a single track. Passengers cannot suggest a different destination or change the booking agent, let alone demand the right to get off.

The Government has adopted this approach. Fortunately, it has abandoned the obsession with unilaterally disarming New Zealand through free trade and investment policies that no one else adopted. The new strategy involves reciprocal agreements with one or more countries to remove restrictions on trade and investment. This patchwork of agreements is meant to achieve progressively the global free-market goal.

A concerted push to expand the CER agreement with Australia is part of this strategy. Two reports on a common currency with Australia have now been produced. And a parliamentary select committee has called for submissions by mid-June to identify the benefits (but not the downsides) of further economic integration with Australia.

A second element is a free-trade agreement with Singapore. Renamed a Closer Economic Partnership to make it more palatable, this ultimately aims to remove all discrimination in trade in goods and services and investment between New Zealand and Singapore.

However, Singapore has many more protections than New Zealand, especially in services. In return for lowering some of these, it wants New Zealand to reduce even further its minimal restrictions on tariffs and services.

Officials admit the tangible gains to New Zealand would be minimal. According to the executive director of Asia 2000: "Stated bluntly, the Singapore-NZ free- trade agreement is a Trojan horse for the real negotiating end-game - a possible new trade bloc encompassing all of South-east Asia and Australia and New Zealand."

An eminent persons' group is working on that plan. Its target remains the Apec goal of free trade in goods and services and foreign investment by New Zealand and the other "developed" Apec countries by 2010, and poorer ones by 2020.

Where Singapore fits is unclear. The Prime Minister has confirmed her commitment to that goal. But it is unclear where the cabinet sits. Its Alliance members cannot be happy. The Greens have made their opposition clear.

Despite attempts to portray the agreement as benign, there are many unanswered questions: How does free trade fit the Government's regional economic development strategy? What rights and protections would Singapore investors be guaranteed? Would clothing made in Singapore-owned free-trade zones in Indonesia be able to circumvent the freeze on tariff cuts announced recently? Would Singapore universities have to be treated the same as New Zealand ones, despite the Government's new emphasis on education's nation-building role?

To pre-empt accusations of secrecy, officials are now assiduously "consulting" interested groups. But there is no information on which to answer these questions and many more. The Government has released a superficial briefing paper and cost-benefit analysis that lacks the necessary details.

Even MPs will apparently not see the text until the negotiations are complete and it is signed. The officials are aiming for late next month. The final agreement will be considered by a select committee that, it is to be hoped, will call for submissions.

But like all economic agreements, the decision to ratify will rest with the cabinet, not Parliament. For the Government to pull out then would involve an unacceptable loss of face.

Like any other move to promote globalisation, this agreement is not inevitable. Any domestic legislation that sought to tie the hands of future governments would be subject to rigorous scrutiny, public debate and select committee hearings while still in draft form. That is the least we ought to demand from the free-trade agreement with Singapore.

<b>* Jane Kelsey lectures in the faculty of law at Auckland University.</b>
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storyID: 136742
fromname: APEC Monitoring Group
frommessage: Op-ed from New Zealand Herald 10/05/00
submit.x: 36
submit.y: 12