EU In A Fit of Pique

UK Slams EU’s ‘Low-Quality’ Deal 

No ‘Democratic Country Could Sign’

Victoria Friedman
Breitbart London


In a scathing letter to Brussels bureaucrat Michel Barnier, David Frost criticised the European Union’s offer of a “low-quality trade agreement” which contains provisions that no “democratic country could sign”.

The UK’s chief EU adviser wrote to his Brussels counterpart, Mr Barnier, on Tuesday, calling for the EU to deal with the UK in trade negotiations as a partner on equal terms. He also criticised the bloc for trying to pressure Brexit Britain into accepting worse deal conditions than it had offered other nations around the world in a forensic, four-page breakdown of Europe’s offer.

Mr Frost said that the UK has been clear and consistent in its intentions in seeking a free trade agreement with the European Union. However, he said he found it “perplexing” that Brussels treats the UK as an “unworthy” partner, forced to accept restrictive provisions as a precondition for a deal despite Brussels not making similar demands when negotiating FTAs with countries like Mexico, New Zealand, or South Korea.

Risks of A Recession Mount in NZ

Messing In Our Own Nest

New Zealand is probably heading into an economic downturn.  It is too early to speculate on how deep or long the "recession" will be.  The irritating truth is that any downturn will have been largely of our own making.

Firstly, New Zealand is unable to get "cut through" with the United States.  We have been hit with a substantial tariff on our steel exports to the US.  There has been no "best friends" relief.  There is no free trade agreement with the US in sight.  Why the obstacles?  Well, NZ is very small in the grand scheme of things.  At the very time when NZ needed as much negotiating coin with the US as possible, we have elected a neophyte as Prime Minister whose "bestie" on the world stage is Canada's Trudeau. 

Our Prime Minister, Jacinda Ardern lacks the depth of a puddle in a parking lot.  Her most significant achievement is noting with famous people whilst overseas and managing to get a few photos taken so as to increase her profile back in NZ.

At the same time, we have managed to rile up China.  Now this may or may not be a serious matter.  We have a double mind with respect to the current president of China who has now engaged in one of the worst human rights abuses on the planet.  Premier Xi Jinping is happily engaged in smashing to bits one of its minority ethnic groups--the Uighurs, who are Islamic in faith.  He is also responsible for the suppression of Christians.  He is showing every sign of being a reincarnation of Mao Zedong.

Trump's Foreign Policy, Part II

A Kernel of Truth

A seasoned New Zealand politician cum diplomat has acknowledged that the proposals of British PM, Theresa May for a soft Brexit are troubling.  Lockwood Smith is arguing that President Trump has put his finger on the problem.

Some Truth In Trump's Warning
Claire Trevett
NZ Herald

Former High Commissioner to London Sir Lockwood Smith says US President Donald Trump's comments about the Brexit deal on a visit to the UK had a kernel of truth to them and he was echoing concerns held globally.

In an interview with The Sun that ran as Trump arrived in the UK last week, Trump said the proposals in the Brexit White Paper could imperil a trade agreement between the UK and the US.  "If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal."

After meeting with British PM Theresa May, Trump backpedalled somewhat saying May and advisors had reassured them it would not, and he was fine with whatever step they took.  Smith told Q+A that Trump's interview with The Sun was "outrageous" but he was right to flag concerns around Brexit and the proposed trade arrangement with the EU.

New Zealand is one of the countries first in line for an agreement with the EU and Smith said Trump's view on the white paper proposal was a global concern.  "What one's got to sift through is what he did say that actually made some sense and the issue is we need the UK to become a global player.  Trump has pulled the US out of being the leader, say, on global trade. And we need the UK to step up."  He said it was questionable whether the White Paper made that possible.

"A half-way house is not going to work. They've got to see that they've got to actually leave the EU and negotiate a real world-leading FTA with the EU."  Smith was High Commissioner to London until 2017 and is a former Trade Minister.  He is now on the influential Legatum Institute's trade advisory group which is advocating for a "hard Brexit" when it comes to trade.

He had met with former Foreign Minister Boris Johnson a few weeks ago before Johnson quit in protest at the White Paper proposal.

"Made in China 2025"

Free Trade With China is an Oxymoron

Trump's looming trade war with China begs an interesting question: is it possible for a Communist government to enter into a meaningful and genuine free trade agreement?  It's arguable that no communist government, such as China, can meaningfully participate in free trade when the economy is at the command and control of the state.

This is the argument being pushed now by the Trump administration and it is one which demands careful thought.  Much of the Chinese economy represents command and control: the price of money is set by the state; mass production of favoured goods is heavily subsidised by the state; the state controls the demand for goods and services; and the state substantially controls the labour market.  When a non-statist government enters into a free trade agreement with a communist state, the price signals of goods and services are inevitably distorted and of little use.  There is nothing "fair" about them.  They are certainly not "free".  Therefore, free trade with a communist state (or a strongly fabian socialist state) is an oxymoron, a contradiction in terms from the outset.

Western nations by-and-large understand that state subsidies and state picked "winners" are an immediate contradiction against free trade.  However, the recent push by Western nations to enter into global and regional multi-national talks in an attempt to secure global free trade agreements is both short sighted and contradictory.  When it involves agreements with communist command-and-control economies it is even more the case. 

President Donald Trump announced on June 15 that he would go ahead with the proposed tariffs on $50 billion worth of Chinese goods, doubling down on his promise to level the playing field and defend against improper intellectual property theft by China.

China retaliated hours later by announcing its own 25-percent tariffs on $50 billion worth of U.S. products. The implementation timeline largely mirrors the United States,’ with tariffs focusing on agricultural imports.  The Trump administration vowed that the United States would pursue additional tariffs once China retaliates in kind.  The Office of the U.S. Trade Representative (USTR) described the goods subject to the 25 percent tariffs as “Chinese imports containing industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy.”

The new tariffs will be implemented in two stages. The first list contains 818 products worth $34 billion which will go into effect on July 6, with another round of goods worth $16 billion to be implemented after a period of public consultation. . . . [Epoch Times]

The "Made in China 2025" policy is a deliberate attempt by the Chinese Communist state to become technologically self-sufficient.

The Government's Attack Upon Free Trade

New Zealand Risks Being Swatted Out of the Way

Ouch. Amazon is standing up to the lordly Aussie and New Zealand governments. They are saying, if you want us to collect your piddly taxes at considerable expense to us, we will ban you citizens from shopping on Amazon sites. Only the "inferior" Aussie site will be available. We think that Australian consumers who are banned from shopping at Amazon US will be highly indignant. And the blame falls squarely on the Aussie government, in the first instance, then upon the New Zealand government next year. 

 Amazon Tax Move Could Leave Government Searching For a 'Plan B'


Tom Pullar-Strecker
Stuff

The Government's plan to require foreign firms to collect GST on goods they ship to New Zealanders from October next year – its so-called "Amazon tax" – is suddenly in genuine trouble.  Australia is the canary down this particular coalmine, and right now that canary is looking pretty poorly.

If you listened to New Zealand retailers, you might think this was the last country in the world to close down a loophole under which consumers can buy low-value items from overseas without paying sales tax.  It is fair for them to grumble. New Zealand's $400 tax-free threshold for most goods crossing the border is relatively high by international standards and they have been dealt a bad hand in that regard.

But the solution the New Zealand and Australian governments have come up with to create a level-playing field for local retailers – requiring foreign firms to collect GST on their behalf at the point of sale – is untested.  Amazon has decided that rather than go to that trouble, it will instead block Australians from buying products through its main website.  Instead, Australians will only be allowed to shop at Amazon Australia, which for years at least looks set to offer only an inferior range of goods at higher prices.

All Heat And No Light

The Failed Promise of Tariffs

Protectionism and tariffs are in the news again--what with the signing of TPP and with President Trump about to impose US tariffs upon aluminium and steel.  As always there is a lot of silly uninformed posturing that rises up to insist that free trade is BAD and that protectionist trade policies are good "for our people".  Both assertions are twaddle and do not stand up to serious scrutiny. 

To put the cat amongst the pigeons, we are reproducing a debate on the issue.  It was reproduced in Patterico. The post was entitled, The Argument in Favor of Unilaterally Abolishing All Tariffs.  It was introduced as follows:

One argument I hear a lot from people who support Trump’s proposed tariffs goes like this: “I’m generally a free trader, but when other countries subsidize their products or impose tariffs on ours, why shouldn’t the U.S. retaliate?”  This post is designed to respond to exactly that argument.

One of my favorite economists, Don Boudreaux, had an Oxford-style debate last November in which he defended this proposition: “The U.S. government should unilaterally abolish all tariffs and duties on imports and all subsidies to exports, thereby making all reciprocal trade agreements with other countries unnecessary.”  To get the most out of Boudreaux’s arguments, you should watch the entire debate:

I’ll summarize some of his arguments from the first half of the debate here, both to whet your appetite, and to provide some arguments for those who don’t have 80 minutes to devote to the debate. (Boudreaux won the debate, meaning more people came to his side than to his opponent’s side.)

Xenophobia Makes Unwelcome Return

Reflexive Cloth-Cap Labour Pollies

Commentator, Mike Hosking has written an excellent piece, published in the NZ Herald a few days ago.  It concerns the proposed NZ government ban on "furreigners" buying real estate in general and houses in particular.  This policy put forward by the obtuse Labour Party is antediluvian insofar as it comes right out of the socialist playbook written well over a century ago.  It also contains elements of crass nationalism.  It represents protectionism.  

Labour unions and left wing politicians think it makes eminent sense for New Zealand to be kept for NZ citizens.  Keep furreigners out.  However such populist twaddle turns out to be positively dangerous when the respective countries of those horrible furreigners start to retaliate with trade and investment barriers against New Zealand.  All of a sudden we are confronted with the unfortunate reality that New Zealand is a minnow in the grand global scheme of things.  We are easily netted and squashed.

Here is Hosking at his splenetic best:

The Ironies of Free Trade

Free Trade and Intellectual Freedom Don't Mix--Apparently

It seems that for at least some Chinese students studying abroad, a Western education is not all it's cracked up to be.  Chinese students are not used to basic human rights such as freedom of speech, liberty of thought and conscience.  When confronted with views and opinions which are implicitly critical of the Chinese regime or contrary to its propaganda, often Chinese students are alarmed and disturbed by such heretical notions.

Tensions are rising at some Australian universities amid concerns that the Chinese government is infiltrating teaching methods across the faculties, according to a report from news.com.au.

The concerns have arisen after multiple incidents of Chinese students demanding changes to teaching methods, as well as demanding apologies from lecturers about the way they explore certain topics. The trend has led to concern across Australia of the growing threat of the Chinese Communist Party’s authoritarian ideology infiltrating universities and potentially influencing other students.

Some students have even posted footage online of lecturers going against the Chinese Communist Party’s ideology.  Last week, a student at the Chinese University of Newcastle uploaded footage of him arguing with a lecturer who referred to Hong Kong and Taiwan as independent countries.  “You are making us feel uncomfortable,” the student tells business professor Nimay Khaliani. “You have to consider all the students.”  “Exactly, all the students, not one set of students,” replied Khaliani. [Breitbart]

No doubt the Chinese government will attempt to put pressure on Australian schools and universities via the much vaunted free-trade agreement between Australia and China.  We anticipate the exchange will go something like this.

Embarrassing

Trumpo, The Circus Clown

It seems that the jury is back in the courtroom, rendering its verdict.  Donald Trump really is dumber than a sackful of hammers.  Or, if not, he manages to give a mighty compelling impression from time to time that the hammers are smarter than the President on a good day.  Or, yet again, if not--maybe it's all fake news.

Here is the latest which had us in a fit of laughter over the over cornflakes:

One of Donald Trump's cornerstone pushes since he's become President of the United States has been his focus on encouraging local manufacturing by increasing taxes on imported goods. And it's the motoring world that's feeling this more than other industries, in the form of a 35 per cent tax “for every car that comes to the USA,” in Trump's words.

And while some of his focus has been on the likes of Ford, it was German marques like BMW that have been in his sights this weekend at the latest North Atlantic Treaty Organisation (NATO) political summit overnight — featuring some of the EU's heaviest hitters.  [Motoring News]

Now, before going further, we hasten to run a few disclaimers up the pole.

Naked Swimmers

The End of European Corporate Welfare Provides a Once-In-A-Lifetime Opportunity 

Warren Buffett once famously quipped that in business and investing when the tide goes out, you find who has been swimming naked.  This is a derivative from a far older proverb to the effect that  "a rising tide lifts all boats".

One of the impacts from Brexit will be that the (previously rising) tide of European subsidies will disappear from Britain.  Lots of naked swimmers will be exposed.  Doubtless, some British businesses will need to make some severe adjustments, but if they avoid the temptation of looking to have their European subsidies replaced with British ones, it will all be to the good longer term.  British agriculture can be included in the list of industries which will have to adjust.  New Zealand, of course, knows all about this, having gone through it in the seventies and eighties.  Now, subsidy free, yet able to compete virtually anywhere in the world, NZ agriculture is a thing to behold, the whinging and moaning of the Greenists notwithstanding.

We smiled to read in the NZ Herald that the royal estates in the UK will be hit--and they will not be isolated.

A Rare Sight

New Zealand Warns the United States

We were amused to read of the NZ Prime Minister's interaction with the elitist US Council of Foreign Relations in New York.  To get the opportunity to confront the reigning US-centric mindset of his audience was too good to waste.

Journalist Tracey Watkins, writing in Stuff, provided a (rough) blow-by-blow.  First up was a chap who wanted to put John Key in his place.

John Key's audience at the Council on Foreign Relations in New York was a small but well-heeled one. So a shocked gasp went around the room when one of its armchair generals rose from his seat to ask whether New Zealand was good for much more in the US than a few lamb chops.  His gripe was New Zealand's anti-nuclear legislation and not pulling our weight which, as Key pointed out, is ancient history, given our decade-plus involvement in Afghanistan and now Iraq.

Now, one supposes that Key's interlocutor was wading waist deep in the miasmic slough of "USA!, USA! USA!" cheerleader chants.  If he were better informed, however, he may have pursued the Prime Minister on this point.

Will the US Go Backwards?

United States and TPPA

We at this blog are Free Traders.  Our position on this issue is grounded in private property rights, which in turn are grounded in the divine command not to steal.  If a government prevents a Mom and Pop business from selling to customers in Timbucktoo should they wish to do so it is indirectly stealing from the couple.  (Of course there are legitimate exceptions--but those turn around matters which are the legitimate concern of the State, namely national defence from armed attack.  But in Mom and Pop's case, this is would not be at issue.)

There is also a fundamental economic rationality to Free Trade.  New Zealand once had a state subsidised automotive industry.  It had to be subsidised, because there was no way in the galaxy New Zealand could make cars as efficiently and cheaply as the United States, then subsequently, Japan.  So eventually we retreated to a subsidised vehicle assembly industry.  Eventually, the whole thing was scrapped, despite apoplectic unions.

Once vehicles in New Zealand were uber-expensive and few and far between.  Our roads were populated by ancient, ailing, vastly overpriced Morris Minors and Hillmans.  As soon as all the protection and anti-free trade barriers on vehicles were removed, the wealth of New Zealanders took a huge step upwards.

The Terminator and the Rats

Counting the Cost

Donald (The Terminator) Trump is shaping up to lose handsomely to Hillary Clinton, arguably the most mendacious carpetbagger yet to stand for the US Presidency.  Faced with falling poll numbers, the Terminator has seen the need to bloviate more volcanically than usual (which is saying something).  This from the Wall Street Journal:

Donald Trump offered a starkly protectionist view on trade policy, pledging for the first time on Tuesday to scrap the current North American Free Trade Agreement while saying he would label China a currency manipulator and kill America’s involvement in the Trans-Pacific Partnership. “I’m going to tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers,” said Mr. Trump, adding that if they don’t agree to favorable terms, “America intends to withdraw from the deal.” [Hat Tip: Kiwiblog]

This latest eructation shows all the signs of a showman looking for ratings.  Once upon a time during the primary season, if the Terminator had come out with such a declaration, the media would have fawned, celebrated, and danced nativist jigs.  It was good for their ratings--and that's all that mattered.

Now, not so much.

Scintillating Confabulations of Outrage

An Internationalist Bridge Too Far

The cause of fighting against the Trade Pacific Partnership ("TPP") has been weakened by the syndrome of embarrassing advocates.

A local journalista/opiner has written:

The opposition to the TPP was ugly. Worse than that, it backfired. At first, the crowds of thousands walking Auckland's streets in protest were impressive.  Until you talked to them.

Too many of them didn't even know why they were protesting.  "I dunno, to be honest," was roughly what one man said.  "I'm just here for my people."  The sight of Sue Bradford wrestling with police - again - can do quite a good job of drawing attention to a cause.  But the sight of Sue Bradford sitting on the tarmac in the middle of a main road to deliberately disrupt the traffic of a city already cursed with motorway constipation is just infuriating.

How did the TPP become the fault of Aucklanders who are just trying to get to work? How did it require vandalism of one minister's electorate office?  How would molotov-cocktail bombing another minister's office stop it?

A  delicious irony emerges when considering these embarrassing advocates.

Useful Idiots

The Syndrome of the Embarrassing Advocate

Both the Republican and Democratic parties in the United States are learning all about the Syndrome of the Embarrassing Advocate.  It's that feeling of hollow victory when someone who is a few sandwiches-short-of-a-picnic starts to advocate for a position you hold dear.

We have seen Republicans wincing when Donald Trump, a celebrity politician, has started to espouse conservative causes.   We in New Zealand can afford to laugh at Trump because none of the avian excrement is likely to foul our nests.  So he has been good for us--as a comedic figure can be.  After all, laughter is the best medicine, they say.  Thus, we were heartily amused when, being confronted by his ideological and philosophical about-faces, Trump (with a straight face, no less) justified them by saying, "Well, look, back then I was a business man,  Now I am a politician."  What a deliciously ironic turn of phrase.

And don't get us started on Hillary Clinton.  Democrats and Independents all over the country must be wincing every time she opens her mouth to change feet.  It pays to be sanguine about it all.  As Mr Bennett has said, "What do we exist for, eh Lizzy, but to make sport for our neighbours, and for us to laugh at them in their turn."

We have had our own Kiwi incident of the embarrassing advocate right here in NZ.

Letter From New Zealand (About Free Trade)

Trans Pacific Partnership is too Important for New Zealand

Labour Leader's  Plays Partisan Political Football  From Unionist Playbook

Fran O'Sullivan

NZ Herald

The Trans Pacific Partnership (TPP) is too important to New Zealand's economic future for Andrew Little to turn it into a partisan political football.

Little has attempted to somersault on the proverbial pin by giving former Labour leader and trade minister Phil Goff a dispensation to take his own position on the agreement - ostensibly because of "his involvement in negotiating its predecessor the P4 agreement" . Yet at the same time, stamping on former leader David Shearer for vocalising support for TPP because he wants his MPs to fall into line with the nebulous notion of caucus "collective responsibility".

It is difficult to understand why Little prefers the judgment of NGO activists over that of a former NZ Trade Minister who not only negotiated the ground-breaking bilateral China free trade deal but also finalised the Asean deal with New Zealand and Australia.  Frankly there is nothing responsible in Little's positioning.

Embarrassing

Time For All Good Men To Come to the Aid of the Party

Sadly once again Maori have been tarred with ignominy, shame, and a loss of mana.  The few have shamed the entire race.  Waitangi Day is supposed to be a holiday celebrating the beginning of the New Zealand nation.  Traditionally, Waitangi plays host to the Prime Minister and a bevy of politicians.  In recent years it has become the pretext for airing of Maori grievances--of which there appear to be no end.

Waitangi and the Treaty Grounds fall within the tribal area of Ngapuhi tribe.  It has traditionally played the role of host for guests and visitors to the Treaty Grounds on Waitangi day.  Ngapuhi is a deeply divided group, bedevilled with internecine bickering and animosity.  At present it appears that the extremists and the radicals are in charge.

One blogger wrote, urging Key not to attend:

John, don't go to the Ti Ti (sic) Marae at Waitangi.    The lunatics have taken control of the asylum.   The debate in Maoridom over the TPPA has become irrational egged on by the lies pedaled by opponents of the agreement.   I doubt whether anyone at Ti Ti has bothered to do the hard yards and read the agreement.   If they had then the sort of canard being pedaled around the unwashed that the agreement could see Maori prisoners sent off-shore to serve their time in US and Aust prisons would be seen for what it is ... loony tunes stuff.

What has happened on the Marae is mirrored in the discord among Ngapuhi as to who has the mandate to negotiate their treaty claim(s) and you can see why. Their leadership has been highjacked by the likes of Kingi Tauroa, Sonny Tau, Hone Harawira, Margaret Mutu and the Popata brothers.   And so it is with the TPPA debate ... rationality has gone out the window.

NZ Labour Party Goes Retrogressive

TPP or Die -- Why We Need It

Duncan Garner
Newshub

The political consensus on free trade is over.  Stand by for thousands of protesters to target the signing of the Trans-Pacific Partnership (TPP) free trade agreement on Thursday.

After decades of supporting free trade, Labour has chosen to veer left into the bosom of New Zealand First and the Greens and oppose the TPP. It's short-sighted and totally hypocritical, in my view. It looks like the party has had its strings pulled by anti-TPP academic Jane Kelsey.

This is a serious and controversial departure for Labour, and it may yet hurt the party among middle New Zealand voters.  Do these politicians know that our bottled wine can be sold tariff-free in Canada, Japan and the US on day one of the TPP being implemented? Why would you oppose that after we as a country have fought for this for so long? Most fruit and other produce can be exported tariff-free too, as a result of the TPP.

I travelled the world with Labour and National Party ministers for years, watching them fight bloody hard for market access for our exporters. I have seen a block of New Zealand butter selling for $25 in Japan; the same with cheese. Some of these tariffs are so high our exporters are locked out.

We Get the Politicians We Deserve, They Say

What Have We Done?

Suddenly the NZ Labour Party has discovered the idea of national sovereignty.  It is somewhat of a late conversion.  Faced with the prospect of the present government signing the Trans Pacific Partnership ("TPP") free trade agreement--a political and policy objective formerly prosecuted and advanced by the Labour Party with great gusto and some notable successes--the Labour leader has now decided that TPP is a bridge too far.  

What is on that bridge? we wonder.  Labour leader, Andrew Little has been very clear in recent days.  The reason he (and his party) now opposes free trade agreements is that they end up diminishing national sovereignty.  They obligate New Zealand not-to-do nasty things with international trade.

This is a right pickle for the Labour Party.  The dizzying intellect of Mr Little has led the Party into a position which rapidly collapses into a quagmire with a scintilla of reflection.

Good News

Free Traders, Not Free Booters

We have noted in the past that we at Contra Celsum are free traders.  We support free trade not because we think there is something magical or messianic about goods and services being freely traded.  Rather, our position on free trade is an extension of the fundamental rights of private property ownership and the command, "Thou shalt not steal".  People's property is theirs to sell or exchange as they see fit.

Naturally, this is not an absolute right.  The use of one's property must be in accordance with the other nine commandments.  If one sells a good or service, whilst bearing false witness about the quality or nature of the service, theft has occurred, for example. Free trade must take place in the context of honesty and integrity, of true weights and measures.

For the past thirty years or so New Zealand has moved pretty steadily in the direction of free trade.  Part of trade being free is that exported goods are not subsidized by the State, thereby enabling sale at an artificially low price for the buyer.  Any such arrangements constitute theft--first of all from taxpayers whose property is extorted by the State to fund the subsidy, and secondly, it constitutes theft from competitors elsewhere in the world.

Traditionally, agriculture has "enjoyed" the greatest subsidies and barriers to free trade.