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- The New Zealand and Thai governments agreed in October 2003 to start negotiating a free trade agreement (called at the New Zealand government's request a 'Closer Economic Partnership'). Negotiations have been taking place in 2004 and it is planned to conclude them by November this year. The draft CEP will then (in New Zealand) be sent to the Foreign Affairs, Trade and Defence select committee in early 2005, and the intention is to have the treaty signed by mid 2005.
The Green Party, the union movement, development and fair trade organisations all have serious concerns about the negative impacts this CEP could have on both the New Zealand and Thai people, and on the environment in both countries. Similar concerns are being expressed by equivalent Thai organisations.
To mark the forthcoming visit to New Zealand of two speakers from Thailand this special issue of JustTRADE sets out these concerns, and how to become more informed and active on the issue.
- Issue # 1: Jobs, Wages and Working Conditions
In New Zealand the clothing, textiles, footwear, bedding, vehicle parts, tyre, rope and twine, carpet and appliance manufacturing industries are currently protected by (low) tariffs of 5-15%. These are all industries where Thailand has a lot of product which could be exported to New Zealand if tariffs come off. NZ businesses and jobs are therefore under threat from a Thai-NZ CEP.
Is this balanced by increased jobs and taxation revenue from producing more for export? That depends on which industries are favoured by an 'export-led growth' national economic strategy rather than a 'sustainable local development' model. In the case of the Thai-NZ CEP, the industry which will benefit most, the dairy industry, is highly automated and not labour-intensive. It may also have reached the environmental limits of expansion (see below). It is therefore extremely likely that the manufacturing jobs and revenue lost through a Thai-NZ CEP will be a net loss to New Zealand.
The economic consultancy group BERL has calculated that for every $1 million worth of goods imported which could have been made here, New Zealand loses 16 jobs, has to pay $159,496 in increased welfare payments, and loses $118,137 in reduced taxation revenue. The overall drop in spending power comes to $259,348. New Zealand's trade deficit this year with Thailand is already $243 million (year to June). That represents 3,888 jobs that New Zealand "exported" to Thailand in the last year.
Given how low wages are in Thailand, and how poor working conditions are for the majority of Thai workers in the export manufacturing sector, a free trade agreement with Thailand constitutes unfair competition for NZ business, and a danger to labour standards in both countries. The legal minimum wage in Thailand is 77 cents per hour — and even that is not rigorously enforced. Thais in the manufacturing sector work an average of 50 hours per week, but are generally not paid overtime rates. Child labour is common in Thailand, with an estimated 500,000 13-14 year olds in paid employment, and 1.2 million children aged 6-14 not in school. Migrant workers (some 2 million, many of them refugees from Burma) are often badly exploited. (Details on Thai labour conditions can be found at http://www.thailabour.org) Thailand has not ratified the International Labour Organisation conventions on the rights to collective organisation and bargaining in the work place, which makes it hard for workers to improve their lot.
Trade based on the exploitation of labour is not fair, and it certainly shouldn't be called 'free'. Protecting, increasing and improving jobs, wages and working conditions should be a primary goal of economic policy — a Thai-NZ CEP would not help achieve this goal.
For Imports and Exports with thailand see Thai trade graph (PDF)
- Issue # 2: Environmental Quality and Protection
The world's largest dairy company (New Zealand's Fonterra) lobbied the NZ government to negotiate the Thai-NZ CEP, and is closely involved with the negotiations. In 2003 Fonterra sold $193 million worth of dairy products to Thailand ($167 million ahead of the next largest export category, wood and wood pulp). But increasing the amount of dairy product NZ has to sell overseas comes at a high environmental cost at home. Recent research by the National Institute of Water and Atmospheric Research found 96% of New Zealand's pastoral lowland waterways are so polluted by faecal bacteria that they are unsafe for swimming. In Canterbury, where dairy farming has been expanding rapidly in recent years, nitrate levels in streams and waterways were found to be 12 times above the recommended limit, while faecal bacteria were 5 times the safe limit. Canterbury is also reaching the limits of its groundwater resources, with some areas already at unsustainable levels of depletion. These environmental costs — which are borne by public - are not deducted from the private profits to be made from free trade agreements. In the interests of fairness and sustainability, they should be.
In Thailand, threats to the environment have increased with the election of pro-free trade Prime Minister Thaksin Shinawatr in 2001. Thaksin has personally intervened four times to override environmental regulations (and even the advice of the Human Rights Commission) in order to ensure the construction and maximum operation of four environmentally and socially damaging energy projects. In July 2004 he called for a cull of protected wild birds, claiming that they, (rather than unhealthy battery farming practices and lax safety standards) were responsible for spreading lethal bird flu in Thailand. Export-led growth policies in Thailand are replacing sustainable family farms with energy and chemical dependent monocultures controlled by global corporations. In the past thirty years one quarter of Thailand's population has been forced off the land and into urban centres to make a subsistence living in poorly paid (and often heavily polluted and unsafe) manufacturing occupations.
What about climate change and fossil fuel depletion? Even if the production of exported products in NZ and Thailand were 100% clean and green, moving them across the world uses fossil fuels, releases carbon into the atmosphere and contributes to climate change. For the sake of the planet's health — and our own — we need to become more self-reliant and cut back on unnecessary international trade, not encourage it.
- Issue # 3: Corporate Control and Loss of Democracy
Bilateral free trade agreements like the Thai-NZ CEP are generally negotiated at the request of and with the assistance of major global corporations, who stand to profit by them, whatever happens to jobs and the environment. The Thai-NZ CEP illustrates this point particularly well, with Fonterra pushing for it on the NZ side and companies which the billionaire Thai Prime Minister owns or is associated with standing to benefit on the Thai side. (For how this works and who is involved see Pluto-Populism in Thailand: Business Remaking Politics, by Pasuk Phongpaichit and Chris Baker (PDF).
In Thailand the public is excluded from opportunities to consider and critique free trade agreements as they are negotiated. In New Zealand, negotiating texts are not made available (as they are in Australia and the USA) and Cabinet, not parliament, ultimately decides what is in them. Consultations favour export business interests, and the impacts of the agreement on labour and environmental rights and standards are not taken seriously.
This is of particular concern in Thailand's case, where environmental and human rights activists are harassed and even murdered. In June 2004 a prominent environmental activist was gunned down as he was returning from giving evidence to the House Committee on Corruption. He was the 16th activist to be killed (or to 'disappear') since Thaksin took power three years ago.
The standard response of government to objections with trading with states which sanction political killing, torture and other human rights abuses is that it is better to address such concerns separately and diplomatically, not via economic policy. That's what they used to say about slavery.
Further reading and links:
Action
- If It's Not Fair - It's Not Free
Hear First Hand About the Thai-NZ CEP and Trade Justice Issues from Two Thai Speakers
Dr Jakkrit Kuanpoth, associate professor of law at Sukhothai Thammathirat Open University, and Ms Sripai Nonsee, labour organiser and ex-factory worker.
Public Meetings - September 2004
- Christchurch, Monday September 13, 7:30 p.m. Trade Union Centre, cnr Armagh & Madras Sts
- Wellington, Wednesday September 15, 7:30 p.m. St John's Hall, cnr Willis & Dixon Sts
- Auckland, Thursday September 16, 7:30 p.m. Trades Hall, 147 Great North Rd, Grey Lynn
Meetings hosted by Green MP Rod Donald and organised by Fair World Links, PO Box 13 367, Wellington 6004 links [at] actrix [dot] co [dot] nz (E-mail Fair World Links)
- Express Your Views on the Need for Fair and Sustainable Trade by contacting Government Ministers
jsutton [at] ministers [dot] govt [dot] nz (Jim Sutton, Minister for Trade Negotiations).
janderton [at] ministers [dot] govt [dot] nz (Jim Anderton, Minister for Economic Development).
pswain [at] ministers [dot] govt [dot] nz (Paul Swain, Minister of Labour).
mhobbs [at] ministers [dot] govt [dot] nz (Marian Hobbs, Minister for the Environment).
pgoff [at] ministers [dot] govt [dot] nz (Phil Goff, Minister of Foreign Affairs).
pm [at] ministers [dot] govt [dot] nz (Helen Clark, Prime Minister).
Letters - no stamp required -addressed to Parliament Buildings, Wellington.
Local Members of Parliament
Write to, ring or visit your local constituency MP (whatever party they belong to) and ask if they have any information on what impacts this free trade deal will have on your community, and express your concerns. Do the same with any Labour Party list MPs from your area.E-addresses and other contact details for all MPs are at Office of the Clerk.
Colleagues, Family and Friends
Share information on the Thai-NZ CEP with them, and encourage them to object to it too. Bring the issue to the attention of your union, professional association, local council, local business association, church or other community group, and discuss it with members.Fellow Citizens
Write letters to the editor, call talk back, hand out copies of the flyer, put up posters — keep the information and interest flowing.Get Involved/Learn More from fair trade, development and social justice organisations such as:
JustTRADE is produced by Christine Dann, Bronwen Summers and Rod Donald MP.
If you have any feedback on the content of JustTRADE, or news items, please christine [dot] dann [at] clear [dot] net [dot] nz>e-mail Christine Dann.
The Green Party is not responsible for the content of external links, or of externally produced articles, and their contents may not reflect Green Party views or policies.
