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Monday, 16 November 2009

We Must Trade or Fade

Image www.voxeu.org/files/image/baldwin_spaghetti.JPG

This quip attributed to John F Kennedy in the early 1960s, certainly doesn’t apply to New Zealand at the moment in terms of the deals it is negotiating.

It seems like New Zealand and the world are rushing into trade agreements left, right and centre. For example here is a Youtube clip in which the Canadian Minister for Trade sums up what his country has been doing: http://www.youtube.com/user/commerceCDA

The WTO in the RTA section of its website, has a useful map: http://rtais.wto.org/UI/PublicSearchByMember.aspx   It lists all the trade agreements of WTO members. While it is not up to date and doesn’t include New Zealand’s newest FTA with Hong Kong, it does help to give the world context for the rush into trade agreements.

By clicking on to the map of Canada using the reference above, you will see that Canada has six FTAs listed plus seven new ones announced.

Can you imagine trying to map all the links that there are as well as putting all the new ones in. It has been tried as you can see from the image above and this is only North America. The article by Richard Baldwin which goes with this image – is worth reading. Here is the URL:


Among the points that Richard Baldwin makes is that: ‘While the spaghetti bowl [development of free trade agreements] is a problem for firms in big nations, it is much more so for firms in poor nations. Rich nations have the resources and negotiating leverage to navigate the tangle’s worse effects. The governments of small and poor nations do not. The spaghetti bowl falls much harder on the heads of the world’s small and poor nations.’

As we live in the South Pacific with small, poor nations as neighbours, it is worth giving the ‘spaghetti bowl’ more than a passing thought. What are yours?

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