What is a "free" trade agreement (FTA), anyway?

Cartoon source

FTAs are not the 'freedom to trade', or if it was, that horse has long since bolted. Maybe it's freedom from subsidies? It's certainly not the freedom to trade without tariffs, goods still have sales tax applied to them and attract other fees.

I have been following developments with international agreements since the late 1990s, having spent some time working directly with exporters, so have more than a passing interest.

I'm responding to the seemingly endless tirade of anti TPP articles that are we are fed by a media that seems sympathetic to a 'the cause'. A recent example is in Scoop an independent online agency, and the NZ Herald, NZ's largest newspaper.

Both would to well do mention if an article is an opinion piece, as opinions are not the best source of balanced perspectives. This is evidenced to the reference to Kelsey's article (and support of) It's Our Future's website in the Scoop article, or the increased rhetorical nature of her posts on The Daily Blog, dedicated to lobbying against the TPPA.

The writer of both articles is professor Jane Kelsey who seems to have become a 'go to authority' on the TPP, in spite of her opposition to it. Kelsey has publicly campaigned against the TPPA and is self described as anti globalization. (Is that the same as being against international trade?)  The articles are not presented as an opinion piece, the usual practice when media deviate from balanced journalism.

Relying on writers like Kesley who have a declared bias to be informed about the TPPA leaves me unimpressed. Neutral, let alone positive voices the TPPA are difficult to find, pro TPPA statements are restricted to sound bytes by politicians, who remained tight lipped about details, as they have agreed. Clearly there are some positive aspects, as the TPPA pursues simplification of international trade. It promotes all member nations to have a minimum wage (which 11 of the 12 already have), has clauses relating to the environment (having any international agreement is a big step forward).

Good inclusions include provisions on the environment, criticized because they will be difficult to enforce, a nice distraction from the fact that the existence of such provisions are a step in the right direction.

Those government leaders would hardly commit political suicide over this agreement by signing a thoroughly rotten anti people initiative that ruins democratic process - like the anti TPPA people would have us believe. Their thinly veiled inference is that government is in bed with big business - but NEWSFLASH - this agreement is about international agreement that affects the way international business is completed. For the TPPA, that unusually includes provisions to do with the environment, labor and intellectual property. And speaking of democracy, we know that governments will be ratifying the agreement - that's their job in NZ's case they were democratically elected to do.

Some countries are punitive in their application of tariffs, and more complex rules favors those companies that have the resources to overcome barriers. I know this because I have worked in teams that dealt with compliance.

So which is better, simpler international trade or more complex? The additional costs from travel to testing has not only a direct cost, but an environmental one. An example is goods that take an indirect route into a market, to avoid a tariff. Simplicity for international trade is usually better.

What's interesting is that there is criticism of secrecy, then statements criticizing details. Which is it? Can the writers have it both ways? Are the writers blind to this contradiction? Also, big points are made from data sourced public statements of negotiating positions, or worse, out of date leaked documents.

The TPPA has the potential that a more international approach can be taken, that improvements can be made to the way we do business internationally - and to that extent new ground is being broken. It is a starting point.

I sometimes try to consider exactly what "Free Trade" is - even though there are international agreements that carry that name (or label), I am left with no clear answer. Most are a simplification of trade rules, or reduction (not removal) of tariffs so that there is a level, or close to level playing field.

Most of all, what I want is more balanced reporting on the TPPA.

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Bruce Hudson founder and CEO of Gantt NZ Limited and offshoot Enzman, a small marketing company dedicated to growing client's businesses. He is currently writing a book on Information Security, due out in September 2015.