Thursday, 20 August 2015

TPP leverage?

The commentariat is of a single half-mind that NZ is that because NZ has already removed most of its tariffs we are negotiating the TPP with one hand behind our backs, and are about to get our pants down.

Garbage, says Eric Crampton. (Well, that’s my summary since he’s far too well-mannered a fellow.)

I could understand this argument if we were talking about bilateral trade deals. But, New Zealand is only one of many countries in the TPP. Whatever deal comes in applies to all of them….
    I just can’t see how New Zealand’s tariff status affects things. We’re a small enough country that, even if we had crazy high tariffs, no US domestic industry would care enough about getting access to the NZ market to outweigh US dairy wishes to keep NZ out. This is just
standard Mancur Olson stuff: the costs of free trade with NZ, in the US, are concentrated; the benefits are diffused. And that would be true no matter New Zealand’s tariff status.
    [Rob] Salmond argues that New Zealand has no leverage because we have no particular tariffs to concede. I just cannot see what coalition, in any of the TPP trading partners, cares enough about getting access to New Zealand markets in particular to get into a fight with their counterparts in their domestic dairy industries.

Like I said. Garbage.

Still, Eric is still willing to bet NZ won’t be signing up

1 comment:

  1. Well, I'm willing to bet that NZ won't sign up if the deal has as poor of dairy access provisions as currently expected.


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