Creating a Positive Trade Future with TPP
Apr 13, 2017
By Craige Mackenzie: Methven, New Zealand
The best way to predict the future is to create it.
Some attribute this clever line to Abraham Lincoln and others to Peter Drucker. Yet it doesn’t matter who said it because the point remains the same: We are the authors of our own destiny.
My country of New Zealand has chosen a future of free trade.
It’s already an essential part of our present: We rely on foreign markets, especially in agriculture.
I milk about 1,100 dairy cows on several hundred hectares. Virtually all of their milk will ship to customers in other countries. We produce high-quality dairy products from a farming system that has a reputation for being clean and green, allowing us to supply the higher end of the market.
We also have a seed production farm, growing ryegrass, fescue, hybrid carrot, hybrid radish, and others. About half of these seeds will be take root in the soil of New Zealand—and the rest will sprout elsewhere, under the care of farmers across the seas.
Overall, New Zealand exports an enormous amount of what we grow and make. We also import many products, especially manufactured goods such as cars, trucks, and machinery.
That’s why so many of us support the Trans-Pacific Partnership, a trade agreement that seeks to link many of the nations around the Pacific Rim. This alliance once included the United States, which is New Zealand’s third-largest trading partner, following China and Australia. In January, however, President Trump announced America’s exit from TPP.
The withdrawal was a major disappointment because trade makes us all better. Competition drives efficiency, which is a key trait of any healthy economy.
Protectionism does the opposite. Although it may please a few politicians and special interests, it hurts the rest of us. Its inefficiency reduces opportunities for workers and entrepreneurs, hikes prices on consumers, and makes everyone poorer.
Nobody gets rich when they sell only to themselves.
Despite this, the finance ministers at the G20 summit in Germany last month refused to condemn protectionism. At the insistence of U.S. Treasury Secretary Steven Mnuchin, they dropped the language that they had used just last year: “We will resist all forms of protectionism.”
Instead, the officials issued a bland and unsatisfying statement that merely noted “the contribution of trade to our economies.”
Here in New Zealand, we don’t just celebrate trade and resist protectionism—we actively search for new ways to trade with willing partners.
That’s why we’ll forge ahead with TPP, even though it most likely won’t include the United States. By reducing tariffs, TPP will save New Zealanders hundreds of millions of dollars per year, allowing our economy to grow by some $2 billion per year between now and 2030. It won’t be as good as a TPP that includes the United States, but it will still be good.
TPP is a beneficial trading platform for us and if we’re going to trade agricultural goods as well as other products equitably with Pacific nations, we need to be part of a larger group.
We expect most of the other TPP nations to choose to move forward as well. Leaders in Australia, Canada, and Malaysia have expressed enthusiasm for a post-Trump TPP. What it means for Vietnam is less clear: Its leaders were very keen on U.S. involvement.
China was never a part of TPP and it won’t join now, but everybody in the region trades heavily with it. America’s withdrawal now opens a chance for China to expand its influence. I doubt that Beijing will be able write the rules of Pacific trade, as some have feared, but it will use this moment to strengthen existing relationships as well as to create new ones.
The last American president, Barack Obama, used to talk about how the United States should “pivot” to Asia. The Trump administration, however, has turned its back on TPP. So a pivot may in fact happen—but it won’t involve Americans. Instead, New Zealand and its TPP partners will do the pivoting.
I won’t try to predict the future—but I’ll gladly participate in its creation, knowing that we still have the power to choose a future that rejects protectionism and embraces free trade.
Craige Mackenzie uses precision agriculture tools and techniques to produce specialty seed crops including wheat, ryegrass, fescue, hybrid carrots, hybrid radish, pak choi, spinach and chicory along with a dairy operation in Methven, New Zealand. Craige serves as a board member of the Global Farmer Network (www.globalfarmernetwork.org).