Tim Groser’s battle with the Wall Street Journal, and the Obama Peace Prize

Ouch. The main media byproduct of the recent Tim Groser march on Washington seems to have been this nasty editorial in the Wall Street Journal attacking New Zealand over its recent decisions on trade. A free trade fumble, the WSJ headline concluded, as it proceeded to slam our recent decision to retain import tariffs at their current five and ten per cent levels. Clearly, the WSJ didn’t buy Groser’s spin that by NOT taking off tariffs, we would eventually be helping the cause of the Doha Round.

Normally, getting slammed by the Wall Street Journal for not doing more to lay ourselves wide open to globalisation should be worn as a badge of honour. The Key government though, is usually keen to tout any favourable comment it receives in the American press as a sign of how splendidly it is doing. So the fact that one of Groser’s ’s main achievements in Washington seems to have been to generate an own goal in the Bible of Commerce is noteworthy and – you might have thought – newsworthy as well. After all, the NZ Herald’s Fran O’Sullivan had devoted much back-patting column space last month to the ‘news’ that something called the Washington Trade Daily regarded Groser as being an ‘honest broker’ capable of getting the Doha Round back on the rails.

This negative editorial in the WSJ is more significant. Arguably, the WSJ piece would have done more to affect New Zealand in its eternal quest for a free trade deal with the US than anything contained in the Washington Trade Daily – and it would certainly have cancelled out any imaginary upside from Prime Minister John Key’s goofy appearance on David Letterman.

OK, so what did the WSJ piece actually say ? For starters it found that the government’s tariff actions contradict its avowed stance on free trade.

“ Wellington’s recent move to forego further free trade for now—in the name of freer trade, no less—is puzzling… It’s a backstep for Mr. Key’s right-of-center National party, which had pledged the last time it controlled government in 1997 to eliminate tariffs by 2010. Mr. Key could have cut tariffs had he wanted to. Free trade is a surprisingly bipartisan issue in New Zealand, with both parties boasting tariff-cutting records. Despite the political pressures of a recession, there was no protectionist outcry against further tariff cuts.

So why did the government do it, the WSJ muses. It runs a skeptical eye over the government’s logic that keeping the tariffs in reserve as bargaining chips in bilateral agreements somehow advances the cause of free trade, globally.

Bilateral trade pacts have their uses. They can cement alliances, such as the U.S. deals with South Korea and Colombia that are languishing in Congress. And they can be a way to open trade when better options aren’t politically feasible. But economically they’re not as beneficial as unilateral opening and multilateral deals like the Doha round.

The WSJ isn’t exactly distraught about our sin against free trade dogma. “Mr. Key’s failure to cut tariffs isn’t the biggest challenge to free trade the world is facing right now…But it’s a disappointing fumble nonetheless.” Very disappointing for Groser too, one imagines, to open up that newspaper during his big week in Washington.

Footnote: can the Tim Groser who now champions the wisdom of holding onto tariffs as bargaining chips in New Zealand’s free trade negotiations really be the same tactical genius who – in his role as New Zealand’s chief trade negotiator in Geneva – gave away almost all of New Zealand’s bargaining chips during the Uruguay Round in the 1990s?

If it is the same person, when did Groser have his Damascus moment of enlightenment – and does he now concede that free trade only works to New Zealand’s benefit if and when our main trading partners disarm their protectionist measures at the same rate and manner that we are doing it ?


The Obama Peace Prize

Any peace prize handed out by the inventors of dynamite should be treated with some ambivalence… just to be sure we’re not talking about the peace of the grave. Personally, I don’t have too much of a problem with Barack Obama getting the Nobel Peace Prize. Several times in the past, the Nobel Committee has made it pretty obvious that it is taking a punt on peace, rather than rewarding the noble for a lifetime of effort and achievement.

The Nobel Peace Prize, in other words, can be aspirational. And not surprisingly, when it is taking a punt of this sort, the Nobel Committee sometimes gets it wrong – Ariel Sharon, Yasser Arafat and Henry Kissinger for instance, are not generally remembered as the leading peace-makers of our time, despite having Nobel Peace Prizes on their shelves.

Interestingly though, the Nobel Committee did go out of its way this time to emphasise that it WAS giving Obama the prize for his deeds, and not for his potential. Obviously, they don’t want to look like a pack of Obama fanboys. Over at Nate Silver’s 538 website, columnist Renard Sextion does a reasonable job of summarising Obama’s credentials – which, in the eyes of the Nobel Committee at least, seem to hinge on his track record on nuclear non-proliferation and climate change.

The justification for the prize, while certainly unexpected and a bit tenuous, is indeed rooted in fact. Obama has long been a booster for non-proliferation, and his speech and lobbying at the UN General Assembly and Security Council proved to be quite successful.

On climate change, the Obama administration has taken the toughest line against carbon emissions of any White House so far in terms of concrete regulations by Federal agencies. The September announcement by the EPA that the agency would begin to regulate CO2 as a pollutant, verified by the Supreme Court in 2007, was a major step towards US action on the climate change issue. Though cap-and-trade or other large scale programmes are clearly the purview of Congress, the executive branch’s efforts in the realm are likely to be a major portion of the US effort.

Regarding diplomacy, the committee was likely in part referring to the re-elevation of Susan Rice’s post, the US Ambassador to the UN, to a cabinet level post, as well as his public addresses and promised strategic changes toward diplomatic action over rapid military decisions – such as Iran. The G5 plus one meeting with Iran, where Undersecretary of State Burns officially met with the Iranian negotiator, and found a way forward on nuclear energy processing was the first concrete outcome of this strategy.

Even so, this is fairly thin stuff – and his moves on Iran in particular consist of a mixture of diplomatic carrot and military stick. The pivotal issue right now is Afghanistan. Again though, it is possible to make a case that Obama is being as constructive and as measured as he can be, in the circumstances. Quite correctly, Obama has restored Afghanistan to its prime position ahead of Iraq, in the US response to the external threats that it faces. To all outward appearances, Obama is also considering every rational option – ie, separating out the military and political responses, focusing the US military on al Qaeda ahead of the Taleban, exploring the feasibility of including moderate Taleban leaders within a political solution etc etc.

All this is occurring while Obama is going about boosting the US military presence – but even so, such moves are clearly in the service of ending the NATO/US occupation, and not into turning that commitment into a lasting imperial adventure, along the lines that George Bush planned for Iraq. True, the logic of a greater involvement in the name of a speedier withdrawal didn’t work in Vietnam, and it probably won’t work in Afghanistan either – but Obama has no choice but to try it. Ultimately, it will be on Afghanistan and Iran that Obama’s credentials as a peacemaker will be decided. In that respect, the Nobel Prize can only strengthen his international mandate to seek a political compromise in both situations – and on that basis, it has to be welcomed.


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