Gordon Campbell on the Northland by election, and a TPP news round-up

Incredibly, Winston Peters is back at centre stage of New Zealand politics, and in the role he likes best – as the virtuous underdog, fighting the forces of entrenched political patronage in the Northland by-election. Currently, a rattled Key government is throwing all the election bribes it can at the voters of Northland to fend him off. Yesterday for instance, the government suddenly found it could afford a $69 million bridge building package to create a short-lived jobs programme in Northland on behalf of its candidate. The symbolism seems perfect. Once the by-election is won and the bridges are built, a National government will allow the needy in Northland to return to their usual state of irrelevance.

Peters’ only concern right now may be that he has peaked too soon. Recent polling has him deadlocked on 36 per cent with National’s contender, Mark Osborne. Clearly, Labour voters have already got the message about the need for tactical voting. So far, Labour leader Andrew Little has done what he has to do on that point, ably enough. Pulling Labour’s candidate Willow-Jean Prime out of the race entirely would probably have been too blatant, and would have tainted the Peters’ campaign. Yet if Labour voters want to permanently stall the government’s deeply loathed employment law package, they know what they have to do: a Peters victory in Northland on March 28 is currently the best (and only available) way to do it. What’s at stake for National is its working majority in Parliament. Watch the skies for more bribes, heading north.

ACC levies

In other circumstances, it might be amusing to think that the revenue from a form of tax – ie, the patently excessive ACC levies – should be an essential ingredient in the Key government returning the country to surplus, with all the bragging rights that entails. Andrew Little has pointed out that the government has pitched the ACC levies at a level where it functions as a cash cow to put the government within hailing distance of its much-touted surplus.

Labour leader Andrew Little has called for an immediate cut in ACC levies, saying the corporation was set to collect $350 million a year more than needed. Mr Little said the money should be left in the hands of workers and businesses.

It is not as if this bout of ACC levies arithmetic is coming from left-wingers in the trade union movement, either:

The figures come from a report by Infometrics into the economic impact of the new 2015-2016 rates, which come into effect on April 1. It found cutting rates lower than approved by the government could boost the economy by $70 million a year, and stimulate a net increase of 590 full-time equivalent jobs, or up to 700 net new jobs.

In a similar Alice Through The Looking Glass argument, ACC Minister Nikki Kaye is claiming that the ACC taxes – sorry, the levies – have to be set WAY high because otherwise they might not be able to achieve their targets in a sustainable fashion. So very true. Set taxes too low and you can’t simply achieve your socio-economic goals in the long run. If this is the rationale that the government is willing to embrace in the wider economy, lets hear more of it.

TPP update

Here’s a grab bag of recent TPP news items. In case you missed Massachusetts senator Elizabeth Warren’s excellent attack on the investor-state dispute settlement (ISDS) mechanisms that are central to the TPP, here it is again:

As Warren says, independent judges do not sit on these dispute settlement panels:

Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high-paying corporate clients, how likely are you to rule against those corporations when it’s your turn in the judge’s seat?

Right. Warren also makes an interesting point that historically, ISDS panels might have had some justification back when foreign investors were at the mercy of unstable regimes ruled by grabby dictators. That’s not the case with Australia, Japan, Chile or any other TPP participant. Each TPP country now has a highly developed legal system with due respect for property rights. So which TPP member’s Stone Age legal system, pray, do our plucky investors need to be protected from with these ISDS measures? Trade Minister Tim Groser, maybe you’d like to answer that question. To Warren and everyone else, ISDS mechanisms look like tools of extortion for TNCs to use against sovereign governments.

On that point, Elizabeth Warren also cites some quite telling statistics :

From 1959 to 2002, there were fewer than 100 ISDS claims worldwide. But in 2012 alone, there were 58 cases. Recent cases include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned. U.S. corporations have also gotten in on the action: Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates…..

In other TPP news… In the US, the mounting opposition to the TPP has united (a) Tea Party conservatives who see US national sovereignty being handed over to foreign trade tribunals and (b) rank and file Democrats who oppose the TPP’s impact on US jobs, wages and conditions. This underlines just how hard it going to be for US President Barack Obama to get the fast track Trade Promotion Authority (TPA) that he needs to bypass any clause by clause rewrite by Congress of the TPP deal, assuming that a suitable text is ever finally agreed upon on. Here’s a recent gloomy assessment of the TPP’s chances from the Japan Times.

From that report, here’s an amusing example of the two steps forward, two steps back notion of ‘significant progress’ that TPP promoters keep on announcing:

The renewed effort to conclude a bilateral agreement on the TPP comes about a month after the last negotiations, in which Tokyo reportedly offered to slash tariffs on beef from the current 38.5 percent to 9 percent over 15 years. But Japanese negotiators also have reportedly asked for a safeguard measure that would allow the tariff to be raised to 20 percent if Japan’s beef industry is threatened.

Note the word there is “threatened” not “suffers measurable harm”. That phrase sends a deeply unattractive ‘use it and you’ll lose it’ message to US beef exporters. On further TPP news : the key Democrat deal maker crucial to whether the TPP has any future at all in the US domestic system is the Oregon Democrat (and Senate Finance Committee chairman) Ron Wyden. There’s a profile of Wyden here.

In the past, Wyden has been a strong critic of the secrecy surrounding the TPP negotiations, but the White House is counting on him to bring enough Democrats across the line to join mainstream Republicans who – Obama hopes – will grant him TPA ‘fast track’ powers, for both the TPP and its bigger trans-Atlantic equivalent. Already, Democratic activists opposing Obama are on the move. Some of them have been warning Wyden that if he does broker a TPP deal, he’ll face a left-wing candidate (who will split the vote) in his re-election bid for Oregon in the 2016 elections.

Oh, and if all that didn’t amount to problems enough for Obama and the TPP, quite a few Republicans he’s counting on to pass his trade agenda still haven’t given up on tacking the issue of “currency manipulation” onto the TPP agenda. To that end, Real Clear Politics has noted a letter that Obama sent to the-then Treasury Secretary Henry Paulsen back when he was merely the junior senator from Illinois. In early 2008, Obama claimed that currency manipulation really, really belongs in trade pacts, and even said that Trade Promotion Authority should hinge on its inclusion:

“Your department’s refusal to take action …’ [Obama wrote back then] ‘raises serious questions about the Administration’s commitment to protecting the interests of American businesses and American workers.

“Refusing to acknowledge this problem,” [Obama had] continued, “will not make it go away… The Administration’s refusal to take strong action against China’s currency manipulation will also make it more difficult to obtain congressional approval for renewed Trade Promotion Authority, as well as additional trade agreements.”

Now that he’s President, these words are being used against Obama. The TPP deal that he is touting currently lacks any meaningful measures to deter China ( and TPP members such as Japan ) from continuing to deliberately undervalue their currencies, in order to make their exports more attractive. That’s the dilemma. Republican moderates may well baulk at the TPP’s exclusion of currency manipulation measures. But the last minute inclusion of those measures would incite Japan (and others) to kill the TPP outright. What do you do?

Exorcist II : The Heretic !

This amusing trailer for John Boorman’s terrible Exorcist sequel is probably how the Beehive must be seeing the Northland by –election right now. With Richard Burton as Winston Peters. Truly, the stuff of nightmares.

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