The poison pill smuggled in with the Indian FTA

Another Constitutional Trojan Horse: advancing change through political stealth

FOR ALL THE FOOLISH NONSENSE about "tsunamis" talked about the Indian-NZ Free Trade Deal, there is a genuine issue that Gary Judd KC has identified in reading through it, and it's not about free trade or butter chicken. It's about a poisonous clause inserted at the obvious behest of the NZ negotiators. 

"The striking feature of this Free-Trade Agreement," notes Judd, "is that it brings the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into the text of a trade treaty. That is not a side issue. It is a political and constitutional declaration inserted into an agreement that is supposed to be about trade. ... New Zealand’s Free-Trade Agreements with the United Kingdom and the European Union refer to indigenous rights and Māori participation. But the India agreement goes further. It is the first to affirm UNDRIP expressly. That is a significant escalation."

Why the hell is it there?

Everything points to this UNDRIP wording having been included at New Zealand’s initiative, not India’s. India appears to have agreed only on condition that its longstanding reservation was recorded. There is no obvious reason why India would want UNDRIP written into a trade agreement with New Zealand. ...

If it truly changed nothing, it would not be there. The obvious reason for including it is not trade with India but politics within New Zealand. A trade agreement is being used to advance a domestic constitutional and political agenda. That is an abuse of the treaty-making process. A provision with no real trade function, but clear ideological value at home, has no legitimate place in a Free-Trade Agreement.

Once this affirmation is in a ratified treaty, it will inevitably be invoked inside New Zealand as proof that the country is committed to UNDRIP in a serious and operative way, not merely in some airy symbolic sense. Lawyers, activists and judges will be invited to treat it as yet another marker of state commitment. To dismiss that as mere technicality would be naive.

You'll remember that Helen Clark, as Prime Minister, was astute enough to have her UN representative vote against the Declaration -- one of only four nations to oppose.  (As Judd notes: "India voted in favour (see here) but immediately made it clear that it did so subject to an important reservation. That same reservation now reappears in the FTA.")

It was John Key who blithely acceded to signing up simply in order to bolster his parliamentary support from Pita Sharples's Maori Party. 

What Key casually signed away was not trivial, as we saw when Ardern's Labour Government began drawing up the He Puapua document under UNDRIP's impetus. "He Puapua is not a minor discussion paper," Judd reminds us. "It is a blueprint for major constitutional change, including forms of co-governance. One example is paragraph 15: 'If they choose, Maori must be able to participate in Crown governance."

Clark's objection to the Declaration was principled, and what Clark's UN representative  Rosemary Banks said about it then is as valid now: Four provisions in the Declaration in particular were [and still are] "fundamentally incompatible with New Zealand’s constitutional and legal arrangements, [with] the Treaty of Waitangi, and [with] the principle of governing for the good of all its citizens."

What were those four provisions?

• Article 26 stated that indigenous peoples had a right to own, use, develop or control lands and territories that they had traditionally owned, occupied or used. For New Zealand, the entire country was potentially caught within the scope of the article, which appeared to require recognition of rights to lands now lawfully owned by other citizens, both indigenous and non-indigenous, and did not take into account the customs, traditions and land tenure systems of the indigenous peoples concerned. The article, furthermore, implied that indigenous peoples had rights that others did not have.
• The entire country would also appear to fall within the scope of article 28 on redress and compensation. The text generally took no account of the fact that land might now be occupied or owned legitimately by others, or subject to numerous different or overlapping indigenous claims.
• Finally, the Declaration['s articles 19 and 32] implied that indigenous peoples had a right of veto over a democratic legislature and national resource management, she said. She strongly supported the full and active engagement of indigenous peoples in democratic decision-making processes. New Zealand also had some of the most extensive consultation mechanisms in the world. But the articles in the Declaration implied different classes of citizenship, where indigenous had a right to veto that other groups or individuals did not have.

In short, the Declaration set up two standards of citizenship based on race, and a legal veto over other's property based on ancestry. Clark understood that. Key was too dim.

And so too are Luxon and Todd McClay, who either called for this clause's insertion in the Indian FTA themselves, or were insufficiently astute to have seen it there and taken out.

The He Puapua programme itself was begun without explicit acknowledgement of its goals. Those goals, indeed its very existence, were only revealed when it began to seem that some underlying framework was at play in Willy Jackson's and Nanaia Mahuta's legislative agenda.  Turns out there was. Media organisations uncovered the document, who then obtained it under the Official Information Act, and it was finally released only in April 2021 after pressure from the Ombudsman. "That is not transparent government," points out Judd. "It is disclosure dragged out by resistance."

The irony is that the same thing is happening here. 

Neither Government appears ready to argue openly for setting up two standards of citizenship based on race and ancestry.

Instead, they have to do it by stealth.

Gary Judd explains the danger in detail here, including illustrations "why ratifying the FTA in its present form is not a harmless gesture." I recommend the read.

He concludes:

What is most objectionable in all this is the contempt it shows for ordinary New Zealanders. Constitutional change of this magnitude should be argued for openly, defended honestly and submitted to democratic judgment. Instead, it has been advanced by ministers, officials and sympathetic elites through opaque processes, delayed disclosure and legal increment. That is no way to alter the foundations of a country.

The obvious remedy is greater democratic control. If politicians, officials or judges wish to drive constitutional change, they should have to defend it before the public in clear terms and win consent for it, not smuggle it through advisory reports, bureaucratic process or the fine print of a trade treaty.

That is the real issue raised by this agreement: not trade, but whether constitutional change in New Zealand will occur by democratic choice or by political stealth.

"Ironically, New Zealand First did not place New Zealand first."

 

"We are discussing the soon-to-be ratified NZ-India free trade agreement and the opposition by Messrs Jones and Peters. It’s proving a popular strategy, but it has been my observation, perhaps unfairly, that New Zealand First can sometimes be a little, shall we say, imprecise when it comes to their interpretation of the facts. ...

"[T]he treaty allows for 1000 software engineers, 1000 civil and mechanical engineers, 700 construction managers, 500 teachers and 1200 nurses. That’s 5000 in total. This isn’t 5000 a year. It is 5000 at any one time. And then they have to go home. ...

"[W]hat [else] do we get in this agreement? ... We are talking hundreds of millions of dollars. Not billions. And without dairy this isn’t a game-changer as the Prime Minister describes it but it is, for those industries affected, transformational.

"The other nonsense being peddled by NZ First is the obligation to invest US$20b into India; this is not what the document says. The wording is clear; we shall promote foreign direct investment '…from investors of New Zealand into India with the aim to increase investment by US 20 billion dollars within 15 years…'

"This is an aspiration, not a commitment. I suspect that this was included to give New Delhi cover to justify the internal political cost of reducing tariffs. ...

"It is significant that the Labour Party stepped up to support a treaty that was in the nation’s interest. They [belatedly] placed country ahead of party and for this Labour deserves our appreciation. Ironically, New Zealand First did not place New Zealand first. ...

"Like the trade deal with China, the initial document isn’t the final one. It opens a bilateral economic engagement that will improve the quality of life for residents of both countries.

"Luxon and his trade minister deserve respect and credit for this achievement."

~ Damien Grant from his column 'Reading the NZ-India free trade agreement made my stress levels rise'

Free trade is good. A reminder. [updated]

Getting a free-trade agreement with India over the line has been harder work than getting oil out of the Straits of Hormuz. But over the weekend it finally happened, and the agreement was signed.

It's true, as Murray Rothbard used to say, that genuine free trade doesn’t require a treaty or its deformed cousin, a “trade agreement” -- all it needs is repealing our numerous tariffs, import quotas, anti-'dumping' laws, and other restrictions on trade. Which, to be fair, is most of what this agreement seems to offer.

A relaxation of rules, not any new ones.

Over the centuries, getting it understood that trade is good -- a win-win -- has been even harder work. It's been 250 years since Scotsman Adam Smith wrote 700 pages to explain that very point. Yet as Daniel J. Smith, Gabriel F. Benzecry point out, "Returning to The Wealth of Nations, one is struck by how little progress has been made in educating the public about sound principles, a task that must be renewed with every generation."

The Enlightenment ideals of individual liberty and voluntary exchange that inspired America’s founders also laid the foundation of modern economics. Yet two and a half centuries later, persistent policy blunders — protectionist trade barriers, ballooning national debt, and stubborn inflation — reveal how far we have strayed from the Scotsman’s insights, endangering the principles upon which our republic was founded.

Protectionism is becoming so endemic once again, so normalised, that it requires a major effort to implement its opposite. It's big news when shackles come off. freedom free-trade 

The problem isn’t a lack of knowledge — it’s a failure to teach and apply enduring principles. ...

Yet even as those principles are applied we can see and applaud the results. Even as the world's population has increased rapidly, we see that the most important growth with more population is not more stomachs to feed, but more minds able to produce -- and (in Adam Smith's words) more people ready to truck, barter and trade. The very simple fact, as Marian Tupy reminds us, is that "for every 1 percent increase in global population, population-level resource abundance grew by about 6.3 percent."

For every 1% increase in global population, population-level resource abundance grew by about 6.3% — according to @HumanProgress's new Simon Abundance Index.

In other words, when people are left even moderately free to produce, resources grow at a faster pace than the population.

It was Malthus, writing after Adam Smith, who ignored so many of his lessons and saw only the stomachs to be fed. 

The Malthusian mind never [saw] the human capacity to cooperate, trade, discover, invent, and adapt.

The record is clear. Smith explained how it works 250 years ago. Let's applaud when more of it is allowed to happen.

UPDATE: Another reminder: 

It's not nations that trade. People trade.

And they will if you just get out of their way. 

To AUKUS, or not to AUKUS?

"Economists think that the more interconnected countries are by trade and investment, the less likely warfare will occur between them. [See for instance the NOT PC posts 'Free Trade Is the Path to Peace & Prosperity' and 'The Horsemen of non-apocalypse']
    "On many occasions countries have consciously intensified those interconnections as an alternative to war.
    "Examples include the federation of the American states into the USA following a confederation after customs conflict between Maryland and Virginia; the European Coal and Steel Community (which evolved into the EU) tying up the French and Germany industries after three painful wars; ASEAN which was started after the Indonesian confrontation of Malaya ended; recently India has improved its physical and trade links with its neighbouring China and Pakistan.
    "Alas, economic relations between China and the US have deteriorated. That this occurred under both President Trump and President Biden suggests a structural tension arising from jostling over their places in the world. ...
     "One can explain the First World War and the follow-up Second World War as a consequence of Germany catching up in economic size to Britain and trying to find a comparable place in the world. (Neither noticed that the US was already bigger.) We may be grateful that moving from one global hegemon, Britain, to a second, the US, did not involve conflict between the two (although the two world wars accelerated the transfer from a weakened Britain). 
    "It is unlikely that China is going to be the next global hegemon. Rather, we are moving to a multipolar world where there is none. There is a plausible economic model which predicts that world economic output, and hence power, is moving to where the populations are – the situation before British industrialisation. It occurs because of the ease with which technology and capital can transfer between countries.
    "That does not mean that Chinese productivity will catch up to the American level – not in this century anyway. Factors like the resource base and social organisation mute the economics. ...
    "So behind today’s incipient economic warfare and military machinations we face a multipolar world whose shape is uncertain. ... The challenge for the world, then, is how to get from the current world order, in which the US acts the hegemon, to a multipolar world in which the US is but one of four or so big economies. Full multipolarity may be less than a quarter of a century away.
    "The US does not seem to see the issue this way. It is largely preoccupied with the short-term task of trying to maintain its current hegemony in a world whose order it sees as not too different from the immediate post-war one. ....
    "New Zealand may have little influence over the evolving world order. In so far as we have, we should be putting our effort in assisting it to move towards the reality of multipolarity. Ultimately New Zealand is having to balance its short-term interests against its long-term ones. I am not sure our friends always understand this."

~ Brian Easton from hist post 'Trading Towards A Multipolar World'

"India plans to institute an emergency law that will require maximum output at coal plants to prepare for record consumption expected this summer"

"Recently, India asked its utilities not to retire their coal plants until 2030 and the country plans to institute an emergency law that will require maximum output at coal plants that use imported coal to prepare for record consumption expected this summer.... India expects its power plants to burn about 8 percent more coal in the financial year ending March 2024....
    "Due to expected high electricity demand, India asked utilities to not retire coal-fired power plants till 2030, just over two years after committing to eventually phasing down its use of coal. Last May, India indicated that it plans to reduce power generation from at least 81 coal-fired plants over the next four years, but the proposal did not involve shutting down any of its 179 coal power plants. India has not set a formal timeline for phasing down coal use and this move indicates it will not happen soon....
    "India is one of the best economic performers among the G20 nations and its industrial activity has driven increases of around 14 percent in electricity generation ... Coal-fired generation accounted for most of the increase ...
    "[The] India[n government] wants its country to continue to grow economically and realises it cannot do that without continuing to use its coal plants. While the country is adding wind and solar power, it fell short of its 2022 renewable energy addition target by nearly a third because there is a disconnection between government targets and various operational, financial and regulatory constraints....
    "Now that governments have begun to control energy policies, it will be important for people to scrutinise the differences between their plans and their performance. In India, available, reliable and affordable energy seems to be the priority."

~ Institute for Energy Research, from their post 'Like China, India Intends to Continue Its Use of Coal' [emphasis mine]