November 5, 2014 9:00am by David Farrar

The benefits of fighting protectionism

Labour has fallen in behind the Government’s decision to join a trade pact that gives Kiwi firms the right to bid for more than $2 trillion of overseas government contracts.

New Zealand has joined 43 other countries, including the United States, Japan and all European Union countries, in becoming a party to the World Trade Organisation’s Government Procurement Agreement (GPA).

Exporters including Fisher & Paykel Healthcare and Hamilton’s Gallagher Security are celebrating the agreement, which is designed to ensure companies are treated equally when competing for government tenders in any of the signatory states.

However, the reciprocal deal could have a flipside for some local businesses which may now face more competition from overseas firms when bidding for work with the New Zealand public sector.

So why is Labour supporting this, when they have spent years complaining that companies like Dunedin’s Hillside should have been protected from foreign competitors? In fact wasn’t their policy to tilt the field towards local companies?

Labour foreign affairs spokesman Phil Goff supported the agreement. “I am prepared to accept the balance of advantage lies in opening up new opportunities for the best of our exporters to sell goods and services into those markets,” he said.

Although it does not cover all government procurement in all those countries, Joyce said the deal would ensure New Zealand firms were able to bid for work worth more than US$1.7 trillion ($2.16t) annually.

Good to see Goff ignoring the rhetoric of his colleagues, and signing Labour up to support this agreement. If you have confidence in NZ firms, we stand to win more than we lose by having equal access to government procurement tenders across the developed world. Plus it is better for taxpayers to more competition for tenders.

But I wonder why the left blogs who daily denounce neo-liberalism have been so silent on Labour’s support of the GPA? Shouldn’t they be demanding that the four leadership candidates denounce it as neo-liberal trickle down policies?