Caution needed on global procurement deal

John Key and the National government are trumpeting an international agreement that they say will open up a $US1.7 trillion market to New Zealand exporters.

Forty-three World Trade Organisation members, including Hong Kong, the European Union and the United States, are already signed up. Trade Minister Tim Groser said the deal is a huge bonus for the country’s exporters.

“We’ve been excluded from, we think about, $US1.7 trillion in terms of the available market, with the biggest one of all the US market. It puts New Zealand exporters on a level playing field with other companies.”

What it really means of course is that NZ companies will be able to compete with international companies meeting the tendered needs of signed up governments. It also means those international companies can likewise bid on NZ contracts.

Given the corruption that already exists in so many overseas markets, and the intellectual property infringements that occur by way of software piracy and patent infringments, (China leads the world in both) I’m not sure that the “level playing field” concept used to justify this agreement is all that accurate. For example Communist Chinese companies paying slave wages and being most likely corrupt and cronyist will be in the same bid pool as legitimate NZ companies.

The Foreign Affairs, Defence and Trade Committee has recommended to Parliament that, on balance, the agreement would benefit New Zealand. “On balance” is the key phrase here. I’d like to see the actual calculations underpinning this recommendation, and be assured they took into consideration the fact that what we are getting into here is a big pond full of very big sharks.