World Trade Organization
New Zealand has been a vigorous promoter of a rules-based system for trade and the elimination of trade barriers through the World Trade Organization (WTO). Engagement with such multilateral activity has imparted policy continuity from both Labour- and National-led governments in seeking liberalised trade in agriculture.
Sleepless in Seattle
Mike Moore, former New Zealand prime minister, served as director general of the WTO from 1999 to 2002. He oversaw the launch of the Doha Round and China’s admission to the WTO – and the 1999 WTO meeting in Seattle, met by mass protests. Thousands of street protesters helped disrupt negotiations and deadlock the Doha Round timetable. The demonstrations reflected growing opposition to corporate globalisation and doubt about the advantages of trade liberalisation.
New Zealand has been a key player in the 19-member Cairns Group. Formed in 1986, the group is a coalition of agricultural trading nations committed to free and fair trade in agriculture, the elimination of trade-distorting domestic and export subsidies, and major tariff reductions.
A key focus has been the trade negotiation process conducted through ‘rounds’ under WTO auspices, which are designed to lower trade barriers. Beginning in 2001, but incomplete as of 2011, the Doha Round (named after Doha in Qatar, where the round began) repeatedly stumbled over agricultural import rules.
Elsewhere New Zealand has utilised WTO procedures to pursue trade dispute settlements, including with Canada (over dairy exports in 1997), the US (over lamb in 1999 and steel in 2002) and Australia (over apples in 2007). Although New Zealand negotiated bilateral and multilateral trade agreements which gave and allowed preferential access to markets, this did not reduce the importance of the Doha Round.
New Zealand joined the World Bank and the International Monetary Fund (IMF) in 1961, and the Organisation for Economic Cooperation and Development (OECD) in 1973. All three organisations undertake critical and closely considered evaluations of New Zealand’s domestic economic and wider public-policy performance.
The decision to join the IMF and the World Bank aroused controversy in New Zealand on grounds that this risked compromising economic control. At the time, New Zealand was fostering the development of local industries through exchange controls and import licensing. Conditions attached to IMF loans subsequently required assurances that New Zealand would follow deflationary policies, designed to reduce its continuing balance-of-payments problems.
Increased globalisation saw domestic interests intensify their monitoring of New Zealand’s multilateral conduct. The government learned a sharp lesson in 1998 when it attempted to introduce the Multilateral Agreement on Investment (MAI). This OECD-led initiative collapsed in the face of combined international opposition by environmental, consumer and social rights groups. They viewed it as a challenge to the powers of democratically elected governments. According to its critics, the MAI amounted to a corporate bill of rights – giving corporations rights that overrode local laws. They argued that it privileged multinational commercial investment by allowing national environmental laws and regulations to be bypassed.
Less contentious was New Zealand’s membership of Asia–Pacific Economic Cooperation (APEC). Its goals are free and open trade and investment in the APEC region by 2010 for industrialised economies, and 2020 for developing economies. These are non-binding goals, reached by consensus and undertaken on a voluntary basis.
Joining as a founder member in 1989, New Zealand hosted a key APEC meeting in Auckland in 1999. At this meeting APEC’s 21 members went beyond their usual role, taking diplomatic initiatives designed to help East Timor reach independent statehood. New Zealand has regularly used APEC meetings to build support for trade liberalisation, reduce border transaction costs and ease the movement of skills, goods and qualifications.
International Organization of Securities Commissions
The New Zealand Securities Commission has played an active role in the International Organization of Securities Commissions since joining in 1986. This agency aims to foster and promote transparent financial market standards, investor protection and market-regulation requirements. All were found seriously wanting by the 2008 global financial crisis.