Every suggested the TPP is not an agreement NZ or others can rely on to boost economic performance in a volatile global environment.
“The contemporary global problems are not due to a lack of free trade.”
World Bank economists have looked at how much gross domestic product will increase in each country if they introduce TPP.
“If you look at NZ, you get 0.22% per year. So growth might go from 2.0% to 2.22%. That isn’t too bad. You might notice a few extra dollars in your pocket.
“Looking at the US, 0.03% per year – a polite way of statistically saying bugger all. Australia, 0.05%. Again, that is a rounding error.
“If anything, the TPP is more trying to keep China tied into a new set of global trade rules,” Every said.
Backing up his concern that FTAs are not the panacea that everyone may think they are, Every said, “Economic growth will always drive trade and business, but trade will not always drive growth”.
“People who keep pushing further deregulation of markets and further free-trade agreements, basically they are pushing on string.
“What is much more important than developing these agreements is that other countries grow.
“Even if they’ve still got tariffs, you will sell to them. You might not sell more in year-one, but you’ll sell more in year-two, year-three and so on.
“No country can produce everything, and demand will always end-up spilling over into other countries.”
Every suggested the tide of global trade is ebbing with protectionism and populism already coming back. However, he said fortunately for NZ, the agri sector is best placed to survive this.
“If you are making cars, mobile phones or televisions you can move factories anywhere.
“But it’s pretty hard to start getting prime beef out of the middle of an industrial estate. Good agricultural products can only come from where you can produce them.
“Free trade can be absolutely wonderful for certain segments of the economy in certain countries at certain times.
“However, I am far from a believer that free trade is always the answer. I fully understand why NZ is in favour of free trade, being an open economy.
“But because you are so firmly of the view that it is beneficial for everybody, it’s important to realise there are other economies, and ones that set the agenda, like the US, who have really had enough of it.”
Every said it should come as no surprise that current United States presidential candidates are saying free-trade agreements have not benefited the US, and that they’re against them.
“Good-paying jobs, key jobs have moved overseas and been replaced by much worse paying jobs.
“This is different from countries who say we make things better naturally – great apples, great beef, in which case everyone benefits.
“This is why I think agriculture, despite being traditionally well-protected, is ironically one of the sectors that will be least affected by the emerging protectionism we are seeing now.”
