When I was Minister of Labour we signed up to two big trade deals China and P4 (NZ, Chile, Singapore and Brunei.
Both pretty big deals – the associated memoranda were designed to protect us from undercutting – the competitive race to the bottom of the wage/skills spectrum. CTU and Business NZ both played a positive role because they saw our future heading up that spectrum.
Since then both organisations have been supportive of the work both governments have been doing on a NZ/US FTA. The CTU have worked with the AFLCIO whose support will be vital especially but not only for Democrat members of the house who must approve any agreement or at least give the President permission to negotiate with particular conditions. And Democrats and US unions don’t naturally support free trade. Nor for that matter do a significant proportion of Republicans.
The Memorandum of Understanding between China and New Zealand is very clear :-
4. The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in domestic labour laws, regulations, policies and practices.
As is the P4 Memorandum of Understanding
5. The Parties recognise that it is inappropriate to set or use their labour laws, regulations, policies and practices for trade protectionist purposes.
6. The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in domestic labour laws.
The important point for this blog is that it is inappropriate to reduce protections to encourage investment.
Which is exactly what the government did in order to secure the Warners Hobbit investment.
I don’t think it is likely that anyone will take a case against us – but one thing is for certain, any plans we had to work with the AFLCIO towards a US free trade deal died when Key gave Warners the pen on our industrial relations legislation.
