Trade negotiators from Aotearoa New Zealand are trying to change global trade norms, one free trade agreement at a time, says Dr Matthew Castle, a lecturer in the International Relations programme at Te Herenga Waka—Victoria University of Wellington.
“The way in which New Zealand negotiators have been able to innovate within trade agreements is something that hasn’t been widely studied. Our position as a small, trade-dependent country at the bottom of the Pacific has seen us push out innovations in the way we negotiate with other, similar nations such as Singapore,” says Castle.
He is hoping to secure funding to develop a theory of how the global trade regime allows innovation and test this theory with a database of 450 agreements negotiated across the world since 1950, and with case studies from New Zealand and selected other countries.
He will also research how, despite norms in the trade regime that promote stability over change, New Zealand negotiators in particular have successfully introduced innovative clauses.
It is now well understood that precedent matters within international relations, but the implications of this are still being teased out, Castle says.
“Countries’ interactions are embedded in this web of the past, meaning they aren’t as free to adopt new policy as a simpler model of world politics might suggest,” he says. “There’s a bias towards the status quo.”
Yet despite these constraints, Castle can see that trade negotiators innovate all the time. Sometimes this is in response to global challenges, like climate change: New Zealand is currently negotiating an Agreement on Climate Change, Trade and Sustainability (ACCTS) with several like-minded trade partners.
“Agreements between New Zealand and Singapore are particularly interesting. The term the Ministry of Foreign Affairs and Trade uses for some of these is ‘pathfinder agreements’. With these, we can push the boat out in terms of trade rules, and do something new and ambitious, with the goal of having the rules taken up at the multilateral World Trade Organization.”
Because countries aim to encourage a stable and predictable global trade regime in the face of uncertainties like changes in government, many legal terms in FTAs become ‘sticky’ and are copied and pasted between agreements, he says.
But countries can escape the confines of these past norms when they cooperate with like-minded partners. Over the years, New Zealand has been a key innovator in a number of areas.
The trend arguably started in 2000 with an FTA with Singapore that included an exception clause allowing the New Zealand Government to meet its Treaty of Waitangi obligations. Singapore was a fairly small trade partner at the time, which allowed New Zealand negotiators to include this new clause, and thanks to precedent they have managed to keep it in subsequent trade deals.
The text of the clause in the countries’ Closer Economic Partnership agreement has been copied and pasted into subsequent free trade agreements (FTAs) New Zealand has signed with other countries, most recently including the 2016 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“The Treaty of Waitangi clause is interesting for two reasons. The first is it’s self-judging. The New Zealand Government gets to decide what its obligations are under the Treaty and how to meet them. Second, it’s a general exception clause that applies to all the terms of the FTA. No other country has as broad an exception, because these flexibility measures can be prone to abuse. What makes trade regimes hang together is an understanding that you shouldn’t maximise flexibility, because otherwise everybody else will and the whole thing falls apart.”
The Government hasn’t yet needed to invoke the Treaty of Waitangi exception clause. But since the pushback on the CPTPP from those who see it as highlighting the unequal benefits of economic globalisation, the clause has come under fire for not being sufficiently comprehensive, says Castle.
As part of his research, he will examine the impact of the pushback on FTAs and shifts under Minister of Foreign Affairs Nanaia Mahuta to bring a Māori worldview to New Zealand’s foreign policy.
By focusing on the interplay between continuity and change in trade rules, Castle believes we can better understand when and why the past constrains innovation, and how negotiators can advance new ideas to tackle pressing global and domestic challenges.
Read the original article on Newsroom.