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US Economic Space and New Zealand

It wasn’t the most earth-shaking event of recent times but was certainly a step in the direction of improving trade, trust and cooperation in at least part of Eurasia. The announcement that Belarus, Kazakhstan, Russia and Ukraine are to form a Common Economic Space (CES) was welcome in terms of specific cooperation and overall concepts of furthering development and improving living standards. Any initiative that contributes to growth and harmony should be greeted with enthusiasm, but the Bush administration is trying hard to at least neutralise and preferably destroy the CES and much else besides.

The advantages of economic groupings are manifold, and the most obvious one is increased commercial cooperation. The shambles of the World Trade Organisation jamboree at Cancun showed only too clearly that nations fighting for economic improvement and even survival cannot expect sympathetic treatment from the European Union or the US. The WTO has spawned powerful and malevolent sub-groupings of rich nations, energetically intent on profit at the expense of developing countries.

Trade in the developing world is thus at the mercy of amoral pressure groups that wield immense political influence in western capitals. It isn’t small farmers in the west who fund (let’s be forthright: bribe) political parties with the aim of maintaining their already massive subsidies: this is the weapon of agribusiness, the enormous combines making vast profits who see their jackpots at risk should there be reduction of protection. (Agribusiness contributed 39.4 million dollars to Republican politicians in 2002.)

The only difficulty in assessing the processes of world agricultural trade is to work out which is the more villainous and hypocritical: the European Union or the United States. It is grotesque that the one thing they can agree about is to stamp jackboots on the necks of developing nations seeking markets and reasonable returns for their products. The fact that stubborn refusal to curb their greed ensures that millions remain in dismal poverty means nothing to avaricious multinationals.

New Zealand has freed itself from this bizarre nonsense and is the only country that has established genuine free trade, being nigh on import/export neutral. In the 1980s, when subsidies were abolished, many farmers and manufacturers went broke. It was a grim time for some who had been on the land or had businesses for generations and suffered gravely as a result of the government’s decision, which was far-sighted and courageous. (In the BBC series ‘Yes, Minister’, which continues to be so apposite, the main character contended cynically that the most dangerous thing a government can do is to take a courageous decision because that way lies electoral extinction. It didn’t in New Zealand.)

There was suffering in the transition period, and there may be more as the last barriers are removed (without any external assistance, least of all from Washington), but the country has benefited enormously from a realistic approach to what was a growing problem of inflation that would have become more desperate the longer decisions were deferred. The US State Department Country Brief goes so far as to say New Zealand “is now one of the most open economies in the world”, and The Spectator (UK) pointed out three weeks ago that unsubsidised Kiwi farmers can ship lamb (for example) half-way round the world, pay outrageous imposts, and still make a profit. In fact New Zealand lamb is cheaper in Britain than European lamb : work that one out.

Unlike Australia it has no bilateral trade agreement with the US. Why? Because in 1985 New Zealand decided it would not permit nuclear warships (powered or armed) in its harbours. The US demanded it rescind its national law (which was purely symbolic as there was no question of such vessels actually docking; the government was merely declaring policy), but Wellington refused to be bullied. The country was then cast into outer darkness, but ‘ and here’s the point ‘ it survives quite well without American patronage. Certainly it would prosper much more were Washington to moderate its savage and grossly discriminatory trade barriers, but the message is: we don’t need special favours from America.

US pressure has recently been increased on New Zealand, with gross and insolent interference in its domestic policies and politics by US ambassador Swindells, who was a major supporter of Bush and was rewarded with a plum diplomatic post. (The Center for Responsive Politics (<>) notes that “Swindells contributed $38,000 to GOP candidates and parties in 1999-2000, including $2,000 to the Bush campaign. He also wrote a check for $3,000 to the Bush-Cheney recount fund. His wife, Caroline, made a single $1,000 donation to the Bush campaign. Swindells, who co-chaired Bush’s Oregon fund-raising effort, is managing director and vice-chairman of the investment company US Trust Corp, which made a total of $85,791 in individual, PAC, and soft money contributions to federal candidates in 1999-2000. More than 70 percent ($60,241) went to Republicans.)”

This amateur hack stated that nuclear legislation “does place limits on our relationship”, thus indulging in overt criticism of government policy which, as has been made clear by Prime Minister Helen Clark, is not under consideration for alteration. In its usual ham-handed, arrogant fashion, Bush’s Washington is not content to let matters rest, even if, as in this case, absolutely no harm is being done to US interests. Although it was obvious that comments by a militaristic foreign power would not alter New Zealand government policy (and heaven forbid they ever should), the policy of Washington is to create as much mischief as possible — for what reason it is difficult to see, beyond the satisfaction of smacking down a tiny nation of four million people and putting it firmly in its box. Little wonder the US of Bush is so hated and despised around the world.

Following the Cancun follies it is being borne upon many other nations that unfair barriers will eventually work against those imposing them ‘ providing there can be concerted action against the feudal greedheads who command and control world trade. There is discussion about establishing alternative groupings, and although India and China distrust each other in many ways there is a sense that if they don’t get together about trade they will suffer mightily in the long run. The same goes for other nations exasperated by the callous and contemptuous treatment afforded them by the predatory plutocrats of the WTO. They seek creation of their own bilateral and regionally multilateral arrangements to exclude the EU and America except on terms better than those set by the odious thugs who currently manipulate the world’s economic strings. Unfortunately most Latin American countries have already lost their nerve about standing up to Washington and are pulling out of talks with Brazil, India and China aimed at achieving trade justice. Their arms were twisted by their benevolent northern neighbour and, understandably, they had to cave in.

Amongst the others, however, one of the first joint actions might be to insist on decent wages for the third-world semi-slaves who turn out ‘designer’ trash and trinkets for pittances, thus contributing to vast profits for multinationals that avoid paying realistic duties or other taxes at any stage of their operations. There should not be even an offer to negotiate. A concerted flat demand for fair treatment followed by instant cessation of supplies on non-compliance would break these companies. Their share prices would collapse and they would face bankruptcy in a heartbeat. Once this happened to a single multinational, the others would see reason.

There is no question of excessive profit on the part of a country having the courage to stand up to these ‘malefactors of great wealth’, as Teddy Roosevelt so memorably pronounced. They ask only for application of economic justice; the chance, as Thomas Carlyle had it, for a ‘fair day’s wages for a fair day’s work [which] is . . . the everlasting right of man’. Not if the WTO’s bullies have anything to do with it.

Establishment of such practical inceptions as the Common Economic Space are anathema to developed countries which in ultimate humbug declare they support free trade while doing their utmost to strangle it and make their rich richer. The US ambassador to Kiev, Mr Herbst, an erudite, charming and linguistically gifted career diplomat (unlike Bush’s man in Wellington), had to convey Bush policy that Ukraine should not join the Common Economic Space with Russia, Belarus and Kazakhstan because ‘it is not in [its] interests to have this integration complicated’. The union would not ‘fit in with Ukraine’s desire to be integrated into the EuroAtlantic community’. The What? There is no such thing. In other words, it doesn’t suit Bush politically, militarily or economically that nations should band together. There can be few better reasons for them to do so.

BRIAN CLOUGHLEY writes about defense issues for CounterPunch, the Nation (Pakistan), the Daily Times of Pakistan and other international publications. His writings are collected on his website:

He can be reached at:


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Brian Cloughley writes about foreign policy and military affairs. He lives in Voutenay sur Cure, France.

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