Trade story needs work: NZIER
Widespread opposition to the TransPacific Partnership (TPP) shows that policymakers must do more to build New Zealanders’ support for globalisation, analysts say.
The New Zealand Insitute of Economic Research (NZIER) has released a new paper considering globalisation’s effect on New Zealand.
It says globalisation is in rude health, with cross-border links and exchanges getting stronger.
While the world’s physical trade is now growing more slowly than at any time since year 2009, other components of globalisation such as people movement continue to grow.
Chris Nixon, a senior research economist at NZIER, said globalisation was not solely an economic phenomenon – it was also driven by technology.
Globalisation and international trade of ideas, culture and goods and services were more important to New Zealand than some countries, he said, because it is a smaller exporting nation.
Small changes internationally could have big effects in New Zealand.
‘‘We cannot stop globalisation. It has too many facets: social, cultural and economic. More importantly, it is how we capitalise on these changes that will determine New Zealand’s progress,’’ Nixon said.
‘‘And they are governed by technology, which keeps moving ahead, as we are reminded with each upgrade of our smartphone’s operating system.’’
But he said there was a risk that New Zealanders were too wary of the concept.
‘‘You can point for example at the TPP. Yes, it might have brought us some advantages but it’s clear we didn’t bring the people along with us.’’
He said more work should have gone into explaining why it was positive and delivering that message to the public.
‘‘Globalisation in essence in New Zealand is a good news story,’’ he said.
‘‘There are things that have gone wrong – I wouldn’t want to underestimate those but in New Zealand we’ve adjusted very well. Part of the issue is that change in New Zealand has not been gradual – it’s tended to be jerky.
‘‘Unlike the experience of Australia, discussions around globalisation in New Zealand have become mixed up with the fraught debates about economic policy changes of the last 15 years of the 20th century.’’
Nixon said globalisation would also prompt a degree of localisation.
‘‘What it does is it sharpens our understanding of what we want to hold on to, and what we think of as generic.’’
The benefits of the Trans-Pacific Partnership could have been explained better, NZIER says.