Wednesday, 26 June 2019

Spot the good guys

Trade wars are top of mind for those interested in the macroeconomic outlook. As our own Reserve Bank said in today's monetary policy review, " A drawn out period of [trade] tension could continue to suppress global business confidence and reduce growth". And it's not just the US vs China stuff, bad as that is, but it's all over the place, as the World Trade Organisation pointed out a few days ago under the heading 'WTO report shows trade restrictions among G20 continuing at historic high levels'.

Out of casual interest I had a fossick through the WTO's trade database, which among other things counts the prevalence of trade barriers. Here's an interesting result.

We're not angels all the time, but at least on this criterion New Zealand scrubs up well by not adding much to the current protectionist rackets. And full marks to MBIE and the National-led government who in 2017 drew the teeth of the worst of these anti-dumping rorts, by amending the law so that consumers got a look in before anti-dumping duties get imposed. 

Here's the press release at the time, and if you're a trade policy tragic the new public interest test can be found in s10F(2) of the amended Trade (Anti-dumping and Countervailing Duties) Act 1988. It reads: "Imposing the [anti-dumping] duty is in the public interest unless the cost to downstream industries and consumers of imposing the duty is likely to materially outweigh the benefit to the domestic industry of imposing the duty".

Personally I'd have put the onus the other way around - "Imposing the duty is not in the public interest if the costs to downstream industries and consumers are likely to materially outweigh the benefits to domestic industry" - but hey, in these more trade-hostile days, I wouldn't quibble too much about wording. When you get a pro-consumer public interest test in trade law, take it and run.

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