Key's first foreign policy act: give Australia the fingers
Colin James's NZ Herald column for 24 July 2007
John Key's first act in foreign affairs has been to give Australia the fingers.
He has locked National into opposing the legislation implementing the trans-Tasman agency to regulate "therapeutics" -- prescription medicines, medical devices, "complementary" medicines, herbal remedies and food supplements.
That is despite a compromise amendment which seems to meet his party's substantive objection.
This is not taken lightly in Canberra.
Key's defence rests on several grounds.
First, he can say, correctly, that governments conduct foreign affairs, not oppositions.
But having the parliamentary power to block the therapeutics agency and choosing to do so is in effect an act because it stops the government acting. Blocking a treaty is also, incidentally, a major extension of Parliament's constitutional role.
Key says take out the complementary medicines, herbal remedies and supplementary foods, which are not regulated here now, and he will back the bill.
But he has been told that means there will be no trans-Tasman agency because Australia does regulate those items and will not deregulate -- understandably, given the dubious and at times dangerous ingredients found in some.
Next, Key can say, correctly, that the government mishandled the treaty negotiations by leaving it initially to the health ministries and ministers instead of applying a whole-of-government, single-economic-market (SEM) process -- a mistake that should not be repeated since the two countries' bureaucrats put in place in May a systematised SEM process.
Then, Key's defence goes (and ministers animatedly dispute), the government did not work hard enough to build a parliamentary majority before signing -- and skimped on consulting National.
But, while making Helen Clark's government squirm is fine domestic opposition politics, an opposition leader with foreign policy experience and a keen sense of foreign policy imperatives would likely have passed up the opportunity.
Jenny Shipley did over the Singapore free trade treaty legislation. Despite serious party misgivings about the Treaty of Waitangi clause, Shipley as opposition leader -- with previous foreign policy experience as Prime Minister -- chose not to block it.
Finally, Key has an argument that Australia's regulatory approach is too heavy-handed and fits poorly with New Zealand's generally lighter regulation. In fact, Clark's government rejected intense Australian pressure for unified heavy regulation of banks and financial institutions.
Michael Cullen was furious at that and feared adverse trans-Tasman fallout. But that appears not to have happened. Key might argue that the Australians respect being stood up to. So what's the fuss now?
First, there is more at stake this time. Australia had hoped, by establishing a supranational agency, to build it into a de facto regulator for smaller countries in the Pacific and south-east Asia whose alternative is to do nothing or nothing much or just accept United States or European rulings.
Second, New Zealand consumers probably want heavy regulation of medicines and related products. They increasingly seem to want that for food, a cause championed by the Greens' Sue Kedgley who has led the political fight against the therapeutics agency. Why logically would consumers have a different view on non-prescription potions and food supplements?
But even if they did, Key has glossed two other facts: the government negotiated a five-year subsidy of the cost of registering those items; and the compromise amendment to the bill would allow makers and sellers of those items to stay out of the Australasian agency's regime.
If there is no joint agency, those who want to sell in Australia will have to submit to the Australian regime, as many already do. That will mean registering and paying twice if, as Kedgley wants and Key seems to concede, there will in time be regulation here.
Moreover, will big foreign prescription-medicine makers go through two registrations for all medicines, not knowing until having spent $100,000 or so in a multi-year process if Pharmac will put them on its list? Unlikely.
Logically, one simple way for Key to save the money he will need for tax cuts will be just to apply Australian rulings -- or European or United States rulings, an option former Trade Minister Jim Sutton favoured.
But tagging along like that rubs up against one of the most powerful emotive drivers in the campaign against the therapeutics agency: sovereignty. Many New Zealanders think Australians own too much of our country, run too many of our businesses, bank too much of our money and are arrogant and bullying to boot.
In populist politics that is reason enough for Key to give Australia the fingers in his first foreign policy act. He might have emulated his search for consensus on the smacking bill -- or at least mandated one of his dissenting MPs to make up the majority. But unity is his prime preoccupation. And populist politics is easier politics.