Trade Minister David Parker

It’s at the heart of the political paradox that is David Parker that today he leaves for that most capitalist of institutions, the annual meeting of the World Economic Forum at Davos in Switzerland.

He follows a path well beaten by former Prime Minister, Sir John Key and his Finance Minister, Bill English. For Key, mingling with the billionaires who had arrived in their private jets must have been second nature.

Parker is a sober-suited Dunedin lawyer who was a close associate of the buccaneering entrepreneur, the late Howard Patterson. He is disdainful of identity politics and began a presentation to business on the eve of last year’s Labour party conference by mocking British Labour Leader, Jeremy Corbyn. At first glance, he would seem an archetypical member of Labour’s right-wing; someone who might feel more or less at home with the celebration of business and capitalism that is Davos.

But at home Parker  seems to have an unerring ability to get up the noses of his many critics.His dogged persistence in promoting proposals last year to clean up waterways brought record numbers to farmer protest meetings around the country, and the battle is not over yet.

However there is more to Parker than that. His mind is more subtle, more complicated than that of the singled-minded doctrinaire Minister that his critics like to portray. 

He stands out as one of the very few MPs in the current Parliament who is interested in political ideas. He has a philosophical and intellectual framework from which he views the world. And in a way,his preoccupation will be shared by at least a few at Davos.

Parker is concerned about the survival of capitalism as it faces a series of direct challenges. And for his Labour party those threats are dangerous.What worries him is the rise of populism in the United States and Europe.and its attractiveness to the blue collar voter.

He understands that for a traditional working-class party, like Labour, that populism represents an existential threat. And so he argues that the insecurity of the middle class brought on by the excesses of globalisation and the global financial crisis threatens the very foundations of democracy.

His mission, therefore, in politics sees to be to moderate capitalism so that those who might be tempted here to introduce the politics of Brexit, or Trump or European nationalism do not get a look in.

You get a hint in his press statement yesterday announcing his Davos trip.

He talks about the need “to promote a more inclusive and sustainable trade agenda.”

“With the effectiveness of the WTO under threat, we must ensure the multilateral trading system is revitalised and can continue to effectively underpin global growth, helping to create jobs and alleviate poverty.” the statement said.

It’s more or less mainstream stuff. But remember, this is from a Minister who is a member of a political party which opposed New Zealand signing up to the Trans Pacific Partnership.

During Select Committee considerations of the TPP in 2016 when Labour was in Opposition, its MPs clashed with the Ministry of Foreign Affairs and Trade’s chief negotiator, David Walker over the value of the agreement.

MFAT Chief TPP negotiator, David Walker, clashes with Labour MPs at the 2016 Select Committee

They quoted a Tuft University study which claimed that singing up would create job losses and exacerbate income inequality in each of the participating nations.

It was a tense moment with Walker, a public servant, arguing back to the MPs that empirical evidence showed the opposite.

“Generally exports tend to increase when barriers to trade are lowered, and evidence shows that wages are higher in export-intensive industries,” he said.

Parker these days would be highly unlikely to argue with that.

Labour eventually decided to vote against the TPP legislation, but the 2017 election prevented the vote ever being held.

Instead, after the election, Parker announced what were little more than cosmetic changes and the party agreed to support what is now called the Comprehensive and Progressive Trans Pacific Partnership.

But he understands the opposition to trade agreements and believes that it is more likely to be grounded in middle-class insecurity than any rational analysis of the benefits or otherwise of the agreements.

It may be that he has always believed that; that he was uncomfortable with some of the more extreme anti-TPP rhetoric that emerged during the debate. He certainly appears to have little time for the perennial free trade critic, Professor Jane Kelsey.

Trade Minister David Parker with junior ASEAN diplomats at the Otago Foreign Policy School last year

Putting his formal speech notes to one side, he explained his argument in what amounted to a personal political credo when he spoke to the Otago Foreign Policy School in June last year.

He said he had thought a lot about the rise of nationalistic populism around the world (for example Trump in the US and Brexit in Britain) including the tens of thousands who had marched in the streets of Auckland opposing the TPP.

“What was driving that was the insecurity of the middle class,” he said.

“To deal with it, you have to identify the underlying causes of that insecurity.

“And when you think about it, it’s pretty easy to identify; enormous rises in inequality, with so much wealth going to the one per cent, not just overseas, but also in New Zealand which is  exemplified by dropping homeownership rates and a sense amongst the public that trade agreements have been made for the benefit of multinationals rather than small businesses.

Parker has thought a lot about the causes of inequality and the disproportionate wealth of the “one per cent”.

He frequently quotes the French economist Thomas Picketty who argues that income from accumulated assets and wealth rises more than income from wages and salaries.

That is why Parker was such a strong advocate within the Labour caucus of the capital gains tax.

Sources say that privately he had proposed to his colleagues a much more vigorous campaign to support it than what Jacinda Ardern and Grant Robertson ended up presenting.

But if Parker accepts Picketty’s argument about inequality as a cause of middle-class insecurity, he does not accept the argument about trade.

Yes, he says, trade agreements have benefitted multinationals but our biggest company, Fonterra, is a multinational and it has benefitted enormously from trade agreements.

The impact on the New Zealand economy is obvious.

“But trade agreements also benefit all of our little tech companies who are trying to sell their goods and services to the world,” he told the Otago conference.

He told the conference that  trade policy needed to deliver for all New Zealanders,” including women, Māori, rural communities” because trade was “a crucial element in our push back against anti-globalisation sentiments and associated scepticism around the benefits of trade.”

As part of that, he commissioned a report by a former diplomat, David Pine, and a host of experts on how to promote “trade for all”.

In a sense, it is an anti-populism manifesto with an emphasis on the Government and its officials becoming much more transparent about trade negotiations.

But for Parker, promoting trade is about more than a communications strategy.

He talks a lot about inequality, and almost always he comes back to the same point; that it is the behaviour of the top “one per cent” that threatens the whole system, not just of capitalism, but of democracy itself.

Thus he told the Otago conference that other causes of middle-class insecurity included tax evasion – both legal; Apple and Google — and illegal; the revelations in the Panama Papers along with the impact of monetary policy after the Global Financial crisis. All of these factors combined to add to middle-class insecurity.

Monetary policy, by dropping interest rates, had allowed the “one-percenters” to come to New Zealand outbid Kiwis from prime land.

Wearing his other hats of Associate Finance Minister and Environment Minister he is trying to stop this with new legislation promised for early this year which will enshrine his current regulatory requirement that overseas purchases of farmland show en economic and conservation benefit to New Zealand.

Prime Minister Jacinda Ardern and David Parker

Parker is close to Prime Minister Jacinda Ardern. His partner, Barbara Ward, is her electorate agent. He is also close to NZ First MPs, in particular, Shane Jones. 

This gives him significant influence within the Government, something he is keen to deploy in pursuit of his ideas.

When he was made Trade Minister, he first said he didn’t want to be out of the country for longer than a week at a time because he did not want to miss any Cabinet meetings. That seems to have been forgotten.

But ultimately it is not his influence over day to day policy that matters. What he has done more than any other Labour MP is craft an ideological framework which seeks to address the political issues of our day.

That makes him unique, not just within Labour, but within the Parliament as a whole. His concern is to prevent New Zealand succumbing to the populism that is now distorting politics in the US, Britain, parts of East Europe and even, ever so subtly, in Australia.

Writing a year ago in the “Financial Times’, the economist, Martin Wolf, blamed the rise of this new populism on “the failures of existing governing and commercial elites — their indifference to the fate of large parts of the population, their greed and incompetence, demonstrated so clearly by the unexpected financial crises in the US and Europe.”

Parker would agree with that.

And so though he may go to Davos, he is hardly going as a true believer.

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