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Insights 10: 24 March 2017
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Rt Hon Peter Lilley: How will NZ fare post-Brexit? - The AM Show

Brexit means trade opportunities
Dr Oliver hartwich | Executive Director |
Before she became British Prime Minister, Theresa May announced that “Brexit means Brexit.” Ever since, we have been wondering what she meant.

It is now nine months after the Brexit referendum. In the meantime, Britain got a new Prime Minister. The UK Supreme Court had to decide on the correct procedure for leaving the European Union. Following that, Parliament needed to pass legislation to allow the UK government to formally start the process. It will probably happen sometime next week.

In other words, we have witnessed nine months of busy procedural preparations towards Brexit but little guidance on what Brexit would mean beyond, well, Brexit.

To help us make sense of this, we invited Peter Lilley to New Zealand.

Like few others, the former UK Trade Secretary and current member of the House of Commons Brexit Committee is well placed to discuss the trade implications for Britain and the world.

Mr Lilley spoke to the Initiative’s members and guests at a dinner in Auckland last night and will address a lunchtime seminar in Wellington on Monday.

To those commentators who portray Brexit as a revolt against globalisation and free trade, Lilley’s position may come as a surprise. He is an arch-Brexiteer who has been critical of the EU for decades. But he is also a committed free trader who sees the United Kingdom’s future as part of a globalised world economy.

These two positions are not at all contradictory. They are, in fact, completely compatible.
Even though the EU likes to present itself as the beacon of free trade, it has always been an organisation focussed more on facilitating trade between its members.

To the outside world, meanwhile, the EU is far less liberal in its trade policies. Just ask African countries for their experiences in trying to export agricultural produce to Europe.

As Lilley argues, Britain has little to lose from leaving the EU’s customs union. In fact, this would free the UK to enter trade and service deals with the huge, fast-growing but protected markets of Asia, Africa and Latin America.

At the same time, the fall in Sterling combined with the UK’s trade deficit with the EU might improve British trade prospects even if the EU introduced tariffs on British goods.

And as for us? Brexit might not just mean Brexit but a surge in trade between the United Kingdom and New Zealand. Bring it on.

Time to address a longstanding fisheries problem
Dr Randall Bess | Research Fellow |
Einstein once said that we cannot solve our problems with the same thinking we used when we created them.

The thinking behind the management of New Zealand’s recreational fisheries is a case in point. It began decades ago as a hands-off approach when recreational fishing was a marginal activity that did not pose much of a threat to fish stock sustainability.
The management thinking has largely remained hands-off, despite continual increases in demand for recreational fishing, along with competition with commercial fishing, leading to localised depletion of several fish stocks important to recreational fishers. And we have ongoing political fights over the allocation of decreasing total catch levels.  
Our first report, What’s the Catch?, warns that the thinking of the past will not solve the fisheries problems we face today.
In our second report, The Overseas Catch, to be released early April, we discuss alternative ways of thinking about competition for limited fisheries resources and conflicts between fishing sectors.
The report focuses on the management of recreational fisheries in the Gulf of Mexico, British Columbia, northern California and Western Australia and their lessons for New Zealand.

The Gulf of Mexico red snapper fishery shows us the disruption that can happen when recreational fishers encounter failed management. New Zealand can head in the same direction if we do not act soon.
The northern California recreational-only red abalone fishery is an intriguing example of citizen science, or, in this case, recreational divers’ knowledge and time on the water being integrated into abalone management.
British Columbia and Western Australia provide some valuable lessons on allocating total catch levels and administrative and market-based mechanisms for reallocating over time.
Western Australia has also devised unique arrangements that have changed the relationships between competing fishing sectors and the Department of Fisheries.
In May, The New Zealand Initiative will lead a ‘fisher exchange’ to Western Australia, with a group of New Zealanders to learn first-hand about its challenges and successes.
What we learn in Western Australia and elsewhere will be useful in debating the future state that we want for New Zealand’s recreational fisheries.
These lessons are timely. The Ministry for Primary Industries’ Future of our Fisheries review is taking place over the next two years.
Hopefully the overseas lessons will help us achieve our shared goals of greater fish stock abundance, fair and equitable allocations and a better recreational fishing experience.

Sideshow Bob and the Transport Committee
Dr Eric Crampton | Head of Research |
I’m a fan of classic episodes of The Simpsons. In Cape Feare, Sideshow Bob sneaks a ride under the Simpsons’ car, with murderous intent. After an unpleasant ride, he steps out from under the car, and onto a rake. And onto another. Every time a rake hit him in the face, it got just a little bit funnier.

Watching the Transport Select Committee’s handling of Uber is funny too, but not ha-ha funny.

Back in November, Uber faced the Transport Select Committee. They should have had a lot to talk about. A lot of the rules around taxis are there to solve problems that really do not come up with app-based systems – and impose a lot of costs at the same time. Working through those details would have been a pretty worthwhile use of the Committee’s time.

Instead, the Committee seemed baffled by even the simplest details of how Uber works. They wanted assurances that Uber would not be picking up passengers trying to hail cabs at taxi stands. Uber’s Richard Menzies had to explain, over and over again, that their cars can only be booked through their app.

The government took some well-deserved rakes to the face from the press after that debacle, with the Transport Minister having to defend his “clueless” committee.

Maybe you’re an optimist and thought they’d have learned from that. And maybe you’d have thought Sideshow Bob would have stopped at just one rake.

Last week, the Committee released its report on the Land Transport Amendment Bill. The Report promised to update the rules to respond to emerging technology. But they kept the rule requiring drivers to keep paper logbooks. That’s Sideshow Bob’s second rake to the face. And keeping the rule that would require multinational Uber to be based here in New Zealand if it wants to operate here – that’s the third rake.

Sideshow Bob stepped on nine rakes before he was done. I wonder what the Transport Select Committee might think of next. Requiring Uber hire people to walk in front of their cars with a red flag? Mandatory “I am not a taxi” signs on the roof? Making Uber legal, but only if you book using a Blackberry? Maybe Ubers could be forced to carry printers to provide hardcopy of the emailed receipts.

There are a lot of rakes yet out there. Get your popcorn.
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