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How the internet created a global trade war

12 July 2019

New Zealand has been talking about the idea for some time but the French seem to have been the first to make a move.

I'm talking about international taxes on cross-border sales in the age of the internet.

I've already written about the hypocrisy of New Zealand mooting a "digital sales tax" on the likes of Google, Amazon, Facebook and the like -- given our self-appointed position as the leaders of global free trade and this column is a follow-up on that original story.

I think it shows the shallowness of thought that takes place in the minds of all politicians, regardless of the countries from which they operate.

If you encounter a problem then the simplest way (in their tiny minds) is to simply tax it so that you either turn the problem into a revenue-generating one, or it simply goes away.

And that's what the world seems to be doing with the issue of cross-border retail-level trade, as made possible by the growth and ubiquity of the internet.

How simple-minded our politicians are.

Wiser men than me have said (to paraphrase) "there is no such thing as a problem, only an opportunity that has not yet been recognised".

And thus it is with the whole concept of cross-border trading.

France, and undoubtedly New Zealand, along with other countries equally bereft of intelligent thought, will start rolling out these trade taxes shortly and that will effectively kill the whole concept of free trade between members of the global community.

How dare Facebook sell advertising into New Zealand without paying tax to the NZ government?

Um, perhaps the same way that a whole bunch of Kiwi businesses sell products over the Net to people in scores of other countries without paying tax to those governments -- had ya thought of that?

Instead of simply reaching into your armoury of tax legislation, why don't you seize this opportunity and run with it?

Instead of trying to prevent foreign companies from selling to Kiwis (by way of taxes), why not ramp up your support of Kiwi businesses selling directly to consumers in foreign lands?

So long as the *balance* of trade swings in our favour, we're winners! Nobody wins when you start throwing new taxes around.

How about the NZ government invests in promoting the concept of "sell direct" to small and nascent Kiwi businesses? How about they set up some infrastructure to help these companies tap into the huge global marketplace that is the world's "connected" population? How about they do something to try and address the outrageously expensive postal and shipping rates that burden anyone considering shipping stuff from NZ to the rest of the world?

Or better still, how about they help knowledge-based Kiwi businesses trade more competitively on the world stage?

Come on NZ politicians... you do remember the "Knowledge Wave" you were all cracking on about at the beginning of the century don't you? What ever happened to your support for that? How fickle are you?

As I write this, New Zealand stands at a cross-roads in its trade future.

We can either retain our position as the world's foremost proponents of free trade and turn this perceived problem into an opportunity -- or we can slavishly follow in the footsteps of countries like France who are clearly lead by idiots.

What's it to be Jacinda?

Are we to lead or are we to follow?

Are we to innovate and turn lemons into lemonade -- or are we just going to join the "mob" who can't think to save themselves?

What do readers think?

Is the internet and the freedom of trade that it allows, about to kick off a global trade-war where countries start throwing digital sales taxes, import levies and all sorts of other protectionist barriers in the way of the global economy?

What would your solution be to this problem?

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