Trade and Export Growth Minister David Parker has attempted to win over critics of the revived Trans Pacific Partnership free trade deal at a public meeting, arguing the Government has kept its promise on five “bottom lines”.
The Ministry and Foreign Affairs and Trade (MFAT) has begun a series of public meetings to explain the Comprehensive and Progressive Agreement on Trans Pacific Partnership (CPTPP), as the deal is now known.
Speaking to an audience of more than 50 people in Wellington, Parker said plurilateral agreements like the CPTPP had become increasingly important in recent years due to the rise of threats to open trade, including more than 3300 new trade “barriers” put up around the world since 2008.
To address the “eroding public consensus” about the benefits of trade, Labour had set out five “bottom lines” without which it would not sign the deal: protecting Pharmac, upholding the Treaty of Waitangi, making meaningful gains in tariff reductions and market access, maintaining the right to restrict land and house sales to foreigners, and stopping corporations from suing the Government for regulating in the public interest.
“If we had to choose between the sovereignty of the New Zealand government being able to control who buys New Zealand homes and a trade agreement, if it had been a dichotomy, we would have chosen the ability to control who owns a home instead.”
Securing the ability to restrict land and house sales had been particularly crucial, given its importance to the Government’s agenda, Parker said.
“If we had to choose between the sovereignty of the New Zealand government being able to control who buys New Zealand homes and a trade agreement, if it had been a dichotomy, we would have chosen the ability to control who owns a home instead.”
Fears about the Investor State Dispute Settlement (ISDS) mechanism, allowing foreign investors to sue the Government for perceived breaches, were raised by multiple audience members and Parker conceded the mechanism was “less than perfect” despite changes to narrow its scope.
“We give ourselves sort of half marks for that because we would have liked to completely knock out ISDS clauses … we tried very hard in respect of CPTPP on that.”
However, the ISDS was “in a state of flux” around the world, and he believed the system would become less popular over time.
The deal still allowed the Government to regulate in important areas like climate change and public health without fear of being successfully sued.
Parker said the Government believed it was worth signing due to the significant economic benefits for New Zealand, given the other CPTPP members had a cumulative population of 480 million people who consumed 31 percent of New Zealand’s exports.
Controversial provisions suspended
Vangelis Vitalis, MFAT’s deputy secretary for trade and economic issues, said the withdrawal of the US had allowed New Zealand and others to suspend 22 of the most controversial provisions of the TPP.
If the US was to rejoin, New Zealand would have “in effect … a veto” over whether any of those provisions could come back into force, due to the need for a consensus.
Asked whether New Zealand would hold its nerve against US demands to lift the suspension of provisions if it rejoined, Parker said he did not believe American re-entry was likely “for a number of years”.
“Even then it may never be possible, depending on the will of ourselves and all parties. They’re in a weaker negotiating position than they were previously.”
Parker said the CPTPP’s Treaty of Waitangi clause, included in New Zealand’s trade agreements by successive governments, was “almost unheard of” internationally due to the strong rights it provided in terms of regulating for the benefit of an indigenous population.
While there were small issues that could be improved, as recommended by the Waitangi Tribunal, attempting to renegotiate the clause could put it at risk in other agreements, he said.
“It’s already an A pass: it might not be an A-plus pass, but we’ll never get to A-plus, and if we try to get from A to A-plus we might end up at C.”
Vitalis said there was a strategic benefit in being “at the heart of the evolving regional economic architecture” by joining the CPTPP.
“We have an opportunity now to shape the future evolution of rules; that is the only way a small country like ours can shape and form and defend and advance our interests in that process, by being inside an agreement.”
Parker said the Government was doing its best to make the CPTPP text public as quickly as possible, a task held up by the need to verify translations for some of the other countries.
“At the moment you have a situation where the Government’s saying we’re going to play a game of touch rugby, knowing full well that the biggest player’s going to get back on the field, it’s going to be full contact and we’re going to get smashed, particularly in areas like climate change.”
Heading into the meeting, the minister was greeted by about a dozen protesters displaying a banner advertising an anti-CPTPP event taking place next week.
Solicitor and TPP scholar Oliver Hailes said the group wanted to provide “a gentle nudge” to Parker that the CPTPP text was essentially identical to the one which had been protested by tens of thousands.
Hailes said only a small minority of over a thousand provisions had been suspended, and were likely to come back into force if and when the US rejoined.
“At the moment you have a situation where the Government’s saying we’re going to play a game of touch rugby, knowing full well that the biggest player’s going to get back on the field, it’s going to be full contact and we’re going to get smashed, particularly in areas like climate change.”
He believed many previous TPP critics were heartened by the new government’s policy ambitions, and did not realise the deal would place “economic handcuffs” on its ability to enact those.
“Nothing’s changed apart from the spin.”
Parker spoke to Hailes and the other protesters before entering the meeting, saying he was confident the Government would not be inhibited to regulate for issues like climate change and other areas.
