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A reminder to Labour about the TPPA

By   /  October 25, 2017  /  10 Comments

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Next Monday officials from the eleven remaining TPPA parties will reconvene in Japan. They will continue working through a list of 50 items that different countries want to put on ice unless and until the US re-joins. Relatively few of those items have been settled.

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Many will, like me, be disappointed that there is no commitment on the TPPA in Labour’s agreements with New Zealand First and the Greens.

To date, Labour has confirmed that it will seek to amend New Zealand’s investment schedule to allow the ban on non-residents buying residential property. In response to a question yesterday, Jacinda Ardern said the question of foreign investor’s rights to sue the government in controversial offshore tribunals, known as the investor-state dispute settlement (ISDS), is still being discussed.

Q: [re position on TPPA] 

A: I found a huge amount of consensus, actually in talks with NZ First around our position on TPP and TPP-11.  And that consensus particularly sits around our view on banning foreign overseas buyers from purchasing existing homes, and also ongoing concerns with ISDS clauses.  We’ll go into negotiations with that view in mind, of course we don’t want to undermine our negotiating position, but it was very clear from the talks that we have the same concerns, but at the same time we both support increasing exports and export growth for New Zealand, and representing those who are exporting to the best of our abilities. 

Q: Will you walk away from the deal if you are not able to get those concessions?

A: I’m not undermining our negotiating position by answering that question. 

Winston Peters said the same when he announced he was choosing Labour.

That’s not strong enough for some of us. But we should also not panic. This is a time to remind all three parties in Government – especially Labour – that they said in their select committee minority reports that they would not vote in favour of ratifying the original TPPA. It is also an opportunity for them to build and sustain a sense of legitimacy and credibility, as well as optimism and enthusiasm, among those who voted for change.

Beyond that, we need to remind the rest of the country that the world is changing. The TPPA model is no longer the norm; it is increasingly the outlier.

Supporters of the deal with warn the Government against revisiting the deal, because trade ministers or leaders from the remaining 11 TPPA countries are supposed to decide its future when they meet from 9-12 November on the margins of APEC in Da Nang, Vietnam.

In reality, there is no such urgency. The pressure to conclude the deal is politically driven and artificial. It’s almost inconceivable that the TPPA-11 can be sorted before the Vietnam meeting.

Next Monday officials from the eleven remaining TPPA parties will reconvene in Japan. They will continue working through a list of 50 items that different countries want to put on ice unless and until the US re-joins. Relatively few of those items have been settled.

Some countries reportedly want to go further and change aspects of the text. New Zealand under National, with Japan and Australia, previously said that reopening text was impossible. A newly elected New Zealand government has every right to reverse that position, and insist on meeting its commitments to the people who voted for it and serving the interests of the country.

The new Government should also insist on taking its time for the kind of detailed economic and employment analyses, health impact assessments, and proper processes of public consultation they said was needed for the original TPPA.

It is common among negotiating countries for new governments to take some time to review their position after an election. The Obama administration did it, Canada did it, Japan took some time to decide how to respond to Trump’s withdrawal.

Let’s remember what the parties that make up the current Government said.

Labour objected that the economic evidence produced by National was based on ‘a wildly optimistic scenario’, whose assumptions ‘are not credible, nor are they a basis for any responsible government to proceed in signing a binding agreement with consequences as far reaching as the TPPA.’  There was a potential for job losses as jobs were offshored to lower cost centres.

They said National should have ‘adopted a model of rigorous consultation with opposition parties, academia, unions, and business, [and] commissioned modelling and developed policy responses to address concerns about employment, income distribution, and public health impacts.’ Labour explicitly joined with other submitters and opposition parties in calling for new studies that addressed those questions.

Of course, National ignored them, and proceeded with the TPPA-11 without even bothering to update its flawed National Interest Analysis to take account of the US exit.

On top of this came Labour’s concerns about sovereignty: ‘The Labour Party believes the ability to act in the interests of New Zealand residents and citizens is a principle that builds faith in participative democracy. Unnecessary weakening of sovereign State powers achieves the opposite. … The current laissez-faire economic approach to economic management speaks to a level of resignation about an expected long-term decline in our nation’s financial security.’ Signing away the right to ban non-resident foreign investors from purchasing residential property was one element of that.

The Greens went further, condemning the TPPA as ‘a regressive document reflecting the ideological excesses of late-20th-century free-market neo-liberalism’

New Zealand First led the demands to abandon ISDS and it still seems committed to that position. These days, that’s hardly a radical position. Despite its current protests, Business New Zealand told the OECD in 2012 that ISDS wasn’t necessary where other parties had sound judicial systems. We don’t have it in the investment protocol with Australia and it wasn’t in the P-4 that supposedly formed the basis of the TPPA.

Other countries with which New Zealand wants to negotiate, like India and Mercosur, have jettisoned ISDS and developed their own alternatives. The EU has a proposal for a standing investment court, although that’s more of a trap as it leaves in place the pro-investor rules that ISDS is the mechanism to enforce.

Most significantly, the US equivalent of a trade minister, Robert Lighthizer, has slammed the US corporate lobby for expecting special protections and ISDS in these agreements, when they should be taking insurance to protect their profits. If the US did want to re-join the TPPA in the foreseeable future, its current position would be to demand the removal of ISDS!

So there are numerous views among countries, large and small, about how to deal with investment in ‘trade’ agreements, if at all. The new Government has ample room to choose its own path.

If there was to be one message to the new government it is to reiterate Labour’s final sentence in the select committee report:

The TPPA will have ramifications for generations of New Zealanders. For their sake, we should not so lightly enter into an agreement which may exacerbate long-term challenges for our economy, workforce, and society. 

These words should be written in neon lights above the entrance to the beehive.

 

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10 Comments

  1. Kim dandy says:

    Quick call the neon light installer!
    Thanks Jane for keeping us all in the loop for so long. Ian waiting for the day you say ‘ the tppa is officially dead’. Only then shall I celebrate.

  2. Philg says:

    Thank you Jane for your hard work and persistence on the TPP.. Our Soverenty is under threat, hopefully not from our own government!

    • Blake says:

      Our sovereignty is still under threat and when the afterglow of the post election hysteria wanes a bit, maybe some will begin to see that it really does not matter , that much, who is in govt.

      Most all govt.s in the world are owned and dictated to. Research deeper.

      Thanks Jane – always support your work and keeping us informed.

  3. Dr Philosophical says:

    Excellent article – Is anyone forwarding them on to Labour / NZ First / Greens so they are aware of the urgency …?

  4. Black Lemming says:

    Well done prof ! With Tpp still under the media radar at the moment its vital you keep the public up to date with developments so we actually know whats going on and can lobby our MPs.

    TPP is still highly relevant because despite the good intentions of political reform under a Labour / Green/ NZF Govt ,the retention of ISDS provisions could still impact on and or reverse new progressive legislation to protect the environment , public health and workers rights .

    Under a National Govt , corporations are well looked after and have little reason to sue the govt for lost profits but under a progressive coalition which may alter , licences , permits ,and contracts for the public good this could change swiftly.

    To use the water bottling example , a 10c per litre royalty placed on foreign owned water bottling companies would raise new Govt revenues of around 3.2 Billion dollars per year on current consent volumes over 75 water bottling plants .Which is a massive amount of money .

    But should this royalty be legislated for after NZ were to ratify TPP 11 those companies could sue for breach of contract and loss of profit in ISDS tribunals .In essence , an change of rules which reduced their profits .

    In effect the NZ govt may back away from a premium export bottle royalty for fear of prolonged legal action ( Regulatory Chill ) or have to pay back hundreds of millions of lost corporate profits should the NZ govt lose in Court .A complete waste of time.

    These companies could then proceed to make make hundreds of millions of dollars profit , with no benefit to NZ for up to 35 years, continuing to take our water .Even under drought conditions , these overseas corporations would still have priority to that water , over both local communities and agriculture .Do we really want this ?

    This is just one example .It is therefore vital all ISDS provisions are removed from all NZ trade Agreements .

    Labour needs to wake up to the fact 9.6 Billion of new export water revenue over the next 3 years is at risk by continuing with the TPP 11 in its current form .

    So its imperative NZF and the Greens add more weight and substantive changes to the TPP wish list , or find a way to kill it for good .

    TPP is like a weed that just won’t die , no matter how many times you spray it with round up , it still keeps coming back up .

    With a new and more vulnerable progressive Govt, stopping the TPP is even more important than ever .

    Go the Prof!

  5. Danyl Strype says:

    We need to defeat not only the TPP but the entire geo-political ideology that underpins it. In this corporatist worldview, states are just a special kind of territorial corporation, and citizens are reduced to the role of shareholding spectators. This is a profoundly anti-democratic ideology, best exemplified by the likes Mencius Goldbug and his fans like Peter Thiel (can the new government review the legality of granting him NZ citizenship?).
    https://thebaffler.com/latest/the-moldbug-variations-pein

    As a species we need to be democratizing business (eg cooperatives and social enterprises), not corporatizing government. Any international treaties we sign up to need to reflect that, which means ISDS need to be gone by lunchtime. Instead, we need trade treaties that do things like set up multinational tax collection systems that make sure multinational companies pay their fare share of tax in every country they operate in. Or make sure that the wages and conditions of workers making goods imported into NZ are as good as, or better than, those NZ-based companies have to meet. Or oblige tech companies offering phone services to interoperate with those of other companies, using common standards set by a neutral body like the ICU (International Telecommunication Union).

  6. Helena says:

    Is anyone keeping a close eye on what’s happening in some of the U.S. States? Agenda 21 is being shoved down the throat of a number of U.S. communities as they are herded off land using various means. U.S. communities in the Caribbean have been destroyed with people missing. Hawaii is preparing those who need medical marijuana to go cashless, firstly with a debit card but clearly leading to chip in the hand. Meanwhile, China now has a leader set to lead his country towards being a front runner world power. Thanks to sirjokey (and others) we have the worst of the worst of the American Military Industrial Complex already embedded into NZ soil. Seems to me NZers as a people sit between a rock and a hard place. If we stand up and just say no, what are they going to do, zap whole communities with lasers? … probably.
    https://www.youtube.com/watch?v=H_YgQB8Rsww&t=1s
    https://www.youtube.com/watch?v=3YmTn-40K0Y

  7. Marc says:

    Jacinda said over recent days, and I believe also today, she will be Prime Minister and her government will be there to govern for ALL New Zealanders. That puts another spin onto whatever was said before.

    If she governs for ALL New Zealanders, she will have to include those that voted for National.

    And it is the whole systemic setup in this country, including the vows to serve ‘the Queen’, that constrain any government from taking any too bold and independent steps, no matter in what direction.

    The powers that be sit behind the scenes, at times before the curtain, in the open, and some will have been present at the swearing in ceremony of the Ministers.

    It is the perfect excuse for any government, left or right, or of whatever ‘colour’, to say, they must consider ALL New Zealanders, when making decisions on policy, and when making changes.

    Therein lies the problem, and we can look forward to a government that is much more of a ‘third way’ kind of government, than many here will wish or hope for.

    The ordinary citizen does not really comprehend what the TPPA is about anyway, and apart from the ‘issues’ that Jacinda Ardern and Winston Peters may have referred to, most know little else that such an agreement may mean in the small print.

    So prepare for a back down of sorts, sold to us in diplomatic political language, and people here, although there is a vocal minority against the TPPA, most will simply accept or swallow what they will get served.

    They want their consumer goods, and what else they can import, never mind the smaller details attached. How many attend the ordinary anti TPPA protest? How many will stop buying gadgets made by Foxconn in their factories in China, where high pollution, poor working conditions and comparatively low pay rule?

    Few if any, I note.

    • John W says:

      Not signing the TPPA won’t stop goods coming in.

      Giving away any part of sovereignty based on fear of not getting trinkets or altering the price of goods is a plain nonsense.

      The text of the agreement must be transparent.

      Anything less is a con allowing lies and speculation. It is the substance and consequences that must be know.

      To be threatened if secrecy is not agreed to is not a position to be entered into.

      Ignore that ands you have no power of decision over anything.

    • They want their consumer goods, and what else they can import, never mind the smaller details attached

      Funnily enough, we did pretty well importing consumer goods prior to “Free” Trade Agreements. In the early 1970s we even had a trade surplus!

      And it is the whole systemic setup in this country, including the vows to serve ‘the Queen’, that constrain any government from taking any too bold and independent steps, no matter in what direction.

      Which didn’t stop the Nats from partial-privatisation of state assets; selling thousand of state houses; under-funding health, education, etc…

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