WHAT WORRIES ME MOST about the proposed “No Foreign Buyers” amendment to the Overseas Investment Act (OIA) is its apparent simplicity. Nothing in politics is ever that easy! And isn’t it remarkable, the way the proposal just happens to solve Labour’s primary objection to the Trans-Pacific Partnership (TPP)? It’s almost as if somebody at the Ministry of Foreign Affairs and Trade (MFAT) had the relevant file tucked away in a draw somewhere, ready to be presented to the incoming Trade Minister, David Parker, with a Yes Minister-style flourish, at just the right moment.
Come to think of it, exactly when did the foreign-buyer problem become Labour’s primary objection to the TPP? More importantly, when did it become a more important issue than the Investor/State Dispute Settlement (ISDS) provisions of the agreement? How did the latter end up as a sort of secondary issue? When did it become what Bill English used to call a “Nice To Have”. An outcome the Prime Minister and her Trade Minister will do their utmost to achieve, but for which neither of them is willing to die in a ditch.
It makes no sense. The ISDS provisions of the TPP are the ones permitting foreign investors (a.k.a huge multinational corporations) to sue the New Zealand Government for imposing legislative and/or regulatory restrictions on their existing or proposed investments. Such litigation to occur not in a New Zealand courtroom, in front of a New Zealand judge, but before an international tribunal staffed and adjudicated by the sort of lawyers more usually to be found working for – you guessed it – “huge multinational corporations”.
How does that work? Well, a government pledged to uphold the provisions of a multilateral trade agreement might decide that, in order to secure its people’s right to access affordable housing, it will legislate to prevent foreign buyers from bidding-up the price of private dwellings beyond their reach.
“Oh no you don’t!”, objects the huge multinational corporation dedicated to acquiring foreign real estate on behalf of its fabulously wealthy international clients. And before that government can say “goodbye national sovereignty”, it finds itself in front of an ISDS tribunal.
I know, I know! The Trade Minister, David Parker, has assured us that providing the OIA is amended before the TPP comes into force, then New Zealand will be protected from the ISDS provisions of the agreement.
To which I offer the following two objections.
My first, is that David Parker’s “solution” logically foresees New Zealand being bound, in all other respects, by the TPP. Why else would he bother using this rather convoluted way of banning foreign property speculators? There must be simpler ways. The only logical answer is: because the new Labour-NZ First-Green Government is committed to signing the TPP – with the ISDS provisions still applying to us – and Parker’s “solution” is the only way it can keep its big election promise to end foreign property speculation.
My second, is that the new Government’s “solution” may prove to be not a solution at all. Even if the OIA is amended prior to the TPP coming into force, I believe that those foreign property investors affected might still have a crack at New Zealand under the ISDS provisions.
They could argue that the legislation banning them amounts to a pre-emptive circumvention of the agreement. The OIA’s original purpose of protecting “sensitive” land was to ensure that sites of environmental, historic and cultural significance remained in New Zealand hands. They could, therefore, argue that the amendment’s redefinition of “sensitive sites” to include private dwellings represents a deliberate perversion of the OIA’s original intention. As the victims of a pre-emptive circumvention of the TPP, they could demand that the ISDS tribunal award them billions of dollars by way of reparation. And what guarantee do we have that the corporate lawyers sitting in judgement of the New Zealand state’s actions wouldn’t find in favour of the plaintiffs?
That’s why I’m so uneasy about this amazing, eleventh-hour “solution”. I can’t help seeing it as too good to be true. Yes, it is acting as a superb distraction from what I consider to be the most dangerous aspect of the TPP – its ISDS provisions – but why? The arguments in favour of refusing to sign the TPP until New Zealand is exempted from those provisions are very easy to make – hell, they’re core NZ First and Green policy! – so why aren’t Jacinda and David making them?
What would make me a whole lot happier, is a rock-solid guarantee from the Prime Minister and her Trade Minister, that a TPP agreement containing ISDS provisions applicable to its own actions will not be entered into by the New Zealand Government.
Aotearoa must not surrender its tino rangatiratanga.
The Investor/state Dispute Settlement provision of the TPP is the ultimate Trojan Horse that will nullify and undermine all attempts to implement progressive legislation. Hanging over all will be the spectre of the huge financial cost of attracting the ISDS tribunal action , that will serve to stifle progress!
Historian Pete 100% .
NZ Govt can pass what it likes but as corporates we can undo it all if you threaten our profits .ISDS is the the one ring to rule them all .It has to go .
NZF and the Greens really have to dig in on this one .
Try their ‘utmost’.
NZ: Please remove ISDS or else.
Negotiator: Or else what?
NZ: Or else we’ll sign the TPP anyway and say we did our utmost.
That’s how the new (cough) left negotiate. Can’t risk causing offence or infringing on another’s safe space.
New Zealand’s own experience of rising prices due to trade imbalance will have a terrible effect on the 3rd world TPP members Vietnam, Chillie, Peru, probably Malaysia. $0.50 meals rising near to 1st world prices on 3rd world wages #rediculous. All to save the family home. Get out of here.
Chile and Malaysia are hardly ‘3rd world’ these days, you must have missed a few decades of global developments there.
Neither is New Zealand third world. But you wouldn’t know with all the 3rd world fucken diseases going around.
Totally agree Chris, i too had begun to wonder over the last few days how the ISDS which i had marched against had suddenly been replaced by non NZ residents not being able to buy houses???? If this so called Labour government signs the tppa with the isds in place they will never receive another vote from me. My only hope was that NZF who were totally apposed to the tppa would use not signing as a bottom line, but we can now only wait!!
Important article Chris, I hope it gets widely read.
Opposing the ISDS clearly seems to be something Labour would only talk about in opposition. Now it seems they are going to cave.
This is why, alas, NZ Labour is not a very progressive force. If the Greens don’t make a stand on this I will be very disillusioned.
Neo-lib Lite again? I suspect so.
If the Greens ‘take a stand’, they risk destabilising this government, and an early end to it, basta.
While some have cheered on James Shaw for standing up for Metiria, he has been rather quiet on that front for a while, and getting the Greens into government with Labour, supporting the Labour NZ First deal, they have already handed over much of what they can do on a silver platter.
They may express dissatisfaction, but words mean nothing, coming from a dissenting Green MP now, unless they really want to rock the boat, then see above, the government will be in trouble, and Nats are only waiting for it.
I expected all this to happen sooner or later.
I didn’t work for the Greens to get elected to sit meekly by and rubber stamp everything their coalition partners suggest.
They risk losing their base if they don’t learn that issues like the TPPA are too important to be silent on.
I realise this may be destabilising – but there’s no point to a left coalition that doesn’t do anything progressive. If they can’t enact progressive policy then there’s no point to them.
Alas yes Marc you may be right, I may be forced to withhold my vote and energy until such time as a truly Left party emerges that understands and rejects neoliberalism fully.
The danger here of course is that disgruntlement with all parties leads to the formation of a neo-fascist party. Neo-liberalism does seem to breed the conditions for this.
Were so far to the right these days, even the liberal washing of a labour government can’t hide the fact this agremment is utter crap for working people
What about Winston Peters he was not in favour of TPP is he going to stop it? The Greens said they didnt want TPP. Is Labour going to call all the shots,maybe Winston and the Greens should back out of coalition. National will definately sign it.
There was always something about Jacinda Ahern that didnt jel.
We all thought that John Key was marvellous, maybe because we were led to believe it by the press. Look how that turned out ,he sold us down the line.
Are we being played again ?
There was talk that Ahern was a Globalist and a Fabian, who can we trust? Not allowing overseas people to buy houses wont stop big business and multinationals they will walk all over NZs sovreignty,whats in it for politicions,?. Tppa is a crooked deal designed for multinationals, they wrote it they will control it.
I am waiting to hear from Winston myself. I voted for him because of this one issue. It’s the most important issue facing New Zealand. If Labour are the only coalition partner that signs it along with National, how would that look? The corporate media will protect Adern if she does go ahead with this and I’d say about 85 percent don’t know what ISDS is…. they’re too busy being entertained (brainwashed) watching their telly. Evil always wins over good. Winston and the Greens are crucial to this agreement.
I quote this text from above, from Chris’ post:
“My first, is that David Parker’s “solution” logically foresees New Zealand being bound, in all other respects, by the TPP. Why else would he bother using this rather convoluted way of banning foreign property speculators? There must be simpler ways. The only logical answer is: because the new Labour-NZ First-Green Government is committed to signing the TPP – with the ISDS provisions still applying to us – and Parker’s “solution” is the only way it can keep its big election promise to end foreign property speculation.
My second, is that the new Government’s “solution” may prove to be not a solution at all. Even if the OIA is amended prior to the TPP coming into force, I believe that those foreign property investors affected might still have a crack at New Zealand under the ISDS provisions.”
Yes, indeed, your objections appear justified points (of concern).
It is too nice to be true what we now get served up by David Parker and by Jacinda Princess, anointed by one Winston Peters, who will get his share of whatever this government may do in the coming months and years.
Both, Labour and NZ First, and even the Greens, appear to have swallowed a rat. The powers that be, the vested interest holding, very powerful business lobbies, they have put the pressure on, already indirectly, during the coalition negotiations, through the participants that they must have spoken to, such as Michael Cullen and others.
Well, to be honest, Labour was only half committed, if that, to any protests against the TPPA, when the protests against the earlier trade negotiations took place (with the US still being part of the agenda).
NEVER was Labour fully committed to ditching the TPPA, and Winston and NZ First did the usual, well, they rallied against it, primarily with the argument and claim, nothing should be negotiated ‘in secret’, they wanted the draft text to be made public.
The ones in the MFAT departments who negotiate for the NZ government are committed free traders, committed neoliberals, as some here would call them, they are senior bureaucrats, ‘experts’ and negotiators, who have all worked their ways up through the ranks and institutions, and they want FREE TRADE, NO matter what, along the lines it was negotiated for decades now.
The horse has bolted, long ago, it started seriously in 1984/1985, my friends, and there is NO way back, not with Labour, with National, even not with NZ First and Greens in the mix now.
Forget it, all the protests on the streets, which were anyway mostly attended by the committed activists we know, they have been largely in vain, a waste of time, so to say.
The system as it is, the powers that sit and pull the strings behind the scenes, they are POWERFUL, and insist on having the LAST word, no matter which government we have.
Hence my warnings before and after the election, for Labour to go into opposition, same the Greens, and to let the Nats go down with NZ First in some arrangement. The desperation of getting into government has required painful and less painful sacrifices, and all parties now in government were quite willing to make such sacrifices, hence the more or less symbolic gesture and proposed law change now, which will not stop foreign buyers, as long as they come and invest in ‘new’ homes, that they can then own, let and on-sell at some point in the future.
As I wrote weeks ago, the housing market has stabilised or is now slowing, not so much because of what inept and indifferent or incompetent NZ governments have done and plan to do, it has mostly to do with the Mainland Chinese government cracking down on easy access to credit and to moving money off-shore, by its own citizens and residents.
So welcome neoliberalism light, with some trimming on the edges, neoliberalism will stay well and alive under Jacinda and Co.
So that humble bit of ‘youth quake’ that we appear to have had with the last general election, that may have been the only kind of ‘quake’ we will have in elections for many decades to come, because after Labour and NZ First will have done what they want to do in government, so many will be disillusioned even more than before, and never bother voting again.
Perhaps some do now finally realise, that instead of voting Labour, it is the absolutely essential time to form a new and truly left of centre, progressive left party to run in coming elections, more of the same, dressed up nicely in PC language, that is just no longer an option, that is from my point of view.
Just ask Canada and Mexico how well they’ve done out of their trade bloc(k) with the US and its threatening corporations. Just ask American labour, too. All those middle income jobs shipped south of the border. All those private businesses left to dwindle and rot along with the little towns that supported them.
Do we learn NOTHING?
‘Oh, we’re Different.’
At the end of the lolly scramble the only things left are the pretty wrappings and the start of cavities.
For all the local people who want to live HERE, thrive, create and contribute – tough. We don’t provide that level of education or those training opportunities. Our level will be fixed for us beyond our shores and above our government. We’ve still got that cultural cringe going.
Know your place.
‘If you don’t like it you can always leave for some other well of misery overseas.’ (The usual Kiwi response to dissent. 🙁 )
We can only hope the core people in our current government aren’t the sort to gasp and fawn when meeting their equivalents overseas, and the Masters of Industry. We’ve suffered from sycophants before (particularly in National) and blindly absorbed, then inflicted, crackpot ideas from other countries, businesses who stood to gain more than we do.
The world won’t end because time is taken to examine the seams for pins. The country might if that checking isn’t done, however.
Hopefully it’s a case of not wanting to show their cards with public announcements, prior to TPP negotiations, much like the coalition talks. New Zealand is far from the only country holding back due to the ISDS clauses. Nine years of National has understandably made us cynical.
If we do not remove the ISDS Clauses we are f&*ked, the Multi National pay little or no tax here in NZ these days ?
I don’t want the TPP either; it’s not a trade deal. The National party is a greedy conduit for monied interests and deals that controls workers’ and governments’ rights to protect their own peoples should be consigned to the sewer where kiwiblog and david farrar inhabit.
But, my opinion is worth squat.
However, Mr Trotter, you have gleefully attacked Labour for the last decade and beyond on everything they wanted to do or had done earlier. You could have huge influence on workers or politicians, if you had worked alongside to change them, but sadly, they may not bother to listen to you now, esp. when you start calling the PM a fxxking politician if she doesn’t do what you say(Bowater Alley).
Totally true. The so called free trade agreements are not free trade at all, they remove protections for local people and put extra IP charges on, so that the powerful can profit freely. In the event of any dispute a special ‘business’ tribunal can resolve it.
The question is, why on earth would government’s sign up to those conditions, especially as the ISDS claims are rising. The cards are stacked against public good and morality does not come into it. Money is the holy grail of free trade – short term of course – thats why not much international action on tax havens or climate change but no stone left unturned for a bank, water or oil company to turn extra profit and not have to put right any pollution.
TPPA agreements are not in the interests of the many, they are in the interests of the very few.
NZ First, Greens and Labour campaigned against TPPA to renege will be a betrayal.
Learn from the China FTA, China bought the farms, bought in their own labour and within a generation they will own Fonterra as well as Silver Fern farms as many Kiwi farmers are going bankrupt with the poor advice they are getting. Chinese are a lot smarter and more strategic than our yokel politicians who haven’t got their head around the current problems with sell now, regret later.
Then there is the IP questions. Crazy to sign up!!
We can barely afford health care now, how about when medicines rise, we start getting more outbreaks of food poisoning and counterfeit food that is unable to be stopped. We now have to pay for solar panels to power companies. Tax payers are now paying developers to build houses so that petrol attendants can be imported in to keep wages down for multinationals paying little to zero taxes anyway. It’s a crazy world , lucky they seem to have the same neoliberal advisers making it all seem sane to the next round of naive Kiwi politicians.
Its too late now really. Labour was always going to sign, regardless of the rhetoric.
My advise to the government is to get a decent legal team to go through the whole agreement and tell them how far they can bend the rules.
Trade agremeets demand foreign and domestic investors have equal rights.
A much more effective solution would be to tax all land at 3% p.a. but allow resident nz taxpayers to claim it back in their tax return. (Including trusts only if all beneficiaries and trustees are NZ residents)
This would make foreign investment in NZ land unprofitable and pointless. Would also prevent farms being sold offshore.
The TPPA or TPA ???? Synonyms of the same 38+ year BS that kiwis are conditioned to.
In February last year I marched against . The DAY of a change which came recently.
He ‘NNZC Party ‘, ie. the existing Coalition will NOT , I say again allow this through. Why/ The NZ First Party voted unanimously against it.
NO . I endorse the writers concerns.
The ANSWER Chris to your question. (Q)
(A) Yes it is TOO GOOD TO BE TRUE.
NZ First lost in the Coalition on this one.
And to the readers of TDB PLEASE ‘ Cut Trump some slack ‘. I’m tiring of the facile predictable anti Trump rhetoric from the Left. Where woul we be with Hilary as President.
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