GUEST BLOG: Damon Rusden – The kinda-new TPPA: We should have cautious optimism

By   /   November 20, 2017  /   8 Comments

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If New Zealand is going to actively push this, then let’s hope the zombified agreement is one that benefits New Zealand and the people of the countries involved, and is not a Frankenstein-monster Labour regrets. I have hope that it will be, but the devil is in the detail.”

“Let me begin strong – there was no way I would ever have agreed to the TPPA when it was American interests driving the entire deal. With the Trump administration dropping out and Canada boycotting the final agreement of the TPP11 (TPPA minus America) it seems the free-trade agreement was dead.

But like everything in politics, there’s a cycle. And now it has arisen anew, and to be honest much of the big concerns have either been allayed or the clauses taken out completely.

The concern was mainly around the ISDS provisions. Another two were the changes to Pharmac and generic patents, which would make it more expensive for us (consumers) to purchase pharmaceutical drugs, and would take longer to get new medicines. The last was around copyright laws, which again would make it more difficult for little ol’ New Zealand to gain rights for all sorts of intellectual property and potentially increase price.

All of these benefited America and were detrimental to both the sovereignty and the market here in Middle Earth. But then America left, and Pharmac is safe and the copyright laws lessened substantially.

The ISDS clauses is the last impediment for the left, and the mere fact it still exists is a worry. The ISDS clause is effectively a contract between the state and a company, and is there to protect commercial interests if the government commits a breach of contract. We have watered-down versions of it already in trade agreements with other countries. But the renewed TPPA, which is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would have created a much more encompassing and aggressive avenue for companies to sue for with even the slightest change of policy. And here lies the cause of my worry. I don’t want our government and democracy being stifled because of the threats (or potential of) from big business. Government reflects the people, not corporates.

However, Jacinda Ardern has been aggressively knocking back the worst of the ISDS clause. To date investor screening is gone (when we vet sensitive areas of investment, like large land purchases), companies can’t dispute the Overseas Investment Office decisions and, most importantly, they are not able to take disputes to an international panel through the World Trade Organization or other agency. It must be settled domestically, here in New Zealand. Australia is our ally in this (which is good, as Aussie is by far the largest direct investor in NZ) although Japan is less enthusiastic because of their expansive direct foreign investments. And the entirety of the ISDS provisions have been shelved, along with 20 others. There was an agreement that those provisions were demanded by America, and nobody else wanted them. They have been left open for a post-Trump administration, but can be vetoed by any individual country upon consideration. So there’s a safeguard.

And so the ISDS clause is less harmful, although not quite toothless. And as a trading export nation, we must be pragmatic, because the trading benefits to NZ are substantial. A huge reduction of tariffs on beef in Japan would garner us millions, and viticulture would also have a huge injection of money. Our primary industries would be substantially better off, even with America out of the deal. And, at the end of the day, the government has signed an agreement. While I agree with parliamentary supremacy, there must be some kind of safeguard for businesses here, provided they’re not exploitative of our environment and our people and previous governments agreed to this. The old method of settling disputes via two nations as representatives of business was neither constructive nor logical.

To me, it’s always been about trade-offs. The original TPPA wasn’t worth it on a cost-benefit analysis. I still have my doubts about the CPTPP – for example, what about our existing environmental policy? The regulatory restrictions are still worrying. The facts show that in order to save our planet we need to “keep it in the ground.” Which means no more drilling. That’s a breach of contract for existing mines and refineries. The Paris Agreement may give legislative lee-way to reach our targets, but Adern will have a tough time using non-enforceable international law as a mechanism to truly do something about climate change. Although the way she has performed so far on the international stage, I have every faith she will.

I always see this valid criticism about ‘fair trade.’ One of the reasons Canada performed a dramatic no-show the other day was because Vietnam and others were refusing to sign basic labour standards, including the removal of child labour and exploitative working conditions. If that doesn’t go through, we are only enabling the inhumane conditions that globalization allows because we want to continue the mass-consumption lifestyle western countries enjoy at the expensive of decent standards for our neighbours. There has also been indication it may even raise living standards and labour standards – that’s fair trade, and with the largest trade agreement to date it’s a milestone. That’s how globalization should work. It is substantially better than others we will be negotiating,  such as the India-China Free Trade Agreement which doesn’t mention environmental or labour laws at all.
The removal of some other standards in the CPTPP, specifically environmental, is concerning. This is only exacerbated by the lack of transparency regarding what has been kept in and what has been struck out or shelved in some kind of trade agreement cryogenic chamber.

However I’m quite not sold yet. But there will be plenty of debate in our legislature and I am confident that parliament will be robust on both sides, and the public allowed to scrutinize. And it is still empirically a better deal than the original TPPA now that corporate America has no input.

If New Zealand is going to actively push this, then let’s hope the zombified agreement is one that benefits New Zealand and the people of the countries involved, and is not a Frankenstein-monster Labour regrets. I have hope that it will be, but the devil is in the detail.”

 

Damon Rusden is a chef, journalist and law graduate with an avid belief in civic education and accountability. He was also a Green Party candidate. 

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8 Comments

  1. Francesca says:

    If the reason the Paris Agreement is non enforceable is because Obama
    objected that he would never get it past Congress, surely now that the US is out,or at least in doubt, the Paris agreement can be made enforceable.
    This would give our government teeth in legislating towards meeting our obligations.
    Could the Paris agreement have precedence over multi lateral trade agreements?

  2. Richard Christie says:

    If New Zealand is going to actively push this,

    – “actively push this” ?

    A revealing Freudian slip if ever I’ve read one.

  3. garibaldi says:

    I think the TPPA is nothing but a rort by Corporates to elevate their powers higher than individual Governments.
    Globalisation is basically a plan to keep the current crooked system going, and the $US king.
    We will lose out because we have no clout whatsoever, being but a tiny minnow up against the sharks.

  4. Noel Ferguson says:

    This deal is still a pig. It will be no matter how much lipstick people smear on it. Best thing to do walk away. Now.

  5. dave brown says:

    The secret to the TPPA 11 is that it is still a ruse to allow foreign capital to buy up NZ assets so as to cut the cost of production and cheapen exports (to itself) leaving the NZ economy (land, assets lost), society (workers enslaved, impoverished) and environment (poisoned) gutted.

    ‘Free trade’ is a fig leaf that tries to cover this unequal relationship. Free trade didn’t even exist in the supposed age of free trade in the C19th as all production costs were state subsidised. The free market is an ideological fiction grounded on the alleged sovereign individual who buys and sells his/her way to freedom. This is the ‘freedom’ of the homeless to sleep under a bridge.

    China has already proved this fact as its state capitalist regime uses the FTA to “go out” to the world and buy up values chains for all the commodities it needs. In NZ it has made inroads into dairying and now sells milk products to itself. There is nothing stopping it buy up the whole economy and remaking NZ in its own image.

    Britain and the US have been doing it since the C19th through the power of their finance capital to penetrate behind NZs ‘protected’ borders. When the state-protected market squeezed their profits, it was the power of this foreign investment in NZ that forced the Fourth Labour Government in the 1980s to deregulate the economy and break down the borders totally to ‘free trade’ and foreign investment.

    So, the Labour Party has proved itself capable of capitulating to the dictates of international capital. The TPPA 11 will entrench that fundamental neo-colonial servitude to these ‘laws’.

    The NZ working majority who suffer as a result will need to organise and vote out all Governments that enforce this subservience to international capital.

    Then, when facing economic sanctions backed by military occupations to enforce the law of international capital, NZ workers will need to link up with workers and oppressed people everywhere to defend themselves against imperialism and its local agents and fight for workers’ power and workers’ governments.

    That will be the kind of ‘majority rule’ that the NACTs and the Labourites will be powerless to change because they will be confined to the dustbin of history.

    • Richard Christie says:

      A simple look at the historical economic outcomes from over two centuries of foreign “investment” in most African economies reveals the benefit of neoliberal trade practises.

  6. Tom says:

    This is misleading information. He implies that the right of a foreign corporation to sue the NZ government has been removed. That is blatantly untrue.

    “most importantly, they are not able to take disputes to an international panel through the World Trade Organization or other agency. It must be settled domestically, here in New Zealand.”

    That only applies to businesses who enter into a contract WITH the NZ Government, it does not stop other organisation suing if their profits are negatively impacted by government legislation. Sugar tax for example.

    These were Jacinda’s words, not mine.

    “Second, anyone who takes up a contract with the government would no longer be able to sue through ISDS provisions but must instead use domestic procedures.”

    Anyone who takes up a contract WITH the government.

    For a decent analysis have a look here.

    https://theconversation.com/the-trans-pacific-partnership-is-back-experts-respond-87432

  7. Dale says:

    the TPP was a dog 2 weeks ago, you can change a dogs name, give it a pedicure and dress it up but it’s still a dog. so much for this labour led government challenging neoliberal capitalism