According to the government’s National Interest Analysis released yesterday, there would be a very small economic benefit from TPP-11. The costs and risks are far higher, including the real constraints on democratic decision-making and regulation of our economy to meet the challenges ahead. The TPP-11 is not in the interests of the New Zealand people. It should not be signed.
Little economic benefit
The National Interest Analysis (NIA) reveals that the economic benefits of TPP-11 will be small, even if some of the exaggerated assumptions are included. The NIA estimates overall benefits will be only 0.3 – 1.0% growth in GDP by the time the TPP is fully implemented, in 20 years’ time.
This compares with a GDP growth of 61% in 20 years’ time without TPP-11 (using Treasury long term forecasts).
The headline from the media that there would be up to $4bn benefit from the TPP-11 uses exaggerated assumptions and ignores the timeframe. In reality, an additional 0.3 – 1.0% by 2038 from TPP-11 is a very small benefit.
This is shown in the data:
- Tariff reductions of $222m per year are 0.4% of overall exports and 1.1% agricultural exports
- They are mainly concentrated in commodities, rather than in value-added processed goods or complex manufacturers that are important to our economic future
- Tariff reductions for dairy and beef fall short of the ‘gold standard’ treaty originally promised
- Tariff reductions for dairy are 0.7% of overall dairy exports
The argument in the NIA that exports to China grew after we signed an FTA ignores the context. There was huge growth in commodity exports from Australia, Brazil and other exporters to China, whether or not they had signed an FTA. It is disingenuous to claim this as a likely scenario for exports under TPP-11.
Risks and Costs
The National Interest Analysis (NIA) of the Trans-Pacific Partnership amongst 11 nations (TPP-11) does not adequately address the costs and risks of TPP-11.
Investor-State Dispute Settlement: Governments around the world are reviewing their approach to ISDS provisions, and exiting ISDS or negotiating alternatives. There is little evidence that foreign multinationals are treated worse than domestic companies – in fact, the opposite is generally the case. If there were risks, private insurance is available, a point made recently by the US Trade Representative.
Concerns over ISDS have not been addressed by the suspension of clauses in TPP-11. Some aspects of government contracts have been suspended, but most of the risks remain. Criticism by opposition parties to ISDS has not been adequately addressed. ISDS is still a ‘dog’.
As documented in research paper ‘The Economics of the TPPA’, the potential for cases under TPP-11’s Investor State Dispute Settlement (ISDS) provisions is likely to create a chilling effect on New Zealand’s governments’ law and policies.
Threats under ISDS create ‘regulatory chill’ that could inhibit sound regulation in sectors such as banking, energy, climate change, transport, environmental protection and mining. Potential compensation payments or settlements could far outweigh the limited economic benefits from TPP-11. Even if cases are successfully defended, the legal costs are likely to be onerous.
Restrictions on the Right to Regulate: The Trade Minister has hyped up the government’s law change to allow restrictions on residential home ownership, but this addresses only one example of the regulations that will be needed in future. It is impossible to anticipate the laws and policies that will be needed to address the known challenges posed by inequality, climate change and the digital economy, let alone future challenges of disruptive technologies, market innovations and changes in social expectations.
The main thrust of the TPP-11 is deregulatory. Standstill and ratchet mechanisms mean that the government can deregulate, but not introduce new regulation. Most of the treaty restricts the powers of government to regulate the economy, even in ways that do not discriminate against foreign investors. This extension of light-handed regulation, or a reliance solely on voluntary regulation, ignores the costs of past regulatory failures, including bankrupt finance companies, the Pike River disaster, collapsed buildings in Christchurch and leaky homes.
Restricting this future flexibility should not be undertaken lightly. As one small example, our government cannot levy a charge on exports of bottled water. TPP-11 increases the threshold for the government to be able to control foreign investment from $100 million to $200 million. We need more regulation on foreign investment, not less.
Assessment: A far more thorough and objective assessment of the costs and benefits of TPP-11 is required. It should include an assessment of the health implications (as repeatedly called for by medical experts), and potential social and environmental impacts. Given the number of international cases under ISDS provisions (more than 817 cases), an objective assessment of risks of legal action under the Investor State Dispute Settlement provisions is also needed, rather than unsubstantiated assurances that New Zealand will not be sued.
At least, this assessment needs to take place prior to signing. The planned date of 8 March for signing should be postponed to provide sufficient time for New Zealand, and other TPP-11 nations, to undertake proper assessment, public consultation and Parliamentary scrutiny.
Not fit for purpose:
TPP-11 is not an agreement for the 21st Century. It is inconsistent with government policy and restricts progressive policy. It restricts the flexibilities that governments will need to address challenges of the future. The small gains from TPP-11 are not worth the costs and risks for the future. It should not be signed.
Barry Coates is a researcher and campaigner. He was previously a Green Party list MP and Greens spokesperson on Trade and Investment.
+1000 Barry Coates – complete travesty you are not in government where you should be an an independent thinker not brainwashed by neoliberalism or focusing on trivial issues to fill the parliamentary hours.
TPPA not only effects everyone living in NZ, it will also effect all the future generations too and therefore the rush to sign it, with zero reason to (apart from a big push from neoliberal ‘advisers’ to do so as fast as possible) is foolhardy.
We were told Labour had changed and NZ First cared about “NZ First”, but there they are, being National Lite in the first few months of being elected!!!
It’s crazy from an economic point of view, crazy from a risk point of view and crazy from a political point of view.
WTF is going on with these people, zombie thinking disease???
The free trade agreements the way they are written and acted out are like parasites, they literally kill off their hosts, socially, environmentally and politically.
True SaveNZ. What a shame there were all those people, on blogs like this, running down the Greens as “middle class” and “neo-liberals” and encouraging people to vote for Winston First to defend our national interests, eh? If it wasn’t for that, maybe Barry Coates would be in parliament, the Greens would in government with Labour, and the TPP would be gone by lunchtime? Remember that in 2020.
I think the problem was the Greens put too many newbie’s on their party list and they seem luke warm in their stance against TPPA. Therefore they are not picking up the anti TPPA voters.
And labour and NZ First both campaigned against TPPA. So the voters have been let down by everybody in my opinion and the Greens made critical mistakes about what was important to people prior to the election.
What is an extra $100 a week on a benefit if your rent, power, water, transport are all going up so much more because you are not focusing on the cause of the effect.
Concentrating on benefits which can be revoked by the next government or not allowed through by Labour is putting a single hose of water on a forest fire that has people still lighting the matches. People are looking for LONG term security policy from Greens not some headline that attracts attention for the wrong reasons.
Greens need to concentrate and identify the major matches flaming the spread of inequality. Greens seem split and the ones who do not believe the free market agreements and deregulation like Barry Coates and are in the media for it, were too low in the list and the voters did not like it when it looked like those who were good at networking and looking good in Metro mags got higher up.
Some of the Green MP’s might be great people and better than many other dinosaurs in parliament but it was never going to appeal to the many in the Green movement when some really long standing or prominent faces of an actual movement (rather than self promotion or a nice sounding CV) were promoted before others with long service and an excellent track record.
Have a look at the media and what the Greens seem to stand for
On their own website home page nothing about TPP. News is
Time to remove Māori ward discrimination from law
Hundreds of thousands of Kiwis to benefit from Election Access Fund Bill
Greens celebrate better support for grieving whānau
Herald, look up Green Party and find no TPP
Green Party may have to support waka-jumping bill
Marama Davidson announces application for co-leader of Green Party
Julie Anne Genter says Green Party needs a ‘big debate’ about supporting waka-jumping bill
Political theatre as ex-MP Catherine Delahunty takes to the stage
Green Party to elect new woman co-leader after Easter
Political Roundup: Why Marama Davidson is likely to become the new Green Party co-leader
On radio NZ only one article on TPP but very short.
Therefore most Green media is centred on themselves and their pregnancies/waka jumping bill/co leadership/disability funding in parliament
If they were really concerned with Maori and people with Disabilities you would think they would have a lot more to say about TPPA!
There is also absolutely nothing when you put Green Party in most media search engines about conservation being bought up.
Hence they seem more focused on self serving issues that issues that might be effecting voters lives.
Labour and NZ First are way worse and National even more evil. But the Green Party have lost their way and too focused on personal pet issues that the majority of voters don’t care about or see worse problems to solve first.
New World Order. That’s what this is about. It’s all tied in together. We’ve been lulled into a false sense of security.
This TPPA, or whatever…The wheels have been set in motion, for quite some time. Shelved for a while,so we would all forget, and carry on with our lives…
Now. It’s reared its ugly head, and it’s going through, whether WE like it or not. We have certainly been duped…. Or some of us haven’t.
This could have been seen from the beginning because we the People, have no rights.
What’s coming next, makes THIS, look like a walk in the Park.
Norway is a classic example, they did not rush to be in the EU, instead stayed true to themselves and kept a small population.
Not only are they very wealthy with free social services but their low population, less competitive approach has actually made the more competitive in sports too – go figure! https://www.usatoday.com/story/sports/winter-olympics-2018/2018/02/18/norway-dominating-2018-winter-olympics-medal-count/350369002/
NZ has lost it’s way, our government is so insecure they can’t actually believe they can make it on their own and happy to sign ridiculous risky deal like TPPA that they don’t understand, and pretend that all is well in this country (latest scandal hundreds of drivers licences are fake after official just took bribes to pass people) with their global low wage, “competitive” strategy.
Soon we won’t even have an environment to protest about with the rising and completely unnecessary pollution (30 beaches closed in Auckland alone). Water being stripped from aquifers.
These are long term problems that will take years to overcome, the time is to stop making it worse and actually back step and solve our existing problems not add more to NZ troubles with more of the same agreements!
If we are such a rock star economy then why is government debt increasing, our productivity low and we are falling in many areas of global scale aka educationally, corruption etc?
The ‘rock star’ economy is not true in real terms, just a deregulators construct.
Time to get a mirror and actually be like Norway and find our own path to success and wealth for everyone not just non resident corporations and individuals who already have enough wealth.
Funny how you forgot to mention what exactly makes Norway the way it is.
Hint : They weren’t selling rainbows and unicorns to the world. They got their wealth by drilling every hole in the North Sea they could for 40 years and selling oil and natural gas – not exactly a popular money maker on the The Daily Blog.
Adrian, we have the same abundance in this country for one of our most valuable natural resources – water. Arrogantly, we are polluting and wasting it and giving it away without regard for long term benefits.
Norway also has had over the last century, a robust union movement and have paid high income taxes (currently personal tax is around 41%). Both contribute to strong social cohesion, and broader understanding of the responsibilities of government.
Well we have plenty of natural resources too, but guess what rather than corporate welfare for the multinationals, Norway taxed the crap out of the multinationals for the oil.
Finland also is a similar country to NZ. They got rich with Tech and don’t sell off their natural resources cheap, they manufacture them into products.
The point is, NZ doesn’t have to sign a dog of a deal, we have a land of plenty, but seem to suffer from successive governments lazy investment strategies , with little imagination to make use of it locally and being too scared to tax corporations or non residents (quite happy to talk about extra taxes to the ordinary citizens though who already support plenty (and growing) corporate welfare from harbour extensions for Auckland for Billionaire boats to free water for bottling, government irrigation plants, free Saudi sheep farms and free citizenship with every donation under John Key’s name.
ECONOMIST STILL CONCERNED ABOUT TPPA-11’S IMPLICATIONS FOR WORKING PEOPLE
“We appreciate the Government releasing the text and National Interest Analysis before signing, but that analysis is deeply flawed. It assumes that working people will find new employment immediately when their jobs are displaced by the CPTPP. That assumption is simply not supported by international evidence and New Zealand’s history of job losses.”
“Like previous studies, its estimates of gains in GDP are tiny – a one-off gain of between 0.3% and 1% of GDP in 16 years’ time. Even these small benefits are unlikely to be evenly spread. At the same time, citizens risk losing our ability to use government purchasing and our state-owned enterprises for the public good. We need to retain our ability to drive the economy towards higher wage, higher value industries like the local processing of New Zealand timber and other materials.”
“The documents released by the Government today do not have an independent analysis of the health and environmental risks. Neither do they have anything to say about who gains and who loses – the impacts on inequality.”
http://www.union.org.nz/economist-still-concerned-about-tppa-11s-implications-for-working-people/
‘The NIA estimates overall benefits will be only 0.3 – 1.0% growth in GDP by the time the TPP is fully implemented, in 20 years’ time.’
The current economic system won’t even exist in 20 years’ time. In fact the current global economic system is unlikely to persist much beyond 2020, due to declining energy availability, environmental collapse and unravelling of the Ponzi financial system.
The whole thing smells bad and the question that really needs to be asked is why are these politicians so keen to sign?
It will cost us dearly as we will be legally tested by the large corporations to soften us up for complete control I see it coming.
Them these Corporates will cause so much trouble that labour will lose the election in 2020.
Labour are being so foolish here.
Great work Barry .
1.BETRAYAL
Both Labour and NZF have sold us out and rather than letting opposition to the TPP slide we should be rightfully angry and more motovated than ever .
The economic benefits are still minimal , our exposure to ISDS still remains,and TPP facilitates a rapid growth in the extraction of fossil fuels which makes climate change worse not better .
It is an 18th Century trade document not fit for the 21st Century.
In 2018 we have an obligation to develop new people and planet friendly ethical trade agreements .
2. NZF
Given some 75 % of NZF voters opposed TPP pre election , Winston backing TPP may prove to be a huge strategic mistake for a minor party . They are only polling around 5 % and and elevation of pro TPP Shane Jones will not help them retain their voter base .
Tactically it would be better for NZF to side with the greens and oppose TPP to maintain some integrity with their voters .
Let Labour lose political capital by voting with National to pass it.
Being now pro TPP perhaps NZF should change their name to NZ Last .
Big loss of trust and I suspect a big loss of voter support.
When the public finally wake up and realise the minor cosmetic changes , don’t add up to real change ,it could well be bye bye NZF.
3. CLIMATE CHANGE AND TPP-11
A key linkage which needs more exposure and one which is easy to understand for the public is the TPP’s escalation of climate change.
a) Bigger beef and dairy cow populations through more TPP export growth means more local pollution of NZ rivers and streams and more greenhouse gas emissions .Doubling the cow population in NZ is a cowtastrophy .40% of all greenhouse gas emissions are from agriculture ,and doubling our methane emission is nuts , the world needs fewer cows not more.NZ also needs better quality streams lakes and rivers and drinking water .Expanded Dairy under TPP = Wrong track .
b) Taxpayer subsidies on the accelerated extraction, transportation and burning of fossil fuels under TPP -11 means a massive increase of greenhouse gases not a reduction .=Wrong Track.
c)The words ” climate change “are not mentioned once in a document 6000 pages long .=Wrong Track .
Not all growth is good growth .
The TPP in no way acts to reduce gas emissions or mitigate climate change .There is no plan to deal with it it or even acknowledgement that it exists . It presents the worst in myopic short term greed not long term sustainable governance,and should not be signed .
Any FTA which aims to increases fossil fuel consumption should be declined or have those provisions removed before we sign it = Right Track.
Would you willingly accelerate the demise of your own planet ?
By signing the TPP-11, NZ Labour and the other 10 countries is about to do it for you .
Is this what you voted for ?
In summary ,lipstick or no lipstick its still a pig . You can roll a turd in glitter but it still smells really really bad .Nice try Labour but….
Im not fooled .You shouldn’t be either .22 suspensions but no removals ? And still no carve outs on fossil fuels growth ?
TPP-11 is neither progressive or comprehensive . A truly progressive agreement would keep the coal in the hole and the oil in the soil On the climate change implications alone we can’t sign this.Its ecocide .
NO WAY – TPPA.
But but Jacinda said Climate Change was the biggest thing facing this (?) generation. Just before she condoned the TPP ? And after she got pregnant
Has anyone considered the possibility that Jacinda and Winston got a visit from an economic hitman, and were told that the only alternative to signing up and paying our tributes to the global corporate empire, is having our country destabilized, and regime changed (remember Libya)?
(full audio book of ‘Confessions of an Economic Hitman’ https://www.youtube.com/watch?v=G265-bocm5k/ )
(full text of John Perkins’ book here: https://archive.org/details/ConfessionsOfAnEconomicHitman_257/ )
The Greens can now easily rest on this principled stand to be critical of the CPTTPA or what it is now called, that ‘beast’.
It will sadly not make a difference, the neoliberal light Labour Party will be joined by the more profoundly neoliberal National Party in voting this through Parliament, they could do it even without NZ First, who are bigger traitors now.
We knew all along that Labour were only offering cosmetic opposition, they were not that sincere in their criticism of the former TPPA.
NZ First wanted to be in government, did a deal with Labour and decided to go for the cosmetic changes now made.
But whatever trade deals they sign, the world will be a very different place in twenty years time, some of us will not be around, sea levels will be higher, climate will have changed profoundly, we will have new pests and plagues, and due to weather changes have to grow rather different crops and so than now.
In the end that bit of ‘gain’ they talk about will NEVER eventuate, due to climate change and more human construction we will in any way be worse off by then, but probably have double the population we now have, as incompetent and short sighted governments here are only able to create ‘growth’ by increasing the labour and consumer pool of people. It is as dumb as telling mums to have at least five babies, to contribute to the economy. The bill to pay for all this madness will fall on future generations, living in a shitty environment with little to make a good living from.
Free trade is based upon the idea of Willing Buyer, Willing Seller but that concept is fully removed by these FTAs.
Our country is forced to trade else we get sued by corporations.
Forced to regulate to the wishes of the corporations while being prevented from regulating for the benefits of the country.
FTAs should not be called ‘Free Trade Agreements’ but Forced Trade Agreements. They quite literally force countries to trade even when that trade is detrimental to them.
It’s time we went back to a free trade model and simply declared who we were and weren’t willing to trade with. Set some standards that other countries must meet to help with that decision.
There’s no such thing as free trade just like there’s no such thing as a free lunch. Apparently everything is tied up in a 2,000 page patent document, including us and our pet cat:
https://www.youtube.com/watch?time_continue=5&v=6Sl9ZF1wcX4
Check out 20:27 just as a highlighted point. If we think any government official .. no matter how big the smile .. is on the side of the people … we better think again.
Jonkey’s legacy..for 30 pieces of silver.
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