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

“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.”