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The jagged edges of the TPP

Trade Minister Tim Groser was smooth and soothing on Q+A this morning, talking about the proposed Trans-Pacific Partnership (TPP). Like the skilled politician he is, the average viewer is likely to have been reassured that the Government is doing a wonderful job to further New Zealand’s interests.

Minister Groser did an excellent job of hiding the jagged edges. Trust us he cooed. We’ve got the best and most experienced negotiators.  There are only upsides for New Zealand. All is well, we’re a safe pair of hands.

And, he is right to some extent. New Zealand has benefited from trade agreements and are well represented in the negotiations. Yet there are real dangers, real potential downsides. They can’t be wished away or simply ignored.

Not a Free Trade Agreement (FTA)
My biggest frustration is the continued insistence of politicians and the mainstream media in calling the TPP a FTA.

The underlying message is that New Zealand has done so many successful TPAs in the past, our experienced negotiators should be trusted to do another one.

Another message is that since New Zealand already has low comparative tariffs, there are only upsides for us.

Nothing can be further from the truth. The name TPP itself signifies that it is a “partnership” rather than a FTA.

Previous FTAs have, at the margin, dealt with services, investor-State relations, visas, etc. The TPP is expected to have only about 5 of its 26 chapters deal with traditional trade issues.

The rest are about reaching beyond the border, to influence or constrain the ability of governments- from the way it makes laws to changing laws, policies, regulations, and standards in the future. The TPP gives power to corporate interests over soverign governments, backed by private international tribunals, in areas such as labour laws, environmental protection, public health, public services, professional licensing, government procurement, and consumer safety. The TPP thus moves the focus from state-state relationships in FTAs to corporate-state relationships in the new “partnership” model.

The TPP is meant to be a “high standard, 21st century trade agreement” rather than simply a FTA. From its genesis in NAFTA, expansive new regulatory constraints and investor offshoring protections on behalf of “the 1%” corporate interests have grown to now be dominant in the TPP.

Secrecy

Another subtle effect of positioning the TPP as another FTA is justifying secrecy during negotiations. Trade treaties have always been negotiated in secret to achieve trade-offs. The final agreement has been presented to Parliament as a done deal, making democratic discussion and scrutiny largely irrelevant.

In comparison to FTAs, international treaties about much of the subject matter of the TPP- from labour laws to intellectual property to banking regulations- have been marked by transparent, inclusive discussions at a draft stage. Experience has shown this to be the best way to deal with these complex areas, more in the nature of public policy and soverign control.

Infojustice said it well:

Our argument is not that TPP is worse than FTA negotiations, but rather that FTA processes are the wrong standard for assessing the legitimacy of the TPP intellectual property chapter negotiations. This is because the IP chapter in the TPP, like ACTA, is not a trade agreement. It does not adjust tariffs and quotas – it sets new international limits on domestic regulation, regardless of whether such regulation discriminates against, or even affects, trade. (emphasis added)

As Minister Groser himself said, the TPP is hugely complex. This makes public analysis even more important at the draft stage. The way things are going, many of the fish hooks are going to be hidden and their full implications will be unexpected and painful.

Political deal
More than any FTA, the TPP will be about doing a political deal. The big trade-offs will reflect the political compulsions and interests of each participant. For example, what will New Zealand have to give up to retain Pharmac? Politically, that’s a no-go area for New Zealand.

It’s this political angle that makes me nervous. This Government does not have a vision or priority for New Zealand’s digital economy. It seems to be content in extrapolating our past dairy successes to define our future, perhaps with some value-add thrown in. That makes contentious issues like intellectual property- hugely important for the US- a chip that New Zealand may trade in for gains in other areas or defending Pharmac/Fonterra.

Time will tell. Unfortunately, at that time it will be too late to do anything other than look at a done deal. And the TPP is forever, impossible to alter unless all participants agree to the change.

Former InternetNZ CEO and current Mega CEO Vikram Kumar posts his personal take on events at Internet Ganesha.

Comments and questions
20

Entering into a trade agreement with a country that's not only the worlds reserve currency but has the ability to print its currency endlessly is an insane idea.

No, it's a good idea, but the better is deploying US DOLLAR as own currency. Then no pain anymore.

Some interesting discussion of the TPP over at the Electronic Frontier Foundation. There does not appear to be broad base support for the current leaked chapters domestically in the USA. There are reports that while certain corporate lobby groups have full access to the secret working papers this is even being denied to elected representatives and their aids.

Also does National have the mandate to pass this treaty into law in any state it comes back in? The TPP is so far reaching it is really a constitutional issue that should be past with a 66% majority, there are no take backs if we find out we've been had in 5 or 10 years, this thing is for ever!

Vikram is right that TPP is not like any other FTA that has been negotiated in recent times. It's spirit is more like CER which has had innumerable benefits for NZ. The reason that TPP goes beyond other FTAs is because business is changing and we need FTAs to change too. And I can assure you that corporate lobby groups do not have access to the text. TPP is not following some pre-determined plan - it's a negotiation !

We just have to take your word for the level of access corporations have, Stephen. Having watched your commentary on the TPPA for ages now, I have to say your own objectivity seems to be very cloudy and seems to be very pro-corporate. What is actually in this for NZers? You're part of the NZUS Council (or is it the USNZ Council, I can never remember) - but both councils seem to be heavily biased in favour of US corporate interests. Out of interest, where do those councils get their funding?

Happy to respond to that Dave and will try not to be cloudy. The NZ US Council is a NZ based, NZ led organization funded by both business and the Govt. All the directors are NZers. The companies listed on our website (www.nzuscouncil.com) are all NZ based, most are NZ owned. The website has several articles and speeches outlining why we believe TPP, if successfully concluded, will be in the interests of NZ workers and citizens. The US NZ Council is a separately constituted and governed organization, funded mostly by US business. We c-operare actively with them of course but the two organizations are separate. Hope that helps.

From this article on the NZUSCouncil website you provide - 16 Negotiating Challenges for NZ): "Opposition to an FTA involving New Zealand has already been signalled from various US agricultural (particularly dairy) lobbies. Other areas where the United States’ position differs from New Zealand and other TPP partners include pharmaceuticals (where the US has concerns about aspects of New Zealand’s pharmaceutical management regime) and intellectual property rights. Civil society stakeholders in New Zealand have also identified concern with other aspects of TPP including investor/state dispute settlement and proposals relating to state owned enterprises. It is important to remember that nothing has yet been agreed in the context of TPP and nothing will be agreed until everything is agreed. It is also important that those with an interest in the negotiation make their views known to New Zealand negotiators."...

On what basis can "those with an interest" develop a view and make it known as the council entreats if the negotiations and the underlying documentation are secret. This is an utter farce. Stephen, I'm appalled that you (or anyone) supports this approach to treaty negotiation. Also, many of the assertions about "advantages for NZ" in the piece I've cited are *highly* debatable. To me it feels that you and the NZUS Council are pushing a barrow for reasons that are *not* in the best interest of NZ.

MFAT and its negotiating team are very open to input from stakeholders. You can send an email or pick up the phone ! I understand many groups and individuals do. Start by checking out the information that is available on the MFAT website. I think the piece on our website acknowledges there are both opportunities and risks in TPP. We make our views and the reasons we hold them plain for everyone to see. I fully respect that you are entitled to your opinion just as surely we are to ours !

Stephen, you're being disingenuous. Not knowing the content of the draft agreement, we are in absolutely no position to discuss anything. We don't even officially know what the TPPA includes! Your attempts at sounding reasonable are very hollow to me. Until this is not a "secret" negotiation, where *all* the participants (which includes the general population of NZ) are aware of what is at stake, this is simply an undemocratic sham. The implications (from what little we think we know) are too far reaching for this to be entrusted to people like you who say "trust us, the negotiators are working in your best interest".

"Disingenuous", "very hollow" , "people like you .." How quickly an attempt to have a respectful conversation turns to personal invective. Good luck to you Dave.

Also, Stephen, I think it's important that the NZUS Council updates its language, because the TPPA is no longer being referred to as a "Free Trade Agreement" - it's a "High Quality Trade Agreement" which makes no claims to freedom. So I think it's inappropriate for the Council to be touting the TPPA as an FTA.

TPP is a negotiation towards what is normally called free trade agreement. My post above acknowledged that the scope of TPP goes wider than other agreements that have been negotiated. It is more like CER which is generally regarded as a free trade agreement (unlike say the European Union which is a customs union). But why do you refer to TPPA when clearly there is no A (for agreement) just yet ....

I use TPPA because I disrespect the process. No "partnership" is proposed, as that would imply a level of equality among the players. It's a farce.

Corporate lobby groups in the USA, such as the MPAA have direct access to text of the TPP it has been reported. New Zealand lobby groups may not, but that does not hold true for all countries negotiating.

In America "Politico" a major US commentator and publisher of political matters has a story in the last week that Obama is wanting to grant the US Executive powers to complete TPP without oversight from elected officials as has been expired since 2007. So as it stands the people NZ are negotiating in good faith with under the TPP do not even have the right under current US law to be making the agreement without elected US representatives making amendments. This is hopes and dreams, not reality amongst both NZ, USA and other diplomats who are giving away concessions voters may not support or ever approve of.

I just spent time in the United States looking at how the US Govt consults with business and other stakeholders on trade policy. There are 600 non government advisers appointed under the Trade Act and Federal Advisory Committees Act (FACA) who receive access to confidential information to enable them to advise officials on trade negotiations. Federally registered lobbyists are excluded from this process. The individuals are mostly business people but there are also advisers drawn from unions and environmental groups. This is the group most often cited as being the "corporate lobby groups" who are said to have access to the text. In fact they are not corporates, not lobbyists and they do not have access to the negotiating text - what they see are advance copies of draft US negotiating proposals. The article you refer to probably concerns the Trade Promotion Authority (TPA). Trade policy is a shared mandate between the Administration and the Congress. The Administration negotiates treaties and the Congress regulates trade. TPA sorts out the respective roles. The last TPA has expired as you suggest and needs to be renewed. The TPP partners are all aware of this and have chosen to negotiate with the Administration even without TPA. Renewal will strengthen the oversight of negotiations not weaken it. Hope this helps clarify things.

There is no requirement for a 66% vote on a "constitutional issue" in NZ. It is interesting that suddenly we have everyone who doesn't like something this government is doing claiming they "have no mandate" or "there should be a referendum". The government commands a majority in Parliament, with its coalition partners and that is all that is required.

Certain acts (or sections of acts) that relate to constitutional matters such as the entrenched portions of the Electoral Act 1993 require 75% of MPs to change them. Sorry I got the 66% wrong but the point stands. Matters of significant constitutional nature can and have historically required more than a 51% majority to update.

Actually, I think it's fair to say that National has "no mandate" for the TPPA. It was not an election issue (keeping it fully secret helps with keeping it out of the public arena after all). I cannot understand on what grounds our government is so doggedly pushing for us sign up to TPPA when they have provided absolutely *no* compelling or credible analysis of what gains NZ might make from taking part. None. This is an "emperor has no clothes" situation.

Dave, TPP was started by Labour not National !

if the people flogging the TPP expect compliance with their "we own EVERYTHING" point of view, good bloody luck.

The harder you grasp at something, the more it escapes you.