PM to TPP critics: 'We’ve never been sued'

NZ has signed four free-trade agreements with investor-state provisions without a single case, Key says.

Prime Minister John Key has hit back at "loss of sovereignty" critics of the Trans-Pacific Partnership (TPP) agreement, saying the controversial trade deal won't lead to lawsuits from big corporations. 

He told TV One’s Q+A programme that “There is genuinely some misinformation." People think, "‘We’ll lose our sovereignty; the New Zealand Government will get sued.' I mean, they’re great statements to make, but they’re fundamentally not true.”  

And in response to the question “You can’t guarantee, though, can you, that we won’t be sued by a big US corporation?”, the Prime Minister said, “Well we’ve had it in four FTAs [free trade agreements] now, we’ve never ever been sued. New Zealand has never had a case taken against us in investor-state.”

RAW DATA: Q+A transcript: Prime Minister John Key

Watch the interview here

JOHN Well, potentially, so if you think about it at one level, as I've been saying, tactically, it was reasonably clever of Putin. He came along to the United Nations and said, ‘Well, you all don't like ISIL. I don't like the Islamic State either, so I tell you what – we will have them as the focus of attention, and I'll do something about that, and you're welcome to as well.’ Of course, what we really know, though, is that he is protecting his interests with Assad. He is proving to the Arab world ‘I stand by my man, which is Assad. But now, of course, what you have seen him do is take these air strikes and, a) there is the potential he kills civilians, and b) there is the potential he kills the opponents to Assad, and thirdly, just sheer by accident, gets in because it's not coordinated--


CORIN Isn’t it hypocritical, though, of the West to criticise him? We are doing the air strikes; we are protecting our interests there. There's no difference in that position.


JOHN So as I understand it, we are immensely careful in the way that we actually do the targeting for those air strikes. I mean, it's not something New Zealand is actively involved in--


CORIN But no one in Russia will believe that.


JOHN Well, they might not want to believe it, but we know what our motivations are. They are exactly as I said in the speech yesterday. We don't think there's a long-term place for Islamic State, nor Assad. Both of them have to go. But where your point is could it make the world a bit more dangerous? You've already seen now small groups of countries putting out a statement, including France and the United Kingdom, United States and a number in the region, like Qatar, basically saying the Russians should stop. Because the risk here is--


CORIN Why don't we make that comment as well? Why don't you come out strongly and condemn Vladimir Putin for what he's doing?


JOHN Well, I do actually say that I'm really concerned that he might end up targeting civilians or ultimately use this as a way of targeting those that are opposed to Assad. And we have certainly made the point, as I said in my speech yesterday, there is no place for Islamic State or Assad. That statement, as I understand it, was made a seven of 60 countries. We weren't asked to be a part of that. There's no cables in our system asking us to join into that, but at some point they might. And we most probably would align ourselves with that because it’s consistent with our view.


CORIN Could you be stronger, though, on Russia? Because there will be people in New Zealand who watched the events unfold, and they may take out all of this that, you know, are we heading back to another Cold War here?


JOHN Well, I think we have made it pretty clear what our targets are and what we think is a credible long-term plan. We have never been in the camp of calling for regime change immediately in Syria, because what we’ve said is that you need institutions that back up the people of Syria and the government of Syria actually to be able to transition and survive. So we don't welcome what the Russians are doing, other than if they are acting to degrade ISIL. Well, we're actually acting to do the same thing. It's just that at that point we part ways. But, you know, look, it's a very complicated set of relationships there. I mean, it's a very difficult thing for people to understand. On the one hand, you go in there and you do lots, for instance, help the Iraqis; but if you overstep the boundaries and is not the Iraqis undertaking it, then you upset the Iranians. This stuff is just not simple.


CORIN Amnesty International has come out, praised you for raising the veto issue but said that New Zealand is too focused on words and not enough action. Couldn't we do more to help the Syrians? Couldn't we take more refugees, give them more money, actually come through with some concrete measures?


JOHN Well, I always think we are a small country, and we need to think about the resources that we have available and how we commit those resources. And we need to spread those resources around. I actually think we are doing quite a lot for a small country for which New Zealand doesn’t have a great connection. So if you think of what we are doing in terms of training troops in Iraq, that is to degrade ISIL. People are leaving Syria because of Islamic State and because of Assad.


CORIN But there is a sense that it is the bare minimum to keep our allies happy. You put in the trainers but not the SAS troops, not the actual skin in the game of the fight, so to speak.


JOHN But no one is putting in the SAS troops. The SAS troops are ground forces.


CORIN Well, there are air strikes. We can't do that, can we?


JOHN Okay, but we don’t have that capability. What we have done is put in our $20 million. We have been setting up education facilities in those refugee camps. We are doing quite a lot. We took 150 people as part of our quota last year. We're taking another 600 on top of our existing quota. And, you know, people can say all they like that we were a bit slow, but we actually got there. We had to go through a process – Cabinet and everything else. We actually got there before the Brits and Australians—


CORIN No, no, but that was significant. And Peter Dunne’s raised this. He's questioned the moral compass of your Government when it comes to foreign policy. The issue with the refugees, though, was about your moral leadership, your instincts. You were behind the public. Shouldn't you have been the one to lead that?


JOHN I don't necessarily agree with that. I think people have conflated two issues. On the one hand, they have conflated the issue of lifting the overall quota, and that's something I don't think we should do unless we actually go through a proper process. Because it’s all very well to express a view on it. The practicalities are that people come to New Zealand, they have to be integrated, they have to have resources and support behind them. When someone says—and it's through their open heart, goodwill and absolutely right instincts, says, ‘I will take a Syrian family in my home,’ I understand the motivations of why they are doing that. It's a wonderful thing. But if they are isolated somewhere, these people can't speak English, how long can you expect people to actually stay there? So I am very strongly of the view—You look at when we started talking about the emergency quota, it was before the picture of that 3-year-old boy turned up; It was before Australia, and it was before Britain actually made the announcement that we made.


CORIN But if you look at New Zealand's overall contribution to aid, I mean, we're nowhere near the 0.7% that the UN’s original goals said we should be at.


JOHN And very few countries are.


CORIN But that doesn't make it any more excusable, does it? I mean, we should be spending more aid, and we're just not.


JOHN Well, in the last Budget – that’s not true – in the last Budget, we increased by 200 million over the next three years.


CORIN But still a—That’s only half of what we’re supposed to be doing, isn’t it, really?


JOHN Yeah, but show me countries that are at 0.7%. Okay, it's Norway, who have so much money in the bank it's not funny; I accept it’s Britain, who have taken a view that they are going to do that; but for the most part of the other 190-something countries, we do our fair share, and we are committed to that as a goal, but it's a long-term goal. And we've had lots of things that we’ve had to deal with, so, again, as I said to you, it's nice to be able to say the sole focus of the government and the resources of the people of New Zealand will be in one place, but in the real world that I live in, I need to spread that across everything, from people who need health services right through to everything else we do. And I still think, if you look at New Zealand, why did we win our bid on the Security Council with such an overwhelming vote on the first of vote? The answer is because we are respected for the opinions we hold and the consistency with them, and we are respected for what we actually do around the world. I think we can beat ourselves up too much that we don't do a good job. We do a pretty good job.

CORIN Okay. Are we doing a good job, though, when it comes to our most closest relationship with Australia? Because it seems like New Zealanders are being treated very poorly with this detention situation. What are you going to do about it?


JOHN We'll do everything we can, which is advocate that we think there needs to be either an exemption for New Zealanders or a change at least in that threshold. So Australia has always deported people to New Zealand who they have cancelled their Australian residency, work permit or whatever it might be. It's—What’s changed in recent times is the threshold of that.


CORIN But we've been advocating for years over the issue of citizenship rights in Australia, and we've got nowhere. Don't you actually need to say to Australia, ‘well, we'll do it to you guys too’?


JOHN We probably technically haven't got nowhere. We have made some minor--


CORIN Small progress, okay, granted. Granted. But isn't the point, though, they are not going to do anything unless we retaliate?


JOHN Okay. I firstly think that you've got a new government, with a new Prime Minister Malcolm Turnbull. I think we need to play this carefully but in a very concentrated and considered way. So on the first instance, if we just back Malcolm into a corner, I don't think it will actually assist us. On the other side of the coin, we have made the case. I have personally spoken to Julie Bishop this week. I had raised the issue before anyway with Tony Abbott. It was more a policy that probably he had driven. We will raise the issue with Malcolm Turnbull, and there’s likely to be a meeting with myself and Prime Minister Turnbull quite soon.


CORIN Why are they doing it? Why have they? What is the real reason that they have brought this rule in?


JOHN Well, they are not focusing on New Zealanders. What Tony Abbott's view was is that he wanted to have tougher policies about the rules you have to observe if you want to live in Australia, and that was a blanket view. Now, what happened as part of that is that we got caught up with a bit more than others because there are just fundamentally more New Zealanders in Australia, and that reflects the special nature of our relationship.


CORIN So would we push for an actual exemption? Why not just say ‘those rules don't apply to us’?


JOHN Well, I don't know if we will strictly get there for the very worst of the worst, but what I do think we should push for is, say, ‘Look, there is an Anzac bond, and there is actually exemptions—’ And actually, we have different criteria for Australia, compared to the rest of the world, in lots of cases. Take foreign investment – I think the level set at just under $800 million worth of investment out of Australia into New Zealand doesn't have to go through the Overseas Investment Office. Well, that’s much much higher, for instance, than the United States, which is around 100 million I think, from memory. So the point is, there are lots of things that we do about that relationship that's different to everywhere else, and I think the Australians understand that. I'm actually not as pessimistic as others that we can't make change--


CORIN When can you come up with something? When can you give Kiwis some answers on this?


JOHN Well, we're raising the issues all the time. I mean, I can throw my toys out of the cot all I Iike, but I can't force Australia--


CORIN But isn't that the point--? Maybe it is time you did that.


JOHN Yeah, okay, but throwing the toys out of the cot could say, ‘Okay, I'm going to, unilaterally, then, rip up the relationship of free labour market movement between New Zealand and Australia. And I tell you what – there won’t be an awful lot of Kiwis thanking me for saying that they or their kids can't go and work in Australia because some person’s gone to jail for 12 months or more and the Australians want to deport him. You know, this is about the long game and the long sentence. It was Helen Clark that actually agreed to the changes and rights for New Zealanders in Australia because she was confronted with exactly that issue. It was accept that or accept that the labour movement rules will change. I just think with Malcolm, you are dealing with someone that is going to take a slightly different perspective. If we give him a bit of room and we reason the case, I think we can get there.


CORIN Let's talk about the TPP trade deal. It seems to me that if this deal is done, we’re going to sign it no matter what, aren't we? There's no sort of sense that—We don't have an option.


JOHN Well, I don't think it's quite as cast iron as that.


CORIN Helen Clark seems to think it is.


JOHN No, she's making absolutely the right point, which is if you just take a step back for a moment and you accept that the United States and Japan are huge markets, and a quarter of the entire household consumption of the world takes place here in the United States, at a philosophical level, you and I both know that New Zealand is going to be well served if we have access to that market without those barriers and restrictions that are on us. And certainly Helen Clark knows that. And she knows that the history of New Zealanders being highly successful--


CORIN Sure. And we have to give up something for that, don’t we? We have to be prepared to make a sacrifice, and so what are those sacrifices?


JOHN Well, we're not going to get everything we want on dairy. The question is, can we get something that’s acceptable--


CORIN No, I mean in terms of sovereignty and in terms of those issues around—can you tell New Zealanders what are we going to have to trade off to get the security of a trade deal bloc for the next 20, 30 years?


JOHN Well, there are other protections, if you like, that the United States wants, or longer protections around intellectual property and when it comes to biologics, for instance, which are a form of pharmaceuticals. But the point is, in terms of sovereignty, it's just not true that we’d trade that stuff away. That is investor-state; that is how you can take action against the government. We've had that in four FTAs. There has never been a case taken against New Zealand.


CORIN But they do have an impact, don’t they? If we look at the plain packaging in Australia, you’ve always said Australia is being sued over the issue of plain packaging in that investor-state forum. You’ve always said, ‘We’ll wait for Australia to see how they go,’ because they're going to cop a massive legal bill, so that's stopped that happening in New Zealand.


JOHN Well, interestingly enough, Australia has a free-trade agreement with the United States. And in fact, they looked, I think, Philip Morris or whoever was taking the case, at taking it under investor-state, and they recognised that investor-state – the threshold is so high they are actually not taking it under the US-Australia FTA. It defeats the very case that Jane Kelsey has been making. They are taking it out of a very strange agreement they've got with Hong Kong, which is why they went and registered themselves with Hong Kong to take the action against Australia. All I'm doing practically is saying, ‘Look, this thing is running through the courts. Let's just see how it plays out, save the New Zealand taxpayers a bit of money, and at some point we’ll move there.’ But--


CORIN But, hang on, we’re dealing with a drug that is killing people. The longer we wait, you know, the more people that will die.


JOHN Yeah. And what will be carved out of TPP will be any restrictions when it comes to public health, so we’ll be quite free to have plain packaging if we want, and the government is moving towards that anyway. We've made significant changes in the time that we've been the Government – raising prices every year, point of sale changes. Actually, our record on clamping down on smoking has been quite impressive, I think, and the number of people who are smoking are reducing as a result of it.


CORIN The other parts of this deal – how good are they? Let’s say the dairy just doesn't shape up but you have to sign. How good are the other parts? Can you give me some sort of ballpark figure on what we are going to benefit here?


JOHN Well, I can't at the moment, but what I can tell you is this – we go away and we model what are the reductions in tariffs over time and what are the behind the border benefits, all those different things. We modelled that for China, and we’ve modelled that for TPP. And when you look at TPP versus China, even in its current form, without a very good deal for dairy, it's impressive. So when I say to New Zealanders look, I'm not going to sign you up to something unless I think it's in your best interests. I don't do that by whistling in the wind. There is a whole of stuff that backs that up, and eventually, when we go out there and say to New Zealanders on the basis that the deal is signed, ‘Here’s what it looks like,’ I think the bulk of New Zealanders will say, I think a lot of sectors in New Zealand will come out and say, ‘The Government has done absolutely the right thing here.’


CORIN But has it –? You haven't brought New Zealanders along on this process, have you? So much concern about the TPP – it feels like you haven’t talked to them properly about it.


JOHN Okay, so, firstly, a) it’s difficult to go through every single sector and everything we’re doing, when there’s an agreement amongst the 12 countries that we won’t publicly go out and talk about what’s there. Secondly, there is genuinely some misinformation, so the, you know, ‘We’ll lose our sovereignty; the New Zealand Government will get sued,’ I mean, they’re great statements to make, but they’re fundamentally not true. So investor-state is there to protect New Zealand investors offshore, not to worry about what’s happening in New Zealand. And thirdly, there are just going to be some people who just don’t like TPP because it involves America.


CORIN You can’t guarantee, though, can you, that we won’t be sued by a big US corporation?


JOHN Well we’ve had it in four FTAs now, we’ve never ever been sued. New Zealand has never had a case taken against us in investor-state.



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