Written By: - Date published: 12:15 pm, June 24th, 2012 - 44 comments
Categories: accountability, capitalism, democracy under attack, economy, International, trade - Tags: democracy under attack, gordon campbell, Jane Kelsey, tim groser, TPPA
One of the (many) areas in which I am woefully uninformed is the The Trans-Pacific Partnership Agreement (TPPA). It’s a “free trade” agreement being negotiated between NZ and 8 other countries (including the USA). What is it going to mean for us? Let’s draw together some resources and explore them together.
The factual outline is here on Wikipedia, note the section on Intellectual Property (IP) concerns. Plenty more facts, and highlights of concerns, here at TPPA Watch. For a quotable summary of the situation, which has grown much more lively since part of the secret TPPA text was leaked, let’s start with the always excellent Gordon Campbell (from June 14):
The leaked document on the US Public Citizen website confirm the worst fears about the Trans Pacific Partnership talks. The leaked text, and Public Citizen’s analysis of the text can be accessed here.
Thanks to a process conducted entirely behind closed doors, New Zealand seems about to sign up to a document that will allow foreign investors to sue us before overseas tribunals if this government ever tried – or any future New Zealand government ever tried – to pass laws to protect our health, safety or the environment, but which happened to cause foreign investors to lose money. Such “investor state” dispute resolution panels are very cosy affairs. They do things judges would never be allowed to do. As pointed out below, such panels are commonly comprised of trade lawyers who sometimes serve as the arbitrators, and sometimes as the advocates for the claimants engaged in suing governments.
Australia – thanks perhaps to its salutary experience of being burned by its free trade deal with the United States – has baulked at the provisions that New Zealand has accepted. Trade Minister Tim Groser’s response on RNZ this morning was little help. On the one hand, Groser gave firm assurances that New Zealand would never sign up to anything that would compromise our sovereignty: “The New Zealand government will not sign any agreement that stops us now, or any government in future from regulating for public health or any other legitimate policy purposes. We will protect New Zealand’s legitimate rights to regulate.”
In the next breath though – and note the weasel word “legitimate” in what Groser said, which renders his assurances virtually meaningless – he went on to make the case for RNZ signing up to “ well designed” clauses that restrict our sovereignty. If such concessions are well designed, Groser argued, they will serve to re-assure prospective foreign investors that we will obey the rules, and at the same time the rules will afford similar protections to New Zealand companies investing offshore. At base, Groser is asking us to trust that he knows best, that he’ll get the balance right, and that he’ll ensure the gains overseas to firms such as Fonterra would outweigh the potential risks, liabilities and restrictions that may be involved back here at home. …
In effect, what he and his Cabinet colleagues are asking for is a blank cheque. There is utterly no transparency to the TPP negotiation process. Thus, the Key government is expecting the public to sign away significant sovereign rights, in the hope of securing a potential trade bonanza downstream – but the entire process is being carried out in a total information blackout, to the point where the first official insight the public will get about the TPP details will be well after Groser has signed up the current New Zealand government, and committed future generations to its terms. Oh, but rest assured it will all be “well designed.” That’s what makes the leaked document significant, because it shows Groser’s assurances to be virtually worthless. …
This same issue about TPP secrecy and sovereignty concerns has also arisen in New Zealand as well – with an open letter written earlier this year by 100 legal professionals, academics and retired judges, a related column by academic Bryan Gould citing the risks posed by the TPP. An editorial response in the NZ Herald attempted to allay those concerns – largely with an argument that if the same rules will apply to all, what’s to fear? Like most allegedly level playing fields, this view naïvely overlooks the fact that some investors bring a far bigger legal war chest to the playing field than others. …
Right. In sum, the public has very good reason to feel concerned about (a) the adequacy of the TPP investor state dispute panels (b) the secrecy in which the TPP discussions are being pursued and (c) the emptiness of the Trade Minister’s assurances that everything will be hunky dory. If there is nothing to fear, why the secrecy? Can Groser at least give an assurance that before a document that will bind present and future New Zealand governments is signed, it is submitted to Parliament for scrutiny – and if not, why not?
Professor Jane Kelsey has been working tirelessly to keep NZ informed on the TPPA. Her latest piece (June 20) is here:
Secrecy in investment talks mocks democracy
The animated commentary and debate last week over the leaked investment chapter from the Trans-Pacific Partnership Agreement (TPPA) negotiations shows how relevant and important it is – and why the nine parties are so desperate to keep it secret. …
The reassurances that trip off the tongues of Trade Minister Tim Groser and Prime Minister John Key seem much less convincing when they can be checked against the text. Public Citizen’s analysis shows the TPPA text goes further than existing US investment treaties. It far exceeds any of New Zealand’s. True, other chapters that are still secret could change that view. That is all the more reason to release the whole text now. The simplest way to describe the leaked chapter is a charter of rights for investors across the nine countries.
Those rules will lock in the current foreign investment regime, so we cannot become more discriminating about what foreign investment we have, why and on what terms. They also allow overseas investors to seek compensation if government regulation substantially affects the value or profitability of an investment. Local investors won’t have that power. An investment can be anything from shares and real estate to mining or casino licences and contracts for public-private-partnership schools.
Most discussion of constraints on the government’s right to regulate has centred on tobacco controls. But a raft of other policies could also prompt investor complaints. Imposing a capital gains tax. Slashing Sky City’s pokie numbers, especially if National guarantees more in a Convention Centre contract. More stringent mine safety laws, a ban on fracking, iwi approval for drilling in wahi tapu, or tighter regulation of mining by companies the government has invited to tender. Capping electricity price increases. Tighter alcohol retail laws. Reversing ACC privatisation, as Labour did before. Stronger finance sector regulation, such as capping a bank’s market share or banning crossover retail, investment and insurance activity.
Especially scary, given the Eurozone meltdown, is that New Zealand has agreed to US demands not to use capital controls to stop hot money flows that play havoc with the currency and exports.
The leak confirms what we feared – that all countries except Australia have endorsed the power of foreign investors to sue our governments directly in secretive offshore investment tribunals for breaching these far-reaching guarantees and protections. We should applaud and join Australia. Instead Prime Minister Key said all parties should adopt the same rules – by implication the other eight should gang up on Australia and force it to back down. …
The Greens and Mana have taken a strong stand for sovereignty. Winston Peters called on negotiators to withdraw from the next round in San Diego starting July 2 and launch a select committee inquiry so all New Zealanders can see the full proposal and comment on it. The Government majority rejected a petition seeking such an inquiry last year. Labour’s position is still unclear. Groser has no problems saying the TPPA, like other agreements, would cede some sovereignty for, as yet, unspecified gains.
The minister is adamant the text will remain secret until the deal is done. Alarmingly, he says neither he nor the Cabinet have seen the text. Yet it is clear that major concessions have already been made. Who, then, is making these decisions and driving the negotiations and to whom are they accountable? Such mocking of democracy needs to end now.
While we the public distract ourselves with trivia like car crushing, and focus on other important matters like asset sales, the TPPA which is quietly unfolding in the background is actually the most important ongoing political issue. It has potentially disastrous implications for our sovereignty and our future. Time to get informed and get active – perhaps start at TPPA Watch, see the section “What we can do about it and how can we find out more?”
On a historical note, we’ve been here before. I recall a similar agreement being proposed, and the same issues being discussed, many years ago (probably 1990s). We were wise enough to drop that proposal (or modify it into an acceptable form). But I can’t recall the name of that proposal, thus I can’t find any details about it and the discussions that NZ had at the time. Anyone out there with a better memory who can point me in the right direction? Cheers.
Update: Jenny with the answer in comment 18, the MAI.