TPP needed now more than ever

On behalf of the NZ International Business Forum Stephen welcomes the announcement that the remaining 11 members of the Trans Pacific Partnership (TPP) are planning to continue to implement TPP.  See his statement on the Tradeworks site here.

Trading in an uncertain world – the post-TPP agenda for New Zealand and Asia

On 6 April 2017 Stephen addressed the World Services Group in Auckland – read his remarks on the Tradeworks website here.

Asia Pacific Integration – with or without the United States?

This is the text of an address Stephen gave to the Asia Forum in Wellington on 7 February 2017.

It’s good to be with you this evening and to have this early opportunity, as a new year unfolds, to speak about the outlook for trade and investment in the Asia Pacific region.

This year is definitely not a case of “plus ça change, plus c’est la même chose”. 

A new President in the White House is challenging the model of past American leadership in the global economy and with that long-held principles and practices of economic co-operation and integration.

This coincides with a new questioning around the world of the process of globalisation, how its benefits are shared and its challenges managed.

I am perhaps a little brave, at this early stage, in accepting Farib’s invitation to explore these issues – the President has been in office for less than a month (somehow it seems longer!) and his Administration is not yet completely in place.

I am certainly of the view that we need to let time elapse before being too definitive about the policy choices New Zealand might have to make in the light of these profound changes in the global environment.

It is not too early to start thinking about how we might position ourselves and so tonight I’d like to explore with you:

  • firstly, where the process of economic integration in the Asia Pacific region has led us thus far
  • secondly, how this process might be challenged in the months to come
  • and lastly, what we here in New Zealand need to be doing.

I’m speaking to you this evening mainly from the perspective of the NZ International Business Forum, a group of senior business leaders concerned with New Zealand’s engagement in the global economy.

These themes are relevant across the range of my work with organisations including the NZ China Council, the APEC Business Advisory Council and the Australia New Zealand Leadership Forum.  

Economic integration – how far have we come?

One of the much repeated criticisms of the ill-fated Trans Pacific Partnership (TPP) was that it was not a trade agreement at all.

I read as much in a recent blog on the website of the Foundation for Economic Education.

Rather than a simple agreement to lower tariffs for mutual benefit, the writer alleged, TPP morphed into a massive international regulatory regime over 5,000 pages long. It was weighed down by numerous non-trade provisions aimed at appeasing non-trade special interests”[1].

It’s not the purpose of my remarks tonight to attempt to rebut the many criticisms of TPP but this particular one calls for a little more economic education!

Of course TPP was a trade agreement – the larger part of those 5000 pages are taken up by complex schedules outlining the process for the elimination of tariffs.

(We can debate whether TPP is a “free” trade agreement since in some limited cases, albeit ones of interest to New Zealand, the goal of zero tariffs was not reached).

But there’s a much bigger picture here and it’s really not complicated – trade is not trade anymore.

Trade has been replaced by a set of much more complex economic interactions between firms and whole economies.

Professor Peter Petri and colleagues, in a report to ABAC in 2015, captured this well when he said:

“Businesses (today) engage in more varied activities, with a wider range of partners, and in more markets than ever. Major technological and economic trends are disrupting the business environment, including the emergence of global value chains, the digital/Internet revolution, the rise of a giant middle class, and dramatic improvements in connectivity[2].

Many of the objections to TPP overlook the fact that the business model in the region has changed and that global and regional value chains, where production occurs across multiple jurisdictions, are, in the words of Professor Petri, “an Asia Pacific innovation”.

New Zealand is not immune from this movement.

New Zealand manufacturers and processors of natural resources including food and forest products are suppliers into these global value chains.

As my friend John Ballingall from NZIER suggested in a recent op ed: “The days of Kiwi firms shipping butter and whole sides of lamb direct from the processing plant to the end consumer are long gone”[3].

Research undertaken by NZIER for the Pacific Economic Co-operation Council (PECC) shows that while New Zealand is struggling to lift its overall participation in GVCs we do much better in relation to agriculture and food and beverage production.

To quote John Ballingall again:  “This world of global value chains (GVCs) poses a number of challenges and opportunities to Kiwi firms, and forces policy-makers to think in non-traditional ways. What’s been done in the past is unlikely to be ideal now as New Zealand looks to boost its productivity and living standards”.

It was precisely to try to find new ways of incentivising and enhancing access into these global value chains that TPP was conceived.

In that sense TPP represented an effort for the regional framework of rules for trade and investment to catch up with the action – even if in the end it was a very long and tortuous process.

Hence the need for the agreement to cover not just tariffs but non-tariff barriers, not just goods but services, not just trade but investment, not just border measures but behind the border measures, not simply regulatory harmonisation – as the writer of that blog contends – but processes for regulatory coherence and convergence, not “one size fits all” but “one fit for all sizes”.

I promised this wouldn’t become an apologia for TPP but simply put TPP was trying, in all its insufficiency, to reflect the new reality of the way business is done in the region and beyond.

The fact of the matter is that business is moving faster than the regulatory system and has been doing so for some time.

TPP was one instrument for achieving economic integration – certainly something less than the utopia of free trade but a very good second best option.

TPP is not the whole answer either – it is a coalition of twelve willing partners, which was always designed to lead to something much larger, an APEC-wide grouping gathered together in the Free Trade Area of the Asia Pacific (FTAAP).

Nor is TPP the only such pathway to FTAAP.

In Asia there is the Regional Comprehensive Economic Partnership (RCEP).

I’m tempted (but it would be unkind) to describe RCEP as a coalition of 16 unwilling partners, given the rather limited level of ambition, which seems to characterise the negotiating process.

It is important to stress that RCEP is not the forum in which China, as our American friends would have it, “is writing the rules for the region”.

RCEP is led by ASEAN, not China, and while on paper seeks an ambitious outcome, is mostly about ASEAN integration with the rest of East Asia.

For its part China remains very interested in the concept of the Free Trade Area of the Asia Pacific (FTAAP).

In his address to the APEC CEO Summit in Lima last November President Xi Jinping described FTAAP as a strategic choice concerning the long-term prosperity of the Asia-Pacific; We should steadfastly promote its construction and provide institutional guarantees for fostering an open regional economy”[4].

President Xi also expressed a preference for inclusiveness:

Any regional trade arrangement, in order to earn broad support, must be open, inclusive and all-win; closed or exclusive pacts are not the right choice”.

Finding a way to realise the FTAAP vision has been difficult.

The theory was that TPP and RCEP, once concluded, would coalesce into FTAAP which would be anointed by the coming together of China and the United States in a new framework which could spark life into a global process in the World Trade Organisation.

Hope clearly springs eternal in the realm of trade negotiations!

Challenges to the existing order

The arrival of President Trump in the White House has clearly put paid to much of this grand strategy – at least for the time being.

His decision to withdraw from TPP was easily done, if fundamentally flawed – after all, he was withdrawing from a treaty that had not come into force, the benefits of which had not been fully seen.

But there are broader issues at play.

His “America First” policies, including the call to bring businesses back to the USA, pose a direct challenge to the prevailing business model in the region.

His stated preference for bilateral deals runs counter to the quest for a region-wide framework of rules for trade and investment.

These rules seek to make doing business easier while avoiding the infamous “noodle bowl” effect of conflicting and overlapping disciplines.

Any future adventurism in US foreign policy, particularly with regard to China, could serve to destabilise the stability and security of the region.

This stability is a necessary pre-requisite for advancing economic and commercial interests.

All of this reverses former President Obama’s policy of seeking to engage more directly in the region through the “Asia pivot” of which TPP became, more by association than by design, the flag-bearer.

It may well be of course that these worst fears may not be realised – as I said, these are very early days in the life of new Administration.

But even at this point it is not hard to see that there could be a departure from what we have known of American leadership in the region.

In a recent memo the respected head of the American think-tank CSIS, John Hamre, writes that we are back in 1949 – a time when President Truman faced an existential choice about whether to concentrate on domestic growth and competitiveness at the expense of global recovery after World War II.

Hamre writes – we are back to the great challenge that faced President Truman. Will America shake off its deep- seated desire to pull back and nurse its bruises, or will it champion an international order designed to create a broad environment where human potential can blossom?[5]

It was after all American leadership, which imposed a benign order on the region after the conflict of the last century.

It was this leadership, which helped secure the emergence of the World Trade Organisation as the repository of trade law and a framework for settling disputes

It is this leadership, which has in more recent times, trialled new arrangements for trade liberalisation through NAFTA and a range of other agreements, and helped shape the new business model we see today in the region.

This is not to say that the existing order is either perfect or sufficient – clearly it was not.

In the economic space that order has come under intense criticism.

There has been criticism for failing to take sufficient account of environmental and sustainability issues.

There has been a perceived failure to ensure that those who are disadvantaged from the adjustment brought about by changing patterns of production and trade are appropriately cared for and helped into new areas of enterprise.

And there is the criticism that economic integration has served to advance the interests of multinational corporations especially through measures aimed at stimulating and protecting investment or through the rules being devised for the digital economy.

“Making globalisation work for people” is not just a slogan – it has become a policy imperative in the age of Brexit and Trump.

So, in 2017, we face not only the prospect of new direction from the United States on trade, we face new challenges from within about the nature of the very order that has served us well in the past.

 What should New Zealand do?

In this context, what is to be done by a small, open, trade-dependent economy like New Zealand?

It needs to be recognised that this is not the first time the core assumptions of New Zealand’s trade policy have been challenged.

When Britain joined the European Economic Community in 1973 we faced the herculean task of diversifying our economy while hanging on tooth and nail to our access for butter and sheepmeat.  (How ironic that today we’re back again talking with Europe and Britain!)

In 1983 we sought to break out of a straightjacket of protectionism and economic befuddlement when we concluded CER with our best friends the Australians – that living and evolving agreement remains a bedrock of New Zealand economic success.

In 1993 when the outcome of the GATT Uruguay Round was in doubt, we made it known that New Zealand was open to the concept of high quality and comprehensive trade deals in the Asia Pacific region.

That ultimately led to FTAs with Singapore, Chile, P4, ASEAN, China and TPP – this sort of FTA coverage was unthinkable back in the day.

Today we see that New Zealand’s Plan A, focused largely if not exclusively around TPP, has gone off the boil and Plan B, is, to quote Prime Minister English, “tricky”.

What is Plan B for New Zealand?

It is certainly not a retreat into “fortress New Zealand” which makes no sense for a nation so dependent on trade and economic integration.

Nor is it a futile attempt to keep away from the controversial aspects of TPP and seek to negotiate more limited “market access only deals” – this merely denies the reality of value chains.

New Zealand after all is already largely a free market for others’ exports – most of them don’t see the need to reciprocate.

One key advantage today, which was not the case in 1973, 1983 or 1993, is that we have options.

Plan B is likely going to be a mix of things, both in the Asia Pacific region and beyond.

Among the latter are the emerging NZ/EU FTA and a possible post Brexit FTA with Britain.

Among the former are the initiative to upgrade our bilateral FTA with China and new initiatives like China’s “One Belt, One Road”, which we need to examine more deeply.

We certainly need to continue to seek a high quality, comprehensive and ambitious outcome from RCEP.

RCEP may not at present be an alternative to TPP, but is a useful initiative none the less, particularly for New Zealand if it delivers for us better access to Japan and India which we currently lack.

Then there the prospect of a TPP-like agreement amongst the remaining 11 members.

Australia, New Zealand and Singapore have expressed interest in exploring the options and Mexico has signalled that it wishes to explore bilateral agreements with the remaining members.

Japan, a key player, has recently said TPP is “meaningless” without the United States.

I think this Japanese reticence is entirely understandable and needs to be seen in the context of their critical security relationship with the United States.

On the other hand, Japan, like New Zealand and unlike other members, has already ratified TPP.

We need to let some quiet diplomacy proceed to see if the remaining 11 parties, or a sub-set of them, see merit in amending TPP to take account of US withdrawal.

This should include deciding whether or not to strip out of the agreement those things that were essentially US demands.

TPP (11) would not deliver the long sought-after FTA with the United States.

While China – under our shortly to be upgraded FTA – may have replaced the United States as our top trading partner, the US remains as important to us today as it was the day before the Presidential inauguration.

America is not just a major trade and investment partner – it is a powerhouse of innovation, entrepreneurship and business ideas.

New Zealand now has to find a way to engage and work constructively with the new Administration, even as we look to advance other options for growing and future-proofing our economy.

The way ahead is far from easy.

New Zealand has been seeking to obtain a bilateral FTA with the United States since the turn of the century.

Two problems have bedevilled that effort: first, a poor political and security relationship, which has now been fixed, thanks to efforts over years by certain politicians and diplomats on both sides, supported by leaders from business and the wider community gathered in the NZ US Council and its counterpart in the United States.

And second, on the economic front, the small size of the New Zealand economy and the perceived – if highly exaggerated – risk which our agricultural sector poses to American farmers.

This will make it difficult for New Zealand to get ahead in the FTA queue and may make a purely bilateral agreement ultimately no easier to negotiate than TPP.

While we simply do not know the detail of the new President’s trade policy, he is not likely to do us favours on agriculture and may seek to go beyond the TPP outcomes on issues like investment and intellectual property, especially medicines.

There is also the challenge of seeking improved visa access to enable New Zealand professionals to work temporarily in the US as many services exporters especially in the tech sector would wish.

To return to my favourite theme, there is much irony here – TPP’s lengthy negotiation was in part because the other 11 partners were seeking to counter the full extent of American ambition across a range of issues.

This was largely achieved: the final TPP text was a carefully structured consensus, which represented a balance of interests of all parties.

For New Zealand TPP delivered substantial benefits with little change to existing policies, even if we did not achieve all we hoped.

Conclusion

Will economic integration proceed with or without the United States?

The theme for my remarks this evening was framed as a question but perhaps it should have been an exclamation!

Economic integration driven by globalisation and commercial impetus is likely to proceed whether the United States ultimately decides to lead that process or not.

There may be holes in the boat, but it is not sinking – yet.

The question is more what sort of economic integration are we going to see and what will be the rule-making that shapes it.

New Zealand benefits from rules for trade and investment especially when we have had a hand in making them.

New Zealand does not have the luxury of closing off options before they have been fully explored.

We’ve been in this space before.

Today we are entering a new and uncertain period where old assumptions may no longer hold true, where old economic allies may not play the role we have become accustomed to.

This profound change requires fresh thinking from governments and stakeholders, together with perseverance and commitment, as we chart some new and potentially rough waters.

 



[1] Iain Murray: “Free Traders shouldn’t mourn the loss of the TPP” -https://fee.org/articles/free-traders-shouldnt-mourn-the-loss-of-the-tpp/

accessed 1 February 2017

[2] Peter A Petri et al: “The FTAAP Opportunity – a report to ABAC”, October 2015 – https://www2.abaconline.org/assets/2015/4%20Manila/FTAAP%20OPPORTUNITY%20(1).pdf accessed 1 February 2015

 

[5] John Hamre; “Memorandum to CSIS Trustees, Advisers and Friends”, 1 February 2017

If not TPP then what?

This op ed was kindly published by The Spinoff on 16 August 2016.

Trade has been described as “war by other means”.

That led the US Defence Secretary in peak hyperbole to declare that the Trans Pacific Partnership (TPP) was as important to him as another aircraft carrier.

New Zealand’s interests are distinctly less martial, but placing TPP on the altar of lost dreams is a whole lot more serious than many imagine.

The world is more inter-dependent than ever before, although today that inter-dependence is under threat from political demagogues and backward-looking protectionists the world over.

What are the consequences and options before us if TPP does not proceed?.

Where are we now?

While TPP took six years or more to negotiate, it has been only six months or so since the signing in Auckland.

To come into effect TPP requires members representing 85% of the area’s GDP to ratify – these means both the United States as well as Japan.

Eight of the twelve parties including New Zealand have commenced the ratification process.

Four parties – the US, Canada, Chile and Brunei – have yet to get started.

President Obama is keen to see the TPP implementing legislation passed by the existing Congress in the ‘lame duck’ session after the elections on 8 November and before a new Congress and a new Administration take office on 20 January.

Last week the Administration took the first procedural step towards that end by sending a Draft Statement of Administrative Action to Congress.

Under the terms of the Trade Promotion Authority, the President is required to give at least 30 days notice to Congress of an intention to submit the text of a treaty like TPP for a vote in both Houses.

That Draft Statement does not commit the President to submitting the text, but is a pre-requisite for doing so.

Once the President decides to send the treaty text to Congress, which he may do at any time, the Senate and House must schedule the vote, up or down, within 90 days.

The Administration must also submit a number of other reports including an assessment of the impact of the treaty on employment and on the environment.

The problem is that US politicians on both sides of Congress say they have diffculties with TPP.

Some – on both left and right – hate the whole idea of trade, which they wrongly accuse of exporting jobs and hollowing out the domestic economy.

Others, mostly on the left, think TPP goes too far in entrenching property rights for pharmaceutical companies and giving new rights to foreign investors.

Others, mostly on the right, think TPP doesn’t go far enough in terms of intellectual property, tobacco and financial services.

Everyone seems to want to do something about so-called currency manipulation, except American currency manipulation of course.

But here’s the key point:  TPP, after six or more years of exhausting negotiation, represents a careful balance – not perfect by any means, but the consensus reached between the twelve parties.

TPP is not the end of the story for the quest for more effective trade rules – in some senses it is only the beginning of a much wider initiative to create a new framework for trade and investment in the Asia Pacific region.

That’s why there is so much riding on TPP and why TPP is still a good idea which will simply not go away.

Why is TPP still a good idea?

For New Zealand TPP would link us to the eleven other member economies representing 36% of the world’s GDP, markets taking over 40% of our exports and 812 million consumers.

To cut a very long story very short, the benefits of TPP would be four-fold:

  • TPP would convey measurable trade advantages for all export sectors and open up important new markets like Japan and the United States (where our competitors have better access than us).
  • TPP would put in place an updated and extensive set of rules for trade and investment which we have had a hand in making and which extend into important new areas like labour and the environment.
  • TPP would improve the climate for inward and outward investment while upholding the Government to regulate in public health, the environment and the Treaty of Waitangi.

TPP would require little policy change in New Zealand, with the major change being an extension to copyright term.

If not TPP, then what?

If we set aside the political rhetoric for a moment, we need to remember that TPP was initiated under President Bush and has been completed under President Obama.

It has not been thrust upon the American people – it has been negotiated by their representatives.

But despite the best will of President Obama the lame duck strategy may not work given the polarisation around this issue in the election campaign.

If so, then it will be for a new President and Administration to address the critical economic and foreign policy issues behind TPP.

There are three broad scenarios.

One is that TPP will be completely abandoned and the United States will turn its back on decades of American-led globalism with all the implications for its trade and foreign policy interests this implies.

The other is that there will be an attempt at re-negotiation.

This will not be easy – why should any of the TPP partners do so when they have been so grievously let down before?

It will also not be quick – it normally takes an incoming Administration the best part of  a year to appoint a US Trade Representative and other key personnel.

The last scenario is that the incoming President will make the calculation that TPP is too good to pass up and will submit the treaty to Congress.

This scenario cannot be totally dismissed but has been rejected by both Presidential candidates.

Any delay in moving forward with TPP will give rise to important shifts in global trade policy.

Other negotiations – like the Regional Comprehensive Economic Partnership or RCEP, under negotiation between 16 Asian economies including New Zealand – will take on new importance.

But equally, we cannot be confident that the outcome of RCEP would have the same high level of ambition as TPP.

Other groupings may also emerge but none of them are likely to include the United States.

The very issues and concerns that fuelled the development of TPP will undoubtedly find an outlet but this will take time – time, unfortunately, that will translate into lost opportunities.

Conclusion

What will not change is that we will need to continue to connect with the rest of the world and the rules for this engagement will remain vitally important for us.

Things may not be looking good for TPP but it is too early still to declare the battle lost.

We must continue to put to our American and other friends that turning aside from TPP would represent a significant threat to all our interests.

If TPP is not the answer, then we will be faced with the daunting task of finding other options.

Making trade not war is just a much better way of using our valuable time and resources.

TPP Unwrapped

Stephen is giving a number of addresses about the Trans Pacific Partnership (TPP) and the implications for New Zealand.  See here for an address he gave in Nelson to the NZ Institute for International Affairs on 5 April. Other addresses are available on the Tradeworks website – www.tradeworks.org.nz

 

Open letter to Andrew Little, Leader, Labour Party, on TPP

 

Andrew Little MP
Leader of the Labour Party
WELLINGTON

 

Dear Andrew

Thank you for clarifying your opposition to the Trans Pacific Partnership (TPP) on your recent blog post “My thoughts on the TPP” [1].  In the interests of open and respectful debate, I would like to comment on the key points of your argument:

Labour is a party of free trade. This isn’t a product of the last couple of high profile trade ministers in Labour governments. It goes back the full 80 years since we first formed a government. We have always championed the cause of better access to markets and free trade.

There can be no argument with this.  I myself (as a public servant) worked directly for former Trade Minister Jim Sutton and can attest to the tough debates with the Alliance Coalition partner about the merits of free trade.  It is precisely this long history of bipartisanship, which makes some of us, both inside and outside the party, so disappointed with your decision.

The National government has handled the negotiations of the TPPA appallingly. Seven years of total secrecy have aroused natural suspicion about its contents. The government did nothing to inform New Zealanders about the negotiations, the issues, progress – anything in fact. The 6000 pages of agreement were dumped in November last year and academics, NGOs and citizens have been left to work their way through the document and form their own conclusions.

People are invariably afraid of what they don’t know and the long and tortuous negotiating process was hopeless in this regard.  The 6000 pages of text were released, together with plain language descriptions, some three months ago, much earlier for example than other FTAs.  Of course NGOs and citizens have to come to their own assessment and this has been assisted by the release of the National Interest Analysis, which provides further insight. The proper place to come to judgments about all this is in the course of the ratification process.  This is exactly what has happened with other FTAs.

The deal is worth less to New Zealand than the government touted. Extending copyright will add costs to libraries and universities. The cost of pharmaceuticals to New Zealand will rise.

The analysis of TPP has been undertaken by the same officials who advised the previous Labour Government and may advise the next.  I suggest, but agree it is a matter of debate, that the additional costs to libraries and universities arising from the copyright change is marginal at best when compared to the other benefits.  (Some in the industry are already claiming the Government’s estimation of the costs of copyright are too high).  It is not clear that the cost of pharmaceuticals will rise since there is little change to Pharmac or to the patent and data protection regime for medicines: at the end of the day the costs to individual New Zealanders are determined by Pharmac and the Government.  The Government is on record as saying these costs will not rise.  You should hold them to account for that.

An email from an acquaintance of mine, a strong pro-free trader and pro-TPPAer, suggested I ‘take note’ of the Canadian trade minister’s statement on the agreement.  The minister, Chrystia Freeland, set out how she is dealing with the TPPA – meeting with unions, businesses, NGOs and holding town hall meetings. She called for a non-partisan debate. All of which I thought was a fantastic idea and was happy to note. Still, I did wonder why my friend hadn’t also sent it to the National Party asking them to take note.

If this was me (!), the point I was making was that the Canadian Government, while having reservations about an agreement signed by its predecessor, was proceeding to sign TPP and allow the ratification debate to continue.  As I understand it you don’t want the Government to sign TPP, which will prevent the ratification debate.  Your contributions this week have been far from non-partisan. The Government has already committed itself to a process of outreach and hui around the country to discuss TPP as a prelude to the Parliamentary discussion.

I have read a lot of the TPPA myself. The free trade aspects are naturally attractive, even though the deal on dairy is hopeless, meat is a little better and the rest amounts to not much considering it is an agreement covering 800 million consumers and 40 per cent of the world’s GDP. The benefit of genuine free trade agreements is the potential to create new markets that previously didn’t exist.

I agree that the dairy aspects of TPP are not as good as they could have been and as we had hoped.  But they are in the view of the negotiators and the dairy industry the best that could have been achieved in the circumstances.  Dairy still benefits more than any other sector from tariff cuts in key markets and the establishment of new tariff quotas.  The meat deal – specifically beef to Japan – is a significant market opening about which the industry has welcomed. Without this we will not be able to compete with Australia which already has an FTA with Japan. To call the rest ‘not much’ is a serious under-estimation – tariff reductions and/or elimination for horticultural products including kiwifruit, wine, wood products and seafood cannot so easily be dismissed. Addressing tariff and non-tariff barriers for manufactured products like health technologies and agricultural equipment is also significant.  This will result in the creation of new markets as you suggest.

Two things that disturb me are, first: the restriction on New Zealand legislating to regulate land sales to non-resident foreigners (Labour’s policy is to require them to build a new house, not buy an existing one, and we would be unable to do this under the TPPA)

Labour’s clearly signaled ‘bottom-line’ for TPP was that it should provide for restrictions on land sales to non-resident foreigners.  This is possible under TPP: a future Government could if it wished apply a stamp duty or other tax to restrict these sales.  Opinion is divided on whether an outright ban could be introduced, but there is a ready alternative to meet Labour’s policy position.

And secondly the requirement to allow other TPPA countries, their citizens (including corporates) to have a say on changes to many New Zealand laws and regulations…

Constraints on law-making and opening up our political system to overseas interests is unheard of.

 TPP does provide for our partners to make their views known on any measure, which may be introduced that could have an impact on trade.  But these provisions are far from ‘unheard of’.  They are already enshrined in the World Trade Organisation (WTO) and other FTAs concluded by Labour including the China FTA.  They are what make it possible for New Zealand to be consulted on changes affecting our exports to other markets such as subsidies under the Farm Bill or a discriminatory labeling or levy system.  Importantly these provisions retain the right of the Government to continue to regulate: the Government may have to listen to the views of trading partners but not necessarily heed them.  Bottom line is we do this already and have been doing so for years now.

For instance we would have to let Carlos Slim, the wealthy Mexican telecom company owner, vet any regulation of our telecommunications industry.

Not quite, the Government is required to publish notice of its proposed changes as it does in the Official Gazette, but not advise everyone personally. Mr Slim may offer comment if he wishes. The Government still decides.

As a social democratic party, we have always stood for effective parliamentary democracy. That means a system that is accountable only to those who elect its representatives and which serves all citizens, not the privileged and the elite.

There is no arguing with this either. In this case it is the democratically elected Government of the day which signs and ratifies treaties.  The Parliament is invited to consider and pass the legislation, which gives effect to the Treaty’s obligations.  TPP is no different in this respect from any other treaty whether in the field of human rights, climate change or labour.  A future Government may also leave TPP after due process albeit with the loss of benefits this would entail.

I hope you will consider these points.

Yours sincerely

Stephen Jacobi

 

Understanding the Trans Pacific Partnership

In two articles published in Idealog magazine Stephen outlines what’s at stake for New Zealand in TPP.

Read these articles here and here.

NZ and Japan – an added value relationship: the implications of TPP

In a speech to the Japan NZ Business Council in Tomakomai,Japan, Stephen outlines the implications of TPP for the Japan/NZ relationship.

Read the speech here.

TPP – where to from here (and how did we get here anyway?)

Read Stephen’s speech to the Wellington branch of the NZ Institute for International Affairs (NZIIA) here

As we look at where we have got to with TPP, we see a deal which is at last coming together in its final form.

To un-pack all this today and to help explain ‘where to from here’ I’d like to focus on three areas – why we set out on this journey, where we are now, and where things might take us in coming months.

 

Ending the TPP ‘endgame’

Read Stephen’s commentary in the New Zealand Herald on the TPP negotiations and why they are good for New Zealand business – here.

Endgame is a play by the absurd dramatist Samuel Beckett. It’s also how the anticipated last hurrah for the Trans-Pacific Partnership (TPP) negotiations in Maui last week was described. And there was quite a lot of the absurd as pressure mounted on negotiators and the wildest speculation about developments circulated in the media back here.