MOD on TPP

May 22nd, 2012 at 10:00 am by David Farrar

Mike O’Donnell writes in Stuff:

Interestingly, the amount you need to invest into duck shooting kit has dropped markedly over the last 20 years.  

When I first went duck shooting as a schoolboy in Timaru 25 years ago, a box of cartridges cost $25 (equivalent to $78 in 2012) and decoys were $35 apiece.  Today you can buy a box of 12 gauge shells for $14 and a dozen decoys for $90.

A key contributor to these reduced costs is parallel importing.  

This allows retailers and other parties to source goods directly from licensed overseas sources, rather than dealing with local licensees. In doing so, it delivers competition between sources of the same or similar goods, and real benefits to consumers.

Back in 1998, the Act 1994 was amended so that copyrighted goods lawfully made overseas could be imported into New Zealand without the consent of local owners.  

This practice of parallel importing lowered the cost of a huge range of consumer goods, from Levi’s through to L’Oreal.

Parallel importing allows people who have legally purchased goods in one country to resell them in another. That means that one can buy goods at a fair market price, rather than at a monopoly price set for just one country.

Ironically parallel importing will likely be a victim of the proposed Trans Pacific Partnership agreement (), a multilateral free trade agreement which aims to liberalise the economies of the Asia-Pacific region including New Zealand, Australia, the United States, Chile, Singapore, Malaysia, and Vietnam.   

And this is the irony. I am a big supporter of free trade and agreements which reduce barriers to trade. But the US demands for the intellectual property chapter are mainly about putting up barriers to trade, not reducing them. A free trade agreement should not be about protectionism, but about allowing willing buyers and sellers to trade more easily.

However, the benefits for trade which flow out of the TPP are accompanied by a whole set of obligations for intellectual property in New Zealand, including parallel importing.  As a result, it’s likely local rights holders would be able to prevent parallel imports (and, consequently, increase the margin that consumers pay).

The implications are far broader than just cheaper jeans and shampoo.  

According to leaked documents from the American TPP negotiation team, the United States is demanding a huge raft of changes to intellectual property law in New Zealand.  

This would see fundamental copyright changes in Godzone, including the return of the repealed Section 92A of the Copyright Act (guilt on accusation),  the removal of ”fair dealing” for accidental copying (like when your browser hits copyrighted material), and a requirement for ISPs to give up customers’ details when they receive a allegation from a rights holder.

After the pain and energy that the local internet and intellectual property industry has gone through to end up with a copyright regime that does a pretty good job of balancing rights with internet pragmatism, this would be a serious slap in the face.  

Some of what the US is asking for would even make caching potentially illegal.

It appears our officials realise this and are providing solid pushback thus far.  

Other leaked documents suggest Ministry of Foreign Affairs and Trade officials have told the Americans that we wish to stick right where we are and not enter into any additional obligations around copyright.

And my hope is that the Government stays firm on this, and doesn’t allow the US to force changes to our intellectual property laws, to suit a couple of US industries whose business model is outdated. Our laws should be based on what New Zealanders determine is the correct balance between producers and users.

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12 Responses to “MOD on TPP”

  1. mynamewastaken (3 comments) says:

    Special interests in the US should not have more say than us in treaties that will result in laws we must live under. It’s necessarily the case that our democratic freedoms have been thrown out the window when binding agreements we cannot get out of, are made not only without any direct mandate from us, but without us even being allowed to know what is being agreed to.

    This kind of thing is breaking democracy, and needs to be the subject of much greater media and public attention.

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  2. rolla_fxgt (311 comments) says:

    Or we could use it to our advantage and demand the removal of dvd zoning and release date stagger, and make it a condition of the agreement that products sold in one country have to be sold in all countries at the same time, or anyone can import and sell them.

    We can’t just say an outright no to any of the terms on offer, we need to negotiate and work them to our advantage, and put out some ideas that are unpalatable to the US, and we’ll end up somewhere in the middle.

    But that said, I don’t know why we’d accept the US conditons around this, as they are late commers to the table, and as such can leave or be shut out just as easily, and there’s no way the US will remove all subsidies and tarriffs on its agricultural sector, so why should we give up something as valuable to NZ consumers as this.

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  3. Sam Buchanan (499 comments) says:

    I spoke to one of the TPP negotiators a while back, and they pointed out that New Zealand already has about as much access to the US market as we are able to use. The only advantage of the TPP (to New Zealand) they could point to was a vague assertion that it could provide the basis of future free trade agreements with Asian countries. But we already have FTA’s with China and Asean and are working on one with India, so it’s hard to see where the dividends for New Zealand lie.

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  4. Aredhel777 (271 comments) says:

    Unusual coming from a centre-right commenter like myself, but frankly, *fuck* the US and its dealings with New Zealand.

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  5. adamsmith1922 (879 comments) says:

    Given government focus on repositioning MFAT to concentrate on Asia and Africa longer term, we should concentrate on agreements with India, Korea, Japan and improving trade into Asean and China.

    Re TPP our objective should be to stop the US impinging on hard won agreements elsewhere and resisting their tired and protectionist world view.

    We are unlikely to gain much and indeed lose a lot from a US deal.

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  6. peterwn (2,940 comments) says:

    NZ has been shafted far too long by overseas interests – sky high prices, waiting ages to see new movies, etc. Perhaps the Yanks should be reminded of this during negotiations. Also their Big Pharma interests want the breakup of Pharmac. They should be asked what is being done about Kaiser HMO in USA. This imposes strict controls on the way its doctors treat and prescribe so must be a similar thorn in the side as Pharmac. But hey! Kaiser has 8 million or so customers on its books – nearly twice NZ population.

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  7. tvb (3,947 comments) says:

    A fta with the united states is marginal. They will want to restrict our agricultural exports but put huge restrictions on parallel importing and use of generic drugs. I assume all this will be carefully weighed up.

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  8. peterwn (2,940 comments) says:

    tvb – too right. The Aussies sold out far too cheaply with respect to intellectual property – the negotiators probably had no idea of value. For example if NZ allows software patents, this effectively transfers enormous wealth from NZ to USA and other countries. Similarly if copyright law can be used to ban alternative supplies of printer ink cartridges, this opens the way for NZ consumers to be ripped off even more (the bloomng things are expensive enough as it is).

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  9. BeaB (1,959 comments) says:

    I still cannot understand why cosmetics in the US cost 1/3 of the NZ price. Why? It cannot be freight. I suspect that, as with so many things, we are being ripped off by someone – overseas or local.

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  10. rolla_fxgt (311 comments) says:

    @peterwn

    That’s why most inkjet, and some laser printers are now throw away items, as a new printer is cheaper than the cost of replacing the consumables!

    NZ could ask for something ridiculous like the removal of US defence subsidies to Boeing (basically making boeing defence a separate company), and agree not to seek that for removal of copyright from the negotiations.
    It’s a bit left field, but given that Boeing is one of the few large manufactures left in the US, and one of the few making a decent profit, it would seek out to see how much the US, and Obama in particular is beholden to the copyright/Hollywood lobby in the US.

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  11. rolla_fxgt (311 comments) says:

    @BeaB
    Its usually the NZ importer thats taking a huge amount of that difference, some goes to the producer, some is due to market size, and some goes to freight. But by in large it is the NZ distributor who takes their cut

    Mountian bikes are cheaper almost everywhere else in the world than NZ, largely due to our limited number or wholesalers/importers. Its got better in recent years, given the rise of the ‘bike supermarkets’, but still its about a 50% more expensive here, than the US or the UK. Down from being twice the price, even once freight and exchange rate differnces are taken out.

    The internet has hindered the profit margins in NZ for the importers, as more and more people are taking to the net to buy parts, and even whole bikes from online UK/US retailers for far less than in NZ, so much so that people don’t care about the lack of consumer garantees for overseas buys. Most even offer free or cheap shipping to NZ, and the duties at the border are low too.

    If any given product is relatively trusted and reliable then people are prepared to take the risk and import it themselves, for far less.
    Its this that business are failing to grasp, and why they are resorting to legal means to make up for their lack of business common sense.

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  12. hamish99 (3 comments) says:

    I just finished busting my ass to get an essay written about TPP this morning for university. My assessment was that US will not give up any agricultural supports, will require us to give up some of our sovereignty around IP laws, PHARMAC, etc and won’t be interest in real negotiation since they have little to gain from a small market that is already pretty open. I suggest we enter ‘negotiations’ with the same disinterested attitude, since we’re unlikely to get anything from them either.

    On the topic of IP and innovation, I saw a TED talks yesterday. Well worth spending the 10 minutes to watch http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture.html

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