Dom Post on TPP

The Dom Post editorial:

US President Barack Obama has thrown the last of his political capital behind the deal, to the consternation of his own party. Japanese Prime Minister Shinzo Abe has suggested he’s willing to kick against the agricultural interests that have long kept in place big farming subsidies in his country.

And trade ministers from all the other countries are delighted; “it’s show time”, our own Tim Groser said.

He should hold the razzle-dazzle and make it clear that New Zealand will only sign up to the deal if it’s plainly a good one. That means meaningful access to new markets where New Zealand exports are likely to succeed. It means serious wins like those that came with the free-trade deal with China, or, much further back, the one with Australia.

I agree. We don’t want a deal like the Australian-US FTA which had little actual trade access benefits.

I don’t mind if there are long or even very long transition times for the lifting of tariffs and quotas. What is important is the end goal – which must be far far fewer tariffs and quotas.

A leaked chapter from May shows the US pushing as hard as ever for new rights for pharmaceutical companies. Pharmac, New Zealand’s economical drug-buying agency, is a special target. Doctors without Borders calls the “the worst-ever agreement in terms of access to medicines”.

The Government says it won’t let Pharmac be gutted. It must hold to that – or drop the TPP. No plausible tariff cuts that would make up for it.

The US pushes for a lot. They, like everyone, has to compromise. I would be very surprised if TPP has a significant impact on Pharmac.

Equally worrying are the TPP’s “investor-state dispute settlement” mechanisms. These give big companies an opaque new forum to sue governments that pass laws they don’t like. They were invented to protect companies operating in countries with dodgy records on the rule of law, but they are spreading all over the world. They have no place in New Zealand – and deserve to be dropped from the TPP.

This is where I disagree. ISDS mechanisms are extremely common in trade agreements, and protect NZ companies also. More to the point half a dozen trade agreements signed by Labour had them in. This is not some new mechanism – they have been included on trade agreements for decades. The devil is in the detail. Our negotiators have been very skilled at getting wording that allows us to pass laws and regulations on public policy grounds, without triggering claims under such clauses.

Trade is a positive force that has helped raise living standards and lift millions out of poverty around the world. Many trade deals have been huge positives for New Zealand, even if painful for particular sectors.

Good to see recognition of this.

Yet the TPP seems to be as much about stomping on valid local regulations as it does about stripping away trade protections. New Zealand has to be clear about the difference.

My ideal trade agreement is one which says:

Country A can sell whichever goods and services it likes to the citizens and companies of Country B, and Country B can sell whichever goods and services it likes to the citizens and companies of Country B.

Sadly we’ll never get that. But hopefully TPP will have significant trade access. Without it, it won’t be worth it.

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