Why US farmers are pro TPP

May 17th, 2016 at 7:00 am by David Farrar

NPR reports:

Turn on the TV and you can barely escape the acronym TPP.

The Trans-Pacific Partnership is a free trade deal between the U.S. and 11 other countries that’s currently being negotiated. Presidential candidates on both sides of the aisle are deriding the TPP, saying it’s a bum deal that will hurt the U.S. economy and especially low-wage workers.

But if you venture into the Midwest and ask a farmer about the TPP, you’re likely to get a different answer.

“This pending TPP trade negotiation, to me, is hugely important for agricultural commodities, but specifically for beef,” says Mike John, a cattle rancher in Huntsville, Mo. He’s one of many Midwest farmers and ranchers who are bucking the political trend to dog the TPP.

A coalition of more than 200 agriculture groups recently drafted an open letter urging congressional leaders to approve the TPP, saying the trade deal will help U.S. farmers stay competitive in an increasingly crowded world market.

And what if the US does not ratify?

Binfield says if the U.S. doesn’t pass the TPP, countries like Australia and New Zealand could make their own deals with each other, excluding the U.S. That could mean less trade access overall for U.S. producers.

But there’s another issue casting a long shadow over TPP negotiations: China. China is not a part of the trade deal. But pro-TPP interests say agreements like this one prevent China from setting global trade rules in its own interest.

Binfield says in the overall strategy, the U.S. wants to make sure China – which is a massive economic power – doesn’t have the chance to dictate the trade rules for Asia. The U.S. wants to set the trade standards.

I’ve been told that what might happen could be fascinating.

If the US does not ratify, then Japan and Canada will only stay in if there is a major economy as part of it.

Who could that be? China!

That would be a brilliant political move. China steps in and says we’ll sign TPP, and then you get a trade agreement with all 11 countries, China and no US.

Well done Phil Goff

May 15th, 2016 at 2:00 pm by David Farrar

The Herald reports:

The Trans-Pacific Partnership legislation has passed its first hurdle with support from National, Act, United Future – and one Labour MP.

The Trans-Pacific Partnership Agreement Amendment Bill will now be considered by the Foreign Affairs Defence and Trade Committee, after passing its first reading 62 to 59.

It was opposed by Labour, the Green Party, New Zealand First and the Maori Party. However, Labour MP Phil Goff voted for the TPP.

In January, Labour leader Andrew Little gave Mr Goff special dispensation to do so, because during Mr Goff’s time as trade minister he started the negotiations for the agreement’s predecessor.

Fellow Labour MP David Shearer had told the Herald he personally supported the TPP, but later said he would be voting along party lines.

Well done Phil Goff for voting for what you know to be in NZ’s best interests.

The last four Labour Party leaders before David Cunliffe all support TPP – David Shearer, Phil Goff, Helen Clark and Mike Moore. They lead the Labour Party for 21 years between them.

Why can’t MBIE defend its cost estimation for TPP on copyright?

May 13th, 2016 at 6:48 am by David Farrar

Richard Harman writes on Politik:

The Ministry of Foreign Affairs and Trade has simply dismissed claims that some of the economic modelling on the TPP contained a basic arithmetical error.

The report back to Parliament yesterday of the Select Committee considering the TPP does not show any substantial reasoning behind the Ministry’s conclusion.

The error was allegedly contained with the modelling of the economic cost of extending the copyright term on recorded music from 50 to 70 years.

The Ministry’s National Interest Assessment claimed this would cost New Zealand consumers $55 million.

In fact, said an internationally recognised copyright lawyer and economist, Dr George Barker, Director of the Centre for Law and Economics from Australia National University the total cost to New Zealand of the copyright extension term was more likely to be around $250,000.

In his evidence to the committee, Dr Barker said Ministry of Business Innovation and Employment officials who did the calculations for the Ministry of Foreign Affairs had simply guessed how much the cost to New Zealand of extending the copyright term on film and television would be by assuming it would be exactly total figure as for recorded music.

“But, he said when they did that they  did not realise  that  the original calculation supplied by an Australian consultant had seriously  overestimated   the costs for music  by more than 40 times

“The Government officials may have inflated the already overestimated   annual cost of term extension by around  $49 million,” he said.

I don’t like the increase in copyright term in TPP. I disagree with Dr Barker on most copyright issues. However I suspect he is right on the issue of the estimate that the cost of extending the term of copyright from life plus 50 years to life plus 70 years would be $55 million a year.

That figure fails the common sense test.

Think about what that change means over the next 20 years? It means that works created by artists who died between 1945 and 1965 now won’t come out of copyright for another 20 years.

Now I can’t imagine that NZers consume $55 million a year of works by people who died between 50 and 70 years ago. 99.9% of what I watch and listen to is far more recent than that.

So the MBIE figure of $55 million a year fails the common sense test. Unless they can provide the detailed calculations they used to calculate it, the estimate is very suspect.

Ironically the thrust of Dr Barker’s evidence is to make the TPP more attractive to New Zealand since it would lower the estimated cost to consumers of the extension of the copyright term.

This is the irony. The Government has seemingly over-estimated the costs to NZ of the TPP.

Waitangi Tribunal says TPPA not a Treaty breach

May 12th, 2016 at 12:00 pm by David Farrar

Stuff reports:

The Waitangi Tribunal have ruled the Trans-Pacific Partnership Agreement has not breached Treaty obligations.

However, the report raised a number of concerns, such as misjudging Maori interests and a lack of transparency on Maori advice.

New Zealand is one of 12 countries party to the free trade deal, which the Government claims will benefit the country by $2.7 billion a year by 2030.

The Treaty of Waitangi clause in the agreement should “provide a reasonable degree of protection to Maori interests”, the Tribunal said.

This is no surprise. Sadly it won’t change the rhetoric of those opposed.

Charles Finny pointed out in February that NZ was the only country that got explicit mention of indigenous rights and protection of the Treaty of Waitangi.

Trump against TPP as NZ wishes to rip heart of US out!

March 16th, 2016 at 10:19 am by David Farrar

NBR reports:

Republican front-runner Donald Trump used an overnight rally to sharpen his attacks on the Trans-Pacific Partnership (TPP). US ratification is needed for the trade deal to come into effect, with a vote expected in December at the earliest.

“It’s a horrible trade agreement,” Trump told a rally in Ohio, which will hold its primary on Wednesday NZ Time.

“You have 12 countries – all of whom want to rip our heart out.

So the hard left in NZ is now allied with Donald Trump. But for very different reasons. The hard left insist that NZ got a bad deal and that we are conceding too much to US corporates.

But Trump (and some others in the Republican Party) say it is a bad deal because the US didn’t get enough in it.

Trump romped home in Michigan by going in the exact opposite direction to the TPP, promising to slap huge tariffs on cars assembled by US automakers at plants in Mexico. The Republican establishment fretted it was essentially a Democrat policy, but it proved hugely popular.

Trump, like Labour, is against free trade.  Because industries that were formerly protected go through painful adjustments when faced with competition, free trade always has a proportion of the population who are against it – especially when combined with nationalism.

During the candidates’ debate on Friday NZ time, Cruz said, “I opposed TPP, and have always opposed TPP. We’re getting killed in international trade right now.”

Earlier, the arch social conservative said the trade deal would undermine US sovereignty.

Labour and Ted Cruz also agreeing! Both using phony arguments.

Upper Hutt City Council idiots

February 27th, 2016 at 11:15 am by David Farrar

Stuff reports:

Upper Hutt City Council has declared the city a “TPP-Free Zone”, prompting its mayor to condemn his colleagues’ “ultimately meaningless” political statement.

Don’t those Councillors have any actual work to do, rather than puerile idiotic gestures?

What do they mean by a TPP-Free Zone? Do they mean they want all imports from the US, Japan, Australia and Canada banned?

Do they want Upper Hutt businesses to stop exporting?

Deputy mayor John Gwilliam agreed the declaration was a political statement but said he voted for the resolution because of serious concerns about how the TPP could thwart local government and undermine public welfare, because of the powers it gave international companies to use dispute settlement proceedings against governments.

McClay said the agreement would not change the ability of governments, to fulfil core functions, at local as well as national level.

“I am surprised that the council has not tried to be better informed.”

After learning about Wednesday night’s vote, Hutt Valley Chamber of Commerce & Industry chief executive Mark Futter said he was astounded the business community was not consulted.

The council owed the people of Upper Hutt an apology for the “purely political” resolution, which could cause a backlash against export businesses in the city trying to establish international trade links, he said. 

“The political stake they’ve put in the ground means nothing. If I was a business owner, I’d be pretty disappointed in the council.”

Someone should remain those Councillors of the rates paid by local businesses.

Councillor Angela McLeod said she voted for the resolution because she had gauged a rising anti-TPP public sentiment and was concerned the provisions of the agreement amounted to an attack on “the sovereignty and democracy of Upper Hutt”.

They’re like lemmings. They repeat a phrase with no understanding of it.

THE VOTE

FOR: Deputy mayor John Gwilliam, councillors Mary Amour, Paul Lambert, Glenn McArthur, Angela McLeod, Helen Swales and Dave Wheeler (7).

You now know which grandstanding fools not to vote for.

International dispute settlement mechanisms

February 24th, 2016 at 4:00 pm by David Farrar

An interesting op-ed from Deborah Hart of the Arbitrators’ and Mediators’ Institute of New Zealand.

Opponents of the Trans Pacific Partnership have been conducting a brisk trade in criticising the Investor State Dispute Settlement mechanisms in the recently concluded 12-nation deal. The term refers to the critical aspect of the agreement that allows parties to take a case against governments they believe aren’t playing ball.

What isn’t so clear is how familiar these critics really are with this aspect of the fine print when they hyperbolically dismiss it as the deal’s most “chilling” feature, which could also yet result in loss of national sovereignty, supposedly secret hearings and other unspecified hardships for New Zealand.

Investor State Dispute Settlement (ISDS) is actually as chilly as a typical summer’s afternoon in Auckland. The warmth is partly in its transparency, but also in the fact that what we’re talking about is a form of arbitration and something New Zealand is not only good at but has already shown itself to be practical, efficient and in the country’s interests.

A dispute settlement provision represents nothing new. In one form or another it has been around internationally since the mid-1960s. New Zealand is already party to a half-dozen trade or investment treaties containing such arbitral provisions.

In 2010, for example, the value of such mechanisms to New Zealand was memorably put to the test when this country petitioned the World Trade Organisation to successfully get access to the Australian market for our apples, which had been barred as a result of restrictive quarantine measures.

Yep we used their provisions to stop Australia using bogus science to block our apple imports.

The intervention of these international tribunals, sited in a neutral venue, comprising independent specialists in international law, often retired judges, and appointed by the parties, is better than the alternatives.

Certainly, they’re much better than litigation in the courts of the home state. It provides a consistent system of justice across member states. If such disputes are left to domestic legal systems, investors are left to deal with the vagaries of local courts, which can be interminably slow, unpredictable, biased or even corrupt.

Chilling indeed would be to contemplate a New Zealand company trying to enforce its rights, say in a Mexican or Malaysian court.

Again the provisions are most liked to be used by NZ companies, not used against NZ.

“Generally speaking,” Simon Foote, an Auckland-based arbitration expert, explains, “the investor protections in the TPP are narrowly drafted, meaning that it would require egregious conduct on the part of a state for an investor to have a meritorious claim.”

Protections for investors, for example, an obligation not to expropriate without compensation, have been part of international law for decades, Mr Foote notes. “They are fundamental and beneficial to investors prepared to invest outside their own backyard. And what ISDS provisions do is provide a workable means to enforce these fundamental protections.”

And there are carve outs for education, health etc.

Mr Foote also points out that this is not an insurance scheme to protect investors against all changes to the law. The Government’s right to regulate on matters concerning public health, safety and the environment are not subject to ISDS. And the TPP does not apply to measures required to fulfil the Government’s Treaty of Waitangi obligations and permits measures favourable to Maori as exceptions to the obligations otherwise owed to investors. Notably, states have the right to deny claims relating to tobacco-control regulation.

Investor-state dispute settlement is therefore not something to be afraid of. It’s part of being a trading nation in a globalised world. Access to markets comes with obligations. ISDS is to be celebrated, for it means our corporates won’t be ending up in foreign courts, and nor will our country’s trading partners end up in ours. This is how arbitration works best. There isn’t a better alternative.

Much fuss about nothing.

Easton on TPP and sovereignity

February 17th, 2016 at 4:04 pm by David Farrar

Brian Easton writes at Pundit:

Allow that we had to give away something, such as increased copyright extensions, for better access for our exports; the real issue for us in the TPPA is that it reduces ‘sovereignty’. To report my conclusion at the beginning: all trade and all trade deals reduce sovereignty to some extent. This has been going on in New Zealand since its first European economic engagement. The Investor State Dispute System (ISDS) is another step. As far as I can judge, the ISDS provisions in the TPPA do not represent a great loss of sovereignty – but then the TPPA benefits from increased market access are not huge either.

I’d say the biggest sovereignity losses have been the Kyoto and Paris agreements on climate change. We are obliged to make dramatic changes to our industry to meet our global commitment. It is not just all trade agreements that reduce sovereignity to some degree – every international agreement does from the Antarctic Treaty to the Convention against Torture.

Modern trade increasingly requires a formal framework between the participants. To take a simple illustration: transaction costs between traders are reduced by common standards for weights and measures and the like. New Zealand is a signatory to various international agreements It did not have to adopt them but it would be troublesome for our exporters and importers if they had to keep converting local measures into international ones.

Because it is a small country New Zealand has been very keen that there be an international framework based on a rule of law so that, typically, there are enforcement provisions in each agreement to make them work. On occasions they have definitely worked in our favour. For instance, we have had favourable WTO rulings in regard to apple access to Australia and lamb access to the US – in each case a larger power was pushing us around but they had to give up some sovereignty and do what the WTO tribunal decided.

They is a key point – NZ has won cases against other countries using dispute mechanisms. If you are the good guy, you will probably win.

When we are on the wrong end of a decision, we will also have to agree to something we do not want to do too.

As far as I know we have never lost (a case against us) or even had one.

No investor will absolutely trust the state legal processes since the law may be changed, the courts stacked. Thus investors seek a dispute resolution procedure outside the state even though New Zealand probably has a better reputation than most states.

My ideal, would be a world court for investor state dispute resolutions, something like that proposed by the EU. But the US Congress will not countenance such a court system, and its fallback is an arbitration system between the state and investor.

It is not be the first time we have agreed to an ISDS process in a free trade deal; it wont be the last. (Instructively, some who oppose the ISDS provisions in the TPPA are willing to take human rights issues to the international tribunals – even though that represents a potential loss of sovereignty too.)

I like the idea of a world centre or court for investor state disputes. And a good point that those against TPPA are often the same demanding some UN committee force NZ to behave differently.

It is argued by some proponents of the ISDS in the TPP, that they already exist in other FTAs and that New Zealand has never had to a claim under one. I say, ‘thus far’. And it is also a matter of concern that the few cases involving other jurisdictions mean there is not a lot of case law.

One can’t rule out no claims ever but NZ generally behaves in a good way and doesn’t nationalise foreign companies without compensation etc. The lack of case law is both a strength and a weakness – the lack of cases means the threshold is high.

So the ISDS in the TPPA reduces our sovereignty, or rather it reinforces the reduced sovereignty that foreign direct investment is already causing. In my judgement the reduction is not great compared to all the many international concessions New Zealand has already made. But the benefits from improved market access (offset by the copyright extension) are not huge either even though they are there.

A very balanced view, and no one could ever accuse Brian Easton as being a neo-liberal economist!

Protests can make you more popular

February 17th, 2016 at 3:00 pm by David Farrar

Audrey Young writes:

It has been one of the longest honeymoons in political history but now Prime Minister John Key is preparing to be hissed and booed at every public outing by anti-TPP protesters.

He was shouted down on Sunday when he tried to make a speech at the annual Big Gay Out festival in Coyle Park. And on Waitangi Day, after giving the lower marae at Te Tii a miss, he was booed by a section of the audience at the NRL Nines tournament at Eden Park.

In the December Herald-DigiPoll survey, Mr Key was preferred Prime Minister by 65.2 per cent of voters after seven years in office.

Helen Clark had been similarly popular, too, after six years as Prime Minister, rating nearly 60 per cent, but had slid to 41.6 per cent by the time she lost office in 2008.

Yesterday, Mr Key said he expected to encounter protesters against the Trans-Pacific Partnership for the rest of the year.

But he would not be changing his public appearances to minimise the encounters.

“… I’m not going to back away from it or engaging with other New Zealanders because you get a small group of very noisy protesters.”

Mr Key said a group of militant people he thought were Green and Mana members “hijacked” the Big Gay Out for their own purposes and that deeply frustrated people.

I understand huge numbers of the 10,000 or so people there were deeply upset by those political activists trying to hijack the event, and if anything such behaviour just makes Key more popular with non-committed voters. Ugly protests tend to reflect more on those protesting than their targets.

Dunne on TPP

February 16th, 2016 at 11:09 am by David Farrar

Peter Dunne writes:

I agree with the Labour Party on the TPP.

Well, some of what it is saying anyway. Actually, to be more accurate, some of what Andrew Little is saying, because everyone else in his Caucus seems to be trying to cover all sides of the argument, all of the time.

My favourite trick at the moment is to ask people if they can explain to me what the Labour Party position on TPP actually is. So far out of 25 people (including MPs, media and activists) no one has been able to.

No, I agree with Andrew Little when he says it would be crazy for New Zealand to pull out of the TPP once it takes effect. He is absolutely right.

So Little is for parts of TPP, against parts of TPP, will vote against it, but won’t pull out of it, and says NZ should just ignore parts of it we don’t like but will be outraged if any other country did the same.

Over the summer period, I took the opportunity to listen quietly to what real New Zealanders, not the vocal protestors, were saying. Their message is mixed. They hear the government’s story about the trade opportunities arising from the TPP, and while, on balance, they are a little sceptical, they tend to see that as positive. They do worry about sovereignty issues, but note that every agreement we have signed up to, including membership of the United Nations under Peter Fraser and the World Health Organisation, has involved sovereignty issues, and there has never been a problem.

I look forward to Labour explaining how the Kyoto Protocol wasn’t a huge breach of our sovereignty.

Others have wanted to know how come it was acceptable for New Zealand to take Australia to the World Trade Organisation over its restrictions on our apple exports, but not acceptable for similar provisions to apply here.

NZ is more likely to benefit from provisions that allow disputes to be arbitrated, as we generally are in the right.

Labour said restrict not ban

February 15th, 2016 at 9:00 am by David Farrar

Charles Finny facebooked:

Most interesting was an attempt by Labour MP and Trade Spokesperson David Clark to make the case that it was the Government’s fault that bi-partisanship on trade policy had broken down. His argument was that it was convention that Government would be familiar with Opposition policy and ensure that it would stay within the bounds of this policy when determining negotiating positions for FTA negotiations. He stated that Labour had a long standing policy of wanting the right to ban property speculators from abroad and that Labour had campaigned on this policy at the last election. He suggested that MFAT and Ministers must have known about the policy and were remiss not negotiating an outcome that accommodated it.

Now let me explain a little about how TPP was negotiated on services and investment. Essentially TPP has frozen the status quo, and in some cases some liberalisation of the status quo was negotiated. Some countries had policy that allows “bans” on foreign investment in urban real estate. New Zealand has not had such policy. Those TPP members did not actively advocate for this policy. The policy was already there and became “bound” as part of the outcome. “Binding” means that policy cannot become more restrictive than in the past. Policy can change but it can only do so in the liberalisation direction. (In days of old this was also known as “standstill and rollback”.)

Now while existing NZ policy was “bound” what is unusual is that New Zealand – quite late in the negotiation (post Andrew Little’s announcement of his conditions I believe) – negotiated the right to adopt discriminatory taxation policies. This was done to allow a future Government to “restrict” sales to foreigners through a stamp duty or other tax measure (I believe that a very high tax of this type can have the same impact as a “ban” for most investors but accept that it might not deter a super rich person – the exception but not the rule).

Now lets get back to Labour Party policy and what Labour campaigned on at the last election. The policy states “Labour will not support provisions in trade agreements that limit the government’s right to provide, fund, or regulate public services, such as health or education. Trade agreements should not prohibit the government from RESTRICTING sale of land and infrastructure or regulating the sale of state assets.”

TPP is fully consistent with this policy. TPP allows a future Government to “restrict” land sales to foreigners and also fits with the other elements of this policy.

And if you search for transcripts for what Andrew little said in the middle of the year about his pre-conditions for Labour support for TPP, he also uses the term “restrict”.

This concept of ban is more recent, and I don’t think you should expect negotiators to know the policy was really about allowing a “ban” when all official comment was referring to “restrict”.

So the TPP has fully complied with Labour’s five bottom lines. They’ve just tried to find an excuse to oppose it to appease their union overlords.

An own goal on the TPP

February 14th, 2016 at 6:57 am by David Farrar

The Standard Watch blogs:

A blight on public education is the very last sort of blight we need.  Anthony R0bins was so concerned about the possibility that he wrote a post on the subject yesterday.  It quotes at length from the secretary of the New Zealand Educational Institute, Pat Goulter.  It wails at the “sheer incompetence” of our negotiators who failed to get a carve out for public education.

The Tertiary Education Union is similarly critical.  Their Sandra Grey warns us:

“The TPPA will limit current and future governments’ abilities to make decisions that are the best for our kids’ education”

So, r0b and the New Zealand Educational Institute and the Tertiary Education Union are all very concerned.

But not so concerned, it seems, that they were moved to read the relevant provisions in the TPPA.  Luckily, Et Tu Brute did.  He was able to direct r0b, at least, to the provision in the agreement giving a lie to all of the wailing (or at least on this issue, they will have others).

“New Zealand reserves the right to adopt or maintain any measure with respect to…public education.”

What was that about “sheer incompetence”?

The left just lie constantly about the TPP. If you follow the link you will see the annex which explicitly carves out measures around public education from the TPP.

Labour’s latest TPPA position – they’ll renegotiate it!

February 12th, 2016 at 10:00 am by David Farrar

Stuff reports:

The Labour Party won’t pull out of the Trans Pacific Partnership Agreement if it wins power, but would back itself to win changes on aspects it doesn’t support, leader Andrew Little says.

Yeah sure you will. 11 other countries will re-open negotiations two years after it has been signed and ratified because Andrew Little wants them to.

The deal is the deal. It is not going to be changed.

Speaking to reporters on Tuesday, Little confirmed the party would not pull out of the TPPA if in Government.

However, it would fight “tooth and nail” to win changes on aspects of the deal it did not support, such as the prohibition on banning foreign property buyers.

The TPPA allows a de facto ban through stamp duty. This is hollow pretend anger.

While foreigners were currently allowed to make submissions on New Zealand legislation, Little said the TPPA would “elevate that process to an obligation” by requiring the Government to notify partners about potential law changes.

Oh shock horror – law changes have to be notified in the Official Gazette now. What an awful obligation.

This is complaining about trivia, and avoiding the substance.

Little did not say whether he would pull out of the TPPA if he failed to win changes, but said he would be confident of success.

Here’s a question for Andrew. What proportion of trade deals ever get renegotiated after they have been signed and ratified? Is it 50%? 10% 5% 1%? Under 1%? He’s dreaming.

“The comments now coming out of other countries, even Hillary Clinton now saying the thing needs to be tweaked, I’m confident that over time we can get some change.”

The changes Hillary Clinton wants are not ones that would benefit NZ. Plus her rhetoric is just that. She doesn’t actually mean it.

HDPA on TPP protests

February 10th, 2016 at 3:00 pm by David Farrar

HDPA writes in the Herald:

The opposition to the TPP was ugly. Worse than that, it backfired. At first, the crowds of thousands walking Auckland’s streets in protest were impressive.

Until you talked to them.

Too many of them didn’t even know why they were protesting.

“I dunno, to be honest,” was roughly what one man said.

Probably typical of most there.

The sight of Sue Bradford wrestling with police – again – can do quite a good job of drawing attention to a cause.

But the sight of Sue Bradford sitting on the tarmac in the middle of a main road to deliberately disrupt the traffic of a city already cursed with motorway constipation is just infuriating.

How did the TPP become the fault of Aucklanders who are just trying to get to work?

How did it require vandalism of one minister’s electorate office?

How would molotov-cocktail bombing another minister’s office stop it?

Nasty stuff. This is I guess what they mean by non-violent.

But what TPP-haters have done is drive the thousands of ordinary Kiwis who don’t really understand the deal and its implications straight into the arms of the TPP fan-boys and girls.

Whose argument are you more likely to believe: the guy who can relay the solitary blog post he’s read on how great the TPP is, or the guy lying in the middle of the road clutching a molotov cocktail because he’s angry about something vaguely to do with the price of medicine?

The anti TPP antics appeal to their own core activists, but are a turn off to middle NZ.

Walker on TPP and soverignity

February 10th, 2016 at 10:00 am by David Farrar

The Herald interviews the chief TPP negotiator for NZ, David Walker:

The first trade deal for which he was chief negotiator was the P4, the predecessor to the TPP comprising New Zealand, Singapore, Brunei and Chile.

His first big one was the China deal in 2008, the first free trade agreement China had negotiated with an open economy.

While there were similarities between the China and TPP agreements, the China deal was less ambitious in trade in services than TPP, which also went further on intellectual property, and had more extensive treatment of labour and the environment.

“But in most respects we’re dealing with a similar range of subject matter in both agreements.”

The combination of having led the China negotiations and the TPP talks affords him the description of New Zealand’s most successful trade negotiator.

The China deal especially was a great success. TPP has not gained us quite as much, but it is much much harder to negotiate with 11 other countries, than one.

So what is his response to the claim that the TPP undermines New Zealand’s sovereignty? “An international treaty to my mind, it’s really sovereign countries coming together in the joint exercise of that sovereignty, deciding what they will do together, or what they agree not to do in concert with each other.

“And sometimes that is going to act as a constraint on individual action. That, in fact, is the purpose of the treaty-making process in the first place and that arises no matter what policy area the treaty is in respect of, whether it is an economic treaty or a security treaty or a human rights treaty.”

Little’s rantings about sovereignty are intellectually dishonest. The TPP no more impacts our sovereignty than the China FTA, the Kyoto Agreement, the Antarctic Treaty or the UN Convention against Torture.

Easton says NZ should sign the TPP

February 5th, 2016 at 1:00 pm by David Farrar

Politik reports:

The veteran centre-left economist and long-time Listener columnist, Brian Easton, has come out saying New Zealand should sign the TPP.

In a blog, Mr Easton says that New Zealand achieves international trade successes such as its recent win by having the World Trade Organisation abolish agricultural subsidies because it has international credibility on trade agreements.

“That trust arises from the way we behave in other trade negotiations, including the TPP,” he said.

“The implication is that if we defaulted on the TPPA we would damage that trust and our ability to function effectively in a wide range of other international negotiations we care about, including on climate change.

Getting very lonely for Labour out there.

Countries wanting to join the TPP

February 4th, 2016 at 3:00 pm by David Farrar

The Herald reports:

Top of their agenda will be what happens to prospective new members over the next two years, before the deal is able to come into force.

Indonesia, South Korea, Thailand and Columbia are among those countries that have expressed some interest in joining.

Taiwan has also.

What are their GDPs?

  • Indonesia $890b
  • South Korea $1,410b
  • Thailand $404b
  • Columbia $380b
  • Taiwan $530b

So that’s another $3.6 trillion of GDP likely to join in the next few years.

Yet again Labour wants to walk away from that.

Herald and Hosking on TPP

February 4th, 2016 at 10:00 am by David Farrar

The Herald editorial:

Looking back, it is hard to recall a greater diplomatic achievement than the comprehensive trade and investment agreement that will be signed by representatives of 12 countries in Auckland today. The post-war creation of the United Nations in which New Zealand Prime Minister Peter Fraser played a role may be as proud for those who remember it. The Trans-Pacific Partnership is directly in that tradition.

It represents another advance on the principles of the World Trade Organisation, formerly the General Agreement on Tariffs and Trade (Gatt) that was one of the multi-lateral institutions formed by nations seeking world peace and prosperity after two devastating wars.

Even 70 years ago, it proved harder to unite the world on rules for international business and trade than to establish a World Health Organisation and UN agencies for the likes of education and science. The Gatt did not become the WTO until the 1990s when just about all countries in the long communist experiment finally turned to capitalism for the prosperity the West enjoyed.

Now we just need Labour, Greens and NZ First to embrace capitalism again!

Mike Hosking writes:

Good morning and welcome to TPP signing day.

I know, I know, I know. We’ve thrashed this thing to death, but here’s your reality: It’s a done deal.

It will get signed today, the legislation will be passed, and all there is left to do is sit back and basically sees who’s right.

Will it be like every other free trade deal and open new markets, bring new opportunities and boost our wealth? Or are the doom merchants right and we’re heading for corporate armageddon, where we spend the rest of our lives in court and have our sovereignty whipped out from under us?

The really big question not many people seemed to ask in this whole debate was: Why would our Government sign us up to all this so-called trouble?

What Government in its right mind would take us down a path of disaster, and with it the political fallout?

Further, why would 11 other Governments do exactly the same thing?

If this is such a dastardly deal, how is it possible that a dozen countries all got sucked in and put their name to the sort of trouble and political mayhem the placard wavers are proclaiming?

12 Governments have signed it because they all stand to gain more from it than they lose. Trade is not a zero sum gain.

Long term, here’s Labour’s potential nightmare: Assuming those of us who like trade deals are right, as the numbers roll in, as the sales get made, and if this deal is like every other deal, it actually produces way more than the paper work ever indicated, think the China deal which is many times better than was initially thought possible.

As that all happens, Labour is going to be backed into a corner explaining just what it was it couldn’t see that the rest of us could.

The benefits of the China FTA have been much much greater than projected, If TPP goes the same way, Labour are going to look very foolish for campaigning against it.

Business groups on the TPP

February 3rd, 2016 at 3:00 pm by David Farrar

The Herald reports:

Business and industry group leaders have lent their support to the Trans Pacific Partnership free trade agreement in an open letter to Prime Minister John Key.

In the letter they make the point:

NZ stands to gain significantly from TPP, which links 36% of global GDP, 812 million consumers and includes markets taking 40% of our exports …

It is inconceivable that NZ would allow our access to markets to be impaired and our competitiveness to decline by standing outside such an important agreement when our competitors are part of it.

Yet that is now official Labour Party policy.

The letter was signed by:

  • BusinessNZ
  • ExportNZ
  • NZ International Business Forum
  • Federated Farmers
  • Auckland Chamber of Commerce
  • EMA
  • Food & Grocery Council
  • Dairy Companies Assn
  • NZ Winegrowers
  • Horticulture NZ
  • American Chamber of Commerce in NZ
  • Beef + Lamp NZ
  • Medical technology Assn
  • ManufacturingNZ
  • Wellington Employers Chamber of Commerce
  • NZ US Council
  • NZ Port Company CEO Group
  • NZ Shippers Council
  • Employers Otago Southland
  • Health IT
  • ASEAN NZ Business Council
  • Japan NZ Business Council
  • Canada NZ Business Council
  • Latin America NZ Business Council

O’Sullivan lashes Little

February 3rd, 2016 at 11:00 am by David Farrar

Fran O’Sullivan writes:

It is difficult to understand why Little prefers the judgment of NGO activists over that of a former NZ Trade Minister who not only negotiated the ground-breaking bilateral China free trade deal but also finalised the Asean deal with New Zealand and Australia.

Frankly there is nothing responsible in Little’s positioning.

Successive New Zealand governments – and their negotiators – have worked hard indeed to bring global economic giants like the United States and Japan and frankly protectionist nations like Canada into an Asia-Pacific agreement.

This is no mean feat.

New Zealand vision and leadership has been to the fore in securing TPP.

The reality is it had earlier proved impossible for New Zealand to forge separate bilateral agreements with these three countries as NZ was simply too small, too insignificant and not of sufficient strategic importance for these much bigger nations to bother.

This is a trade agreement that we initiated. It was not pushed on us. We managed to get the US to come on board, and also now Canada and Japan. It is a significant achievement. The TPP is far from perfect but it is clearly a net gain for NZ to be part of it, and we’d lose out badly if we were not part of it.

Labour MPs like Clayton Cosgrove and Stuart Nash will also be seething at their leader’s stance. Sure, they will cover it up in public – no-one wants to be dumped down the greasy pole of Labour’s political rankings by taking issue with their leader publicly.

There are a number of very unhappy MPs in Labour over this.

New Zealand has a proud record of bipartisanship when it comes to pursuing our advantage on the world stage: not just the many preferential trade agreements which successive National and Labour Governments have negotiated; but also our role in deepening global trade by taking a pro-active role in promoting major giants like China and Russia to successfully join the World Trade Organisation; promoting leaders like Helen Clark, Don McKinnon and Mike Moore to achieve high international office, and, securing NZ’s role on the Security Council.

NZ in opposition has always stuck to this bipartisan record, and up until recently so had Labour.

Maori businesses see TPP gains

February 2nd, 2016 at 1:00 pm by David Farrar

The Herald reports:

Some Maori business leaders say there are risks with the Trans Pacific Partnership, but people should look at it again to see the benefits it offers for the Maori economy. …

The Maori economy has been estimated at $40 billion and Auckland lawyer Paul Majurey, chair of the Hauraki Collective, said Pare Hauraki’s fishing and aquaculture assets would benefit and the trust was supportive of the deal.

It already exported to China and Japan and the TPP would open access to Japan where fish products faced stiff tariffs.

The agreement would also allow Maori to form partnerships with investors from those countries, as happened under the China FTA.

He said there were risks and it was natural Maori would be concerned about sovereignty and the erosion of Treaty of Waitangi rights.

“There are issues and question marks with any international agreement that involves our sovereignty.”

He said the TPP protected the Treaty and reserved the right to protect rights to traditional knowledge and plants, according to the Wai 262 finding. …

Traci Houpapa, the chair of the Federation of Maori Authorities (Foma), said the TPP had obvious benefits for Maori exporters and businesses and that would flow through to communities.

She said New Zealand could not miss the chance to sit with global heavyweights such as the US and Japan, and hoped consultation on the agreement over coming months would provide Maori with assurances about the Treaty partnership.

“People are wanting assurances that partnership is in place and isn’t impacted by the TPP.”

She was comfortable that other trade agreements had upheld the Treaty.

“And our expectation is this Government will do the same,” she said.

She said New Zealand was the only country with protections for indigenous rights in the trade agreement.

Yep as I previously blogged, NZ is the only country that got indigenous rights protected in TPP, and the wording in TPP is near identical to the China FTA that Labour signed.

Dispelling TPP myths

February 1st, 2016 at 2:00 pm by David Farrar

Both Charles Finny and Stephen Jacobi dispel some TPP myths.

Finny in the Herald looks at the false information abut TPP and the Treaty:

Former MP Hone Harawira has stated some complete falsehoods about Trans Pacific Partnership, Maori and the Treaty of Waitangi.

This coincided with publication of a paper by “experts” Dr Carwyn Jones, Associate Professor Claire Charters, Andrew Eruti and Professor Jane Kelsey on “Maori rights, Te Tiriti O Waitangi and the Trans-Pacific Partnership Agreement”.

Days later several Maori elders spoke negatively about the TPP at Ratana and were joined by a bevy of political leaders.

This criticism of the Trans Pacific Partnership (TPP) forced me to reread a big chunk of the TPP and previous free trade agreements and to study every element of the criticisms being levelled against the TPP and Maori.

My conclusions are radically different from the critics’. I believe that rather than being inadequate in its protections for Maori, TPP is if anything a taonga in the way it protects the rights of the New Zealand Government to discriminate in favour of Maori.

This in turn, I think, adds enormous mana to Maori.

Finny has actually read the TPP, and he makes the point NZ is unique in getting protection for the indigenous people in there:

TPP is an agreement between 12 countries. Pretty much all the 12 jurisdictions are home to indigenous minorities – for example, the First Peoples of the United States, Canada, Mexico, Peru, Chile, the Aboriginal people in Australia, the Malays in Singapore and Malaysia, and the Ainu in Japan.

Yet none of these peoples is mentioned in the main text of the deal and none of their Governments has secured agreement from the other members that they should be allowed to discriminate in favour of them.

And further:

TPP’s protection of the Treaty goes even further than earlier FTAs. It states “the parties agree that the interpretation of the Treaty of Waitangi, including as to the nature of the rights and obligations arising under it, shall not be subject to the dispute settlement provisions of this agreement.” This means it is entirely up to New Zealand to determine if any discrimination has occurred because of the treaty (so long as this is not a disguised restriction on trade).

I am frankly amazed the US and others have agreed to this provision. Our ministers and officials have done a great job achieving this. All Maori should be saying: “Well done!”

treaty

This image shows the China FTA Treaty clauses and the TPP Treaty clauses.  Again the difference is Labour are just sulking because they didn’t conclude the TPP.

And on the wider TPP issues, Stephen Jacobi responds to Andrew Little’s letter on the TPP:

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 underestimation – 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 such as health technologies and agricultural equipment is also significant.

And he deals with Little’s claim one of their bottom lines was not met:

Labour’s clearly signalled “bottom-line” for TPP was 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.

Labour could set 100% stamp duty of sales to foreigners. They could set it at 10000%. It’s a different method to achieve the same result.

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 labelling 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.

Almost every international agreement has a provision about consultation, such as the Antarctic Treaty.

Little- “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.

So basically the requirement is to publish things in the Official Gazette. This is so trivial, I can’t believe Labour are seriously citing this as a major issue.

The reality is Labour are only against TPP because National concluded the negotiations. If they had been Government they would have got the same deal (or worse) and would be proclaiming it as a great success, as they did with the China FTA (which they did and was). They’re just sore losers because they’re in opposition.

Exporters worried by Labour

February 1st, 2016 at 10:00 am by David Farrar

The Herald reports:

New Zealand exporters say they are concerned that a political consensus on trade has been lost after the Labour Party came out against the Trans-Pacific Partnership.

ExportNZ executive director Catherine Beard said in the past exporters had been able to rely on the support of both main political parties on trade.

“This has helped our exporters succeed in new markets and earn valuable revenue for New Zealand,” she said.

“Exporters are now feeling some dismay at the thought that our future trade prospects could be limited by political disagreement.”

Ms Beard said it was difficult to understand why Labour supported the China free trade agreement but not the TPP, “when they are similar in all major respects”. She described Labour’s position on the TPP as a step backwards for the country’s export competitiveness.

It is sad to see Labour abandon decades of bipartisan support on trade policy. They keep getting dragged more and more to the left.

 

Charles Finny on TPP dispute mechanisms

January 31st, 2016 at 11:00 am by David Farrar

A very informative Facebook post by former trade negotiator Charles Finny on the TPP:

My old University chum Timothy O’Brien asked me yesterday to defend TPP’s dispute settlement provisions.

TPP contains two types of dispute settlement. In the media and political criticism the two are often confused. There is the standard (in WTO and all our FTAs apart from CER – the reason why apples took so long to resolve)provisions which allow parties to the agreement to challenge breaches of the agreement. This is a purely government to government process and applies to the full agreement unless specified (e.g. interpretation of the Treaty of Waitingi the dispute settlement provisions do not apply). Then, in the investment chapter only, there is the investor state dispute settlement mechanism. This allows a company to challenge a government if it believes that government has breached its commitments in the investment chapter only. Many of the critics (who should know better) suggest that governments can be sued for breaches of outside of the investment provisions. This is not possible.

Useful clarification.

It is important to stress that TPP is worded differently to NAFTA and the Australian investment treaties that were used to challenge plain packaging of cigarettes. The critics often cite these agreements as examples of why we should fear ISDS without noting the fact that TPP has been drafted with the sloppy drafting in earlier agreements in mind.

New Zealand has been agreeing (indeed advocating for ) ISDS provisions in investment treaties and FTAs since the late 1980s (see for example the original China NZ Investment protection agreement). To date the NZ Government has yet to face a challenge.

Put simply I believe these provisions provide useful security for NZ investors offshore. Some of the governments we trade with and have FTAs or investment treaties are far more likely to breach these agreements than we are.

Not one challenge in 30 years, yet alone a successful one. Over 3,000 international agreements have provisions for dispute resolution and the number of actual disputes is very small – around one per agreement on average.

There are multiple exclusions (e.g. our Overseas Investment laws) and multiple acceptances of our right to regulate to protect the environment, to protect human health and safety, to discriminate for Maori under the Treaty of Waitangi etc to ensure that TPP will not have the type of chilling effect on policy making that the critics maintain. And, on top of the above protections, tobacco is completely carved out of the agreement so no worries there.

Our negotiators did a very good job getting numerous exemptions.

But is you want to nationalise huge hunks of the economy without compensation – you do have a problem. As you would if you tried to use human health as a justification for a policy if there was no science to justify the policy. Until recently I did not think that future NZ Governments would act in this way. This is why I think we have nothing to fear and that these provisions can only benefit NZ.

I’d say it is more likely a NZ company could use the ISDS against a fellow TPP country, than a US company could use it against New Zealand.

Will TPP get ratified by the US Congress?

January 30th, 2016 at 8:54 am by David Farrar

Stuff reports:

New Zealand shouldn’t rush to sign the controversial Trans-Pacific Partnership agreement given its “extremely remote” chances of passing into law in the United States, according to an American trade analyst and critic of the deal.

However, Prime Minister John Key has dismissed the concerns, saying he is confident American politicians will ultimately support the free trade deal.

Trade analyst Lori Wallach, who is in New Zealand to speak at a series of anti-TPPA public meetings, said the deal was “in a certain amount of political trouble” in the United States.

“One of the big questions in political Washington is why New Zealand is rushing towards both the signing right now but also the notion of passing implementation, given the prospects that the US Congress passes the TPP as it is – ever – is extremely remote.”

Wallach said the TPPA was “dozens of votes short” in the House of Representatives, with Democrats concerned about the changes to environmental standards and drug patent changes and Republicans opposed to the “carve-out” excluding tobacco control measures from the investor state disputes mechanism.

It is true that Republicans complain Australia and NZ negotiators were too tough and got too good a deal in the TPP. But this does not mean they will let TPP die.

First of all the likely vote is in the lame duck Congress, which will mean there will be some retiring Democratic Representatives and Senators who will be able to vote for it as they don’t need to worry about the Labor unions trying to get them thrown out if they support it.

But you also have to look at the history of major trade agreements in the US. NAFTA was way more controversial than the TPPA, yet it got ratified by the Congress with a 234-200 vote in the House and 61 to 38 in the Senate.