Auckland Councillors waste hours debating TPP!

October 9th, 2015 at 7:00 am by David Farrar

The Herald reports:

Auckland councillors have today spent two and a half hours debating the Trans Pacific Partnership at a reported cost of $50,000 to ratepayers.

Albany councillor Wayne Walker put forward a notice of motion, including clarification from Trade Minister Tim Groser on how the recommendations from eight Local Boards were being addressed in current negotiations.

After a long discussion on the trade agreement, several councillors vented their frustration on social media.

Councillor Denise Krum said: ” A very long morning! Best use of our time? I think not.”

Councillor Linda Cooper said at a cost for council committee meetings of $20,000 an hour, the debate had cost $50,000.

“That much money to a local community development organisation would employ a community broker. Actual work on the ground for people,” she said.

And councillor Sharon Stewart: “We need to stick to our core business.”

The debate took up most of the morning session at the regional strategy and policy committee.

Yes they do need to stick to core business.

What next – spent a morning debating Syria and ISIS?

If Councillors can waste time debating this, then there are too many of them, and not enough real work!

Tags: ,

The battle for the IP chapter

October 8th, 2015 at 2:00 pm by David Farrar

This will be a long blog post, but an important one. It is about the TPP, the IP chapter, and how a group of NZ organisations actually managed to help beat back the US Government and the corporates they were fighting for.

First I want to talk about critics of the TPP, and how you can divide them into three categories. They are:

1 – Opponents of all trade deals

There are some people who are opposed to all trade deals. They have a honest belief that either trade deals are bad, or trade is bad. A couple of examples are Jane Kelsey and the Greens.

Jane Kelsey has opposed (as far as I can tell) every trade deal NZ has ever signed up to. It doesn’t matter what the details are, she has campaigned against it. She has a world view that is basically protectionism is economically good, and no amount of evidence will sway her views.

Kelsey has every right to her views (though I do grumble that she seems to spend a large proportion of her time as a taxpayer funded academic running campaigns), but the reality is that Kelsey will never influence the details of a trade detail, because people know that nothing they agree to will ever stop her being a critic. She can make a deal more unpopular with voters, but no one in Government ever asks the question “Will this satisfy the demands of Jane Kelsey”.

I’m not trying to personalise it on Professor Kelsey. There are many others like her, who are against petty much all trade deals.

The Greens have voted against against (I think) every trade agreement. Their opposition seems to be more because of their belief that trade harms the environment, and we should grow and produce everything we need locally. So again, no one ever asks what is needed to get the Greens do support a trade deal – it is basically impossible.

2 – Opponents because of who the Government is

This is basically the Labour Party, and some of their supporters. If Labour were in Government I have no doubt the TPP would look very similar to what was announced this week, and they would be signing up to it. They are not opposed to the TPP (well not most of their caucus), but because National is in Government they just see it as a weapon to attack with. Just like the flag referendum.

I don’t mind oppositions attacking Governments for things which they honestly disagree on – for example labour laws and the like. But it does get tiring when you know their opposition is only because they are not in Government themselves. It is worth remembering the TPP started under Labour. They also did a great trade deal with China, which has been hugely beneficial. If it was National that had done the trade deal with China, I suspect Labour would be condemning it.

So in the end these opponents do not get much traction either, because their opposition is more about who the Government is, than what is in the TPP. That doesn’t mean their criticism do not have validity, just that their motivations are more about bashing the Government.

3 – Opponents of some proposed details

The last category is what I want to focus on. It is individual and groups who have been critical of what might be in the TPP, because they think certain aspects would be bad for their area of interest if included.

These opponents are not against the TPP regardless of what is in it. They’re not for it either. They’re people saying “We don’t want X in there” but if X is not there, then we don’t have a view on it.

That might be a health group on keeping the Pharmac model, or ICT groups on the details of the e-commerce and intellectual property chapters. The latter is what I want to focus on, and tell a story about the battle here.

The US wish list on intellectual property

The first post I can find I did on the TPP was about how despite being a big supporter of free trade, I was concerned about the US wishlist in TPP. I quoted Rick Shera on how it could affect us:

  • Rights holders would be allowed to prevent parallel imports
  • Massive extension of terms, from life of author plus 50 years, to 70 years
  • Circumventing a Technological Protection Measure (TPM) will to be a criminal offence even if the work it protects is in the public domain or you want to exercise fair dealing rights like educational use or current affairs reporting
  • The return of guilt upon accusation three strikes Internet termination laws
  • Forcing us to reverse the decision recently taken to exclude software from being patentable
  • Introducing statutory damages (which give rights holders windfall damages up to 3 times their actual losses)
  •  ISP policing of IP rights including a requirement for ISPs to give up their customers’ identities when they receive a mere allegation from a rights holder
  • Criminal liability even where the infringement has no commercial value at all
  • Pushing Courts to impose imprisonment as the default sentence for infringement even where no monetary benefit is obtained

These provisions would have been truly horrible, if they had been agreed to. The good thing is that with the exception of the extension of the term (which is more a copyright than Internet issue) the US got beaten back on pretty much all of this. I’m not saying the IP chapter is great (there are still a couple of areas of concern which we need to see the detail on) but this truly horrible stuff is not in there – software is not patentable still, parallel importing remains legal, you can circumvent TPMs for legal purposes, ISPs don’t face extra liability, no changes to our three strikes law for filesharing infringing (which rights holders don’t like).

So why did the US not get its way on much in this chapter? Is it because it was an unimportant chapter? No, far from it. For several years it has been said that the IP chapter will be one of the most difficult. Many in the media thought the big battle was Pharmac, but in reality that was never at great risk. The PM and others had often said that the IP chapter was one of the big challenges.

This was a concern, as those of us against the US demands, were worried that the IP chapter would be traded at the lost moment with the US, in order to gain a better deal elsewhere. We wanted to stop that happening, and make the price of compromising on the IP chapter too high, so what did we do.

By we I mean groups such as InternetNZ, IITP, TUANZ and NZ Rise. I don’t speak for any of them, this is just my views as someone who was involved.

Set the tone right

It was important that we were not seen as just against TPP regardless. We were against an IP chapter that was bad for NZ. While we would work with other critics such as Jane Kelsey (and inform them of our concerns), it was vital not to be seen as anti-TPP regardless. You lose influence if you do that.

We also tried to have it about ICT and Internet industries being important for NZ’s future and don’t trade away their interests for those of commodity industries.

Be specific

Another key was not just to rant about secret negotiations (even though criticism of the process was made), selling out sovereignty, attacking Hollywood corporations. It was to be specific as to what measures were opposed, the impact on NZ of them, and putting up alternative provisions.

Meet NZ negotiators

Many meetings were arranged with negotiators with MFAT and MBIE. And they were extremely professional, and useful. The negotiators do not set policy (Ministers do), but they will tell you what their position is, listen to your concerns, and make sure they understand them.

They would also share information on the negotiations. They are not allowed to sit down with you and show you a copy of the proposed texts (unless every negotiating country agreed). But they could tell you in some detail what the issues are, and what the NZG position currently was. And thanks to texts being leaked on Wikileaks, we actually got verified that the NZ negotiators were advocating exactly what they told us they were, and resisting the US demands.

They also were useful in giving us some idea of which countries were with us on these issues, and which were not, and which were yet to take a position. Again, not in exact detail which would breach confidentiality, but some useful steers.

The key here is that while the exact negotiating texts were secret, stakeholders could gain information on proceedings by engaging with the process – and not just corporates, but civil society groups also. Engaging with the process works, rather than just shouting slogans.

Also at least one meeting was held (possibly more) with the Trade Negotiations Minister, Tim Groser. I did not attend, but understand he was very up to speed with the issues around the IP chapter. Meetings were also held with the ICT Minister, so she could be a voice for the industry if Cabinet discussed details.

It also became apparent to me that other Ministers, up to and including the PM, were aware of the issues around the Internet and the IP chapter. In fact as I said earlier, the PM said fairly early on that the IP chapter might be the toughest.

Meet TPP supporters

We met supporters of the TPP such as NZ International Business Forum (Stephen Jacobi). We explained that our potential opposition was issues based. If certain provisions were in the TPP, we would be opposing and criticising it. But if they were not there, then mostly we would have no view.

We know that most business groups would support the TPP, regardless of the IP chapter. What we wanted to get across, was that if they could use their influence to get an IP chapter that was more palatable to us, then there would be less domestic opposition.

The meetings were cordial, and useful.

I can’t recall exactly other meetings we had, but off memory there was some dialogue also with the US Embassy and Federated Farmers.

Attend the Negotiations

Staff were sent to some of the international negotiations rounds. Why, if you are not allowed in the negotiating room? Well, a lot happens in the side events and public forums. You can set up stands handing out information on your views, you can chat to NZ negotiators, you can get to meet the negotiators from other countries, and also develop links with other third party groups who share your concerns.

The staffer who attended some of these for the NZ group did an excellent job in building networks, organising events and getting our message across. It was an excellent investment in sending her.

Build a coalition locally

A local coalition was set up – called the Fair Deal coalition. It was set up to critique and oppose the US demands, but also to put pressure on the NZ Government to stick to its position. We wanted to make any backing down politically painful. A quote from the site is:

The US wants copyright standards that would force change to New Zealand’s copyright laws. We want you to know more about what’s at stake so that you can have a say now, before the deal is done.

The good news is that we know – from another leaked document – that the NZ copyright team went into TPP talks looking for fair copyright (and other intellectual property) standards. Now is the time to stand behind our team and  support a Fair Deal for New Zealand.

NZ members were InternetNZ, NZ Rise, Creative Freedom Foundation, Blind Foundation, TUANZ, Consumer, IITP, Trade Me, NZ Open Source Society, LIANZA, Tech Liberty and Scoop.

The tone wasn’t to attack the Government, but to pressure the Government to stand firm.

Build a coalition globally

At the beginning of the negotiations, NZ was quite exposed. The US was pushing hard for their wishlist, NZ was the most staunch against, and we had few allies. Many were not focused on it much, and Australia even seemed to be backing the US.

The NZ negotiators made it pretty clear that if we are alone there, then we need to compromise more. So we went about building a wider coalition.

Through attendance at the actual meetings, links were made to other groups in the countries negotiating the TPP. An alliance was formed with Public Citizen, Open Media, Australian Digital Alliance, Consumers International, EFF etc. Gradually more and more countries came to siding with the NZ position.

Note I am not suggesting this is solely or even mainly due to the work of the alliance, but I do believe it did have an impact.

Also crucially, we tried to soften the US position. Their position was reflecting the demands of Hollywood associated creative industries. In fact many of the staff in the IP area of the Trade team, had worked for lobby groups there. But then big US IT companies started lobbying, saying they did not support some of the US position. This helped weaken the US stance, as it was no longer unambiguous what Us businesses wanted.

Host the negotiations

Auckland hosted the 15th round of negotiations in December 2012. This was great as it gave us a great opportunity to interact. There were a number of initiatives as part of that, but the most significant was we hosted a lunch for all the IP negotiators from all the countries. I think they all had someone attend, and most importantly the US did.

Over the lunch a few of us spoke, on various aspects and outlined what our issues and concerns were. My role was to talk about the politics, and explain how NZ had just had several big fights on IP law – the blackout campaign, ACTA, patent law, a new copyright act – and I doubted any Government would want to be explaining why the hard fought compromise that had been achieved was now going to be upended. I also talked on Dotcom and how he is alleging Key and Obama did a deal with Hollywood to lock him up, in exhchange for the TPP – and while that may be nonsense, could they imagine a NZ PM standing up and saying “We’ve decided to change our copyright and IP laws to please Hollywood”. The point was that if you demand something a Government is simply politically unable to deliver, then you won’t get an agreement (like Canada on dairy – political cost too high).

And this is partly why the only major change appears to be length of copyright, rather than stuff more directly affecting the Internet. And don’t get me wrong – I am against the extension, but from my point of view it is less harmful than what else the US was demanding, and if we had to compromise on something – that is the lesser evil from an Internet point of view.

Constructive opposition does make a difference

The point of all this, is that constructive engagement, criticism and even at times opposition can make a difference. When you work with the Government and negotiators in good faith, you can have influence and get better outcomes (even if still sub-optimal) than without your involvement. You do a mixture of loud noisy activism (postcard campaigns, petitions, public meetings) and behind the scenes diplomacy – but always with a consistent principled message that we are not anti TPP (or pro TPP), just anti these provisions.

I’m actually very proud that the NZ ICT industry and civil society managed to run a very effective and principled campaign, that was overall remarkably successful – especially against the power of the US Government, and very wealthy and powerful firms in the US. One can be cynical about aspects of politics (such as the secrecy), but one can also celebrate that spending time and money on sticking up for your beliefs can work, and logical well reasoned arguments can beat vested interests.

Again do not take any of this to suggest the ICT industry now thinks the TPP is great. I don’t speak for them, and from what I have observed views are as diverse within it, as elsewhere. Some still think it is the worst thing ever and the end of democracy, and others think it is a great deal. I personally think it is an overall positive deal, and actually pleasantly surprised that we managed to get a deal, with most (not all) of the nasty IP provisions defanged.

But there is a lesson here for other groups, and individuals. Constructive opposition and criticism can achieve far far more, than just blanket negativity and attack.

The groups involved in the Far Deal coalition, both locally and globally, should be proud of what they managed to achieve, against formidable odds.  Also I give credit to the professional negotiators from MFAT and MBIE who I think did a very good job of holding the line.


Tags: ,

ANZ on the TPP

October 7th, 2015 at 11:00 am by David Farrar

Some interesting analysis from the ANZ Bank newsletter on the TPP. They make the point:

FTAs aren’t solely about tariff elimination. They are also about the ability to trade with as few impediments as possible. In this respect, TPP looks comprehensive at first glance, with the promise to breakdown compliance and non-tariff barriers across the Pacific Rim. These benefits are significant, especially for smaller economies and companies.


Closer connectivity with the major players on the trade and investment scene adds another string to our bow. The likes of the United States, Japan and Canada have some of the highest incomes and thus purchasing power of all countries. New Zealand isn’t the lowest cost producer in many sectors anymore and needs access better market access to wealthy consumers to capture margin, and to deliver on the “value-add” strategies that many sectors are pursuing.

But what I found interesting was their analysis of estimated tariff savings as a proportion of current earnings per industry. They are:

  1. Meat 3.1%
  2. Dairy 2.2%
  3. Fruit & Vegetables 2.2%
  4. Fish & Fish products 1.4%
  5. Wine 1.2%
  6. Other agricultural goods 1.1%
  7. Forestry 0.6%
  8. Wool, leather and textiles 0.6%
  9. Manufactured goods 0.1%

So when people say dairy was such a bad deal, actually the dairy sector gets the second largest savings as a proportion of current earnings. The dairy deal was a lot less than what full tariff removal would have been, but the savings are actually higher than most other sectors.

ANZ make the point again it is not just about the tariff reductions:

  1. We can create new markets where tariff levels have previously been prohibitive to trade;
  2. Gain parity with competitors who have already obtained free-trade concessions;
  3. Increase competitiveness through reducing or eliminating tariff costs, compliance and other non-tariff costs. The elimination of non-tariff barriers and streamlining of compliance requirements is particularly beneficial for many of New Zealand’s smaller exporting companies;
  4. Increase access through harmonising or eliminating technical standards; and
  5. Increase confidence in New Zealand products as a result of closer economic cooperation. Indeed, one of the key noted features is a platform for regional integration, with the potential to add additional countries in the future.

And finally:

There is a raft of empirical evidence suggests trade liberalisation benefits overall welfare and lifts nationwide GDP, particularly for open trade dependent economies like New Zealand. Studies by the Peterson Institute suggested that the gains to New Zealand from TPP would cumulate to around 2% of GDP by 2025. Some of the numbers being bandied around by Government officials look a little on the high side, but considering the surge in two-way trade between New Zealand and China following the signing of the FTA less than a decade ago it leaves little doubt as to benefits on overall trade (and GDP) from increasing trade liberalisation.

Also NZIER have done an analysis here. Their conclusion:

Our negotiators have delivered a good deal, given the hand they have been playing. Their skill and the way they have clearly respected the fundamental interests of the community, while gaining real returns, is now evident. The end result is that, outside of some dairy products and beef into Japan, all of New Zealand’s goods’ exports to all TPP countries will see tariffs completely removed over time.2 New Zealand’s exports of fruit, vegetables, wine, seafood, forestry products, wool and manufactured goods, which account for around 65% of our $20 billion of goods exports to TPP countries, will all enjoy tariff-free access to TPP markets over time.


Clark, Labour and TPP

October 6th, 2015 at 10:06 am by David Farrar

The NZ Herald editorial:

Sometimes it takes someone a little removed from the fray to put the right perspective on an issue.

New Zealanders have sorely needed such insight on the Trans-Pacific Partnership, so deeply polarised are they about its potential benefit to this country.

And there could be few people better placed to supply this than former Prime Minister Helen Clark. …

Ms Clark’s statement, a rare one on a domestic issue since she became the Administrator of the UN Development Programme, emphasised how foolish that would be.

What had always haunted her as prime minister, she said, was the development of a series of trade blocs of which New Zealand was not part. That would be “unthinkable” for this country as an export-orientated, small trading nation.

“So, of course, New Zealand has to be in on the action with the TPP and go for the very best deal it can as the agreement expands beyond the original four economies to a wider regional agreement.” …

Ms Clark’s statement also carried a message for her former Labour colleagues.

Curiously for a party that formerly embraced free trade, it has insisted its support for the TPP is contingent on the meeting of several “non-negotiable bottom lines”.

Labour may imagine this plays well with those people adamantly opposed to the pact.

But most importantly, as its former leader implies, it reveals a failure to to appreciate the big picture. That dictates a small trading nation cannot afford to stand aside from an agreement of such magnitude for the Asia-Pacific region.

The partisan part of me wants Labour to vote against TPP, as I think it will continue their descent away from electability. But actually it would be a bad thing for NZ to lose its long-standing bipartisan support for trade deals.

Liam Hehir writes:

When Helen Clark came out in broad endorsement of New Zealand’s participation in the Trans-Pacific Partnership, she lifted the lid on what is going to become a real headache for Andrew Little. If negotiation of the mammoth trade treaty is completed (which could well have occurred by the time you read this) the Labour Party is going to have to make a decision about whether or not it will throw its support behind New Zealand joining the bloc.

Until now, Labour has been assiduously ambiguous on the subject. This seems to be because some swivel-eyed members of the party base are convinced that the treaty is a sinister National Party scheme to outsource sovereignty to Halliburton, Pfizer and the Rothschild family. Not wishing to alienate these noisy activists, the party has been careful to avoid expressing any enthusiasm for the deal.

Yet …

But at the same time, it has not ruled out supporting the deal should agreement be reached. A significant chunk of Labour’s parliamentary caucus is serious about governing. They care more about pragmatism than party slogans and, when pushed, they care more about the national interest than they do about oppositional politics.

But are there enough of them? I’m not sure there are.

The problem is that weasel words will only get you so far. Complaining about the secret negotiating process won’t cut it once the negotiations have been wrapped up and the terms of the deal have been laid bare. The debate then has nowhere to go but to the ultimate merits of the thing.

Despite persistent claims to the contrary, joining the TPP is going to require the enactment of implementing legislation. When those votes are called, Labour MPs will need to make a call on turning its back on vastly improved access to markets representing nearly 40 per cent of the world’s GDP. Whatever decision is made, somebody is going to have to be disappointed.

I think it will be the party activists. If the TPP represents a halfway-decent deal for New Zealand, my bet is that Labour MPs will give it their blessing. There will be some public handwringing, of course, and reservations will be loudly stated. Unlike NZ First or the Greens, however, Labour is simply too integral to our political system to indulge in fantasies of the country prospering as a hermit kingdom closed off from the world economy.

I hope Liam is right, but I am less optimistic. They have abandoned bipartisan support for stable monetary policy that targets inflation, and in recent elections have had a policy of effective nationalisation of electricity generators.

For Helen Clark, the only Labour leader to have won a general election in almost 30 years, to say that “of course” we should “be in on the action with the TPP” starkly exposes the reality of the situation. Labour is a serious, mainstream party. It is inclined to deal with the world as it is.

If Labour don’t support TPP, I can see a number of election ads quoting her words back to them!

Tags: , , , , ,

TPP negotiations concluded

October 6th, 2015 at 6:50 am by David Farrar

It’s taken eight years, but the TPP negotiations have now been concluded. They started under Labour and Phil Goff in early 2008 and it has expanded from five countries (the original P4 and USA) to 12 countries, with another six saying they may join also.

Before I look at the substance, I think it is worth reflecting that just getting an agreement is significant. The Doha round of WTO multi-lateral negotiations has been going on for 15 years, and is far from complete (and may never complete). This is the largest trade agreement since the Uruguay round completed in 1994.

The New Zealand Government has had many negotiators working on this for the last eight years – from MFAT, and from other agencies such as MBIE. This has been their life month in and month out with 19 rounds of negotiations.and 23 meetings of chief negotiators and/or ministers. I’ve got to meet a few of them over the years and they’re extremely dedicated and effective public servants, who will be very pleased to see this work complete.

In terms of the substance, there seem to be three broad themes.

  1. Eventual elimination of all tariffs in all industries except beef and dairy
  2. Minor concessions from Canada on dairy but better deal with Japan on beef (tariff dropping from 40% to 9%)
  3. Most of the potentially “bad” stuff has been resisted (change to Pharmac model, the US demands on ISP liability for copyright, tobacco companies can’t use ISDS provisions)

This is not a gold plated deal, as was the aspiration. Canada and Japan especially have been unwilling to fully open up their markets to competition. Canada has almost a soviet style dairy system where a 30 cow farm has a quota worth $1 million. Some cows sell for almost $200,000 due to the law restricting either domestic or international competition. So incumbents quota owners fight hard against losing their quota, just as taxi firms fight hard against Uber.

With the benefit of hindsight, it may have been better to not allow Canada and Japan to join the TPP. They promised in joining that they understood the aim was the elimination of all tariffs. But their domestic pressures were too great. However the argument to have them in, is that the US would have been less able to get fast track approval through Congress without those two large economies as part of the deal.

But while the benefits are less than what they could have been, it will still be a beneficial agreement for NZ. As Helen Clark said, you’d be basically nuts to walk away from a deal with 40% of the world’s economy. And the net benefit to the NZ economy through the tariff removals and overall agreement is (I understand) in the hundreds of millions of dollars.

There are always some dead rats to swallow in deals, but we appear to have avoided the larger nastier ones. When the full text is released in a month, we’ll have a clearer idea, but the US Trade Representative has a summary of each of the 30 chapters. The removal of tobacco companies from ISDS provisions will reassure many, the US failed to get much progress on extending drug patents, the Pharmac model is unchanged, and the early US demands on Internet and intellectual property issues (some of which were deeply concerning) appear to have fallen away, and the current chapter seems reasonably palatable. That is not to say there won’t be some stuff in there which we’d rather not have at all. For example the length of term of copyright looks set to be extended by 20 years. This is stupid, when in fact copyright terms (life + 50 years) are already too long in NZ. But from what I can see the negatives in the TPP are outweighed by the positives by a very considerable margin.

The FTA with China has been hugely beneficial to New Zealand. Parties such as NZ First and the Greens which opposed it should be embarrassed, as exports to China skyrocketed since the FTA, resulting in billions of extra dollars into the NZ economy. The history of our trade deals is that the benefits and increases in exports have almost always been far greater than anticipated.

UPDATE: The Beehive site has some details on the deal. The savings on tariffs, once full implemented by sector are:

  • Dairy $102 million
  • Meat $72 million
  • Fruit and vegetables $26 million
  • Other agriculture $18 million
  • Wine $10 million
  • Manufacturing $10 million
  • Forestry $9 million
  • Fish $8 million
  • Wool $4 million
Tags: ,

Labour’s TPP duplicity

October 5th, 2015 at 9:00 am by David Farrar

Stuff reports:

Labour deputy leader Annette King said the fact the Government has put the brakes on legislation around plain packaging for cigarettes, while it waits to see whether Australia is successfully sued by a tobacco company, has put doubt in people’s minds.

“It must also be in the Government’s mind at this point because why wouldn’t we pass (the legislation) if we can’t be sued.”

King is being deliberately misleading, The lawsuit in Australia  that NZ is waiting to see the outcome of, is not under an investor state dispute settlement provision of an free trade agreement.  It is under WTO rules and is not a company but a country suing – Ukraine, Honduras, Indonesia, Dominican Republic and Cuba.

These are the same dispute settlement provisions that allowed us to get a WTO ruling that Australia can’t block NZ apple imports on phony biosecurity grounds.

King said the Government had done an “appalling” job of handling public confidence and public information over the deal.

“Yes, everyone understands you don’t give away all the things you’re negotiating…but there has been a very high handed and arrogant approach.

“The vacuum (the Government) left by not bringing along the public in some respects has been filled by people who have got information from other sources. It’s their own fault they’ve ended up with a divided public over a deal that they tell us is going to be a high quality deal,” she said.

I love this – Labour scaremongers for months over the TPP, and then says it is the Government’s fault the public has had misleading information!

Tags: ,

Clark says “unthinkable” for NZ to not be in TPP

October 1st, 2015 at 4:00 pm by David Farrar

The Herald reports:

Former Prime Minister Helen Clark says it would be “unthinkable” for New Zealand to be left out of the TPP, as ministerial talks to try to get the deal signed off this week continue in Atlanta.

It is hard to think of a stronger phrase of endorsement.

She rarely comments on New Zealand domestic issues, but made an exception when asked about the TPP, which began under the former Labour Government as the P4 with Chile, Singapore and Brunei.

“What always haunts a Prime Minister is ‘will there be a series of trade blocs develop that you are not part of?’ Because that is unthinkable for New Zealand as an export-oriented, small trading nation.

“So of course New Zealand has to be in on the action with the TPP and go for the very best deal it can as the agreement expands beyond the original four economies to a wider regional agreement.”

Sadly the Labour Party of Clark which proudly signed an FTA with China has become a Labour Party which promotes hysteria and nonsense against the TPP.

Tags: ,

There are acceptable and unacceptable forms of protest

September 18th, 2015 at 4:00 pm by David Farrar

Stuff reports:

A senior doctors’ union has condemned an “outrageous” move by Whanganui District Health Board to summon a hospital doctor to a disciplinary meeting over his part in a protest against the Trans-Pacific Partnership Agreement.

Emergency medicine specialist Chris Cresswell, who is also the Association of Salaried Medical Specialists’ Whanganui branch president, was arrested at last week’s protest after he climbed on top of localo MP Chester Borrows’ car and sat on it while dressed in his scrubs.

 He was given a verbal warning by police, but was not charged.

Now the DHB has called him in for a “please explain” meeting, prompting his association to order it to “pull your head in”.

ASMS executive director Ian Powell said on Thursday that the DHB’s move was outrageous. “Memo to Whanganui DHB: doctors have a right, and in fact a responsibility, to speak out publicly on these matters without you trying to shut down the debate.  Pull your head in.”

The union is in the wrong.

Doctors, like anyone, have the right to write letters, do op eds, attend protests on the TPP or other issues.

But he doesn’t have the right to sit on an MP’s car and refuse to leave until he is arrested.

Doing so while dressed in his employer’s uniform does bring the employer into disrepute.

“This binding employment agreement includes specific clauses to protect the right of doctors to engage in public debate on matters relevant to their expertise and experience.”

Sitting on a car is not engaging in public debate.

Tags: ,

Jacobi on TPP

August 3rd, 2015 at 3:00 pm by David Farrar

Stephen Jacobi writes in the NZ Herald:

As the debate continues, here’s a brief guide about what to look for.

Dairy has the most potentially to gain. It’s our largest export and the barriers in the US, Japan and Canada are absurdly high.

The question is not whether dairy will be excluded from the deal, but rather the extent of its inclusion – will TPP economies allow significant access into the dairy consumption in their markets and under transparent rules? Will these benefits be offered to all or will there be better access for some?

Again, I’m very pleased the NZ negotiators refused to accept a deal that didn’t deliver enough on dairy.

The sad thing with the soviet-style system of quotas the Canadian industry has, is that it stifles them, rather than protects them. The history from NZ is that removing protection will actually massively boost the local industry, as they have to then respond to competition.

If Canada did have the political will to reform their system, they would find over time I am sure that the biggest beneficiaries would be Canadian diary farmers. Just as the NZ wine industry grew massively once they lost their tariffs and protection.

Other goods should not be overlooked. In just four major exports – meat, horticulture, seafood and wine – there are annual tariffs paid of at least $130 million.

If other products are added (forestry, manufactured goods), and with some even partial gains on dairy, the benefits from elimination would be significant. This is not new business, which could occur under lower tariffs, or overall economic impact, just money saved.

If a deal is struck, it will be good to see an economic analysis of the impact.

On intellectual property New Zealand has interests to promote – our creative industries and some IT exports could benefit from better IP protection internationally – as well as some clearly identified risks to avoid.

Generally the Government will want to hold, to the greatest extent possible, to existing policy in respect to medicine pricing, the role of Pharmac, patent terms and extensions including in respect to biologic drugs and to software, copyright, geographical indications, parallel importing and internet file downloading.

Very pleased to see Stephen agree we want to retain current policy on copyright, parallel importing, downloading, patents etc. From all accounts the negotiators have done that.

This is not to suggest that some changes to existing policy might not need to be made.

Hopefully nothing too major. I understand the term of copyright may increase, which is regrettable, but not as bad as many other possible changes.

Reports coming out suggest that the US has backed down on most of the IP chapter demands – to the degree that Australia wants the TPP agreement to supersede their bilateral FTA agreement on Internet copyright issues, as it is less onerous.

The US press has pointed to the value of the first FTA to include binding environmental provisions which protect endangered species.

New Zealand has always championed the elimination of fish subsidies.


Some will argue that what is now realistically on offer is significantly less than the bold vision for TPP outlined at Apec in Honolulu in 2011. They are right. That is deeply disappointing for negotiators and business alike.

“High quality, ambitious and comprehensive” was how TPP was begun and should guide its ending.

What the process has showed is that there are protectionist and anti-competitive forces at work even in the most open of trading economies.

Yep, it is not going to what they wanted at the start. Part of this is because Japan and Canada were allowed in. That is good in terms of more markets being available to us, but bad in the sense of getting a higher quality agreement.

Whether or not the TPP is a net plus for New Zealand will be seen when or if there is a final agreement. But again I find it encouraging that NZ was prepared to reject an agreement which didn’t deliver enough for dairy, and just as importantly is holding our position on the IP chapter.

Tags: ,

Good to see NZ hold firm

August 2nd, 2015 at 10:00 am by David Farrar

The Herald reports:

Trade Minister Tim Groser says he is disappointed a landmark free-trade pact stumbled after talks broke down in Hawaii.

Negotiations among 12 Pacific nations failed to reach a conclusion.

“Good progress was made this week, but a number of challenging issues remain, including intellectual property and market access for dairy products”, Mr Groser said.

“We will continue to work toward a successful conclusion. This is about getting the best possible deal for New Zealand, not a deal at any cost.”

This is good. It shows the NZ negotiating team is not willing to sign up to an agreement without substantial diary access and an acceptable intellectual property chapter. I’m really pleased that we have not given in.

Stuff reports:

Pacific Rim trade ministers have failed to clinch a deal to free up trade between a dozen nations after a dispute flared between Japan and North America over autos, New Zealand dug in over dairy trade and no agreement was reached on monopoly periods for next-generation drugs. …

The president of the Canadian Dairy Farmers, Wally Smith, blamed New Zealand for the delay in the agreement saying it was not accepting what was on the table.

“New Zealand is being very obstinate … I am really surprised that this late in the end game, a country like New Zealand would not put a little water in its wine,” he said.

Canada has a general election later this year, so I suspect the Canadian Government may not feel able to sign up to any meaningful reform of their soviet style dairy system. And if there is a change of Government, then even less likely. I’d be happy for Canada to drop out, if they are the barrier to a dairy agreement.


Crampton on TPP and drugs

July 30th, 2015 at 3:00 pm by David Farrar

Eric Crampton writes:

I don’t think that the extensions to drug patents hinted at under TPP are for the good. But it isn’t obvious that they aren’t.

Let’s run the story.

Most new drug development happens in the US and EU, with more coming in now from China as well. It is ridiculously expensive to develop new drugs. Some of that is because the FDA makes things harder than they need to be, but a lot of it is real cost. The US has pretty strong drug patent protection to encourage investment in new drug development: nobody will spend hundreds of millions, or more, on drug research that might lead to one or two commercially viable breakthroughs if they can’t reap the rewards on the ones that pan out.

On that story, New Zealand and others have been free-riding pretty hard. Don’t get me wrong – this is great for New Zealand. We get a pile of generics out of India when they come off-patent here and the drug system saves tons of money. But we’re contributing rather less to the general “let’s develop more new drugs” effort. Price controls on pharmaceuticals do discourage new development (and here’s similar EU evidence), and newpharmaceutical innovation saves lives.

You could imagine an international convention, agreed to by everybody, that would reduce global free-riding on research done in the EU and US in order to get more new drugs developed. We in New Zealand would pay more than we’re paying now, but we’d also be paying a fairer share of the development costs of new drugs. Optimal pricing should still involve poorer countries paying less than richer ones, but you’d also have expected things like iPads to sell for less in New Zealand than in the US on the same kind of grounds – so that part might disappoint.

But think about the rhetoric on “doing our part” on global warming, and wonder why the same “doing our part” arguments haven’t been made about pharmaceutical innovation to save lives.

It’s a fair point.

Overall like Eric I don’t want want longer patent terms for drugs, but the cost to NZ may not be hugely significant. We’ll have to wait to see the costings, if or when there is a deal.

I’m still undecided on TPP, and getting nervous about the rhetoric. I’m a huge supporter of freeing up trade, but this is starting to sound like a very modest deal, rather than the gold plated one we were told was the aim of it.

Some of the US demands in the intellectual property chapter would be bad for New Zealand. We have resisted them to date, which is good. But as part of the final stage negotiating we may compromise on the IP chapter in order to make gains elsewhere. Now that may be okay if we get a really really good deal elsewhere, but not if we don’t.

The two key chapters appear to be dairy and IP. So broadly there are four scenarios. They are.

  1. Good dairy access, no compromise on IP chapter – a great outcome – sign it quickly
  2. Poor dairy access, no compromise on IP chapter – a modest outcome – worth signing
  3. Poor dairy access, significant compromises on IP chapter – don’t sign.
  4. Good dairy access, significant compromises on IP chapter – the difficult balancing act

So scenario 1 is what we want. Scenario 3 is what we should refuse to sign up to. Scenario 2 is disappointing but still a gain for NZ so ok.

Scenario 4 is more tricky. The devil will be in the detail. If we really got eventual unrestricted access to the US, Canadian and Japanese markets then we probably have to accept some painful concessions elsewhere. But if the dairy gains are relatively modest, then compromising on the IP chapter may turn the TPP into something I can’t support. Ultimately I’ll reserve judgement until I read the impact analysis, but I’m worried that scenario 1 is looking rather remote.

Tags: ,

Hehir on ISDS

July 25th, 2015 at 2:00 pm by David Farrar

Liam Hehir writes:

Protectionist critics of the TPP, however, allege that ISDS undermines national self-government by allowing foreign businesses to sue member states over legitimate policy decisions. NZ First MP Fletcher Tabuteau is so concerned about this that he has a bill before Parliament to outlaw free trade agreements that include ISDS provisions altogether – something that would preclude our participation in the TPP.

Consistent with its Hamlet-like agonising on the subject, Labour has pledged to support Tabuteau’s bill to a first reading (despite the fact that it will almost certainly back the treaty when it comes to the crunch).

In fact, concerns over ISDS are probably overstated.

In the first place, ISDS is now a well-established aspect of international trade. Globally, there are already about 3000 treaties and deals with ISDS in place. Our own recent free trade agreements with Malaysia, South Korea and the People’s Republic of China include such provisions (and did so, it should be added, with Labour’s support).

Yes, ISDS is not some new thing dreamt up by the US. Labour agreed to ISDS clauses in most of the FTAs they signed.

Those still wavering can take further comfort in the fact that, in any event, no ISDS procedure will be able to overturn any of our laws or enjoin our government from any particular course of action. The most an aggrieved party could ever win would be compensation for harm suffered. And if our Government didn’t want to pay the damages, nobody could force it to – though our international reputation would take an (entirely deserved) beating if that happened.

This is not to say that we should go along with ISDS in any form whatsoever. We should only sign treaties we intend to honour and a badly drafted ISDS regime could expose the Government to unmeritorious claims that could soon become a serious nuisance. If the risk of that happening outweighs the benefits of the treaty, then the Government should refuse the deal.

When all is said and done, however, there is nothing conceptually untoward about ISDS provided our overall national sovereignty is not threatened (more on that next time). The devil will be in the detail, of course, but in all probability New Zealanders will have more to gain from the mechanism than our government stands to lose from it. It is not, in principle, a sound reason to oppose the TPP.

As Hehir says, there are some ISDS forms which would be bad for NZ. But our negotiators have negotiated ISDS clauses in several previous FTAs, and we’ve never had a problem to date with them.

Tags: ,

Labour’s TPP conditions

July 24th, 2015 at 11:00 am by David Farrar

Stuff reports:

Leader Andrew Little said his party supported free trade but would not back the Trans-Pacific Partnership (TPP) unless the five “non-negotiable bottom lines” were met.

They are:

* Drug buying agency Pharmac must be protected.

* Corporations cannot successfully sue the Government for regulating in the public interest.

* New Zealand maintains the right to restrict sales of farm land and housing to non-resident foreigner buyers.

* The Treaty of Waitangi must be upheld.

* Meaningful gains are made for farmers in tariff reductions and market access.

These are not unreasonable bottom lines. It is good to see Labour have not abandoned their previous support for free trade.

The issue may be that some of them can not be defined with 100% certainity – you can never know the outcome of a lawsuit. But I note the following:

Labour believes the conditions reflect protections in the 2008 free trade agreement it negotiated with China.

That FTA has investor state dispute settlement provisions, so if the TPP has the same, then that should not be a reason for Labour to oppose it.

I’d add a sixth condition on – that NZ does not have to make changes to out intellectual property laws in a way which would harm the Internet in NZ.

Tags: ,

Dom Post on TPP

July 7th, 2015 at 1:00 pm by David Farrar

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 TPP 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 TPP “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.

Tags: , ,

TPP and Dairy

June 24th, 2015 at 2:06 pm by David Farrar

Richard Harman at Politik writes:

Prime Minister John Key has confirmed that New Zealand has yet to see any major concessions on dairy exports to Japan and Canada from the Trans Pacific Partnership trade agreement negotiations.

That’s because both Japan and Canada, the negotiating countries with the highest barriers against dairy imports have yet to begin the “hard” part of their negotiations.

But it leaves a huge hole in the negotiations which Mr Key admits is not what New Zealand wants. …

Speaking at his weekly post Cabinet Press Conference, the prime Minister described the situation in Washington as “a game of chess” between the Senate and the House.

He said there was a deal on dairy products “but it’s not at the level we would currently like.

“There are more negotiations to be undertaken”

Asked what advantages New Zealand would gain, if the dairy agreement could not be reached he said: “What I’ve seen at the moment is if we froze time and concluded the deal, as I see it it’s a net positive for New Zealand.

“But it wouldn’t be nearly enough for dairy for us to be comfortable and we’d like to see more.”


The TPP was meant to be a gold standard trade agreement. It won’t be that if there is no meaningful dairy access.


3,000 agreements have an investor-state dispute settlement clause

May 16th, 2015 at 2:00 pm by David Farrar

Some anti-trade activists are saying that NZ should not agree to any TPP, as it will have an investor-state dispute settlement clause in it. They would have you think that this is some new clause that will give multinationals rights to over-turn decisions by Governments.

As I previously blogged, almost every trade agreement signed by New Zealand in the last decade has an ISDS clause. Labour signed half a dozen with such a clause.

But as Brian Fallow reports, they are even more common that that:

More than 3000 bilateral investment treaties and other international agreements include ISDS.

3,000 agreements to date have such a clause!

In fact the number of agreements providing ISDS protections for foreign investors greatly exceeds the number of cases brought under them over the years.

According to the United Nations Conference on Trade and Development (UNCTAD), which monitors them, by the end of last year 356 investor-state cases had been concluded, of which 37 per cent were decided in favour of the state and 25 per cent ended in favour of the investor with monetary compensation awarded.

So over the last 40 years the number of cases has been less than 10% of the number of agreements. So on average you only get one case for every 10 agreements.

I have concerns over some of the clauses proposed by the US in the TPP. But a decision on whether to support or oppose the final agreement (if there is one) should be based on what is actually in the agreement, not on scaremongering.

Tags: ,

Vietnam benefits most from TPP?

May 1st, 2015 at 10:00 am by David Farrar

Tyler Cowan blogs:

Here is an assessment from the Peterson Institute that Vietnam will be the biggest gainer from TPP.  Do you get that, progressives?  Poorest country = biggest gainer.  Isn’t that what we are looking for?  And if you are a deontologist, Vietnam is a country we have been especially unjust to in the past.

Some people think the TPP is all for the benefit of the US. This study found that Vietnam will gain the most benefit, so the TPP could help lift hundreds of thousands out of poverty.

Yes, I am familiar with the IP and tech criticisms of TPP, and I agree with many of them.  But if you add those costs up, in utilitarian terms I doubt if they amount to more than a fraction of the potential benefit for the ninety million people of Vietnam.  TPP is more of a “no brainer” than a close call.

Likewise I agree with the criticism of the US proposals for the IP chapter. However we don’t yet know how much of their proposals make the final agreement. Only then can we look at whether the costs are bigger or larger than the benefits.


Has NZ caved on copyright in the TPP?

February 9th, 2015 at 3:00 pm by David Farrar

The EFF report:

New reports indicate that Trans-Pacific Partnership (TPP) negotiators have agreed to language that would bind its 12 signatory nations to extend copyright terms to match the United States’ already excessive length of copyright. This provision expands the reach of the controversial US Sonny Bono Copyright Term Extension Act (or the “Mickey Mouse Act” as it was called due to Disney’s heavy lobbying) to countries of the Pacific region. Nations including Japan, New Zealand, Malaysia, and Canada would all be required to extend their terms and grant Big Content companies lengthy exclusive rights to works for no empirical reason. This means that all of the TPP’s extreme enforcement provisions would apply to creative works for upwards of 100 years. …

These are the terms of the proposal, revealed by several leaks of the TPP Intellectual Property chapter: If the copyright holder is an individual, the minimum copyright term would extend to the lifetime of the creator plus 70 years after her death.

It is unclear if NZ has caved on just the length of copyright, or also on all the other issues in the intellectual property chapter. If it is the latter, that is truly bad as the US proposed text would be severely detrimental to the Internet, ISPs and users.

If they have only caved on the length of copyright, that is less bad but still undesirable. The current NZ law is for copyright to apply for life plus 50 years, and an extension to life plus seventy is not justified.

The reason we have copyright is to protect and encourage innovation and creative works. If there was no copyright at all, then we’d have few authors and movies. However no author or creator is encouraged to produce creative works by the possibility royalties will still flow 70 years after they die.

You could make a principled case that copyright should only apply for the life of a creator. However that could set up an incentive to kill authors to make their works public domain, plus if they have young children it is fair that royalties from their works should continue while their children become adults.

So I think a copyright term of life plus 20 years is what we should have. We should not be always extending the life of copyright to benefit some US corporations. Think if you could never put on a Shakespearean play without having to pay a large fee to the great great great great grand children of Shakespeare.

Copyright is an invented right, which seeks to balance the rights of creators and the rights of users. It is not an natural right such as free speech. It is an important intellectual property right, but extending the term to life plus 70 years will not benefit creators (they will be long dead). It will benefit a few large corporations.

Tags: ,

From an anti TPP protest

November 11th, 2014 at 1:00 pm by David Farrar

Screenshot 2014-11-08 23.46.53

Sent in by a reader, as reported on One News.

I wonder if she even knows what the NZ position on the TPP negotiations has been. I suspect she doesn’t.


Tags: , ,


March 4th, 2014 at 4:00 pm by David Farrar

The Cato Institute is a libertarian free market think tank in the US that is very pro free trade.

However they have string reservations around the TPP, specifically the intellectual property chapter. The fact these come from normal champions of free trade agreements makes them harder to rebut.

They have a webinar on the TPP on Thursday morning for those interested.

The blurb is:

 Intellectual property has been a focus of U.S. trade policy for many decades, and the Trans-Pacific Partnership negotiations include an especially ambitious effort by the United States to strengthen international intellectual property laws. At the same time, however, there is serious debate within the United States over the proper scope and level of intellectual property protection. Is it in the interests of the United States to seek to harmonize intellectual property rules around the world, or is the U.S. position overly influenced by special interests hoping to export bad policy abroad and to lock it in at home? Come hear our panel of experts discuss why trade agreements cover intellectual property law, whose interests are served, and what, if anything, should be done about it.

Hopefully the NZ negotiators will maintain their position of opposition to the proposed US text for the intellectual property chapter.

Tags: ,

Local body politicians who aren’t focused on their city or region

February 28th, 2014 at 2:00 pm by David Farrar

The Manawatu Standard reports:

Palmerston North’s voice will be added to calls for New Zealanders to be told what is in the proposed Trans-Pacific Partnership Agreement, amid fears it will allow multi-national companies to bully local and national governments.

The city council yesterday received a deputation led by Sue Pugmire and Warwick Smith asking for it to urge Prime Minister John Key to drop the veil of secrecy surrounding the agreement.

Such a key issue for the Palmerston North City Council.

The exception was Cr Leonie Hapeta, who said she did not believe local government should get involved in a central government process.

She was the dissenting voice in a 15-1 vote.

In passing its resolution, the council joined Auckland, Nelson and Greater Wellington in calling on the Government to reveal the content of the proposed agreement.

Horizons Regional Council was to consider a similar proposal today.

Pathetic politicians, trying to make themselves feel important.

As I have said many times before, the Government is unable to unilaterally reveal the contents. To do so would see it expelled from the agreement, and never allowed into any other trade negotiation again.

Where were these moronic City Councilors when the China FTA was being negotiated? Did they demand that text be released? Of course not. It’s different when Labour does it.


Smellie on TPP

February 16th, 2014 at 7:00 am by David Farrar

Patrick Smellie writes 10 things he says TPP opponents don’t want you to grasp:

  1. The secrecy surrounding TPP negotiations is typical of any such exercise.
  2. The bogey of corporations being able to sue governments is not only overblown, but corporations can do that now, without a TPP.
  3. Corporations might try to sue but they’ll be whistling if the government is acting in the public interest.
  4. United States corporate interests are obviously among those seeking influence on the TPP agenda, but that doesn’t mean the US Senate and Congress are on board.
  5. US politicians know less about what’s in the TPP negotiating documents than US corporate lobbies.
  6. No-one knows what the TPP could be worth to the New Zealand economy
  7. The US on the backfoot on many of the most contentious issues
  8. This is the end of Pharmac. Balderdash.
  9. The deal will be done behind closed doors. It can’t be. Every Parliament of every country involved will have to ratify any deal signed by leaders.
  10. There’s no guarantee TPP will come in to land.

It is quite legitimate to oppose some of the things that the US (especially) is asking for in the TPP, I am strongly opposed to many of their proposals for the intellectual property chapter. But there is a difference between opposing some of what the US is asking for, and demonising the TPP negotiations as a whole.

Matthew Hooton makes a similiar point in his Cunliffe’s Four Fails:

Mr Cunliffe’s fourth fail was over the Trans-Pacific Partnership (TPP) about which Labour has been fully briefed by the government, through Mr Goff.

Pandering to the Greens, Labour’s radicalised membership and Auckland anti-globalisation activist Jane Kelsey, Mr Cunliffe called for the TPP negotiating text to be released.

The good news is that Mr Cunliffe accepts this can’t happen while negotiations are under way and that the text should remain secret until it is finalised.

He says, however, it should be released two weeks before it is “signed.”

It is difficult to know what Mr Cunliffe – who claims, implausibly, to be “a former New Zealand trade negotiator who worked on the GATT negotiations and bilateral trade agreements” and to have “represented the New Zealand dairy industry overseas in many markets and on many occasions” – even means.

He cannot seriously be proposing that New Zealand unilaterally release the text without the agreement of the other parties.  That would see New Zealand excluded from all further international negotiations on any topic.

He must also know there is no two-week gap between a treaty being “finalised” and it being “signed.”  At trade minister level, they are the same thing.

Trade agreements are negotiated under the principle that nothing is agreed until everything is agreed.  When trade ministers do reach agreement, there is seldom even a formal signing ceremony.  Instead, the agreed text is released as part of a communiqué and each country then decides if and when it will ratify it.

For the TPP, the US Congress has not granted President Obama fast-track negotiating authority, reserving the right to re-litigate each clause.  The text will be debated in detail in our parliament and media.  While the cabinet holds the formal ratification power, Parliament retains the right to legislate over the top of it.

 It could be a long time – even years, if other TPP countries have difficulty ratifying the deal – between a final TPP text being publicly released by trade ministers and it ever being finalised and ratified to come into force.

If he really ever were a trade negotiator, Mr Cunliffe would surely know this.

Matthew is a former press secretary to a Minister of Trade Negotiations.

Tags: , , ,

Goff on TPP

December 11th, 2013 at 10:00 am by David Farrar

The Herald reports:

New Zealand would benefit more than most countries from a concluded Trans Pacific Partnership deal, former Labour trade minister Phil Goff told the Herald last night.

“We have the least barriers and therefore we have the least we have to give away,” he said. “Other countries have to give away much more.

“While there are all sorts of problems involved in this negotiation, you have to look at the wider picture and the wider picture is that each country will benefit from a successful conclusion to it but New Zealand will benefit more than most.”

It’s great to have Phil Goff say this, but once again Labour is the yeah, nah party.

On union demands they say yeah to the unions and then tell employers nah, don’t worry.

On oil Shane Jones says yeah all for it, and Moana Mackey says Labour is against off shore drilling.

On TPP Phil Goff says it will be beneficial for NZ, while other MPs such as Twyford organise protests against it.

This is Labour standing for nothing, and trying to be all things to all people.

Mr Goff made his comments just before Trade Ministers from the 12 countries negotiating the TPP ended four days of intense talks in Singapore in a bid to resolve the toughest issues.

New Zealand Trade Minister Tim Groser is thought to have played a central role in the talks, having been a professional trade negotiator and diplomat before entering politics.

Groser is excellent in these forums.

Mr Goff said opponents of the TPP were seeing the talks through their particular lens “and they are highlighting worst-case scenarios” and he was not criticising them.

“It’s unlikely we will get to a worst- case scenario and if it was a worst- case scenario, it is unlikely that we would agree to it.”

Exactly. I don’t like a lot of the stuff the US is proposing – but it is only a proposal. The leaked documents have shown that in fact the NZ Government is doing a great job in resisting any provisions that are bad for NZ.

Tags: , ,

Cato on the TPP

November 27th, 2013 at 4:00 pm by David Farrar

The Cato Institute is a libertarian think tank – the largest one in the United States. They are huge supporters of free markets and free trade. So with that in mind this article by Bill Watson on their behalf is worth considering:

The prospects for timely completion of the Trans-Pacific Partnership (TPP) trade agreement are looking increasingly bleak. Just as the president was struggling to secure fast track trade negotiating authority from Congress, a barrage of anti-TPP sentiment erupted last week when WikiLeaks published a classified draft text of the agreement’s intellectual property rules. The text was rightly criticized for enabling Hollywood and other industries to improperly influence U.S. and foreign law in their favor.

The first instinct of trade advocates is to be defensive, but this time the criticism actually offers an excellent opportunity: Instead of mumbling unconvincingly about the political power of innovative U.S. industries, free traders should put their collective foot down and demand a stop. Imposing intellectual property rules through trade agreements has become a political liability that serves special interests at the expense of free trade.

I agree. Some of the provisions in the chapter are aimed at preventing free trade, and restricting parallel importing.

Getting intellectual property out of the TPP would increase the agreement’s ability to open markets, improve its chances for passage in Congress, and bring the negotiations back to what they ought to be about in the first place: lowering protectionist trade barriers.

Hear, hear.

Despite being tightly wedded in the U.S. trade agenda for the last 20 years, trade policy and intellectual property policy don’t fit together very well. Trade agreements are useful because they provide an effective but imperfect way to improve U.S. trade policy. By offsetting the political power of protectionist industries with the political power of exporting industries, trade agreements offer the promise of open markets at home and abroad.

But this model doesn’t make any sense for intellectual property laws. Unlike tariff reductions, extending intellectual property rights in foreign markets does not directly benefit foreign consumers. At the same time, there is the potential for harm to U.S. consumers when international obligations make domestic intellectual property laws harder to reform or, in some cases, stricter than they would be otherwise. Using trade negotiations to set patent and copyright policy gives excessive power to industry without any justification.

All good points.

Global rules already exist that prevent piracy or severe regulatory differences. The World Trade Organization imposes minimum standards for patent copyright protection and prohibits discrimination. Intellectual property rules in the TPP, on the other hand, are about things like extending copyright terms from really long to really, really long. Getting Canada to impose a longer copyright term may benefit Disney, but that shouldn’t be a goal of U.S. economic relations.

WIPO treaties are where changes to international intellectual property laws should occur.

You don’t have to oppose stronger intellectual property laws to recognize that they reduce the value of trade agreements. The United States is expending a significant amount of negotiating capital to secure patent and copyright rules at the behest of a narrow set of industries. As the leaked text reveals, U.S. proposals are facing coordinated opposition from most, and sometimes all, TPP partners. What other negotiating goals have had to be sacrificed in order to push these unpopular rules through?

There could well be an agreement by now, if it were not for the IP chapter.

U.S. negotiators can accomplish more in other areas if they stop fighting for detailed intellectual property provisions. Hollywood and biotech are not the only industries hoping that the TPP will secure foreign markets for them. The American dairy industry, for instance, doesn’t benefit if negotiators give New Zealand a pass on milk barriers in order to secure concessions on medical procedure patents. More importantly, consumers in New Zealand don’t benefit either.

Not sure what milk barriers they men – I presume Fonterra?

Most proponents of the TPP wrongly claim that we must have intellectual property in agreements to get enough political support. That may have been true in the past, but times have changed. U.S. negotiators would do well to remember how the Stop Online Piracy Act crashed so dramatically after internet activists got popular opposition to go viral. Good news about how the TPP lowers regulatory barriers for financial service firms operating in Asia is not going to assuage the online masses who think you’re coming to kill the internet.

A common criticism of the TPP has been that the agreement is not really about free trade. It’s time to fix that and remove intellectual property negotiations from the TPP.

Sadly I don’t think the US Government will change its policy.

Tags: ,

The TPP IP chapter

November 14th, 2013 at 1:00 pm by David Farrar

The Herald reports:

Secret details of the United States-Pacific trade agreement have been leaked showing New Zealand in serious dispute with US negotiators on many issues.

These include internet freedom, access to affordable medicines, protection of New Zealand industrial innovation and ownership of native plants and animals.

After 3 years of intense negotiation and with political calls for an agreement by Christmas, New Zealand and the US are still far apart in key areas.

The UK-based WikiLeaks organisation has obtained the crucial “intellectual property” chapter of the Trans-Pacific Partnership agreement and released it exclusively to the Herald and Mexican, Chilean, US and Australian media.

Ha, not sure how exclusive it is. The text is on the Wikileaks website here.

The 95-page draft includes some of the agreement’s most contentious issues, such as copyright, patent and pharmaceutical rules.

It contains more than 250 references to New Zealand supporting or opposing particular clauses. In about 60 cases, New Zealand supports the US position. But in most cases the US and New Zealand are opposed to each other’s proposals, usually with several other countries agreeing with New Zealand.

It’s good to see NZ negotiators sticking to the NZ position of not agreeing to any changes that would require a change in NZ intellectual property laws. That may change of course as ultimately an agreement involves compromise, but who has to compromise often comes down to where the majority of countries are, and the fact several other countries back the NZ position is good.

The Creative Freedom Foundation met the NZ Chief Negotiator last week, and have a good blog post on some of the issues. The issue NZ may be weakest on is opposing an extension of term of copyright from Life+50 to Life+70. Personally I think it should be no more than Life+20.

Angela Strahl, who is handling the IP chapter, stated that NZ’s Parallel Importing abilities are likely to stay unchanged, as is the ability to set our own limitations and exceptions to our domestic Copyright law. However, it was strongly hinted at that an extension of our Copyright Term is inevitable.

As Walker put it: only three of the twelve countries involved in the negotiations currently have a Life + 50 copyright term (NZ, Canada, and Japan); no-one has signed a trade agreement with the US that hasn’t included at least a Life + 70 year copyright term; and if you were to place a bet on what way NZ was going to go, those are some pretty big odds.

The term of copyright is less important to me than maintaining parallel importing and being able to set our own limits and exceptions to copyright. If we have to compromise on something in the IP chapter, I guess that is the least bad option arguably. But I hope enough other countries support the NZ position and we can hold firm. The idea of copyright is to encourage innovation. Life + 70 in no ways encourages innovation more than Life + 50. And as the CFF say, has detrimental effects.

Back to the Herald story:

A large section reveals the battle between the US pharmaceutical lobby and countries such as New Zealand that want to continue to buy cheaper generic medicines. The US negotiators have inserted several pages of measures to help maintain and extend the dominant position of big pharmaceutical companies. Only the US supported these proposals while Australia, Peru, Vietnam, New Zealand, Chile, Malaysia, Singapore and Brunei opposed them in full.


The NZ negotiators are doing good work according to the leaked text. May they keep it up.

And I just have to respond to this piece of nonsense from Phil Goff:

The debate over the TPP negotiations should have been revealed by the Government and not left to be exposed by Wikileaks says Labour’s Trade spokesperson, Phil Goff.

Goff is being malicious here. Goff is a former Trade Minister. He of all people knows that the NZ Government would be kicked out of the TPP and never allowed into any trade negotiation again if it unilaterally released the text. I can accept this sort of hysteria from Jane Kelsey, but again Goff knows what he is saying is bullshit. Never in 10,000 years would he as Trade Minister do what he is now calling on this Government to do.

Now don’t get me wrong. I think there should be more transparency, and that at suitable intervals draft texts should be released. But this is not a decision NZ can make by itself. It’s like declaring that the one member of the UN Security Council can make decisions on behalf of the other 15.

It is good and noble to call for more transparency. It is an act of partisan fuckwittery to demand that the Government unilaterally release the text. Goff knows this. I do agree with him in one area though:

“In all trade negotiations parties make demands that they don’t expect to be accepted. All negotiations inevitably involve compromises. But New Zealand negotiators should remain staunch in their opposition to demands in the intellectual property area which appear to favour vested interest groups in one country to the disadvantage of others,” Phil Goff said.

That I agree with.