US Senator says NZ and Australian TPP negotiators were too good

November 13th, 2015 at 3:00 pm by David Farrar

UNGN reported:

“I understand that renegotiation may be difficult, particularly with so many parties involved,” Sen. Orrin Hatch said, adding, “The alternative to renegotiation may very well be no TPP at all.”

Republican U.S. Senate Finance Committee Chairman Orrin Hatch said Friday that the Obama administration might have to renegotiate parts of the 12-nation Trans-Pacific Partnership trade deal, the text of which was released Thursday. …

Hatch said he was concerned that negotiators failed to secure 12 years of protection for next-generation biological drugs, which could push companies to leave the industry, make it more difficult for innovators to recover investments made in new products and leave Americans subsidizing cheaper medicines in other nations, according to Reuters.

Biological drugs are given a minimum of five years of data protection under the agreement, along with an extra buffer for administrative processes. The U.S. campaigned for 12 years of protection to ensure incentive for innovation, while Australia and New Zealand pushed for five years to give patients access to cheaper medicine, according to BioPharma Reporter.

Hatch said the U.S. should not have agreed to Australia’s “greedy” demands for a smaller monopoly period.

Do you remember Jane Kelsey telling us for years how the the NZ Government was going to sell us out to the US.

Here’s the reality. A top US Senator is saying that the Australian and New Zealand negotiators were too strong, and that the deal should be rejected because there is not enough in it for big US pharmaceutical companies.

If I was an Australian or NZ negotiator, I’d be rather pleased that a senior US Senator is saying you were too stubborn and got too good a deal for your own countries, at the expense of the US.



Easton on TPP and copyright

November 12th, 2015 at 10:00 am by David Farrar

Brian Easton writes at Pundit:

The stupidest thing said about the TPP deal – thus far – is the claim that it does not reduce New Zealand’s sovereignty. Of course it does. Agreeing to it will mean New Zealand will not be able to do things it currently can do. How important this reduction in sovereignty is is a proper matter for assessment for there are gains as well as losses.

Every international agreement is a loss of sovereignty, in that you agree to do something or not do something. An international agreement on climate change is a huge loss of sovereignty – it may partially dictate economic policy for the next 20 years or so. So the sovereignty argument is silly.

Does extending copyright to 70 years after death make sense? How many authors are mindful that their works of genius will be of benefit to their great-great-grandchildren whom they will never meet? Did the announcement of the twenty-year extension result in any writers getting onto writing that novel which previously they had not bothered with? (I don’t even agree with 50 years. There is a view, including among some prominent American economists, that the period should be no greater than 20 years after death; I think that is to deal with publisher stocks at the time of the demise.)

I’m one of those with think it should be life + 20.

Apparently New Zealand was opposed to the extension to 70 years, but Japan and the US already have domestically legislated it as a result of corporate pressures and they insisted. Our negotiators had to give in, in exchange for other benefits (that beef access is really valuable), although we got some phasing in of the extension.

So if we think the TPP deal is to our advantage we are going to have to adopt the 70 years. But we can adapt policies to improve access to free information. Here is the beginnings of a list:

* the government should stop privatising the information it holds; yes it has sold-off some valuable data bases and their owners are charging like wounded bulls for their use;

* the government should direct the agencies which manage its (publicly owned) data bases to stop profiting from them. They may charge for the costs of releasing the information, but only those costs. This would require some financial compensation to the agencies who may well be reluctantly charging but need the cash because of government meanness;

* the government should set up a fund to purchase private data bases putting them in the free public domain;

* the digitisation project – placing public records in the digital domain – needs more funding.


I like these ideas.

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Labour drop their worst policy

November 7th, 2015 at 10:00 am by David Farrar

Stuff reports:

Labour leader Andrew Little has all but dumped the party’s controversial NZ Power policy.

In his opening address to the party’s annual conference in Palmerston North Little said the policy, which aimed to set up a single buyer for the country’s power generation, was too complex to explain simply to voters.

When it was announced it was widely criticised by business and the sector as too interventionist.

Little said the policy, which was unveiled before the last election in concert with a similar policy from the Greens, was important.  

There was something wrong with the power system, given rising prices and the high salaries paid to top executives in the sector.

“But our answer to that has to be something we can explain simply to New Zealanders. … So we will have to revisit the NZ Power policy.”

It is understood the Greens will also drop the policy before the next election.

Good. It was the worst of their policies. It was a de facto nationalisation of the power generators, which would have seen the state determine all prices, who can build new supply, and would have destroyed any competition between generators. It was an appalling policy.

But not all good news:

He said if Labour won the election in 2017 it would pass legislation to implement the foreign sales ban policy.

It would also try to renegotiate the deal on the foreign buyers issue, something Trade Negotiations Minister Tim Groser had indicated was possible over dairy exports.

“We will not support anything that takes away the right of New Zealand politicians in our democratic elected Parliament to make laws in the best interests of New Zealand … it simply isn’t acceptable,” he said.

He said other countries had deals that allowed such a restriction on land sales, but the current Government had not even tried to secure an exemption for that.

Little said Labour was a free trade party, but standing up for the right of Parliament to legislate in the interests of its citizens was not anti-free trade.

Asked if it would be acceptable for other countries to make unilateral changes – for example if Japan legislated against dairy imports – Little said “other countries can do what they like”.

So Little is saying he is fine with other countries breaking agreements they make with New Zealand, because he intends to do the same. Credibility zero.

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TPP released

November 6th, 2015 at 9:00 am by David Farrar

Tim Groser announced:

Minister of Trade Tim Groser has announced that, on behalf of the twelve members of the Trans-Pacific Partnership (TPP), New Zealand has released the text of the results of TPP negotiations in its capacity as Depositary of the Agreement.

The text is currently available on the international treaty depository section of the New Zealand Ministry of Foreign Affairs and Trade’s website, at

That’s very helpful timing for Labour, just before their conference, as it means they can’t keep using the “We can’t take a position on it, as have not read it” line.

In related news the Government announced:

The Government has awarded New Zealand researchers $53.5 million in new Marsden Fund grants, Science and Innovation Minister Steven Joyce announced today. 

The 92 successful proposals will be funded over three years and include a diverse range of topics from exploring causal factors between earthquakes and volcanic eruption, to therapies for motor neuron disease and a research programme that will investigate the implications of prodrugs for many types of illness.

The full list of awards is here. One of them is:

Transcending embedded neoliberalism in international economic regulation: options and strategies

Professor Jane Kelsey is being paid $600,000 for this work! The Government is paying her $600,000 to campaign against its own trade agreements!


TPP and small business

October 29th, 2015 at 4:00 pm by David Farrar

Fortune reports:

As Congress evaluates the details of what could be the world’s biggest trade deal yet in the coming months, one of the most crucial components that often gets overlooked is the agreement’s focus on small and medium-sized businesses. The Trans-Pacific Partnership represents an unparalleled opportunity for the global economy. The deal is the largest and most substantial free trade agreement in history, connecting 12 global economies, 40% of GDP and 800 million consumers across the Americas and the Asia-Pacific region.

For the first time in any trade agreement, TPP includes a chapter focused on addressing trade barriers that disproportionately challenge small business, including complex trade paperwork, opaque customs regulations, and the slow delivery of small shipments. Collectively, these improvements through TPP should help small- and medium-sized companies expand their international business or make the decision to go global in the first place.


This is an area there has been little focus on.

Most of the focus goes on tariff removals as economists can easily calculate the value of those to the economy. But there is far more to trade agreements today than just removing tariffs and stuff such as making it easier for small businesses to trade internationally can be very important – especially to NZ.


Imperator Fish on Labour and TPP

October 17th, 2015 at 2:00 pm by David Farrar

Imperator Fish blogs:

People have been telling me that they don’t really understand Labour’s position on the Trans Pacific Partnership. …

Our opposition to the TPP is principled and based on what we think is best for New Zealand. We don’t want New Zealand to sign up to the TPP, but nor would we pull New Zealand out of the deal.

While this is satire, it appears to also be Labour’s actual position,

Labour is not opposed to free trade. We recognise that as an exporting nation we need to honour our international commitments. What kind of example would we be setting as a developed nation if we looked to back out of our international obligations? That’s why a Labour government won’t pull New Zealand out of the TPP. We’ll instead just ignore the bits we don’t like.

Again this appears to be Labour’s actual position.

New Zealand is not a banana republic, and we can’t just tear up the treaties we sign with other countries. That’s why a Labour government will honour all of the international commitments entered into by this government on behalf of New Zealand, even if we don’t like them, unless we change our minds and decide we won’t honour those commitment because we don’t like them.

See, that wasn’t difficult to grasp, was it?

Not at all.

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Sense from Goff who comes out in support of TPP

October 16th, 2015 at 11:22 am by David Farrar

Stuff reports:

Senior Labour MP Phil Goff says it is unlikely the party would have to breach parts of the Trans-Pacific Partnership (TPPA) free trade deal if it came to power, with “more than one way to skin the cat” regarding its concerns.

What Goff is saying that while TPP wil not let you ban foreigners from buying houses, it would allow you to impose 100% stamp duty on them, which is effectively the same.

This is very different to the ramblings from Little who has said they’ll just ignore the parts they don’t like!

Goff, a former Labour leader and the trade minister who signed a free trade agreement with China in 2008, told TV3’s Paul Henry he had encouraged his party colleagues to consider the costs of opting out of the deal, which was “not the monster” that opponents were afraid of.

Goff is right. The problem is his colleagues have spent two years claiming it is a monster and Little campaigned for the leadership on the basis of opposing it.

Goff say he “maybe [knew] a little bit more about the trade than some of the others” in Labour due to his involvement in initial negotiations, and said he had asked his colleagues to consider the costs of not being in the TPPA.

“This is a deal that’s going to get bigger: It’s 12 countries now, but I can conceive that China will come in, South Korea will come in.

There would be significant costs to not being in the TPPA. As Clark said your biggest fear is a trade bloc forming you are not part of.

Well done to Phil Goff for being the first sane voice from Labour so far on TPP.

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Quin doubts Labour is ready to govern

October 16th, 2015 at 9:00 am by David Farrar

Former Labour staffer Phil Quin writes:

In the unlikely event it ever came to pass, Labour’s proposed course of action on the Trans-Pacific Partnership – flout the bits it doesn’t like – would constitute the most reckless act by any New Zealand government of the post-Muldoon era.

For those of us who want to see Labour re-emerge as a plausible alternative government, it was dispiriting enough to witness finance spokesman Grant Robertson first float the idea Labour might ban foreigners from buying New Zealand property even if it contravened the TPP. But not only has Andrew Little’s repeated doubling down on this reckless notion raised the stakes sharply, it has called into question Labour’s capacity to govern responsibly.

Andrew Little echoes Robertson’s contention that a government he leads can simply legislate around irksome elements of the TPP – an unconscionable policy position for a serious political party. No trade deal, nor international treaty of any kind, would be worth the paper it’s written on if signatories opted out of unfavourable clauses on the grounds of national interest.

If Labour’s policy of selective implementation were adopted by the 11 other signatories, the TPP would dissolve overnight.

Not just the TPP. Labour claims it wants countries to enter into a binding agreement on reducing carbon emissions. You can’t credibly wish for that, and also claim you will ignore provisions of binding agreements you don’t like.

Helen Clark’s comments in support of the TPP made crystal clear how the case for New Zealand staying out of the deal, however flawed, is an impossibly hard political lift. After all, we’re talking about 11 of our most important export markets that, between them, comprise 40 per cent of global GDP.

In any case, unlike the Greens or protectionist elements of the former Alliance (several of whose most prominent activists populate Andrew Little’s office), Labour is a pro-free trade party, specifically endorsing the TPP process as recently as 2013.

In trying to placate opponents of the TPP without further trashing the party’s tenuous economic credentials, Labour has half baked a policy that nobody in their right mind could take seriously.

Little claiming Labour will just ignore the parts of TPP it doesn’t like is his worst blunder as leader. It will haunt him with long-term damage.

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Trotter on Little’s credibility

October 15th, 2015 at 2:00 pm by David Farrar

Chris Trotter writes:

Not that Mr Little was without a strategy on Tuesday morning. His proposed way of dealing with the TPPA was to see it ratified; to assist the National Government in bringing New Zealand’s laws into conformity with its provisions; and then, upon becoming the Government, simply “flout” those TPPA rules which conflict with his government’s plans.

As a gift to Labour’s political opponents, this strategy is hard to beat. No responsible political party loudly announces to the world that, if it wins office, no other nation should place the slightest trust in their country’s solemnly given word. Such behaviour would turn this country into an international pariah.

Yep.It may be the stupidest thing he has said.

Not that it’s likely to happen. From now until the 2017 election, National will use Mr Little’s words to shred Labour’s political credibility. Not only that, but Little’s decision to “flout” will also allow Mr Key to present New Zealand’s adherence to the TPPA as a matter of national honour. Labour will be made to look like an untrustworthy bunch of thieves and liars.

In the House on Wednesday, Labour had only one question on TPP, and National had three. This shows that National thinks Labour is in deep trouble over what Little has said.


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Gower on Labour’s dead TPP rats

October 15th, 2015 at 7:00 am by David Farrar

Patrick Gower writes:

The Labour Party is swallowing a dead rat, and not just any old dead rat.

Labour is swallowing an enormous, filthy, stinking, rotten, maggot-infested dead rat called the Trans-Pacific Partnership (TPP).

Labour’s 32 MPs looked deflated and rattled in Parliament’s question time today.

Sounds like normal question time.

It was like 32 individual TPP rats were served up as a ghastly afternoon feed.

Labour looked as if it had nowhere to go when attacking the TPP the Government had agreed to.

Labour seemed to be flailing about, its questions effectively patsies that allowed Prime Minister John Key and company extol the virtues of the trade deal.

The lowest point for Labour was the inevitable and humiliating recital by Key of Helen Clark’s public statement that it was “unthinkable” for New Zealand to be left out of the TPP.

It was always going to come, but it looked like it really hurt the Labourites. Their hero, Clark, was in support of TPP – her words thrown back at them as a disgusting garnish on their dead rat feed.


It wasn’t so much that she endorsed it, but her language – saying it was unthinkable not to be part of it.

It is looking like the TPP was nowhere near as bad as Labour made it out to be.

The big fears have been muted: the PHARMAC model is looking intact and there are restrictions on tobacco corporations suing the Government. And while the deal’s not great for dairy, there’s a lot in it for other export industries.

In fact, the TPP seems pretty much okay and it looks like Labour should be supporting it.

This is the problem you get when you scaremonger on the worst case scenario, and then that doesn’t eventuate.

At the moment, Little is trying to play both sides, refusing to say whether Labour supports the agreement or not. Basically Little is playing word games as he plays for time, knowing that National is going to rub his nose in the TPP dead rat feed.

My pick is that Labour will continue to play out this silly game for a while before finally giving its support to TPP. Labour wants to try and trick its base supporters that it is still against the TPP, but let the public think it is for it.

It really is untenable for Labour to refuse to say either way. However, it has until the final text is out to continue its charade.

Labour’s best hope is that there is some massive face-saving fishhook, but that seems unlikely and Labour’s sad faces show it knows it.

It seems Labour’s TPP game is up. It should just swallow the TPP dead rat and get on with it.

The paragraph bolded is key.

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Labour’s latest TPP position

October 14th, 2015 at 7:00 am by David Farrar

Stuff reports:

Labour leader Andrew Little says it is unlikely the party would withdraw from the controversial Trans-Pacific Partnership (TPPA) free trade deal if it gains power, following a meeting with Trade Minister Tim Groser to discuss the agreement.

Little and Trade Minister Tim Groser met on Monday evening to discuss the provisions of the TPPA in further detail, after the 12-nation free trade agreement was signed last week.

Little told Radio New Zealand the party still had a number of unanswered questions about the deal, but was unlikely to pull out of the agreement if it gained power at the next election.

It would be politically suicidal for them to do so.

But does this mean they are still insisting it is a truly horrible deal? If so, why wouldn’t they pull out?

Little said a Labour government would take a “responsible” approach to the deal, but would flout provisions of the deal if they were not in New Zealanders’ best interests.

This man wants to be Prime Minister?

Does he also think NZ should flout all the UN conventions we have signed, if he deems it not in our best interests? Does he think Iran should flout the deal they brokered on not developing nuclear weapons, if the Supreme Leader deems it not in their best interests?

Does Little think the other TPP countries should simply ignore provisions of an agreement they don’t like? Does he think Australia should ignore the WTO ruling and ban our apple imports again?

This is pathetic sophistry from Labour. You can not have a policy saying we will not withdraw from TPP but will ignore parts we want to.

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Dann on TPP

October 13th, 2015 at 10:00 am by David Farrar

Herald business editor Liam Dann writes:

Helen Clark, who as Prime Minister kicked off the trade talks that evolved into the TPP, doesn’t seem to think so.

Last month she told New Zealand media in New York: “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.”

Clark’s words must seem brutally pragmatic to many of those still clinging to the notion that New Zealand should walk away from the TPP.

But her point seems to be that the bar for not signing up to this trade deal would have to be extremely high.

She was talking before the agreement was signed but one doubts the final text will have changed her stance.

It is hard to see any deal breaker in the detail so far which would justify New Zealand isolating itself from a trading block that represents 40 per cent of global GDP.

We’d be the laughing stock of the world to walk away from a deal we spent seven years negotiating.

This is problematic for Labour if it remains opposed to this deal based on specific points of detail.

And this has raised the prospect that Labour may oppose it on ideological grounds.

That might seem a populist approach when it comes to Facebook clicks, but would put the party into serious conflict with the current realities of the New Zealand economy.

As a tiny country, New Zealand is considerably less well placed to go down an isolationist path than, say, the UK under a Jeremy Corbyn-led Labour Government.

It would be an almost revolutionary position for a major political party to take here.

Vietnam – hardly an easy target for US imperialism – is set to sign the deal.

It would seem strange, I think, to see the New Zealand Labour Party taking a harder ideological stance than the Communist Party in Hanoi.

Sadly, it is quite possible.

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Hide and others on TPP

October 11th, 2015 at 10:00 am by David Farrar

Rodney Hide writes:

Auckland University law Professor Jane Kelsey is wrong.

Specifically, she is wrong with her constant criticism of the Trans-Pacific Partnership Agreement. For years she has pumped out press releases and opinion pieces and given endless interviews to scare us witless about the evils of the TPPA.

She has complained it “raises the price of medicines and handcuffs the right of governments to regulate in their national interests”, that it would “bust the Pharmac budget” and “make SOEs prime targets for privatisation”.

She has said Prime Minister John Key is enabling “Hollywood to sell us down the river”, that at stake “is a battle between life and death for New Zealanders and life and death for the tobacco industry” and that governments are signing up to an agreement that “surrenders their domestic economies and grants undue influence over their policy decisions to powerful, largely US, corporate interests”.

It is fine to say that the TPP might include some of the bad stuff above, because some countries did push for stuff we did not want. But it is bad faith to claim the TPP will do the bad stuff, before there is an agreement, and also bad faith to try and paint the Government as being in favour of the bad stuff, rather than actually being the ones trying to get the best deal for NZ.

Well, the deal has now been agreed. And miracle of miracles, the sun still shines. The agreement covers two-fifths of the global economy and eliminates or reduces about 18,000 tariffs, taxes and non-tariff barriers.

It’s a huge boost to world trade and prosperity. The only criticism is that it does not go far enough.

It is interesting how some critics have gone from all this bad stuff will happen, to it isn’t a good enough deal for dairy. I agree with Groser’s use of the old quote “perfect is the enemy of good”

So why is Kelsey so opposed? Well, she was taught her political views by left-thinking Marxist scholars at Cambridge. Her Marxism means it is not the specifics of the TPPA that concern her but the agreement itself.

To Marxists, free trade is evil because it makes the rich richer at the expense of workers who are kept poor on subsistence wages.

As I said last week, Kelsey has vigorously argued against every trade agreement NZ has made (as far as I can recall).

Another view on TPP is Audrey Young:

If the test is whether New Zealand will be better off signing the TPP or not signing it, there is only one answer.

And to avoid doubt:

Better off – not just for the $259 million in identifiable tariff reductions but for the so-called “dynamic gains of trade” that come with a greater presence in a market as the China FTA has shown.

Labour and New Zealand First will rail against Tim Groser’s failure to get a great deal on dairy, but the public are not fools.

They know the blame lies with the United States and its protectionist buddies in Canada and Japan.

Labour could perhaps apply its own test to the way it handles the TPP issue: will Labour be better off supporting the deal than not supporting it. Will it be any better off sounding as though it opposes it but supporting it in the end?

If it does not support TPP eventually it would be punished for the next two years by the Government over its willingness to allow New Zealand exporters to be disadvantaged in export markets of new partners, where 93 per cent of tariffs will eventually disappear.

It would erode its standing as a potential government of a trade-driven nation.

It would be bad for NZ if Labour votes against it, but it would be good for National. I put NZ’s interests first, and hope Labour does support it.

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Hooton on Labour and TPP

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

Matthew Hooton writes:

John Key must be sorely tempted to put the Trans-Pacific Partnership (TPP) to a formal ratification vote in parliament. If the prime minister did so, he would split the ridiculous rabble that sits across from him.

Two former Labour leaders, Phil Goff and David Shearer, would cross the floor to back the deal, along with Napier MP Stuart Nash, Te Tai Tokerau MP Kelvin Davis and Tāmaki Makaurau MP Peeni Henare, party insiders say. They alone would inherit Peter Fraser, Norman Kirk, David Lange and Helen Clark’s liberal-internationalist mantle.

There is no vote on ratification, but there will be a vote on legislation to implement parts of it.

For 20 years, New Zealand’s number one foreign policy goal has been a free-trade agreement (FTA) with the world’s largest economy, the US. If the TPP is ratified – which remains a big if – that NZ-US FTA has now been achieved, and FTAs with the world’s third and 11th largest economies, Japan and Canada, both hitherto highly protectionist, have been thrown into the bargain.

That’s three of the G7.

As a first tentative step in the long-term strategy, Dr Smith and Mrs Shipley launched negotiations in September 1999 for an FTA with Singapore, an agreement without economic significance but designed as a template for a wider 21st century deal.

The greatest share of political credit, though, lies with Ms Clark and her trade ministers Jim Sutton and Mr Goff.

It was the Clark government that concluded the Singapore deal, launched and completed the initial TPP with Singapore, Chile and Brunei and then drew in the US, Australia, Peru and Vietnam in 2008, following Ms Clark’s successful 2007 meeting with George W Bush.

The New Zealand origins of the deal are why Wellington had the diplomatic honour of being the depository and administrator of the treaty.

Worth remembering that. This is not a deal that the US approach NZ with. This was part of a 20 year strategy by both National and Labour Governments to get an FTA with the US.

To take one somewhat ironic example of the deal’s effects, given the music industry’s usual politics, the TPP’s copyright provisions mean the likes of Lorde, Tiki Taane, and SIX60 have ended up bigger winners from the TPP than Fonterra – which is surely fair enough given they actually bother to add value to their raw material and market it creatively offshore.

I don’t support the extension of the term of copyright to life plus 70 years, but did note on Twitter today that Lorde’s great grand children will be happy they can get money from her music in the year 2167!

The TPP also includes rules demanding higher labour and environmental standards, which are enforceable through ISDS, a first for a trade deal of this nature. Pharmac is left alone. Tobacco companies are excluded from being able to benefit from the deal. The Treaty of Waitangi is protected. So are marine mammals and even sharks.

If Labour vote against, they will be voting against an agreement that no member can weaken their environmental or labour laws and must introduce a minimum wage.

The union bosses, student politicians and former Alliance activists who now control Labour will have none of this.

Under Labour’s new rules that further empower its more fanatical grass-root members, the party has fallen under the spell of UK Labour’s Jeremy Corbyn, unwavering anti-globalisation activist Jane Kelsey, Marxist twitter addicts and extreme-left bloggers at The Standard and The Daily Blog.

The party’s antics over the TPP this week suggest its missing-in-action leader, Mr Little, and its woeful finance spokesman, Grant Robertson, have never moved on from their time leading student rabble as presidents of the New Zealand University Students’ Association.

The student politicians have taken over the party!

Mr Little’s chief of staff is Matt McCarten, the former Alliance president who broke with Jim Anderton because the then deputy prime minister believed New Zealand should support the US in retaliating against Al Qaeda in Afghanistan for the September 11 attacks.

Insiders say that when Labour’s senior MPs and staff discuss policy and political positioning, the likely reaction of the left-wing Twitterati and blogsophere is given greater weight than that of any union, environmental group or social-policy advocates, let alone any industry association or business.

Surely this is not true?

The party’s hierarchy is now seriously considering actively campaigning against the TPP and making a manifesto commitment to activate the agreement’s withdrawal procedures should it become government.

It would be good for National if they do, but bad for NZ to have Labour go further left.

You read that right: today’s Labour hierarchy is seriously considering promising to withdraw from a trade deal with 40% of the world’s economy, including the US, Japan and Canada, for which Ms Clark, its greatest prime minister for a generation and its first ever to win three elections, deserves the lion’s share of the credit.

Have nothing to do with these people. Do not give them money. Do not help them with their policy development. Do not let them visit your business for cute photo-ops designed to suggest today’s Labour is interested in listening to mainstream people. For all the current government’s usual purposelessness and drift, the lunatics now running Labour’s asylum must never be let near power.


UPDATE: Labour is denying an internal rift on TPP, which means of course there is one!

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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!

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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.


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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!

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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
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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!

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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.

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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.

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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.

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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.

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