Kiwiblog

Claire Trevett reports:

Japan has been allowed to enter the Trans Pacific Partnership trade talks by the 11 countries already in negotiations.

Trade Minister Tim Groser announced Japan’s entry had been agreed on from Indonesia where TPP talks were held on the sidelines of the APEC trade ministers’ meeting.

New Zealand has been cautious about Japan’s entry into the talks because of its protectionist policies and high tariffs especially in horticulture and agriculture.

Mr Groser gave New Zealand’s final approval after meeting with Japan’s Minister of Economic Revitalisation, Akira Amari who had assured him Japan was committed to a comprehensive agreement.

There are some risk with having Japan join the TPP negotiations, but also great potential benefits. They are a major trading partner for NZ, and getting a reduction in trade tariffs would be very good for New Zealand.

The US proposals for the intellectual property chapter are unacceptable, as they are not balanced enough. Our current law is pretty good (not perfect) in reflecting the balance of rights when it comes to intellectual property. I want New Zealand to maintain the stance they have had for the last two to three years on the intellectual property chapter – which is no change to domestic law.

If a TPP can be concluded with an acceptable intellectual property chapter, I’d regard that as a very good thing.

Susan Chalmers writes at the NZ Herald on the TPP:

I’m not an economist, but I do understand what a net loss or a net gain is. Most people will be familiar with the concept – at the end of the day, are you better or worse off? To figure that one out you need to know what you’ve brought in, and what you’ve paid out.

We’ve recently heard what New Zealand could bring in under the Trans Pacific Partnership – US$2.9 billion by 2025. But that figure is based on a hypothetical situation involving 21 countries, not the 11 that are negotiating. Even so, the Prime Minister recently embraced and advanced this figure.

What’s missing? Our leaders haven’t told us what the costs will be.

The biggest cost that New Zealand could sustain under the TPP would be in the intellectual property, particularly copyright. This is because the most powerful party to the negotiations – the United States – is a net exporter of copyrighted goods (movies, books, TV shows, songs, games, etc) while all other TPP parties are net importers.

The interests that drive US trade policy in copyright are Hollywood and the recording industry. They want stronger and more powerful legal rights that would bring more money to them, often at the expense of many different sectors of society and business.

I’m all for the benefits of liberalising trade with other countries. That does provide benefits. But as Susan says, we also have to be aware of the costs to New Zealand, if the TPP includes US drafted changes to our copyright laws.

The Government has rightly said that any decision on TPP will be based on whether it is a net gain to New Zealand. But again, one can only calculate a net gain if you actually calculate the costs.

Now ideally NZ holds firm and doesn’t agree to any provisions that require changes to our IP laws.

Since the Government has not run its own analysis of potential costs, perhaps we can look elsewhere for guidance. Australia is a good place to start. Like New Zealand, Australia is a net importer of copyrighted goods and wants better access to the US agricultural markets – for sugar and beef exports in particular. …

A report from the Australian Productivity Commission – the Government’s independent research and advisory body – indicated that Australia suffered a net loss under AUSFTA as a whole because of accepting the US copyright demands.

Maybe the NZ Productivity Commission could look at the the benefits to the NZ economy of balanced IP laws?

So why has our political leadership not talked about the costs of accepting the US copyright demands? For instance, the cost of paying decades more in royalties to overseas companies, losing parallel imports, not to mention all the taxpayer money to support US copyright litigation here in New Zealand.

Trade agreements are meant to liberalise trade. Banning parallel imports is putting up barriers to trade.

Regardless of the reason for our leaders not acknowledging the potential costs, it is now time to run that analysis, as any normal business would. New Zealand’s copyright negotiators have been holding the line throughout 15 TPP rounds, working to stave off these costs for the country. Let’s encourage our elected officials not only to give them some support, but to explain exactly what the country is about to commit to. Shouldn’t we know?

We should.

Been sent a link to a poll commissioned by the First Union on the TPP. It looks like 64% oppose TPP, but look at the question:

New Zealand is currently negotiating a free trade and investment treaty with ten other countries called the Trans Pacific Partnership. As part of the negotiations, there is a proposal to allow foreign investors to sue governments in private offshore tribunals if government actions threaten their future profits. The US advocates it while Australia says it would not sign a deal with this in it. Which one of the following statements do you most agree with:

That’s such an outrageously worded question, I am surprised they didn’t get 90% opposed. There is no proposal to allow investors to sue if their “profits are threatened”. The proposal (which is in many other trade deals we have) is to sue if the government discriminates against the company based on their country. You can’t simply sue because the Govt passes a law that will harm profits.

The difference is massive. As that poll question describes the proposal, a normal respondent would imagine that there would be potentially hundreds of law suits – because many many Govt actions impact a company’s profits. In reality law suits under this provision are massively rare – one per decade maybe, because any action is restricted to whether it is discriminatory (ie would not impact local companies also).

Again, based on that question, I’d expect 90% to be against. There is a legitimate debate about investor state provisions, but this loaded question is all heat and no light.

The lesson for media should be to always look at the actual poll question asked, and don’t just go off any media release. And ask yourself if the poll question is a fair representation of the issue being debated.

Siobhan Leathley at NZ Herald reports:

Police have condemned “violent” protesters who attacked two police officers and set fire to cardboard boxes as they tried to force their way into free trade negotiations.

A handful of police and SkyCity security staff were overwhelmed by more than 150 protesters, forcing the on-the-ground commander to call in reinforcements from around Auckland.

“Police staff moved in to prevent escalation and two officers were separated, attacked and kicked numerous times. Fire appliances were called to the scene to help,” police said in a statement. “Two arrests were made. One of these arrests was a female that stomped on a constables head.”

Charming. Such idiocy and violence from those protesters actually damages their cause.

I wonder how many of the 300 were on their tenth protest or more of the year?

A good article by Geoff Cumming at the NZ Herald:

If you think opponents of the Trans Pacific Partnership are typically anti-free trade/anti-globalisation conspiracy theorists, consider these unlikely bedfellows: librarians, software exporters, researchers, book lovers, fans of DVDs, media creatives and people who download music. The negotiations for a trade deal covering 11 Pacific nations have managed to unite these apparently unconnected sectors in alarm.

I wouldn’t say they are opponents. Some people are opposed to the TPP no matter what its form is. They often oppose all trade deals.

Other groups and individuals have concerns over potential provisions – especially those in the US written draft intellectual property chapter. To date the NZ Govt and other countries have not agreed to these, and have proposed alternative wording which would mean no change in current NZ law.

Parallel importing is in the firing line, according to the leaked draft of the US position. This could affect not just knock-off copies but our freedom to source licensed brands without the premium charged by licensees.

Trade deals are meant to liberalise trade. Restricting parallel imports is actually going in the other direction.

Apart from the damage to our Christmas shopping budgets, the Libraries Association says a ban on parallel imports would slow down access to new-release books in libraries. A longer copyright length would restrict what libraries are able to digitise. They could be prevented from overriding technological protection measures such as zone restrictions on DVDs. Users of iPhones and iPads may risk fines for “jailbreaking” devices to add non-licensed functions. Longer copyright periods would narrow the options for musicians and media creatives.

The longer copyright term proposed is especially worrying. We already have life plus 50 years. I actually think that is too long. Life + 20 years is more than adequate when you consider the purpose of copyright is to reward and incentivise creators.

Internet and copyright law specialist Rick Shera is concerned about proposals to increase powers to prosecute and hike penalties – up to US$150,000 ($180,000) per infringement.

“There have been cases in the US where housewives have been sued over [downloading] five to 10 songs,” says Shera. “You could end up with an iPod with $4 million of infringements on it, as rights holders are able to seek a multiple of the damages suffered.”

And we have seen here that the music rights body will try and claim 90 times the value of a song based on hypothetical situations.

The film and music industries, which are driving the US goals on IP, want internet service providers (ISPs) to monitor internet activity for copyright breaches at their own expense and to pass on alleged abusers’ names to rights holders, says Shera.

Telecommunications Users Association chief executive Paul Brislen says the huge monitoring costs would be passed to consumers.

“If ISPs are required to filter stuff or block websites, it’s the consumer who pays at the end of the day. It will lead to things like deep pocket inspections [filtering] of everybody’s content which will slow down the internet and raises privacy issues. ISPs risk being sued for the behaviour of their customers – it becomes quite laughable. You get lawyers claiming to represent rights holders and demanding take-downs for content they don’t have any rights to or clients they don’t represent. It’s the kind of nonsense that only the American legal system engages in.”

I think our current law is a pretty good balance. ISPs do have to respond to requests to pass on notices to customers whom allegedly infringe. But they get their costs (in the main) reimbursed.

The devil is in the detail – and it quickly descends into terminology that only trade treaty specialists and techno geeks can decipher. Susan Chalmers is policy lead for internet NZ and spokeswoman for Fair Deal, a coalition of the interest groups. She believes that the draft US position threatens the very workings of the internet, for instance by challenging the right to store copied material, known as caching. “The internet works by making temporary copies, or ‘transient reproductions’, of data in order to transmit it from point A to point B,” says Chalmers. “The US proposals threaten the exception [in copyright law] that ensures that copyright owners don’t abuse their power by suing anyone who intentionally or unintentionally makes a temporary copy.

Basically the US draft says any copying is infringement, but then says we’ll give you an exception for caching and the like. We actually need copyright laws that focus on use of material, not the fact it may be copied. The Internet is the world’s largest copying machine.

A summary:

Contentious wish list

Interest groups’ key concerns over leaked draft of US IP chapter.

• Extension of copyright terms, eg, from 50 to 70 years for books after author’s death.

• Clampdown on exceptions to copyright rules, e.g, “fair use” provisions.

• Patents on software (New Zealand has already reversed its plan to exclude software in review of patent law).

• Parallel imports subject to veto.

• Internet service providers responsible for monitoring and policing.

• Rights holders can insist on removal of material.

• Offence to circumvent technological protection measures (e.g, region codes on DVDs, technology locks on iPhones).

I’m actually up in Auckland for a couple of TPP events today. My hope is that the NZ Government will continue to maintain its position that the TPP IP chapter should be consistent with current NZ intellectual property laws.

The NZ Herald editorial:

Trade is these days recognised as a universal benefit even if countries still make heavy weather of bargaining for it.

I wish that was true. NZ First and Greens oppose almost all trade deals, and elements within Labour are anti-trade also.

It is important that countries signing up to an investment treaty indicate at the outset the sort of health and environmental regulation they will uphold. John Key reaffirmed as recently as last week that New Zealand will not give up its public medical purchasing system, Pharmac, under pressure from US pharmaceutical manufacturers. Pharmac was not the only possible “deal breaker”. Mr Key also said the Government would not sign a TPP that allowed dairy tariffs to remain at present levels. New Zealand, as Trade Minister Tim Groser has also made clear, is aiming for a “gold standard” agreement and has no reason to settle for less. The TPP’s original four signatories set the standard and they should stick to it. If others want to do a weaker deal, they are in the wrong talks. The TPP means business.

What I would welcome is an equally clear statement from the Government on the IP provisions. Their negotiating position to date has been excellent – no change to our domestic laws. However the fear is this may be compromised later on. A pro-TPP website has also been launched – Trade Works, by a group of businesses. I agree trade works. I don’t agree that US copyright laws work, or are suitable for New Zealand.

TV3 reported:

Green Party co-leader Dr Russel Norman and Ms Kelsey both claim the TPP will form a legally-binding agreement which will impact on future Governments.

“The cabinet effectively can sign them off and make them binding on us without us having any say about it. Parliament has very very little role to play in this process,” says Ms Kelsey, but Mr Hooton disagrees.

“If, after time, we don’t like it we can always pull out so there’s no question of sovereignty,” he says. “We remain sovereign.”

The facts appear to me on Mr Hooton’s side. Clause 20.8 of the existing TPP (it is an expansion being negotiated) states:

Any Party may withdraw from this Agreement. Such withdrawal shall take effect upon the expiration of six months from the date on which written notice of withdrawal is received by the Depositary.

Some people are against all trade agreements. I’ve yet to find one that the Greens or Jane Kelsey have supported. This is ironic as the China FTA has been a huge economic boon with massive increase in exports to China.

With TPP, there are definitely some proposed provisions that are not good for New Zealand. But they are just proposals at this stage, and to date New Zealand has been resisting them. This is a good thing. Of course at some stage, there may be some compromises (but recall this is a 11 party negotiation, not a bi-lateral so a lot depends on where the majority of the parties wishes lie) and one has to take a view on the final package as a whole. It might be great for NZ as a whole. It might be mildly beneficial or it might not be beneficial, either slightly or significantly.

Until we see a final agreement, my position is to keep opposing the provisions I feel are bad for NZ, but to retain an open mind on any final agreement. Ideally of course I want a TPP which has as many wins for NZ as possible. I also want it to be wins for other parties, and the US would actually benefit in the long-term if they dropped their silly tariffs (as has been the case for NZ) and also gave up trying to have copyright laws that damage the Internet. So I see the NZ position as not being bad for the US, but actually good for them also – they just have vested interests back home they try to placate.

Tracy Watkins at Stuff writes:

A large group of US senators and members of the House of Representatives have already written to US Trade Representative Ron Kirk opposing any moves to open US dairy markets to New Zealand. We know from bitter experience the strength of the US lobby against increased agricultural access.

If there is no dairy access, I think there is no deal. The danger is that either there are loopholes which allow the US to keep blocking free and fairy dairy access to their consumers – or that the US Congress doesn’t ratify the agreement.

As an example of just how far it could reach into daily life, our librarians have joined groups questioning the deal, because of concerns changes to copyright law will push up the cost of buying books.

There is widespread concern, meanwhile, both in the business and web communities, about intellectual property clauses.

Governments tinker in that area at their peril: think back to widespread protests against section 92 copyright law changes that would have seen users have their internet connections cut for taking free downloads of music and movies. The Government was eventually forced to rewrite the law.

This is right on the mark. The concerns over the US proposed IP chapter are widely shared by many businesses, as well as the Internet communities and other groups such as libraries and the Royal Foundation for the Blind.

The concern is that the Government may see the IP chapter as something it can trade off for improved dairy access. So far the Government’s position has been to reject anything which would force a change of our current IP laws. I am hoping that stance remains.

The Greens argue foreign investors will have even greater rights than domestic investors and a company like Shanghai Pengxin, which is behind the contentious Crafar farms purchase, would be able to sue if the Government impinged on their operations by moving to regulate or legislate to clean up water pollution.

That’s their spin.

The Government spin, backed by Labour, is that such a clause is nothing new and is, in fact, included in the China Free Trade Agreement. It is also, as Groser reminds opponents, protection for New Zealand companies overseas from having the plug arbitrarily pulled out from under them.

It’s a pretty standard clause in most FTAs. Without such a clause, then governments can undermine the agreements with other forms of barriers. I’m not that worried over such a clause in the TPP so long as it has the normal exemptions.

But no one is suggesting the US will demand anything as crude as scrapping Pharmac. It will instead seek the ability for either the drug companies or consumer groups to challenge and appeal its decisions.

A leaked 2004 Wikileaks cable, written by then US Embassy deputy chief of mission Dave Burnett notes that “after trying in vain for years to persuade the New Zealand government to change its restrictive pricing policies on pharmaceuticals, the drug industry is taking another tack: reaching out to patient groups with information designed to bolster their demands for cutting edge drugs”.

This is a strategy hardly unique to drug companies. They are one of thousand of groups who try to build up political pressure for the Government to spend more money on an activity.

I’d be surprised if the TPP, if completed, has anything in it which affects Pharmac.

An interesting interview with John Key by Audrey Young. Some extracts:

Who first suggested you visit Burma?

My trusty foreign policy adviser [Ben King] and it worked because of location – it is close to Cambodia – and because we as a Government genuinely do believe that the Myanmar [Burma] Government is making progress. I don’t think we are naive to that progress. We understand it is not all perfect. It’s a long way from perfection, but fairly much every country is recognising them now and taking sanctions off them and trying to encourage them. The other EAS leaders have been very strong in their personal views to me. Certainly [President Susilo Bambang] Yudhoyono of Indonesia and [Prime Minister] Lee Hsien Loong of Singapore have been very much of the view that [Burmese President] Thein Sein is quite genuine in his progress. …

You said in a press briefing with President Thein Sein that New Zealanders were passionate about human rights.

I care about people’s human rights and, as a country, we have a very proud record indeed. But I’m also realistic about what we can do … we can raise those issues with leaders and we can talk about those issues, and we do that. Moral persuasion over a period of time makes a difference, but we shouldn’t be naive to think that just because we raise it in a meeting it will make all those problems go away. It won’t and it doesn’t.

Can you have real democracy in Burma and still keep the ban on motorbikes?

You could if the voters had the chance to vote out the Government that had such a policy. But apparently the genesis of the ban was that one of the generals’ sons was killed on one so they just got rid of them.

Amazing. The madness of absolute power.

Do you think he’ll visit New Zealand as President?

My foreign policy adviser keeps reminding me to ask. I am not so confident. I hope so and he will probably come to Australia and he has obviously been before. He might. He really wants to. But the problem is that there just aren’t areas of disagreement. There’s obviously the anti-nuclear issue but that has been put behind us long ago. In a world that is so intense for him with so little … I know he personally wants to.

Ironically, you’re more likely to get a US visit if there is a dispute to help smooth over!

Was it a good trip?

I reckon really good. The thing about EAS is we got everything we wanted. We got the President saying let’s try and get a deal by the end of 2013. We said to him ‘do you want us to say this in the press because [if] you do, it will be reported and we’ll be held to account on it?’ and he said yes, absolutely. That doesn’t mean we’ll get a deal. There’s a lot of scepticism from those that aren’t involved in TPP. But he’s really serious about it. He thinks there aren’t that many levels for him to pull. It’s hard. They’ve got very low interest rates, they’re printing money, they’ve got big fiscal deficits. What things can he do to stimulate the economy? That’s one of them. It might fail but it won’t fail by want of trying.

My reading of this is the US needs the TPP more than NZ does. This doesn’t mean NZ should be unreasonable and try to screw the US over in negotiations. But it does mean that the NZ position on issues such as the proposed IP chapter shouldn’t be traded away.

Andrea Vance at Stuff reports:

Prime Minister John Key will play ‘wing man’ to US president Barack Obama this morning, as the pair push for a Pacific trade pact to be completed. …

Obama will lead the TPP meeting this morning and then look to New Zealand to make an ”intervention,” Key explained.

“Our message [is] there’s a real opportunity to complete the Trans Pacific Partnership. It won’t happen without goodwill, give and take and shove from the leaders.

“This is our opportunity to get it over the line… there’s a lot to be gained.”

Sticking points include intellectual property rights and agriculture.

”It’s easy to identify the big issues…but then there is potentially a pathway through. I don;t think it has to become a lose lose situation. In the end New Zealand would never sign a deal unless it was in our best interests. We might have to give a little bit on one or two of those areas.”

I would love our exporters and especially our dairy sector to get US trade barriers lifted against them.

I don’t want NZ to agree to anything which changes our intellectual property laws – they already reflect a hard fought balance and compromise. I also want NZ to reject effective trade barriers such as bans on parallel  importing.

I understand to get a deal that compromise is needed. But that doesn’t mean any compromise is a good compromise. The Internet is hugely important to our future, as a geographically isolated nation. Agreeing to something which would introduce greater liability and uncertainty to Internet providers and publishers is not in our best interests.

The US needs the TPP to occur more than NZ does. It is of strategic importance to the US. With NZ, it is more a “very nice to have” in terms of trade access. We already have trade deals with China, Australia and many countries in Asia. Don’t get me wrong – I’d like a TPP which lowers trade barriers with the US, and other signatories. But I am skeptical of the US track record on meaningful concessions on trade barriers (The US-AU FTA was disappointingly weak) and a TPP along the lines of the US and Aus FTA would not be worth doing.

The Herald reports:

Trade Negotiations Minister Tim Groser, who is also in Cambodia, described the launch of the RCEP as “a wonderful symmetry between the two” for New Zealand.

While there was the chance of tension between the two deals, it had not been set up like that, he said.

“Our policy is we will dance with anybody provided they are prepared to engage in a high-quality FTA.

“It’s not like a cunning ploy but you can see quite clearly the possibility of creative tension.

“If RCEP just goes round in circles and TPP goes forward, it will put pressure on RCEP – equally the other way round.”

I like the way Groser thinks. While the timing is not deliberate, we can use the RCEP negotiations to put pressure on the US to be more flexible on the IP chapter of TPP. All NZ has to do is stay firm on its current negotiating position, while the US sees RCEP making progress. I’m confident they’ll then see the merits of a less dogmatic IP chapter and then we get a high quality TPP – a win win.

A stark reminder of how the Greens out global solidarity ahead of NZ’s interests.

Audrey Young reports:

Meanwhile, the Green Parties of New Zealand, Australia and Canada are joining forces to campaign against the Trans-Pacific Partnership.

They issued a joint statement yesterday after Metiria Turei, co-leader of the NZ Greens, held a press conference in Canada with her counterpart from there.

Among the Greens’ concerns is the prospect of the heavily protected Canadian dairy industry being de-regulated, removing safeguards which they say aim to preserve farmers’ livelihoods.

So the NZ Green Party is against NZ dairy farmers being able to have fair access into Canada!!! Their concern is to protect inefficient subsidized Canadian farmers, not to help NZ farmers export more milk.

The Financial Post point out how the Canadian system works:

Canadians must hope New Zealand and Australia force Canada to scrap its protectionist supply management system for dairy, poultry and eggs before being allowed to join the coveted Trans-Pacific Partnership (TPP).

The Aussies and Kiwis have been upset with Canada over these agricultural subsidies for decades and are doing consumers in Canada, and the economy as a whole, a favor by opposing them.

Canada’s dairy, poultry and egg farmers belong to government-sanctioned cartels that keep out foreign competition with the help of tariffs as high as 300%. The government guarantees their success by setting a floor price. The result is monopoly profits and an estimate, by the OECD, that Canadians overpay $3 billion annually for these foodstuffs.

The Greens basically don’t like trade. They voted against the FTA with China which has seen us export an extra $12 billion to China since it was signed. They want Canada to keep up its tariffs of up to 300%.

As the most remote developed country in the world, trade is vital to our future. Yet, the Greens want to kill it off.

Stuff reports:

The European Parliament overwhelmingly defeated an international anti-piracy trade agreement on Wednesday after concern that it would limit Internet freedom sparked street protests in cities across Europe.

The vote – 39 in favour, 478 against, with 165 abstentions – appeared to deal the death blow to the European Union’s participation in a treaty it helped negotiate, though other countries may still participate without the EU.

I think this shows the strength of global opposition to unbalanced copyright regimes, as pushed by the US entertainment industry. But to have barely 5% of the European Parliament vote in favour is incredible, especially when you consider the details of ACTA.

The failure to ratify the treaty is a humiliation for the European Union, which was one of the prime movers in the multi-year effort to negotiate the agreement. EU officials had maintained that ACTA would change nothing in European law, but would be simply an instance of the EU leading by example and exporting its strong copyright protection laws to other countries where safeguards are weaker.

This is the astonishing thing. The final version of ACTA was in fact relatively benign. The draft versions pushed by the US had some draconian provisions, but the New Zealand Government, and other Governments, insisted that there be nothing in there that would require a significant change to our copyright laws. Eventually the US backed down, and the final version is, well as I said, fairly benign.

What New Zealand politicians should reflect on is if even a relatively benign copyright agreement such as ACTA can provoke such opposition that only 5% of the European Parliament will vote for it, think what electoral fate would await politicians who vote for a truly horrendous copyright regime?

The New Zealand Government is currently negotiating the TPP agreement with the US and a dozen or so other countries. The draft US chapter on intellectual property laws and especially copyright is even worse than the draft ACTA chapter was – and exponentially worse than the final ACTA agreement. Think the difference between a poodle and a pack of African Wild Dogs. Rick Shera summarised it here:

• Rights holders would be allowed to prevent parallel imports
• Massive extension of copyright 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
• The return of s92A guilt on accusation, repeat infringer, termination of internet accounts
• Forcing us to reverse the decison recently taken to exclude software patents
• Introducing statutory damages (which give rights holders windfall damages up to 3 times their actual losses)
• ISP policing of IP rights incuding a requirement for ISPs to give up their customers’ identities when they receive a mere allegation
• 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

The US IP chapter would also see Internet caching effectively made illegal. It really is that bad.

Now the good news is that as with ACTA, the New Zealand Government has been resisting the US IP chapter, as have most other countries. This is a good thing. I am personally a fan of free trade agreements and would love the TPP to be concluded reducing trade barriers. But not if the price is agreeing to the US IP chapter.

TPP is more difficult than ACTA. In ACTA, New Zealand was not really seeking anything in return – so it was easy to stay firm. In the TPP, all countries have wish lists, so it is inevitable that at some stage there may be some compromises made at a senior political level.

The clear message to the United States has to be that if even a benign copyright agreement such as ACTA can’t get agreement and ratification, then they have to realise that there is no way the TPP can include the IP chapter they are pushing. It would be an electoral suicide pact.

Even in the US itself, unbalanced copyright laws have been turning toxic. SOPA and PIPA got voted down in Congress. Every single Republican Presidential candidate denounced them.

I am not one of those people who are anti-copyright.  I am all for there being penalties for people who copy a song/book/movie rather than pay for it. But the laws need to be balanced, and they need to not screw over the Internet.

Scott at Imperator Fish blogs on the TPPA:

The Trans-Pacific Partnership Agreement has a lot of people talking, particularly over the fear many people have that New Zealand will agree to an investor-state dispute provision that would allow foreign companies to take legal action in some circumstances, if our government passed legislation those companies didn’t like. Environmental and health groups worry that the provisions could be used by tobacco companies to challenge anti-smoking regulations, or by multinationals to toss out environmental protections they don’t like.

Critics have claimed the measures would amount to our handing over our sovereignty. Legally this is a nonsense. What right, if any, we give to multinationals we will give because our Parliament adopted legislation ratifying the agreement. Parliament could theoretically the very next day repeal that legislation, rendering the agreement provisions unenforceable. People, we don’t lose our sovereignty.*

It is also worth pointing out that investor-state provisions work two ways. They protect NZ companies from (for example) having their assets nationalised in another country, purely because they are NZ owned.

For me the issue is not the existence of investor-state provisions, but how they are crafted. You want them crafted in a way which does protect your country’s right to make laws and policies in the public interest.

That’s not to say the deal’s a good one, and there is plenty to be deeply concerned about. However, the nature of free trade negotiations is you win some battles and lose others. If we ratified the thing it wouldn’t be all bad. It might be more bad than good, and that might be enough reason to say no to the deal, but it’s not true to say that the TPPA offers New Zealand nothing.

I am a supporter of free trade agreements, but the chapter proposed by the US on intellectual property is deeply flawed and its inclusion in any deal would be a bad thing.

Most people following the TPPA negotiations would agree there should be more transparency in the deal-making process. But we cannot expect officials to disclose everything to the public, because if our officials did that no country on Earth would want to enter into discussions with us. Clearly there has been too much secrecy, but it isn’t realistic to expect no secrecy. However, the broad condemnation across the board suggests officials haven’t got the balance right.

There’s plenty not to like about the TPPA and the secrecy surrounding the negotiation process. The opposition parties should continue to put pressure on the Government, to ensure that if the deal proceeds it provides more opportunities than costs for New Zealand. But we can’t do a deal without any trade-offs. The challenge is to find concessions we can live with, a challenge that is looking increasingly difficult.

The reality with negotiations is you need all parties to agree to do anything – including made draft texts public. NZ can push for this, but it can not dictate to the other parties.

Scott is right that there are always trade-offs. But these need to be from all countries – including the US. It’s IP chapter is basically opposed by every other negotiating country. If they want a deal, they need to come up with a chapter that won’t make Internet caching illegal, won’t ban parallel importing, won’t stifle software innovation with patent wars, won’t extend copyright terms for decades more, and won’t force on countries laws where people lose Internet access upon unproved accusations.

Mike O’Donnell writes in Stuff:

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

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

A key contributor to these reduced costs is parallel importing.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gareth Hughes blog at Frog Blog:

With the Trans-Pacific Partnership Agreement negotiations having just occurred in Melbourne I’m urging the Government not to surrender New Zealand’s sovereignty on copyright so we can keep enjoying Kiwi Music in the public domain.

Under a leaked draft of the TPPA, copyright length is to be extended from 50 to ‘…not less than 95 years from the end of the calendar year of the first authorized publication of the work, performance, or phonogram,’ meaning music and recordings set to enter the public domain in New Zealand will take decades longer.

An iconic song that would be impacted by the copyright extension is the Fourmyula’s “Nature”which was voted the best New Zealand song ever written. Produced in 1969 this song should enter the public domain in 2020 to be remixed, re-played, and re-imagined however under proposed TPPA rules Kiwis would have to wait to 2065. Likewise Ray Columbus’s “She’s a Mod,” released in June 1964 wouldn’t enter the public domain till 2059.

The extension in the term of copyright would mean no new works would enter the public domain in New Zealand until at least the late 2050s negatively impacting access to New Zealand culture and history. In particular ‘orphan works’ that aren’t available commercially would just not be accessible.

Kiwi listeners and artists will miss out on freely accessing Kiwi classics until the 2060s not benefiting the musicians who would have likely died decade’s prior, but benefitting mostly very profitable businesses who own the copyright. Copyright is about finding a balance and I welcome a discussion – should it be 40, 50, 60 years etc. but I think 95 years is extreme.

95 years definitely is extreme, and the TPP should not be used to rewrite our copyright and other intellectual property laws. The Government has been resisting the US demands, but of course at some stage there will be great pressure to make concessions. Our concessions should be  allowing the US to export whatever goods or services they want to us, but not allowing them to export their laws onto us.

James Murray, TV3′s online editor, has done a very well researched and comprehensive blog post on the proposed TPP free trade agreement.

I am a huge supporter of free trade and my ideal free trade agreements simply consist of saying “You can sell our residents us anything you want that is legal and safe and we can sell your residents  anything we want that is legal and safe”. Of course then up to individual consumers what they choose to buy and import.

But free trade agreements are rarely that simple. They have a mixture of good and bad stuff in them. Overall the ones we have signed have been massively beneficial for New Zealand such as CER and the China FTA. But that does not mean all future ones will be. Murray points out some areas of concern in the TPP:

Hughes points out that proposed changes to copyright law could see the international copyright term (the author’s life plus 50 years) extended for another twenty years.

This would mean that no new works would enter the public domain in any of the countries signed to the TPP until 2033.

To steal a quote from the analysis linked to above – lengthening copyright terms would “impose severe costs on the American public without providing any public benefit. It would supply a windfall to the heirs and assignees of dead authors and deprive living authors of the ability to build on the cultural legacy of the past”.

What would this mean for publishing in New Zealand?

Books by James K. Baxter, Dame Ngaio Marsh and Ronald Morrieson, all soon to come into the public domain, would stay in copyright.

The US in 1998 increased the term of copyright from 75 years to 95 years, partly at the lobbying by Disney to stop early Mickey Mouse works entering the public domain. This was in my opinion not needed, as Mickey Mouse would still be a trademark owned by Disney and not able to be used by others.

Critics of the TPP point out that the agreement spelled out in the leaked document would lead to a situation where pharmaceutical companies would be able to extend patents on medicines more easily and also delay generic drugs from hitting the market.

Ever picked up a camera or mobile phone from a Parallel Import shop for less than an approved supplier?

NewstalkZB reports:

The tertiary education union is criticising plans for a Destiny Church ‘university’ – saying it makes a mockery of public education responsibilities.

The Church plans to build its own village in South Auckland which would include schools and a university.

TEU President Dr Sandra Grey says public universities all provide accredited evidence based high quality public education.

She claims in all likelihood Bishop Brian Tamaki’s university will do none of those things.

Calling it a plan, is giving Bishop Tamaki too much credit. All we have is a press release. He probably has no idea what an institution needs to do to become a university. The Education Act in s162(4)(a) specifies they must do all of the following:

(i) they are primarily concerned with more advanced learning, the principal aim being to develop intellectual independence:

(ii) their research and teaching are closely interdependent and most of their teaching is done by people who are active in advancing knowledge:

(iii) they meet international standards of research and teaching:

(iv) they are a repository of knowledge and expertise:

So up until now, I’m agreeing with the TEU that a Destiny university won’t qualify. But then a swipe at the Govt for some reason:

Dr Grey says the combination of this proposal and the Government’s Trans Pacific Partnership Agreement threatens to open the floodgates for dozens of foreign privately-owned, extremist ‘sham’ universities.

Oh please. A “combination” of this proposal and the proposed TPPA? That is clutching for straws. Is Destiny foreign-owned? Is anything in TPPA going to change the law and criteria for any bid by Destiny?

TPPA could well have something about not discriminating against foreign universities who wish to set up here, but that does not mean the provisions in the Education Act would not apply to then.

Don’t get me wrong. I have reservations around TPPA – especially the intellectual property chapter being pushed by the US. But debate on TPPA should not just be scare-mongering, linking it to Destiny Church.

Phil Goff was Foreign and Trade Minister for many years, and most would say he was a very good trade minister. The China FTA is a huge credit to him (and Clark).

He also knows that one rule to trade negotiations is that the parties do not publicly lay out bottom lines, or rule things out. The reason for this is simple – doing so destorys negotiations. The moment one country says publicly “we will never ever agree to this”, it means all the other countries will do the same. And then you have nothing to negotiate.

So reading the Andrea Vance story:

New Zealand’s drug-buying agency should not be sacrificed for a trade deal with the United States, Labour leader Phil Goff says. …

But Mr Goff said yesterday: “We should not be trading Pharmac off for a free trade agreement with the US.” The agency was an “absolute bottom line and we should not be trading it away”.

You need to understand Goff is saying something in Opposition, he would never ever say in Government.,

For the record as a fiscal conservative, I think Pharmac is great and keeps the cost of drugs down for the NZ taxpayer. I find it hard to imagine that the US could offer us something so good that the Government would consider major changes to Pharmac. But again to have negotiations proceed in good faith, you can’t lay down unilateral bottom lines in public.

Personally I’m sceptical that the US will offer anything greatly worthwhile in terms of trade access. Their rhetoric is much stronger than their commitment to free trade.  However there are strategic advantages to the US in concluding an agreement, so maybe they will actually offer something decent.

Top copyright law professor Michael Geist blogs on how Wikileaks revealed the extent of the US lobbying pressure on our copyright laws:

Wikileaks has also just posted hundreds of cables from U.S. personnel in New Zealand that reveal much the same story including regular government lobbying, offers to draft New Zealand three-strikes and you’re out legislation, and a recommendation to spend over NZ$500,000 to fund a recording industry-backed IP enforcement initiative.

Yes, the US Embassy actually offered to do the rewrite of Section 92A. Thanks, but no thanks. We’ll write our own laws thanks.

Geist also notes:

Finally, an April 2005 cable reveals the U.S. willingness to pay over NZ$500,000 (US$386,000) to fund a recording industry enforcement initiative. The project was backed by the Recording Industry Association of New Zealand (RIANZ) and the Australasian Mechanical Copyright Owners Society (AMCOS).  Performance metrics include:

“The project’s performance will be judged by specific milestones, including increases in the number of enforcement operations and seizures, with percentages or numerical targets re-set annually.  The unit also will be measured by the number of reports it submits to the International Federation of the Phonographic Industry (IFPI) on its contributions to IP protection and enforcement methodology.”

The proposed budget included four salaried positions, legal costs for investigation and prosecution, and training programs. The RIANZ still runs an anti-piracy site, but does not include disclosure about the source of funding.  It certainly raises the question of whether New Zealand is aware that local enforcement initiatives have been funded by the U.S. government and whether the same thing is occurring in Canada.

The current S92A is not too bad (but it should not have termination as an option), but the real danger is the TPPA negotiations. The US is demanding as part of those negotiations a total rewrite of our intellectual property laws in their favour. This is a price we should not be willing to pay, unless the trade gains from the deal are massive. To date the NZ Government has been resisting the demands. I hope they continue to do so.

Few people are more enthusiastic advocates of free trade than me. I basically want to see a world without trade barriers.

The path to free trade is difficult due to entrenched interests. The best path is a multi-lateral agreement such as the GATT agreement which set up the WTO. Failing that, bilateral trade deals are worth pursuing. The China-NZ FTA, for example, has already led to a huge increase in exports to China. And CER with Australia is part of our economic DNA.

Personally I think bilateral free trade agreements are far too complex. My ideal FTA would be as follows:

1. Country A agrees that the businesses and residents of Country B can sell any goods or services they like to the business and residents of Country A, so long as they are legal in Country A.
2. Country B agrees that the businesses and residents of Country A can sell any goods or services they like to the business and residents of Country B, so long as they are legal in Country B.
3. There shall be no duties, tariffs or other barriers on exports or imports between Country An and Country B
4. ENDS

NZ is currently negotiating a free trade agreement, called the Trans-Pacific Strategic Economic Partnership Agreement, or TPP.

The TPP is now a brand new agreement. It is an extension to an existing agreement between Brunei, Chile, Singapore and NZ called the P4. Five additional countries are seeking to join it – Australia, Malaysia, Peru, Vietnam and the US.

Now New Zealand would gain immensely from free trade with the United States. One study estimated our exports to the US would increase by 51%. That’s an extra $2b a year approx.

So free trade with the USA would be great. But sadly free trade agreements are not as simple as the one I wrote above. They include areas which are not about reducing tarrifs, such as intellectual property laws. The United States wants New Zealand to agree to change our intellectual property laws, as part of any TPP agreement.

Top IT lawyer Rick Shera, has done a guest post at Public Address on what the US is asking for. I highly recommend you read his post in full. A summary is:

• Rights holders would be allowed to prevent parallel imports
• Massive extension of copyright 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

Bloody nasty isn’t it. And it is not as if NZ is a country with weak copyright laws. The Property Rights Alliance do an annual index of property rights. Their 2010 report for New Zealand ranked NZ the 4th best country (out of 125) in the world for (lack of) copyright piracy.

The New Zealand Government position has been to reject these provisions, which is good. But at some stage, there will be some calls to be made and compromises to occur to get an agreement.

This will pose a challenge for free trade advocates such as myself. Is allowing the United States to rewrite our copyright laws, a price worth paying?

Well if it was a true free trade deal, where the United States agreed to phase out all (or at least the vast majority) of its tariffs, then yeah it might be. An extra $2b a year of exports would create a lot of extra jobs, extra investment, extra wealth and extra tax revenue.

But what if we don’t get the US to agree to let in our lamb, our beef, our wool, our milk, our fruit without restrictions? What if the lowering of trade barriers is modest at best? This can not be ruled out – the US/Australia free trade agreement was very modest in terms of lowering trade barriers.

Eric Crampton has blogged on the TPP agreement. I know Eric well enough to confidently say that he is probably just as big a fan of free trade as I am. However he is pessimistic about the TPP:

I suggested New Zealand might do best by sidelining the US for now. The biggest potential gains to New Zealand from a free trade deal with the States would be an opening of American dairy markets to New Zealand dairy products. But that won’t happen – a trade deal that would actually open up American dairy markets to New Zealand product would never make it through the Senate.

The actual economic impact on the US of allowing dairy competition would be minor overall. But it would create a political fuss in certain states which would make it very difficult for Obama to ignore.

Eric continues:

I’d put decent money that, if America signs onto the deal, there’d be years of costly arbitration before New Zealand had any kind of increased access to American dairy markets. For starters, American dairy farmers would argue that failure of the New Zealand competition authorities to prosecute New Zealand dairy cooperative Fonterra as a monopoly constituted a subsidy under US law and justified counterveiling duties. …

I don’t think the United States has any credibility on free trade when it comes to agricultural products. They can’t make time-consistent pledges. At point of signing it’s all friendly, then you’re straight into arbitration over whether you’re hurting US domestic competitors – never mind the benefits to American consumers who are paying double what Kiwis are paying for baby formula.

His solution:

And so it’s better that New Zealand sidelines America in the Trans Pacific Partnership negotiations so the rest of us can have a serious free trade zone. Get a serious free trade zone, then look to widen it by inviting China. The threat of a Pan-Asian free trade zone that includes China is about the only thing I can imagine that would bring the States around on agriculture. Since New Zealand already has a free trade deal with China, it’s not implausible that China could someday join the TPP.

The idea of a TPP without the US may sound implausible, but I think it is more important to have a high quality agreement that actually reduces trade barriers and doesn’t force IP law changes on us, then a free trade agreement that is more symbol than substance. John Key I believe wants this too – he basically told Japan to stuff off from the TPP negotiations, unless they were seriously willing to commit to a “high quality” agreement.

The same attitude should apply to the US. If at the end of the day we can’t get decent lowering of trade barriers, and they insist in trying to force draconian IP laws on us, then we should be willing to say that we’ll go ahead with Australia, Malaysia, Peru, and Vietnam joining the P4 – and leave the US for another day.