Jane Kelsey: Trade talks a recipe for controversy

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China has been marginalised in the US-led Apec agenda which could impinge on nations' domestic policies, writes Jane Kelsey of Auckland University.

If you think "trade"is about imports and exports of shoes, butter and computers, think again.

The buzzwords at the annual Asia Pacific Economic Co-operation (Apec) meeting in Honolulu were "next generation trade and investment issues".

Decoded, that means making sure that our domestic policies and laws are business-friendly and efficient, and do not pose "unnecessary barriers to trade and investment", taking into account "legitimate policy objectives" as defined within Apec.

Parallel commitments to "transparency" mean providing business with a seat at the regulatory table, or at least privileged input into new policies and reviews of existing regulations, while "due process" ensures they can appeal the Government's decisions.

If you hear echoes of light-handed regulation that brought us leaky buildings, Pike River, finance company collapses and weak liability for oil disasters like the Rena, and new subsidies and labour laws for Warner Bros to keep the Hobbit in New Zealand, you are spot on.

Apec is the perfect place to develop this agenda. The old slogan "Apec means business" describes the participants, priorities and processes. Governments of the 21 Apec members are present as economies, not countries. Last week's Apec Business Forum, CEO Summit and other official sideshows gave privileged access for "stakeholders" to engage with trade and finance officials, ministers and political leaders. The various working groups that help generate Apec's proposals, often initiated by the corporations, amount to a regional form of political public private partnerships.

Other "stakeholders" in our countries' laws and policies, such as trade unions, public health advocates, environmentalists, indigenous leaders, non-government organisations or just ordinary citizens are physically and figuratively excluded. So are their concerns. Transparency somehow does not extend to them.

The hoopla surrounding the Apec summit left many Honolulu locals bemused and frustrated. Businesses were promised a bonanza, but trade was down in many shops, restaurants and taxis as the meeting provided its own. Local news reports complained about the road blocks, traffic jams and wire fences that lined the streets. Parts of Waikiki beach were cordoned off to tourists. Few people I spoke to had any idea what Apec and its partner acronym "TPP" even meant.

Two key themes around this year's meeting have been the dawning of a new Asian century and the pursuit of Apec's goal for a Free Trade Area of the Asia Pacific through a proposed Trans-Pacific Partnership Agreement (TPPA).

The Australian Labor Government has already commissioned a white paper on Australia in the Asian Century. New Zealand's Trade Minister Tim Groser suggested the shift in power to two emerging superpowers of China and India would be accelerated by economic storms in the eurozone and to some extent in the US. Secretary of State Hillary Clinton gave a speech during the week entitled America's Pacific Century that set out the diplomatic, economic and strategic tasks of American statecraft in the Asia Pacific region.

Yet the centrepiece of this new Asian century, China, has been explicitly marginalised as the old players move to set the terms for this new future through a TPPA. Last week, a Chinese official called the US agenda for Apec too ambitious and singled out the lack of balance between the TPPA, in which China had not been asked to participate, and other multilateral and regional pathways in which it plays an active role.

He observed many of the US proposals for the TPPA are directly aimed their way.

China's exclusion is no accident. The economic and strategic goals of the TPPA are to design a US-centric "gold standard" deal that China, India, Korea and other Asian countries can then join on a take-it or leave-it basis.

There is a new urgency to pull off this "next generation, transformative agreement". It was originally to be signed at this year's Apec meeting. The nine Apec leaders involved in the negotiations (Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the US) met on Saturday and released a stream of official statements - the first substantive comments on the obsessively secretive negotiations.

The information released adds nothing to what has been pieced together from leaked texts, analysis of speeches and statements by trade officials and corporate lobbies, and private discussions with delegations concerned about different aspects of the proposed agreement.

But it does confirm that the TPPA is intended to reach further behind the border to "discipline" the choices our governments can make about a whole raft of policies and laws because they impact on commercial interests, and it would empower foreign corporations to have a disproportionate say in national decision-making processes.

It remains to be seen whether other Apec members seek to join the talks. Japanese Prime Minister Noda has defied mounting domestic opposition and half the Diet members to do so. But Japan will have to satisfy demands from the nine existing parties before gaining entry. The US has already targeted restrictions on US beef imports, introduced in response to mad cow disease.

There is no specific deadline, but it seems that leaders want a legal text, including chapters that would impact on Pharmac and give foreign investors rights to sue governments, tied up by mid-2012 - before the political decisions on questions like agriculture.

Ironically, the more governments that get involved, the more complex the negotiations will be. And the more people in the now 10 countries come to understand the kind of straitjacket a TPPA would impose on domestic political decision-making, the more controversial the talks will become, not least the US in a presidential election year.

Professor Jane Kelsey of Auckland University attended an Apec-related conference in Honolulu.

- NZ Herald

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