Jane Kelsey: Secret talks breed scepticism

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Promises made on agriculture and Pharmac in Trans-Pacific trade negotiations don't stand up to scrutiny.

John Key and the other TPPA leaders meeting in Phnom Penh last month. Photo / Alan Gibson
John Key and the other TPPA leaders meeting in Phnom Penh last month. Photo / Alan Gibson

As the 15th round of Trans-Pacific Partnership agreement (TPPA) negotiations in Auckland comes to an end the New Zealand public has still not been told what is being discussed behind closed doors.

Ironically, the secrecy has provoked a healthy degree of scepticism and informed debate - which the Prime Minister has urged the public to ignore.

His own assertion that the TPPA will generate a $3 billion bonanza for New Zealand was exposed as fanciful in Parliament, by economic commentators and the media.

Prime Minister John Key has now confirmed two bottom lines: the US must progressively abolish its tariffs on agricultural imports; and the Government will protect the "fundamentals" of Pharmac, the mechanism that provides us with affordable medicines.

Neither promise stands up to scrutiny. It is hard to find anyone who really believes the US will offer New Zealand anything more than a face-saving gesture on dairy, given the politics of the US Congress.

As for Pharmac, Trade Minister Tim Groser admitted to Inside US Trade he is "seeking reasonable compromises". In language that betrays his own contempt for public debate, Groser said he was confident New Zealand could find ways to advance US interests "without causing projectile political vomiting in New Zealand, and many of the other countries of the TPP".

What might constitute a "reasonable compromise"? The threat to Pharmac comes from two aspects of the TPPA. The incongruously named "transparency" provisions would give the big pharmaceutical companies more leverage over how Pharmac operates. That risk is now well understood, especially by the public health community, so agreeing to those demands could create a serious backlash.

The alternative, and more likely path, is that New Zealand agrees to stronger patent rules that would allow Big Pharma to white-ant Pharmac from a different direction.

Compared to a year ago, these debates on agriculture and medicines, as well as the internet, show a high level of awareness and concern that go well beyond parts of society that are usually worried about such agreements. That is fuelled by anger over the secrecy of the negotiations.

Yet there is relatively little understanding of how seriously the TPPA would constrain New Zealand's future policy and reshape the nature of our democracy through its "behind the border disciplines".

The maths is quite simple: of the 29 discrete sections or chapters proposed for the TPPA, only five deal with trade as we traditionally understand it.

The bulk of the TPPA chapters dictate in one way or another the process and criteria for what will be viewed as legitimate domestic regulation, with a bias towards the light-handed approach that brought us leaky buildings, finance company collapses and the Pike River tragedy.

"Disciplines" on permissible domestic regulation are likely to range across GM labelling, construction projects, water quality, local government zoning, health and safety standards, the age-care industry, toxic financial products, and much more.

The Transparency chapter would guarantee commercial interests more say in our domestic decisions, while the leaked draft of the Regulatory Coherence chapter mandates a cost-benefit analysis that puts the burden of proof on regulators to minimise the impacts on commercial players.

What makes the disciplines especially potent is the power of foreign investors to enforce guarantees that are designed to protect their value and future profits, by suing the government for compensation in private overseas tribunals. Whether the investment has social or economic value to New Zealand is irrelevant.

A study released last week by the Transnational Institute showed how these disputes have become a business in themselves, with international law firms acting as ambulance chasers and private equity firms funding the cases in return for a share of any winnings.

The cumulative impact of these various chapters would seriously limit a democratically elected government's policy options. Tim Groser described such agreements in the Herald this year as "putting limits around countries' sovereignty".

The Prime Minister rejects concerns about signing away our sovereignty through backroom negotiations, claiming any deal will need to go through the "normal parliamentary process, including public consultation" before it is approved.

That is disingenuous. The Cabinet Manual says "in New Zealand, the power to take treaty action rests with the Executive." The text is tabled in Parliament after it is signed, meaning the Cabinet has formally indicated New Zealand's commitment to adopt it. A select committee has 15 sitting days to hear submissions and report back, unless the Government extends the time. The committee has no power. The Cabinet can ratify the treaty while the hearings are still under way.

Parliament's only power is to refuse to pass new laws to implement our obligations. But the Cabinet can still ratify the treaty, putting us in breach of our commitments.

Sadly, our elected representatives, and we as citizens, are impotent to affect a process that the Cabinet effectively controls from start to end.

Dialogue Contributions are welcome and should be 600-800 words. Send your submission to dialogue@nzherald.co.nz. Text may be edited and used in digital formats as well as on paper.

Professor Jane Kelsey is associate dean (research) at Auckland University's School of Law.

- NZ Herald

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