Simon Terry: TPP backers have questions to answer

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Germany fears deals with investor rights and New Zealand can hardly hope to match that country’s clout

PM John Key pictured with other leaders at a Trans Pacific Partnership leaders meeting in Phnom Penh, Cambodia. Photo / NZ Herald
PM John Key pictured with other leaders at a Trans Pacific Partnership leaders meeting in Phnom Penh, Cambodia. Photo / NZ Herald

ExportNZ's Dialogue article in support of the Trans-Pacific Partnership talks failed to come to grips with the issues that matter.

Top of the list is rights for foreign investors to sue our government in overseas tribunals if their profits are cut by legitimate government actions.

Under the proposed investor-state dispute procedures, national policies designed to protect the public interest can be litigated in overseas tribunals that trump a nation's courts and provide no right of appeal.

Already Australia is being sued by Philip Morris for requiring the plain packaging of cigarettes - something the New Zealand Government plans to introduce but is waiting to see what happens in the Australian case.

The global backlash against these secret tribunals includes the most orthodox of voices.

The Australian Productivity Commission says there is no evidence that such rights promote foreign investment and recommends against them altogether.

The Economist magazine, a bastion of free trade sentiment, also rejects such rights: "Firms need protection; but so does the right of governments to pursue reasonable policies," it says.

In September, Germany flatly declared that it would not sign any further trade agreements with these provisions.

Germany's stance was influenced by direct experience.

If a country such as Germany cannot see a way to live with these investor rights, New Zealand can hardly hope to do better. Such rights open the door wide for foreign corporates to bully governments away from protecting the public interest.

ExportNZ argues that the benefits of joining the Trans-Pacific Partnership (TPP) club are too good to miss.

Suppose New Zealand caves in to United States demands for special investor rights to sue, as well as the TPP's long list of constraints on New Zealand freedoms that have nothing to do with trade, such as extensions to intellectual property rights that will mean higher costs for consumers, particularly in medicines: What are the trade benefits in return?

ExportNZ implicitly concedes that any serious gain for New Zealand depends on getting increased access for agricultural exports - but it is now apparent the TPP is not going to do much to remove those barriers.

Last week the US agriculture negotiator put things starkly: "It will be up to Japan to decide if it wants to extend the same concessions it has offered the US to other TPP agricultural exporting countries like New Zealand and Australia."

And the US has yet to begin talking about agricultural products with Canada - for a deal closing in May.

It has been plain for months that New Zealand has largely been abandoned to find its own way on agriculture. Australia ended up negotiating a separate deal with Japan, and got very little.

Yet ExportNZ hypes the TPP as though none of this has happened and the gains are there for the taking.

Even before the failure to make real headway on agriculture was clear, a Sustainability Council study of the deal's claimed economic gains concluded that, on the information available, it was doubtful there was a net benefit for New Zealanders.

That study demonstrated that the economic projections relied on by the Government used implausible assumptions and the real potential gains were a fraction of those claimed.

Instead of engaging with our detailed critique, ExportNZ resorts to wildly inaccurate jibes on unrelated issues.

Export income is critical to our economy and to attaining strong environmental standards.

But the benefits of joining the TPP club are looking more remote all the time, while the costs are all too apparent and would cut deep into New Zealand's sovereignty.

The stakes are high, and exporters and citizens alike deserve better from our chief business lobby than last week's shallow rhetoric.

* Simon Terry is executive director of the Sustainability Council, a research and advocacy trust. The council's critique, Economic Gains and Costs from the TPP, is available at www.sustainabilitynz.org

Debate on this article is now closed.

- NZ Herald

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