Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

Labour's new TPP limbo still a big shift

David Cunliffe with Horticulture NZ chief executive Peter Silcock at the Labour Party Conference. Photo / Audrey Young
David Cunliffe with Horticulture NZ chief executive Peter Silcock at the Labour Party Conference. Photo / Audrey Young

Horticulture New Zealand has more than a passing interest in the Trans Pacific Partnership, given its producers have to pay $200 million a year in tariffs last year for its $3.6 billion in exports.

The organisation was one of a dozen groups that took set up a stall at the inaugural "marketplace" at the Labour Party conference in Wigram, and it gave away snack-sized cucumbers from Pukekohe and Eve apples from Nelson to lure delegates in.

Leader David Cunliffe was tempted by the apples and yesterday spent 15 minutes talking to chief executive Peter Silcock.

Horticulture NZ may consider the $1200 fee for the stall well spent if Cunliffe becomes prime minister and Labour ends up supporting the TPP (Trans Pacific Partnership).

There is no guarantee of either.

The bipartisan position on free trade, which Helen Clark's Government adopted for three terms after inheriting some of National's on-going deals, is now in limbo.

Labour's position, confirmed at its conference yesterday, is to agree to withhold support until it sees the detail.

It is not as radical as the original proposal to oppose the TPP.

That was put forward by the Engineering Printing and Manufacturing Union in the wake of the Council of Trade Unions coming out in opposition, a position reinforced by CTU President Helen Kelly in her speech on Saturday.

Cunliffe attended the affiliates council on Friday and secured the compromise wording of withholding support.

Deputy leader and finance spokesman David Parker is said to have played a highly constructive role as well - and will do so in the decisions ahead on TPP.

He, as much as anyone in the Clark Cabinet, did due diligence on Phil Goff's free trade agreement with China before it was approved, being anxious as Lands Minister to protect New Zealand's ability to regulate land sales to foreigners despite claims by TPP opponents that it would remove such sovereign powers. It did not.

One of Labour's big tests for a completed TPP, as Parker voiced yesterday, will be any deal to protect a future government's ability to introduce laws - such as Labour's flagship NZ Power policy, which will set up a Government entity to set the wholesale price of electricity.

The plenary of the conference adopted the compromise resolution yesterday of withholding support in a closed-session debate (all policies and constitutional remits were debated behind closed doors this year).

While the compromise of withholding support might not sound radical, the fact that Labour has gone from a default position of support last year to withholding support is a big step away from the current orthodoxy.

It sends a strong signal to National that concerns about the negotiations should not be dismissed, as they often are by Trade Minister Tim Groser, simply because the concerns are shared by staunch anti-free trade Professor Jane Kelsey.

Events leading to Labour's new position also sends a message to the free trade champions within Labour that the sceptics cant be taken for granted.

Prime Minister John Key has adopted a "trust us and wait and see" attitude but the "trust us" defence has worn a bit thin in the past year, particularly over its dealings with the GCSB law.

Key has made little attempt to initiate the TPP debate. He may now consider taking a more active role in laying the groundwork for a deal.

The biggest concern is what protections future governments have to make policy in the public good but that might affect the value of foreign companies - and what remedy those companies can take. The short-hand for the concern is the investor-state disputes procedures.

The chief trade negotiators of the 12 countries in the TPP are working furiously to try to get a deal done by the end of this year.

Few are betting on them getting there, but even if a breakthrough is made, it could take up to a year for a deal to be finalised.

That gets it into election territory and it is entirely plausible that a Labour-led government could inherit an almost complete TPP.

The stakes would then be enormous, either way, as Cunliffe acknowledged yesterday.

- NZ Herald

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