Barry Coates: Concerns over trade deal have not gone away

Opinion

COMMENT: The Government has now ratified the CPTPP trade agreement, the rebranded Trans-Pacific Partnership. Some improvements were made after the US pulled out but the concerns that led more than half of the New Zealand public to oppose it have not gone away. We need fundamental change to our international trade and investment strategy.

The CPTPP will reduce tariffs faced by some exporters over time but the economic benefits will be small, a fraction of a 1 per cent increase in GDP by 2040. And most of the CPTPP chapters extend far beyond tariffs. They set the new "rules for the global economy" on patents, government procurement, foreign investment, digital commerce and intellectual property. They will affect all New Zealanders.

The Government's "trade for all" initiative can be an important start to reform. Some changes have already been announced, notably rejection of notorious investor state dispute settlement (ISDS) rules in future treaties. But further reforms are needed. A recent hui at University of Auckland's Pasifika fale was focused on what an alternative strategy would look like.

Future treaties must support action on climate change. In its thousands of pages, the CPTPP does not even use the term "climate change". Instead, it protects foreign investors in ways that limit the Government's ability to introduce new regulations to reduce emissions. The hui discussed mechanisms such as the border tax adjustment proposal from Nobel prize-winning economist, William Nordhaus, to tax imports on their carbon content at the same rate as domestic producers.

Another major priority is to restore rights to Māori as Tiriti partners, not just as stakeholders to be periodically consulted and subordinated to foreign businesses. Those rights need to encompass the resolution of outstanding Treaty claims as well as supporting indigenous forms of international trade.

Treaties need to achieve a better balance between rights and responsibilities. Many Kiwis consider rights for foreign investors have already gone too far. Yet the CPTPP increased the threshold for screening foreign investment from $100 million to $200m.

Future treaties should allow our Government to control access to our taonga, including our high quality groundwater, our iconic places, cultural expression and our strategic industries.

Future treaties need to enforce the responsibilities of foreign investors - to pay their fair share of taxes, compete fairly, uphold high standards and contribute to the local economy. We are already seeing the profound effect of dominant digital companies - Facebook, Apple, Amazon, Netflix and Google - on our data privacy, security, local businesses, tax revenues and the future of an independent media. E-commerce rules in treaties like the CPTPP constrain our future ability to regulate their activities.

We will need new democratically agreed standards to protect the environment, uphold labour rights, ensure gender equality, promote public health, and provide public services for all. These standards should not be subject to the threat of challenge by multinational companies or a foreign government under a trade and investment treaty.

Our economic strategy as a high-value food producer needs to allow government to set high standards for emissions, environmental impact, food safety, animal welfare, labour rights and community benefit. Trump's unilateral use of punitive tariffs, triggering a potential global trade war, is the wrong response to public concerns. But so is business as usual. We need a trade system that is fit for the future for the 21st Century.

• Barry Coates is a trade researcher and former Green Party MP.