Trade Negotiations Minister Tim Groser admits that the Trans Pacific Partnership trade deal involves some loss of sovereignty for New Zealand - but says that is normal for trade agreements.

"Of course trade agreements involve concessions over the sovereign rights of countries to do things," he told the Weekend Herald. " That's the point of international law."

New Zealand's problem had been the "excess sovereignty" other countries had exerted over it, such as introducing export subsidies, when it tried to diversify its markets away from Europe.

"Because we have operated in agriculture, in particular, where there were such inadequate legal frameworks internationally, people have just screwed us.


"We needed to control their sovereign right to do whatever suited their fancy. The whole point of international law is to put limits around countries' sovereignty on the basis of negotiated understandings."

He said increased domestic wealth generated by free trade agreements meant New Zealand would be less reliant on foreign investment.

But the people who opposed foreign investment also opposed free trade agreements.

Concerns have been mounting over part of the deal which gives foreign investors power over countries.

A group of 135 legislators from all 50 US states this week wrote to US Trade Representative Ron Kirk saying an investor-state dispute settlement procedure had no place in the TPP.

It would give foreign investors the right to sue governments and allow a "second bite" if investors did not like domestic court judgments.

This could have a "chilling effect" on policy-making deliberations.

The lawmakers said it would interfere with their capacity to enact and enforce rules to protect public health, safety and welfare.

Investor-state disputes procedures are a large part of Greens co-leader Russel Norman's objection to the trade deal.

"The whole idea of the agreement is to restrict the ability of Governments to regulate," he said.

He believed the TPP would give foreign investors greater rights than domestic investors and would limit the Government's ability to regulate to protect the environment.

If the Government moved to regulate or legislate to clean up water pollution, foreign investors in the dairy sector (Shanghai Pengxin, for example) could argue they were being indirectly adversely affected.

Dr Norman said the economic effects of free trade agreements were greatly exaggerated and believed the increase in dairy exports to China since the 2008 free trade agreement stemmed from the scandal there over melamine contamination of infant formula.

Mr Groser said the investor-state disputes procedures protected New Zealand's investments overseas and would give confidence to foreign investors "that the New Zealand Government is not going to do something completely dodgy, completely outside the framework of international law."

"When we are trying to attract foreign investment into our minerals and petroleum blocs, we want to give confidence to people."

He did not believe what was being negotiated in the TPP would limit the Government's ability to pass laws.