Two senior Labour MPs have broken ranks with the party line and declared their support for the Trans Pacific Partnership (TPP), amid rumours that at least one, Phil Goff, could cross the floor of Parliament to vote with National if Labour opposes enabling legislation.
The issue was hotly debated at the Labour caucus retreat in Wairarapa this week.
Labour has joined the campaign to oppose the deal as the focus turns to the signing in Auckland next week.
Mr Goff, a former leader and former Trade Minister and now an Auckland mayoral candidate, and David Shearer, also a former Labour leader, last night told the Herald they both still supported the TPP.
Mr Goff said the deal should be signed.
Former Labour Prime Minister Helen Clark also backed the TPP among 12 countries and it was begun under her leadership. Mr Goff was Trade Minister.
Labour has decided to oppose the TPP on the grounds that it undermines New Zealand's sovereignty.
Mr Goff did not blatantly criticise Labour's position. But he effectively dismissed that view and the suggestion that Labour would not be able to prevent foreign investors buying New Zealand residential property.
"Every time you sign any international agreement you give away a degree of your sovereignty." He cited the China free trade deal negotiated when he was Trade Minister.
"We gave up the sovereign right to impose tariffs against China when we signed up to the China free trade agreement. But it came with quid pro quos. China gave up its right to impose huge tariffs on us.
"That's what an international agreement is; it's an agreement to follow a particular course of action and a limitation on your ability to take action against the other country.
"You have the ultimate right of sovereignty that you can back out of an agreement - with all the cost that that incurs."
The TPP obliges member Governments to treat investors from member countries as though they were domestic unless exceptions are written into the agreement. Labour wanted an exception written in for investors in residential housing but National did not seek it.
Mr Goff is critical of National for choosing not to do that.
"But there is more than one way to skin that particular cat," he said. "We retained the right to make it financially undesirable or unattractive to buy up residential property in New Zealand.
"You can still impose, as Singapore and Hong Kong do, stamp duty on foreign investors."
Mr Shearer told the Herald that his position on the TPP was unchanged and "certainly after reading the NIA [national interest analysis]" that was to support the deal.
Mr Shearer would not comment on whether he would cross the floor.
Mr Goff said he had no comment to make on crossing the floor "at this stage".
"My caucus knows exactly what my views are on TPP."
Labour leader Andrew Little told the Herald last night that Labour would support tariff-reducing legislation but would oppose any measures if they undermined sovereignty, expressly the issue of selling houses to foreigners, and anything that allowed foreigners to have a say on New Zealand laws.
"As a caucus we don't support the TPPA in its current form."
Mr Little said Mr Goff had made his view known to him and to the caucus and they understood his position because he was close to the TPP.
He said the issue of crossing the floor was a matter for future discussion.
Asked if there would be any consequences for Mr Goff and Mr Shearer for supporting the TPP, he said there was an understanding about Mr Goff.
"Anybody else in caucus, that'll be a matter for myself and/or caucus."