Tomorrow and the day after, David Parker will sit down in Da Nang, Vietnam, with fellow trade ministers from the 11 countries in the Trans-Pacific Partnership agreement and decide what to do with the deal, now the United States has withdrawn.

The new minister knows that agreeing to proceed will contradict the position Labour took in Opposition. Its minority opinion in the select committee report said: "The TPPA will have ramifications for generations of New Zealanders. For their sake, we should not so lightly enter into an agreement which may exacerbate long-term challenges for our economy, workforce, and society."

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New Government needs to land TPP

Yet the Government will be doing just that if it commits New Zealand to the original deal at Apec this week. Following a three-day meeting of officials in Japan last week, there is a 50/50 chance it will.


Labour has been clearing the way since the election by narrowing its objections to just two issues. The first, protecting New Zealand's "sovereignty" by preventing foreign purchases of residential property, can be achieved without changing the TPP text provided legislation is passed before the agreement enters into force.

Once it binds New Zealand, future governments will be unable to tighten foreign investment rules further, for example on strategic assets like the ports. That's hardly a preservation of sovereignty.

Second, Labour has asked the other countries to exclude New Zealand from the investor-state dispute settlement (ISDS) regime that allows foreign investors to enforce their special rights under the TPP agreement in controversial offshore tribunals.

By using side-letters, it again doesn't have to reopen the text. If the others say "no", the Government's promise to exclude ISDS from future agreements becomes largely symbolic.

This strategy is consistent with reports that the TPPA-11 have agreed that nothing in the original text is to be rewritten, aside from the rules for its entry into force that previously required the US's participation.

Objectionable parts of the existing agreement will only be suspended or "frozen", where there is consensus. All of its toxic elements will remain, to come into effect if the US decides to re-engage.

Last week in Japan trade officials considered some 50 items that the 11 countries had asked to be suspended. The continuing secrecy pact means we won't see what New Zealand asked for.

Japanese media say the parties agreed to "freeze" about one third of the 50 items. Many are in the intellectual property chapter affecting medicines, but not the annex that allows the powerful pharmaceutical lobby to have greater influence over Pharmac's decisions.


The officials aim to settle the remaining items on the list when they reconvene in Da Nang this week, then pass the unresolved matters to the trade ministers and if necessary the leaders.

Reportedly, the remaining items for consideration include the ISDS mechanism (but not the vague rules that give special protections to foreign investors), a ban on countries requiring personal or corporate data to be held within the source country, and the rule that prevents state-owned enterprises from giving preference to local firms when they buy and sell products and services.

Ironically, the Trump administration itself no longer supports ISDS and has proposed it becomes optional in the revised North American Free Trade Agreement (NAFTA).

The politicians won't have much time to decide. The TPP meetings are on the margins of the formal Apec summit, and that is already under way.

The tight timeline adds to the uncertainty of whether outstanding technical and political issues can be resolved.

But there is no rush. The Apec meeting is an artificial deadline. We have a new Government whose parties all rejected the ratification of the original TPP and said such negotiations require a consultative process.

There is a serious risk that politics will overtake principle and prudent decisions for our future.

Trade minister Parker says the "undoubted trade benefits in TPP11 ... are obviously not nearly as significant as they were when the US was part of the deal but nonetheless a residue is still important, particularly into Japan".

Yet Labour rejected National's "flawed" modelling as being based on "wildly optimistic" scenarios, and that was when the US was still involved.

There has been no economic impact assessment, including on jobs, which Labour said was required. Watchdog group Doctors for Healthy Trade have reminded Labour it also said a health impact assessment was a prerequisite for such agreements.

The new Government will suffer a serious blow to its integrity if it proceeds to endorse an agreement that its three parties have previously opposed.

* Jane Kelsey is a professor of law at Auckland University.