Editorial: So near yet so far on TPP

Editorial

The new Government has been true to its promise in one respect on the TPP, the public has been kept more closely informed of the detail of negotiations over the weekend than previously.

Consequently, we can see how difficult trade negotiations between multiple negotiations truly are, and what an achievement it is when they succeed.

Near the end of last week, trade ministers of the 11 remaining negotiating partners were slapping each other's shoulders and celebrating an agreement at last, according to our Trade Minister, David Parker.

Then Vietnam, hosting the talks, baulked over an issue he would not specify.

That was solved by Saturday, by which time the leaders arrived in Vietnam and looked certain to confirm the agreement until Canada's Justin Trudeau failed to attend their meeting, an extraordinarily rude way to behave in diplomatic dealings.

The next day Canada seemed to be reconciled and while nothing could be finalised at Da Nang, the 11 are still pursuing an agreement, now called the "Comprehensive, Progressive Trans-Pacific Partnership" (CPTPP). Prime Minister Jacinda Ardern calls it, "a damn sight better than what we had when we started", though she was not one of the leaders pressing for changes.

Evidently four countries now have issues that need to be settled for the revised agreement. This is how quickly multilateral agreements can unravel when just one country breaks ranks.

While New Zealand is not one of the four who have put an issue back on the table, Ardern says she is still not happy with investor-state dispute settlement clauses though they have been narrowed somewhat.

Investors with government contracts would not now have rights to seek a ruling from an independent international tribunal if they believed the government had acted unfairly. They could only sue in the government's domestic courts.

It seems investors in the private sector may still appeal to an international adjudicator set up by the CPTPP, though Australia and New Zealand have agreed in a "side letter", to waive that right for transtasman investment.

Ardern says she is seeking similar side letters with other countries, but she needs to be careful. Not all of the Asia-Pacific nations might have a domestic legal system that could offer adequate security to New Zealand investors.

The much-maligned independent dispute settlement provisions are needed to encourage more foreign investment into countries that struggle to attract it.

The TPP is to be made "comprehensive and progressive" probably by additional labour and environmental standards.

Labour standards can easily be used as a trade barrier if goods from developing countries are penalised for their wage levels.

It needs to be recognised that trade is the way developing countries have moved up the income ladder. Environmental standards could mean goods with high carbon emissions in their production will face tariffs.

Meanwhile New Zealand farm products need this agreement for equal access to Japan and other large markets. We can not lose hope that one fine day the deal will be done.