An ActionStation mock billboard urging Labour to reject the new TPPA
An ActionStation mock billboard urging Labour to reject the new TPPA

PoliticsJanuary 25, 2018

Kelsey: Labour has shown a lack of political backbone on so-called ‘progressive’ TPPA

An ActionStation mock billboard urging Labour to reject the new TPPA
An ActionStation mock billboard urging Labour to reject the new TPPA

If it signs the latest version of this controversial deal, Jacinda Ardern’s government can hardly expect people to take the promise of a progressive new model for New Zealand’s international trading relations seriously, argues leading TPPA critic Jane Kelsey.

Read Stephen Jacobi’s positive take on the deal here

The on-again, off-again Trans-Pacific Partnership Agreement (TPPA) is reportedly a done deal, again. Exactly one year after the Trump administration withdrew the US from the original agreement, trade officials from the remaining 11 countries reached consensus on a revised TPPA-11 in Japan. The rebranded Comprehensive and Progressive Agreement on Trans-Pacific Partnership is due to be signed in Chile on 8 March.

Back in 2017 Labour’s dissent to the majority select committee report on the TPPA said it “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.”

What has changed? Overall, very little. Former trade minister Tim Groser said New Zealand had to swallow a number of dead rats to conclude the original agreement. A number of those rats are in hibernation under the TPPA-11, but none have been euthanised.

To be fair, the Labour-led government was handed a poison chalice. National excluded the opposition parties from information about the negotiations, leaving them dependent on leaks like everyone else. It expected – and senior Labour officials had hoped – the agreement would have been in force before the 2017 election.

Following a truncated treaty examination process, Labour, New Zealand First and the Greens all wrote dissents to the select committee report, criticising the secrecy of the TPPA process and saying they would not support its ratification. All criticised the economics of the deal, with Labour endorsing calls for a robust economic assessment that included the impact on employment and wage distribution, along with a health impact study. All three objected to the constraints on regulating foreign investment and the controversial investor-state dispute settlement process (ISDS). Only the Greens remain true to that position today.

Within two weeks of taking office, the new government attended the “final” round of renegotiations before ministers met in Vietnam in December to finalise the revised deal, based on wish-lists tabled by each country. I understand New Zealand never tabled one, but I have made an Official Information Act request to confirm this.

The government did try to get some last-minute changes, including side-letters from the other parties promising not to apply ISDS to New Zealand. Most said “no”. Labour then claimed the already-existing side letter with Australia and some other safeguards as its own achievements, along with the consensus decisions to suspend some provisions pending re-entry by the US. Prime Minister Ardern and Trade Minister Parker then set about selling the same TPPA as “progressive” and in New Zealand’s best interests.

There were some short-term gains. The suspended provisions include some of the toxic provisions that would have impacted on Pharmac’s process and its leverage to reduce the monopoly price of new generation medicines. The extension of copyright term to life plus 70 years had been estimated to cost an average $55m a year. Most of the other “gains” are marginal or illusory. And the legal risks still exist, some active, some dormant (forget the idea the US might be required to agree to abandon some of them as a condition of re-entry).

The obsessive secrecy that has shielded governments from accountability over seven years of TPPA negotiations continues. According to Japanese officials the final TPPA-11 text won’t be revealed until after it is signed, despite David Parker saying earlier that he wanted it released as soon as possible. Parker responded to an OIA request, confirming the original secrecy pact to withhold all negotiating documents for four years after the TPPA came into force, even though this is supposedly a different agreement.

What should a Labour-led government have done differently? First, it should have commissioned the revised independent economic assessment and health impact analyses it called for in opposition. Second, it should have shown a political backbone, like the Canadian government that also inherited the deal. Canada played hardball and successful demanded side-letters to alter its obligations relating to investment and auto-parts. Not great, but something. New Zealand should have demanded similar side-letters excluding it from ISDS as a pre-requisite for continued participation. Third, it should have sought the suspension of the UPOV 1991 obligation, which has serious Treaty implications, and engaged with Māori to strengthen the Treaty of Waitangi exception, as the Waitangi Tribunal advised. Fourth, it should have withdrawn its agreement to the secrecy pact.

None of that happened. So what now? The government could still do all the above, but both Labour and NZ First lack the political will. Instead, we’ll have domestic political fight with two parties that previously opposed ratification.

The priority for me is to break through the information deficit and reiterate the long-term costs of the deal, versus the minimal gains for low quality exports of beef and dairy.

The most crucial area of the TPPA that has not received enough attention is the novel chapter on electronic commerce – basically, a set of rules that will cement the oligopoly of Big Tech for the indefinite future, allowing them to hold data offshore subject to the privacy and security laws of the country hosting the server, or not to disclose source codes, preventing effective scrutiny of anti-competitive or discriminatory practices. Other rules say offshore service providers don’t need to have a presence inside the country, thus undermining tax, consumer protection and labour laws, and governments can’t require locally established firms to use local content or services.

I asked technology minister Clare Curran in an OIA request for analysis provided to her on the e-commerce chapter. She says that information doesn’t exist. I have made the same request to David Parker. When I asked him to release the legal analysis of the chapter, he indicated he was unlikely to disclose any advice that discussed grey areas. Hopefully he has changed his mind. Otherwise, crucially important commitments will be adopted without the government receiving contestable advice on the implications. The legal risks extend beyond the TPPA-11. Similar e-commerce texts are proposed for virtually all other mega-agreements, and New Zealand has supported moves to negotiate them in the WTO.

The government’s endorsement of the TPPA-11 also raises questions about future trade strategy. The National government’s “Trade Policy Refresh” saw it adopt a goal of free trade agreements covering 90% of New Zealand goods exports by 2030. Parker rejects this “notches on the belt” approach and promises a new “inclusive and progressive” approach to trade negotiations that addresses gender, labour, indigenous rights, environment, small and medium enterprises and climate change. He held a rushed round of consultations in early December – after Labour endorsed the TPPA-11 decision in Vietnam – promising more early this year.

Parker has endorsed the Canadian approach, which involves clip-ons to the standard agreements, without changing rules that have negative systemic impacts on those constituencies and issues. One example was the statement on “trade and gender empowerment” adopted by ministers, including New Zealand’s, at the recent WTO ministerial in Argentina. Within 24 hours over 160 women’s groups internationally had dismissed it as an exercise in “pink-washing” that sought to “mainstream women into a polluted stream”.

Labour knows it has to do better, but I don’t think it knows how, especially if it has to get other negotiating partners on board. It also knows that it can’t expect people to take the promise of a progressive new model for New Zealand’s international trading relations seriously if it signs and ratifies the TPPA-11.

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