New Zealand is currently negotiating major trade agreements with Asian countries, including the RCEP, the TPP-11, the NZ-China FTA upgrade, and the India FTA. What are your priorities in securing New Zealand’s interests in trade deals?
"We support open and rules-based trade, but have concerns over agreements that extend into intrusive rules on government regulation, and the inclusion of Investor State Dispute Settlement. We would work with like-minded governments towards agreements that embody fair and sustainable trade, and which ensure that governments’ right to regulate in the public interest is fully protected.
Reform is needed to ensure trade rules fit the 21st century. We want a new framework for trade and investment built on:
- Fair trade and equitable sharing of benefits,
- ecological limits and sustainability,
- protection of human rights and Te Tiriti o Waitangi,
- and respect for democracy and Parliamentary scrutiny."
[*Editor’s note: Labour responded to questions in this feature by referring the Asia Media Centre to its 2017 party manifesto and other publicity material.]
"It is important that trade agreements are carefully negotiated, and that provisions in these agreements do not undercut the regulatory sovereignty of New Zealand.
Labour opposes the sale of our farms, homes, state-owned enterprises, and monopoly infrastructure to overseas buyers. Investment protocols in trade agreements should not prevent a future government controlling such sales. The current National government traded away these rights in NZ’s Free Trade Agreement with South Korea and in the proposed Trans-Pacific Partnership. Ceding this was wrong in principle. It was also unnecessary, given that other countries including Australia retained their rights to do so. Labour will renegotiate these provisions.”
Excerpt from David Parker's speech at the Asia Forum, 4 April 2017:
“The share of world GDP in what the IMF calls 'emerging and developing Asia' has grown from 9 percent in 1980, to 32 percent in 2016.
Our own trade figures reflect that. Annual trade with China is now over $10 billion each way.”
"Using the Trans-Pacific Partnership (TPP) as an example, the Māori Party would consider five main areas with respect to Free-Trade Agreements (FTAs):
1. The Crown processes for engaging Māori
Currently in domestic legislation there are no agreements and treaties that require the Crown to engage with Māori in negotiating international agreements and treaties. The Waitangi Tribunal in its WAI 262 report critiqued the current status quo and recommended that this change. The Crown’s limited and selective engagement with Māori with respect to the TPP confirmed this and highlighted the discretion that governments have to enter international agreements that can impact on local communities with little engagement from those communities.
Recommendation: That a Government review be conducted of its international Treaty-making procedures generally, as well as review its processes for engaging with Māori.
2. The effectiveness of the Treaty of Waitangi Exception in protecting Māori interests
The Treaty Exception permits the Government to take measures that favour Māori that would otherwise be inconsistent with New Zealand’s substantive obligations under any FTA. However, there is uncertainty as to how the Exception will be interpreted by the Government (and successive governments) and highlighted the ‘chilling effect’ on the Government’s inclination to adopt measures and its potential impact on future Treaty settlements.
Measures that could be undertaken include:
- Enacting domestic legislation that specifies how the Treaty Exception is to be applied and interpreted domestically
- Include a provision that is required to ratify any FTA that specifies how the Treaty Exception is to be applied and interpreted domestically
- Enter in to side letters with individual FTA parties clarifying the interpretation of the Treaty Exception, and
- Extend the binding recommendation jurisdiction of the Waitangi Tribunal on matters relating to whether a proposed Government regulation (or an omission by the Government to adopt a regulation) is consistent with the Treaty Exception.
3. Whether an FTA fetters Crown sovereignty and the impact of Investor State Dispute Settlement (ISDS)
The Crown is exercising its sovereignty to enter into and withdraw from any FTA at any time, and so its sovereignty is not affected to this extent. However, the Crown’s right to regulate is hampered by agreeing to be bound to its obligations under any FTA including the TPP. Research identified that exposure to liability for breaching the TPP, in particular the ISDS provisions that allow an investor to sue a government for loss and damages for breaching TPP protections, could again have a ‘chilling effect’ on the Crown’s regulatory inclinations. As well as the obvious Treaty Exception, there are also generic exceptions in relation to health, safety and the environment that permits the Crown to breach its TPP obligations, although it remains to be tested as to the extent of the exceptions. Mitigating against the ‘chilling effect’ will be difficult.
Recommendation: To mitigate this ‘chilling effect', a suggestion has been to provide legislative protection that in adhering to its Treaty obligations, the Crown must not have regards to the fiscal impact of its obligations pursuant to an FTA. The Crown must instead legislate in a manner that is consistent with its assurances that any FTA secures the regulatory freedom of the Crown to meet its Treaty obligations.
4. The impacts of Intellectual Property (IP) provisions
Most of the provisions in the TPP were consistent with New Zealand’s existing IP, although the changes further entrenched the current status quo framework which the WAI 262 report from the Waitangi Tribunal claims breaches Treaty principles. Existing IP provisions will require a number of changes to New Zealand’s domestic law (at least 10 legislative changes in areas of copyright, data protection, pharmaceutical patents and protection, procedures for geographical names, provision for trademark infringements), and will require New Zealand to join five multilateral IP treaties.
Recommendation: That changes to any IP clause within an FTA provide the impetus for the Crown to re-engage with the WAI 262 recommendations in respect of intellectual property.
5. The economic implications of any FTA for Māori
There is no doubt that the potential to benefit from the elimination or reduction of tariffs and access to new markets is possible under any FTA. However, in the case of the TPP, there are no statistical reports or papers that have been prepared which set out a cost-benefit analysis of an FTA to Māori nationally and by region. In the case of the TPP, when the text was released and a report was produced, it had analysed the economic impacts of the TPP and projected that although NZ’s GDP is likely to increase, there was also a negative impact on employment, with a loss of around 5000 jobs by 2025. It did not identify what this meant for Māori.
Recommendation: That any FTA undertake detailed modelling that sets out a cost-benefit analysis of the FTA to Māori nationally and by region."
“National’s policy is to deliver New Zealand’s boldest-ever trade push. We will work to unlock markets with 2.5 billion new consumers for the benefit of large and small exporters and their workers in every region of New Zealand.
The plan includes pushing strongly to complete TPP-11. We are prepared to move now to improve access for our food producers in key markets like Japan.
A re-elected National Government will seek to launch high-quality and comprehensive free-trade agreement negotiations with the EU, the UK, Sri Lanka and Brazil, Argentina, Paraguay & Uruguay (MERCOSUR).
We will also seek to complete negotiations with TPP-11, the Pacific Alliance, and RCEP countries, and upgrade existing FTAs with China, Singapore and ASEAN.”
New Zealand First
“A high priority for New Zealand First is reviewing all current and future bilateral FTAs, including the Closer Economic Relations (CER) process, to improve transparency and accountability, and to ensure they are in New Zealand's interest. We will support FTAs that are demonstrably in New Zealand's interests.”
This is one of four questions on Asia foreign policy the Asia Media Centre posed to New Zealand political parties. Read the rest of our Election 2017 feature here.
– Asia Media Centre
All responses by the parties have been published verbatim – the Asia Media Centre has not changed terminology used.