‘What an Alternative and Progressive Trade Strategy Should Look Like’,

Fale Pasifika, 19-20 October 2018.
Professor Jane Kelsey, introductory comments

These days I feel depressed, cautiously optimistic, and frustrated at the same time.

Depressed because the harm caused by four decades of capitalism unleashed, fostered by a neoliberal regime expanded and locked in through free trade and investment agreements.

Poverty, inequality, precarious jobs, decaying infrastructure, social dis-ease surround us Governments and international institutions admit that reality at almost every international meeting I go to. They acknowledge there is a crisis of legitimacy in the current regime, and pepper their speeches with the buzzwords of social inclusion, empowering women and indigenous peoples, reversing inequality and embrace the economic, social and environmental pillars of the sustainable development goals – although they rarely go as far
as mentioning climate change.

Yet I am cautiously optimistic about the prospects of change, because the forces of creative disruption are breaking the mould, with the caveat that the outcome is not always progressive. We can debate the pros and cons of the UK’s Brexit and Trump’s withdrawal from TPPA, the rewriting of NAFTA, Trump’s tariffs on traditional allies and China alike, but there is no denying or reversing the jolt that has given to the system.

Separately from that, the World Trade Organization (WTO) has been paralysed for some years by the refusal of rich countries, including our own, to deliver to poorer countries the rebalancing they were promised in return for agreeing in 1994 to US-driven rules on services and intellectual property. Ironically, Republicans and Democrats both told me in Washington recently that the WTO’s rules and dispute processes are stacked against them.

While the US throws its toys out of the WTO cot, other mostly affluent countries, including New Zealand, are proposing reforms they hope will pacify the US’s concerns and lure it back. They are also pushing an aggressive new agenda on digital commerce, investment and constraints on domestic regulation, that will heighten internal factures and external antipathy to the WTO. The WTO is set to become an even more contested zone.

China is also a circuit breaker, for good and bad. The hegemony of the US and secondarily the EU is under threat. The US originally expected to draw China into the orbit of US-designed rules at the WTO, and cement China’s subservience. Instead, China has become an economic powerhouse with an independent modus operandi. Both Democrats and Republicans complained to me that China is breaking the rules, and justified imposing trade sanctions as a matter of national security. China has responded by appealing to the rules-based system!

While the US-China trade war is important, it’s a symptom of a larger transition, as China offers an alternative paradigm. Funding and contracts under China’s One Belt One Road initiative, the Ali-Baba-dominated digital ecosystem, the Asian Infrastructure Development Bank and bilateral state-to-state relationships are attractive alternative to many, mainly developing countries. There are costs, with China directly or indirectly controlling the infrastructure it funds, much of which rely on fossil fuel. Faced with growing criticism, China has also become increasingly keen on protecting its investors through agreements, including with investor-state enforcement.

These fractures in the current regime stepped up a pace this month, with the revised North American Free Trade Agreement (NAFTA) allowing the US to kick Mexico or Canada out of the deal if they negotiate an FTA with China. If that becomes the established US position, we will have a new cold war via FTAs, with countries pushed to choose between the US or China. I’m sure Terence will have more to say about these developments.

On a more progressive note, the escalating backlash against bilateral investment treaties and investment agreements in FTAs has brought real change. These rules protect foreign corporations from the adverse impacts of new laws and decisions, allowing them to recover their investment and lost future profits from taxpayers even when they are at fault, through private, unaccountable offshore investor-state tribunals – ISDS.

States have terminated stand-alone investment agreements, are developing new genuinely progressive models, and have refused to include ISDS in new agreements – indeed, that is formally NZ’s position, although the government has yet to deliver on it and has played no role in promoting its critique of ISDS internationally. This week the UN Human Rights Council is meeting to discuss a Binding Treaty to hold TNCs accountable for human rights violations, as a direct challenge to put indigenous and other human rights ahead of corporate profits. The Trump administration has even stripped ISDS out of the NAFTA in relation to US and Canada and severely limited it with Mexico. That is highly significant as
NAFTA was the first FTA to include ISDS. the exception of oil and gas contracts with Mexico demonstrates the ongoing power of the corporate lobby and the blindness to climate change.

Affluent countries, neoliberal international institutions, and the arbitration industry are fighting a rear-guard action to defend privileges of foreign investors, including the EU’s proposal to establish a permanent multilateral investment court, but not change the rules it would enforce. The outcome would be the equivalent of the Multilateral Agreement on Investment (MAI) that we defeated in 1998.

Other innovations in NAFTA appeal to the working-class voters Trump stole from the Democrats, with promises to bring jobs back home that were offshored to lower wage countries, notably Mexico. For example, products can only benefit from lower tariffs if they have a minimum content made in the three countries, and 40% of that is by workers paid USD16 per hour. That has laid bare the Democrats’ failure to develop their own progressive alternative and poses a quandary for those demanding real change.

Which brings me to why I am so hugely frustrated. An unprecedented turbulence has subsumed the ‘free trade and investment’ regime that was born 30 years ago. It faces an existential crisis. UNCTAD’s recent 2018 Trade and Development Report recalls the dominant “free trade narrative” of a rules-based system that has broken free from local political oversight and can promote a level playing field and prosperity for all. In reality,UNCTAD says, we live in a hyperglobalised world…

where money and power have become inseparable and where capital – whether tangible or intangible, long-term or short-term, industrial or financial – ha extricated itself from regulatory oversight and interference. …
Resisting isolationism effectively requires recognizing that many of the rules adopted to promote “free trade” have failed to move the system in a more inclusive, participatory and development-friendly direction…

The tragedy of our times is that just as bolder international cooperation is needed to address those causes, more than three decades of relentless banging of the free trade drum has drowned out the sense of trust, fairness and justice on which such cooperation depends’. (xii-xiv)

There is a serious void in international leadership towards such a values-based paradigm. I don’t want to downplay the significance of Bernie Sanders and Jeremy Corbyn, the two elderly white men who are incongruously have led progressive politics in two of the power-house states that would need to embrace real change.

But the more powerful fall-out from globalisation has been the decline of democracy and rise of populist authoritarianism. Trump is now burning down the neoliberal model with his trade war, NAFTA, WTO – a model previously drawn up by US in its self-interest – and creating a global legitimacy for authoritarianism, with other strongmen. Capitalising on populism of fear, not populism of the positive, he appeals to those who feel alienated and disempowered while elevating the super-rich and powerful to new heights.

Labelling the current dynamics as unilateral protectionism is simplistic and dangerousThe Pavlovian response is to call for multilateralism based on profits, not on values. That is a critical distinction. The patrons and beneficiaries of the existing system are mobilising to restabilise it. The New Zealand government, past and present, are active players in that project.

Incremental reforms will not work, for several reasons. They are nowhere near the necessary speed, and will settle for the least common denominator. They purport to address critical issues that have become lightning rods, like ISDS, and the social harms by gender, labour, environment, and indigenous rights, by cosmetic clip-ons that change nothing. Digging us deeper into the regime is not a fix. Instead, it will extend the time needed for larger scale paradigmatic reform.

Consider two of the most pressing challenges to that system. You can’t shoehorn climatechange into the existing regime. Equally, digital technologies are bringing a fundamental transformation to which old models of trade, investment, even intellectual property no longer apply. You can’t address the opportunities and challenges this poses by tinkering. We need to move from the economic reality of the past to a future based on a different
paradigm.

We have to fill the vacuum of leadership before others do. We have seen radical change before – in the post-depression era of Keynesian welfarism and the neoliberalism of the 1970s. If progressive ideas are not yet in vogue then we need to create intellectual framework and build movements to generate a momentum for ideas, communicate them, create political will, and make sure our ideas are on the table. Otherwise the void will be filled by the ‘corporations-first’ model of recent decades, or an America-first model competing for ascendancy with an equally self-interested China.

We have the capacity to do that, but it is part of a larger political and social project. We need to re-empower governments because they have outsourced so much of what needs to be done and make sure that policy and regulatory space is not closed off by even more deals. But it is not enough to reassert the role of the state. States are not benign. Their alignment with capital and political and economic elites has to be constantly contested.
National regulations can be even worse than the international agreements. Silenced voices – Maori, women, precarious workers, including migrants – which have been systematically disempowered by the state, by corporations and by agreements, need to be genuinely empowered in reformulated economic models and governance processes.

There are also limits to what states can do to address global aspirations and abuses, such as the catastrophic threat of climate change and the private global oligopoly of GAFA and Ali Baba. By default and design, responses to these challenges are being framed by the rules of neoliberal trade and investment treaties. We need global aspirations, based on different visions, values, politics and institutions.

To end with my favourite line from Gramsci: We are in an interregnum. The old regime of international economic agreements is dying. We are surrounded by morbid symptoms of its demise. The new is yet to be born. We don’t know what it will look like. It could be more of the corporate-led agenda that the neoliberalism and financialised capitalism. It could be a battle between the world’s most powerful authoritarian regimes. Or it could be remade
according to fundamental principles of social justice and survival of the planet. The third seems a no-brainer to me.

What might this involve?

I don’t want to pre-empt the discussion at this hui or the ideas you might produce at the end – and Jim Stanford is about to present some ideas of his own. Let me identify a handful of progressive alternatives that are already underway.

The UNCTAD Trade and Development Report cited earlier urges states to revisit the original post-war Havana Charter on which the GATT was based and update it for the digital age. Born of post-war Keynesianism, the Havana Charter recognised the links between labour market conditions, inequality and trade, as well as anticompetitive business practices, monopolistic control and limited access to market. Returning free trade rules to their roots and shedding the non-trade ephemera would be a start.

The UN Human Rights Council is meeting this week to advance its mandate to develop a legally binding international instrument on transnational corporations and human rights. There is an internal battle between the state and NGOs supporting the treaty, mainly from countries that have been targets of investment disputes, and OECD countries led by the EU seeking to sabotage it. New Zealand has not YET participated in this process. If we are looking at real rebalancing by putting people and planet before corporate interests, New
Zeland needs to become involved – on the right side.

Still at the UN, rapporteur for indigenous peoples Victoria Tauli-Corpuz has strongly criticised the adverse effects of free trade agreements and investment agreements, especially ISDS. Maori attended a regional workshop she hosted in Peru and another in Bangkok. The new Minister of Crown Maori Relations has a mandate to take the lead on resetting Crown/Māori relationships on hard issues and find opportunities for active partnerships between the Crown and Māori. He could work with the Rapporteur and counterparts internationally, and identify and develop tikanga based processes and options in Aotearoa that are consistent with the UN Declaration on the Rights of Indigenous Peoples, The Declaration of Independence and te Tiriti o Waitangi. The panel this afternoon will explore that further, and before lunch Wayne Garnons-Williams will share some insights from the
First Nations in Canada during the rewrite of NAFTA.

Then there are many initiatives to address the democratic deficit and enable citizens to hold their governments to account. Measures promoted and adopted in various countries include ongoing disclosure and debate on mandates and negotiating proposals and texts; guaranteeing elected politicians the right to oversee mandates and negotiations; ensuring full, balanced and independent cost-benefit and impact analyses during the course of
negotiations; requiring referenda or super-majorities for their adoption; and including sunset provisions that limit the life span of such deals.

The World Health Organisation and peak international and national health bodies have developed the methodology for full health impact assessments of proposed agreements during the course of negotiations, as part of broader human rights impact assessments, with the presumption that negotiations that fail that ssessment should be abandoned.

How might we address the legacy problem of existing agreements? Countries around the world are terminating bilateral investment treaties. A conference I was at in New York earlier this month explored and debated various alternatives. South Africa has substituted a domestic law, where foreign and local investors are treated the same, whereby their rights and obligations are subject to the post-apartheid constitution, and disputes are heard before the domestic courts. India has a new model agreement which, while not as socially progressive as the draft, includes real protections for social rights and the right to regulate, and gives priority to the domestic courts. Brazil’s Congress had never approved investment agreements, and it has developed a new model that emphasises long-term investment relationships and uses mediation rather than investor enforcement. A decade ago this kind of talk was incendiary. Today we are not discussing whether, but how.

There is active talk about developing a multilateral agreement through which signatory states could extinguish prior agreements, rather than having to unpick them one by one. Countries that feel vulnerable if they take unilateral steps to terminate could benefit from the protection of a critical mass, especially if some larger and stronger countries also want to reconsider their obligations. One precedent for this is the multilateral Mauritius Agreement on Transparency in Investor-State Arbitration 2014, that changes provisions of existing agreements among signatory countries. The EU is adapting that to terminate bilateral investment treaties between EU member states.

A parallel example is the anti tax-avoidance Base Erosion and Profit Shifting or BEPS process in the OECD. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS would result in mass change in double taxation treaties to make them consistent with the agreed BEPS actions. Among other things, the Convention modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation.

There is no reason why a similar approach could not apply to free trade agreements that are legally easier, but politically more difficult, to exit.

These are all practical, achievable ideas if there is the political will, and the momentum and ideas to create that will. Let’s advance that discussion over the next 2 days, and beyond.

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‘They promise to make the TPPA-11 work for women, indigenous peoples, small and medium enterprises, workers, the environment. Yet those constituencies have repeatedly made it clear that the deal itself is anathema to their interests – most recently in a statement from fifty women’s organisations across ten of the eleven countries, who condemned the signing the agreement on International Women’s Day’.

Professor Kelsey notes that ‘progressive’ Canada presumably refused to sign a side-letter to protect New Zealand from investor-initiated disputes. Instead, Canada, Chile and New Zealand issued another joint statement where they promise to work on the ‘evolving practice’ of investor-state dispute settlement (ISDS), offering suggestions that are mere tinkering with the system.

‘How does that fit with the Prime Minister’s description of ISDS as “a dog” and the instruction to negotiators not to include ISDS in New Zealand’s future agreements?’, she asked. ‘This joint statement does nothing to engender confidence that the government is really serious about ridding us of ISDS.’

Reinforcing those concerns, the government appears to have increased New Zealand’s exposure to ISDS in relation to Singapore. The free trade agreement in 2001 required the government’s consent before a Singaporean investor could bring an ISDS dispute. A new side-letter says Singapore’s investors can use the right under TPPA-11 to sue New Zealand, presumably without its consent.

Other side-letters which Trade Minister Parker said would protect New Zealand from ISDS are from countries whose investments in New Zealand are largely insignificant. Australia had already signed such a letter. Malaysia is the only new signatory with substantial investment in New Zealand.  Yet its side-letter does not block Malaysia’s investors from using ISDS. New Zealand would have to positively veto a dispute.

‘This outcome does nothing to assuage our fears that the government will capitulate again on its promises to abandon ISDS and to adopt a new inclusive and progressive approach to international trade relationships and agreements.’

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• The original Trans-Pacific Partnership Agreement was signed by the 12 negotiating parties in Auckland on 4 February 2016, in the face of a massive protest led by tangata whenua.
• Japan and NZ completed their domestic processes to ratify (adopt) the original agreement during 2016.
• In January 2017 US President Trump withdrew the US’s participation from the TPPA.
• The 11 remaining countries met 7 times in 2017 to rescue the TPPA minus the US.

Each country tabled a list of provisions in the TPPA that it wanted removed or suspended. Apparently, NZ under the National government did table a list of requests, but that remains secret. The new Labour-NZ First government, supported by Greens, only had input into these negotiations at the very end.

Labour asked other TPPA countries to suspend the right of foreign investors to sue the NZ government in offshore tribunals over new laws and policies (investor-state dispute settlement/ISDS), but it failed.

Labour did not seek to make other changes or even suspend other provisions of concern to Maori.

•  In December 2017 in Vietnam, the TPPA 11 agreed to suspend 20 items from the original text, pending the US’s re-entry; 4 matters remained to be finalised.
• In January 2018 in Tokyo the TPPA 11 announced a new deal, one year to the day from Trump’s withdrawal.
• Canada insisted that it needed changes to protect its culture sector. Reports say it also achieved changes on automobiles, although that was not on the list. These were done through side letters that remain secret.
• The TPPA-11 will contain the entire old agreement. 22 of the 1000+ original provisions have been suspended, pending US re-entry, but they have not been removed.
• The TPPA has been rebranded the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP or TPPA-11) even though the substance is the same at the old TPPA.
• They intend to sign the TPPA-11 agreement in Chile on 8 March 2018.
• The text of what they agreed remains secret. Japanese officials say the text will not be released until after it has been signed. The National Opposition, which ran the secretive negotiations, wants the text released.
• In January 2018 President Trump said he would consider re-entering the TPPA, but the terms would have to be more favourable to the US than the original agreement.
• The process for US re-entry will require consensus. Labour says some suspended items may never be re-activated. But the US domestic political processes mean any US re-entry will inevitably require more benefits to the US, not less.
• The TPPA-11 will reportedly come into force after 6 of the 11 parties have ratified it by completing their domestic processes. Again, the actual text of this provision has not been released.

The new government and the TPPA

• Labour, New Zealand First and the Greens all wrote dissents to the majority select committee report on the TPPA and said they would not support its ratification.
• Labour said the economic modelling was flawed and there must be a robust cost benefit analysis that includes impacts on jobs and on distribution, as well as a health impact assessment. Neither report has been done for the TPPA-11.
• Labour now claims the new TPPA-11 meets Labour’s 5 pre-conditions for change, but it does not: it provides market access for exporters (but it has no new economic analysis of net costs and benefits); it protects the Pharmac model for buying medicines (but the provisions are suspended not removed); the Treaty of Waitangi, the sovereign right to regulate and restrictions on foreign ownership of property are all protected (which they are not, see below).
• Winston Peters says the TPPA-11 is a very different deal from the one NZ First opposed and they will now support it. That is not true. The ISDS provisions and core protections for foreign investors that NZ First so staunchly opposed remain the same and have not even been suspended.
• Bew Zealand’s ratification of the ne TPPA-11 requires another round of submissions to the parliamentary select committee on which National has 4 of the 8 members, including the chair and deputy chair.
• If legislation is needed to implement the agreement, National has said it will vote with Labour and NZ First. The Greens remain opposed.
• So the parliamentary process is a foregone conclusion.

The Treaty of Waitangi Exception

The Treaty of Waitangi exception in the TPPA is a copy of one that was drafted in 2000 for the Singapore free trade agreement (FTA). The same exception has been rolled over in agreements since then, without any consultation with Māori, even though today’s agreements impose much greater restrictions on what governments can do.

Prime Minister Ardern says NZ ‘has an exemption that says it is always able to legislate and act to protect its obligations under the Treaty of Waitangi and that can’t be challenged by other nations’. That is not true.

•  The Waitangi Tribunal in the TPPA claim (Wai 2522) said the Treaty exception ‘may not encompass the full extent of the Treaty relationship’ because it only covers Crown actions that give preferences to Māori, not laws or policies that apply generally but are at least partly for Treaty compliance (water, mining, fisheries).
•  The PM said the Tribunal found the ‘exemption provides protections for the Treaty’. That is also not true. The Tribunal found no breach of Treaty principles because the exception was ‘likely’ to offer a ‘reasonable degree’ of protection for Māori. But it did not accept the Crown’s claim that ‘nothing in the TPPA will prevent the Crown from meeting its Treaty obligations to Māori’.
•  The Tribunal was not convinced that the exception protects Crown actions from a dispute by a foreign investor, for example on water or mining.
• The Wai 2522 claimants made proposals for more effective protection. These have been ignored. There has been no consultation on any stronger protection.
• The wording of the exception hasn’t changed in other negotiations since the TPPA. Officials say that they can’t change the wording, because they tell other countries they must have this wording because it’s in all NZ’s agreements. New wording would open the text for negotiation.
• But New Zealand got additional new wording on UPOV 1991 at the last minute in the TPPA (see below), so it’s not true the Crown can’t demand and win different wording.
• Labour seems to be accepting the Crown’s advice and accepting an ‘imperfect’ Treaty protection as a trade-off for other commercial benefits it sees in these deals.

The Waitangi Tribunal claim is ongoing

• The Waitangi Tribunal granted urgency to the TPPA (Wai-2522) claim, but limited its scope to whether the wording in the Treaty exception provided effective protection for Māori interests. It didn’t address other parts of the claim (eg water, mining, health).
• The Tribunal’s time for preparing its report was cut back because the National government pushed through the legislation to implement the TPPA; once the Bill was introduced the Tribunal had no jurisdiction.
• The Tribunal found there was a reasonable level of active protection in the Treaty exception, but suggested there should be consultation on better protection, and it kept oversight of the UPOV 1991 issue (below).
• The Crown wants the Tribunal process terminated. The claimants point to a lack of good faith consultation over TPPA-11 negotiations since the Tribunal’s report and issues not addressed in the urgent hearing remain.
• On 30 January 2018 the Tribunal asked the parties (basically the Crown) to say by mid-February (a) when the text of the new agreement would be available, (b) what its effect would be on the Crown’s engagement with Maori on the Plant Varieties regime and adopting UPOV 1991, (c) what issues in the TPPA claim remain live, and (d) ‘when would be the appropriate time for the Tribunal to commence inquiry into the remaining substantive claims that have been filed with respect of the TPPA?

WAI 262 and the UPOV 1991 convention

• The TPPA required NZ to adopt the UPOV 1991 Convention that creates rights to claim intellectual property rights on plant varieties, which Wai 262 report and the Cabinet have recognised is inconsistent with te Tiriti.
• Legal arguments from the Wai-2522 claimants showed the Treaty exception would not protect a Crown decision not to adopt UPOV 1991, because the decision only applies to a ‘preference’ to Maori. Not adopting UPOV 1991 is not a preference to Maori.
• The Crown convinced the other TPPA countries to adopt an annex that allows NZ to either adopt UPOV 1991 or pass a domestic law equivalent to UPOV 1991 that complies with te Tiriti. But it has to do one or the other within 3 years of the TPPA coming into force.
• That obligation hasn’t changed in the TPPA-11. National and Labour didn’t try to have it suspended.
• The Waitangi Tribunal has retained oversight of this matter and is actively monitoring it.
• The claimants say MBIE’s consultation process is unacceptable and have set in train their own process for expert advice and consultation.

Foreign investors’ rights

• The TPPA (and earlier NZ agreements) allows foreign investors from the countries involved to challenge laws, policies and decisions of a NZ government in controversial ad hoc offshore investment tribunals (known as investor-state dispute settlement or ISDS). An ISDS tribunal can award massive damages against a government for breaching special protections the agreements give to foreign investors.
• PM Ardern has called ISDS a ‘dog’.
  The new government tried to protect NZ from ISDS in the TPPA-11, but failed.
• Australia signed a side-letter with NZ not to allow their investors to use ISDS against each other. But that side-letter was in the original TPPA and in other agreements. It’s not new to Labour.
• The new government says some other countries will sign a similar side letter, but won’t say who. Unless all the other ten countries sign side-letters, they don’t protect NZ from the risk of ISDS disputes.
• A provision that allowed investors to use ISDS to enforce infrastructure contracts has been suspended (not removed); but that is marginal and doesn’t change the TPPA’s special protections to foreign investors or the ISDS process through which they can enforce them.
• The Treaty of Waitangi exception is unlikely to protect NZ from an ISDS case over new laws to promote compliance with te Titiri.
• The Waitangi Tribunal noted ‘uncertainty about the extent to which ISDS may have a chilling effect on the Crown’s willingness or ability to meet particular Treaty obligations in the future or to adopt or pursue otherwise Treaty-consistent measures.’ (p.50)
• The government points to other protections for public policy measures, but those protections don’t apply to the main rules that investors rely on in ISDS disputes.
• The new government has instructed officials to oppose ISDS in future agreements, which is a positive move. But that doesn’t mean it will walk away if other parties insist on it. Officials are likely to advise that any new market access for agriculture is an acceptable trade-off.

Water

• Trade Minister David Parker says NZ First’s policy of taxing bottled water exports would breach various international agreements because it is discriminatory. But there is a much bigger risk that foreign investors could threaten to bring an ISDS dispute if moves to resolve water claims affect their commercial interests.
• NZ has protected the right to adopt discriminatory measures in the TPPA-11 ‘with respect to water, including the allocation, collection, treatment and distribution of drinking water’. But it says: ‘This reservation does not apply to the wholesale trade and retail of bottled mineral, aerated and natural water.’
• That reservation of the right to regulate on water does not apply to the main rules that investors rely on when they bring ISDS disputes against governments.
• The Treaty of Waitangi exception would not stop investors challenging such measures.
• There is a serious risk that the government would back away from a proposed solution to Māori rights over water if MFAT or an investor from a TPPA country, says the solution would breach NZ’s obligations.

Land and forestry

• The new government is rushing through changes to the Overseas Investment Act to restrict foreign purchases of residential housing. They admit that the law would breach the TPPA if it was passed after the agreement came into force.
• In January 2018 the government also sought consultation with Maori over proposals to redefine sensitive land under the Overseas Investment Act to include forestry cutting rights.
• The separation of cutting rights from the land was a device used by the Labour government in 1988 to allow corporatisation of the forests and separation of the land from the trees so the forests could be privatised.
• Labour and NZ First want to restore the right of NZ, and Maori, ownership of the forests. They have to change the foreign investment law before the TPPA comes into force, because they can’t do so afterwards.
• The TPPA only allows the government to keep the categories that are subject to foreign investment vetting which exist when the TPPA comes into force.
• The TPPA text says the vetting applies to ‘sensitive land’. If the government wants to implement its election policy, it has to rush through these changes to the law.
• But if the TPPA enters into force the government won’t be able to change the investment law to address other failed treaty settlements, such as fisheries quotas, or policies like carbon credits for forests.
• Even if changes are made to allow restrictions on future foreign investors, any existing investors from TPPA countries could still bring an ISDS dispute claiming their rights have been breached by the new laws because they can’t get as much for selling their assets as they had expected.

‘Consultation’ and tino rangatiratanga

Claimants in Te Paparahi o te Raki (Wai 1040) have challenged the Crown’s right to negotiate international treaties without the full and equal participation of nga iwi me nga hapu.

• The original TPPA was negotiated in total secrecy, aside from leaks. So were the meetings after the US withdrew. National was not interested in genuine consultation with anyone, let alone recognising te tino rangatiratanga o nga iwi me nga hapu. The same secrecy continues under the new government.
• The Waitangi Tribunal advised the Crown to consult with Māori to make the Treaty of Waitangi exception stronger. That hasn’t happened. Labour has kept the same exception.

Businesses as usual for the Crown

Labour held meetings in various cities in early December and January. But this is not a good faith dialogue: they say the TPPA-11 is the best deal they can get, no further changes can be made, and they are prepared to sign it. The ‘consultation’ can’t change anything. That’s not a Treaty partnership.

The new government says it wants to develop a ‘new and inclusive trade agenda’ that makes trade and investment work for Māori, small business, women, and address climate change, environment and regional development. That sounds positive. But the examples it gives are clip-ons to existing agreements that don’t address, let alone override, the problems the agreements create. And they are usually unenforceable.

Labour and NZ First’s positions on TPPA and te Tiriti show that it’s businesses as usual for the Crown. They will try to shut down the Waitangi Tribunal process, while they run consultations around the motu (eg Wellington, 12 February) to promote an agreement the majority of parliamentary parties say they will support.

Other processes to advance Titiri-based continue over UPOV 1991. Public meetings will be held in February in Auckland on 12th, Wellington on 14th, Nelson on 20th, Christchurch on 21st and Dunedin on 22nd.

The arguments being used to promote the agreement don’t stack up for Maori or for Aotearoa/New Zealand. The parties that make up new government promised change. If they are going to deliver, their positions on TPPA have to change.

Professor Jane Kelsey, Faculty of Law, University of Auckland, 1 February 2018

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Trade Minister Todd McClay has proclaimed a new era of openness for trade and investment negotiations in the Regional Comprehensive Economic Partnership (RCEP) negotiations, urging critics of the Trans-Pacific Partnership Agreement (TPPA) to …A new era of openness? RCEP ‘stakeholder’ process just ticks the box.

‘Trade Minister Todd McClay has proclaimed a new era of openness for trade and investment negotiations in the Regional Comprehensive Economic Partnership (RCEP) negotiations, urging critics of the Trans-Pacific Partnership Agreement (TPPA) to “Leave your protests and your placards outside and come and join the conversation”.’

‘If he is serious there needs to be a genuine conversation, not giving people two minutes to express serious concerns about impacts on health, workers, environment, the Treaty’, says Professor Jane Kelsey, who has urged the government to open up the secretive RCEP negotiating process.

‘It turns out that industry has an additional session tomorrow to advise negotiators on what regulations they want changed.’

At the last round in Australia, where that government organised the first tentative ‘stakeholder’ engagement, concerned local experts had the opportunity to sit with negotiators on investment and intellectual property to discuss the issues with them.

‘Today’s “stakeholder” programme was a matter of ticking the box’, says Professor Kelsey.

‘Ironically, the process has gone backwards from the frustrating TPPA rounds. MFAT’s own account of the Auckland round in December 2012, before the TPPA negotiations went underground, said more than 300 stakeholders from over 200 organisation made over seventy-one presentations on topics including Intellectual Property, Labour, Environment, Market Access, and Investment and a briefing with Chief Negotiators.’

‘I have a simple message for the Minister: If you don’t want RCEP to turn into another TPPA disaster for the government, open this process for effective input and release the negotiating texts now’.

ENDS

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