Recently more and more New Zealanders are emailing Act MP David Seymour with regard to the Trans-Pacific Partnership Agreement and Fletcher Tabuteau’s Fighting Foreign Corporate Control Bill. Seymour’s office is responding with a standard email designed to quell their concerns. The response is riddled with inaccuracies that reveal a hole in Seymour’s knowledge about the New Zealand economy and the laws that govern it. Seymour’s response is copied below, with a few comments added in to try and help him out.
Thank you for your email regarding The TPPA. I have also made some comments regarding Fletcher Tabutau’s Fighting Foreign Corporate Control Bill, which has been discussed in relation to the TPPA.
I appreciate your concern that New Zealand should be able to chart its own course in the world. Our democracy is a precious treasure that many other countries can only envy, and it will be protected. Any trade agreement will ultimately have to be given effect openly and in parliament. While the TPPA is negotiated in secret, and for good reason (you don’t reveal your best price when bidding in an auction),
Hold up, besides the fact that it probably does you no favours to compare this negotiation to an auction (‘Aotearoa’s not for sale’, anyone?), the comparison isn’t quite right. Anybody who has taken the time to read one of the leaked chapters of the TPPA at various stages of negotiation (such as this intellectual property chapter leaked last year) will see an awful lot of square brackets with countries’ abbreviations inside them. These are the text proposals that have been made by the different countries on what they think the text should be.
Why is this important? Because it demonstrates to us that, to use Seymour’s own framing, we are revealing our bid to the other auctioneers. They know exactly what our best price is, because we’re telling them, over and over again. It’s only the people that don’t know we’re negotiating away.
…those negotiating it are also aware that it would be futile to agree to anything that would be invalidated by Parliament.
David, do you know what NZ’s Treaty Making Process is?
It’s laid out in Rule 7.112 of the Cabinet Manual, and simply says that “In New Zealand, the power to take treaty action rests with the Executive.” In practice that means Cabinet, which then approves the signing of the agreed text (by the Minister), binding the government to act in good faith towards its negotiating partners.
According to the Cabinet Manual, by signing an agreement the Executive indicates an intention for New Zealand to be bound to that text. This creates a good faith obligation under international law. A signed TPPA would then be presented to Parliament, accompanied by a National Interest Analysis (a document prepared by the very Ministry that negotiated the deal), which then refers the treaty to the Foreign Affairs, Defence and Trade Select Committee.
That Committee has the discretion to seek public submissions, but it has no substantive power. The Cabinet Manual (para 7.119) makes it clear that the Executive can even move to ratify the TPPA while the Committee process is still underway. The government cannot ratify the treaty until the select committee has reported or 15 sitting days have elapsed since it was presented to Parliament, whichever is sooner. In other words, the maximum period for the select committee to report on the bill is 15 sitting days after it is tabled. Within these days submitters need to (a) access the document, (b) analyse its technical detail across a reported 29 chapters, (c) write an accurate and detailed submission, and (d) appear at a hearing before the Select Committee, and for the committee to prepare a considered report.
In other words, Parliament has practically no power in the entire process.
New Zealand is a trading nation. For us not to have open and free trade would be as silly as, say, Colorado (population 5.5 million) closing its borders to the other 49 American States, British Columbia (population 4.5 million) closing itself of from the rest of Canada, or Denmark (5 million) closing itself off from Europe. Of course all of those democratic states, of similar size to New Zealand, have completely open trade with their respective regions.
This may be correct, but to call TPPA an ordinary trade agreement is quite a stretch. 5 of its 29 chapters cover trade-plus issues, such as the regulation of intellectual property, giving investors the power to sue states, raising the price of medicines, and giving corporations greater control over how we regulate. This undermines New Zealand’s democracy. We may be a trading nation, but that doesn’t mean we shouldn’t have rules to establish and stabilise markets, to provide social services and to ensure that our values are reflected in our government. Should we sacrifice our regulatory autonomy to achieve greater trade? This is the central question here that has so many New Zealanders concerned.
Given that we are committed to free trade for our survival and prosperity as a nation, we need to decide what agreements we are prepared to make with other countries.
Yes we do. ‘We’ being the operative word here, as in ‘we the people’, as opposed to ‘you the politicians’. If you were fulfilling your function properly then you would be acting as a conduit for the concerns of the people, not a barricade that rejects their concerns.
Most trade agreements restrain governments from regulating within their own territory. Indeed, New Zealanders have used such provisions to secure access for their exports into other countries.
Let me give one example: From 1921-2010 New Zealand apple growers were involved in a long running dispute with Australia over apple exports. The Australian government claimed that New Zealand apples were a threat to their biosecurity. New Zealand growers believed that the real motivation was not to protect the Australian environment but to protect Australian growers from competition (and preventing Australian consumers from getting some decent apples in the process!). In 2010, the World Trade Organisation finally ruled that “Australia’s measures were more trade restrictive than required to meet Australia’s appropriate level of protection.” Australia was instructed to lift the block. You can read more about that dispute here: http://www.mfat.govt.nz/…/02-Trade-l…/0-australia-apples.php
This is a good story for New Zealand, but it’s a totally irrelevant point of comparison. The WTO jurisdiction is state-state, which is quite different from the ‘investor-state dispute settlement’ (ISDS) procedures we are negotiating in TPPA. These provisions give foreign investors the power to sue our government when we change our laws. There are numerous examples of countries being pushed around by investors with deep pockets, such as the Philip Morris cases (taking Australia and Uruguay to court for implementing tobacco control), the Veolia v Egypt case (where Egypt has been challenged for raising its minimum wage) and the Lone Pine Resources v Quebec case (where Quebec has been challenged for implementing a moratorium on fracking). These cases revolve around important public policy decisions about public health, workers rights and environmental protection, costing states millions in legal fees even if they win. Losing could cost them billions, and in many cases the threat of a lawsuit alone is enough to halt the public interest.
Even right wing think tanks like the Cato Institute have suggested there are problems with these agreements because, by providing a kind of insurance for investors, they effectively subsidise risky investment decisions, insulating investors from potential negative outcomes. These negative outcomes eventually get shifted onto the affected country, in the form of tax hikes. Multinational law firms and the institutional investors that fund these cases are making a killing by the enormous increase in this kind of litigation.
In summary, we are a trading nation and trade agreements are good for New Zealand. No other small jurisdiction that wants to prosper is opposed to free trade. In order for trade to work, there must be dispute mechanisms to decide whether regulations are legitimate attempts to protect a country’s interests, or simply an excuse to restrict trade and prevent competition and such agreements are not new.
But, as you said yourself above, we already have a perfectly good dispute settlement system within the WTO, of which all the negotiating states of the TPPA are members. Why do we need another one?
With respect to Mr Tabuteau’s bill, I don’t know what it’s effect might be on existing trade agreements, and I suspect he has not thought this through. However I would respectfully suggest that while his single line bill is a good publicity stunt, it is not a thoughtful piece of legislation. For all of those reasons I certainly will not be supporting it Mr Tabuteau’s bill.
So why not engage in some cross-party dialogue to try and respond to peoples’ concerns and strengthen the Bill? If you believe there is a thoughtful piece of legislation that can do this then take up the challenge and get onto it. Start listening to the people that are addressing you. Your constituency will not hold you in any lesser regard for respecting and responding to popular questions and criticisms. If you’re truly committed to liberalising trade in a way that doesn’t sacrifice our sovereignty, then why not start coming up with some solutions yourself?
I will, however, more than likely be supporting the ratification of the TPPA.
Kind regards
David Seymour
MP for Epsom, Leader ACT New Zealand
So there you have it. If you’ve received a response from Seymour, please feel free to craft your own reply using what we’ve written here. Or take matters into your own hands and see what other criticisms you can come up with.
Remember, MPs have a duty to listen to the people. So speak up, and make some noise.
