New Zealand Herald, Auckland

TPP stakes are high, so harden up

By Jane Kelsey :

5 June 2015

Chile’s no-nonsense stance on contentious trade deal sets an example for New Zealand, writes Jane Kelsey.

There has never been any doubt that the United States, and especially the US Congress, wields ultimate power over the Trans-Pacific Partnership.

Events of the past month suggest how that will play out.

The "final" meeting of trade ministers from the 12 TPP countries, scheduled for Guam from May 26 to 28, didn’t happen. It wasn’t cancelled, we were told, because it was never officially confirmed.

Instead, ministers met over breakfast at Apec in the Philippines. Behind the platitudes that "welcomed progress" and "reaffirmed their commitment to an expeditious conclusion" a new dynamic is at play.

Several governments refused to meet until the US President had Fast Track authority that requires Congress to accept or reject an agreed text in toto. That makes sense. Why reach a "final" deal that can be picked part by a Congress beholden to corporate lobbyists on one hand, and unions and environment groups on the other ?

That New Zealand’s trade minister now says he’s willing to proceed without Fast Track shows how desperate he is to conclude a deal. A TPP under Barack Obama seems doomed if a final text is not before Congress when it breaks for the August recess. But Japan, Canada and Chile remained resolute. No Fast Track, no ministerial, no political trade-offs and no final deal.

Congress is not playing ball. After the shock defeat of the Fast Track bill in the Senate, a compromise bill was passed. That was not enough to save the ministerial. The battle remains on the floor of the House, where even conservative media say Obama faces a rebellion from Democrats and Tea Party Republicans. The bill won’t go to a vote if it will fail. The new deadline for a TPP ministerial of late June means a month of frantic lobbying and back-room deals in Washington DC.

Domestic politics in other countries become crucial if the ministers finalise a deal. US processes mean the initialled text will be released several months before it is formally signed. US Trade Representative Michael Froman said that would allow other countries to decide if they are in or out.

Other governments have been promising firm bottom lines. Chile’s foreign minister recently spent two hours answering questions in Parliament, and assured it "we will not take new commitments on intellectual property ... or modify our internal legislation".

Neither would Chile be held to ransom by US refusal to certify its compliance - "We have been emphatic not to accept any interfering in our regulatory sovereignty" - and if the US insisted, "the agreement will not enter into force".

None of Tim Groser’s weasel words about "protecting the fundamentals" or "trust me to protect the national interest", just clear red lines.

It helps that Chile’s legislators can vote not to accept the agreement. I asked under the Official Information Act about the proposed parliamentary process here and was stonewalled. Recent moves on the New Zealand-South Korea free trade agreement suggest the National Government wants to stifle debate.

Last month nearly 4000 people made submissions on that deal.

Almost all focused on the controversial investor-state dispute settlement (ISDS) process.

The New Zealand Medical Association, the Sustainability Council and the Council of Trade Unions, among others, voiced serious concerns that are widely recognised internationally, and which our government and MFAT continue to deny.

The government’s $11 million "investment" in a "demonstration" farm owned by Al Ali Khalaf in Saudi Arabia illustrates how ISDS would work.

I have no doubt the Sheikh would have used those provisions to sue New Zealand if the free trade agreement with the Gulf States had been in place.

The select committee’s report on the Korea agreement was quietly tabled in the House on a Friday, with no time set aside to debate it despite the Government’s claims that Parliament plays an active role in the treaty-making process.

New Zealand First and the Greens opposed the Korea deal because of ISDS. Labour supinely accepted the officials’ assurances that it wouldn’t impact on health and environment policies, saving its concerns for the impact on restricting land sales to foreigners.

Whether it is really convinced or is saving face because it signed similar deals, Labour can’t continue fence-sitting over ISDS if the TPP becomes a reality.

If New Zealand is to enter high-stakes negotiations, we deserve a government that has at least as much backbone as Chile’s, and an opposition that holds it to account.

• Jane Kelsey is a law professor at Auckland University.