A critic of the Trans Pacific Partnership says Labour has softened on a provision to allow foreign investors to sue governments even though its coalition partners have spoken out about it.
New Zealand First and the Greens have questioned the controversial investor-state dispute settlement (ISDS) schedule in the original TPP and the updated TPP-11 which excludes the United States.
The settlement provisions allow a corporation to take legal action against a foreign government for introducing legislation that harms their investment or profits.
Prime Minister Jacinda Ardern told Morning Report the government would try to legislate against foreign home ownership before ratifying the agreement and then look at the ISDS clauses.
But the government was missing a crucial opportunity ahead of APEC next week, said Auckland University law professor Jane Kelsey.
"Internationally there is a groundswell turning against those investor state disputes," she said.
"Even the United States government is now turning around and seeking to withdraw them in its review of the NAFTA [North America Free Trade Agreement] negotiations."
It was disappointing that Labour stepped back from the criticism it had that the economics of the agreement did not stack up, Professor Kelsey said.
"[The government] seems willing to proceed now with the agreement largely unchanged and indeed possibly unchanged at all if they can get through their ban on foreign investment in residential housing under the existing wording," she said.