13 Nov 2017

Exporters welcome revamped TPP, critics have doubts

10:47 am on 13 November 2017

A refashioned Trans-Pacific Partnership has been met with both jubilation and trepidation in New Zealand.

At the APEC summit in Danang (from left) Prime Minister Jacinda Ardern, Mexico's President Enrique Pena Nieto, and Canada's Prime Minister Justin Trudeau.

At the APEC summit in Danang (from left) Prime Minister Jacinda Ardern, Mexico's President Enrique Pena Nieto and Canada's Prime Minister Justin Trudeau. Photo: AFP

After looking perilously close to complete collapse over the weekend, the TPP is now back on track.

All 11 nations involved reached agreement on the core elements of the deal, which has been renamed the Comprehensive and Progressive Agreement for the Trans Pacific Partnership (CPTPP).

Sir Graeme Harrison - a pioneer in New Zealand's meat industry - described the development as a "huge step forward".

"We haven't had a multi-lateral completed negotiation since 1994."

The founder and chair of ANZCO Foods said the deal would level the playing field for Kiwi exporters.

Sir Graeme said, for example, New Zealand frozen beef exports were hit by a 50 percent tariff in Japan, whereas Australia copped a 27 percent tariff.

"The important thing is that we're all going to be on the same footing [now]."

The Meat Industry Association congratulated the new government on its "early milestones" on trade.

Chief executive Tim Ritchie said the last few days had been very nerve-wracking.

"[The talks have been] going hot and cold, a bit like a roller coaster - thankfully, sense has prevailed.

"Australia's been gaining market share [in Japan] in a very significant way. And we've been losing that. So this, in due course, will create that level playing field."

National MP and former Trade Minister Todd McClay also applauded the progress. He was heavily involved in talks earlier this year to try to keep the pact alive.

"Put party politics aside. It was imperative after nine years of arguing, TPP was a done deal."

But he dismissed Labour's "spin" that the deal was significantly different from what National had negotiated.

"We can give it a differently name, but ultimately it substantially is the same."

On that point, Mr McClay has found an unlikely ally in Jane Kelsey.

The long-time opponent of the TPP and Auckland University law professor argued the deal was very similar to the old agreement.

"Labour has effectively agreed to a text that it said initially it would not support the ratification of."

Ms Kelsey said the government should consult extensively before signing anything.

"In Canada, Prime Minister Trudeau conducted a very extensive consultation... and that has underpinned Canada's current caution.

"We need to do the same here."

Ms Kelsey conceded the new deal had put several provisions on ice, but said they could be defrosted if the United States ever wanted to return to the table.

Prime Minister Jacinda Ardern has played down those fears.

"If America comes in, it's not an automatic lifting of those suspended provisions. At that point that triggers an ability for a negotiation over their re-entry," Ms Ardern said.

The Council of Trade Unions also said the agreement was still not good enough on labour laws or transparency.

A major concern for critics was that the TPP could push up the price of life-saving drugs for Pharmac.

Those provisions were among those suspended, but a spokesperson for Doctors for Healthy Trade, Dr Erik Monasterio, said he still had concerns.

"We're cautiously relieved to some extent - but we're also very worried that in the future, aspects that have been suspended will be activated.

"Then we'll be no better off than we were a year ago."

Trade Minister David Parker said New Zealand had wins on all five of its concerns about the deal.

Those concerns included:

  • Retaining the right to stop non-resident foreigners buying homes in New Zealand
  • Achieving meaningful gains in market access for farmers
  • Upholding the status of the Treaty of Waitangi
  • Preserving the government's right to regulate in the public interest
  • Preserving the drug-buying model which allows the government agency Pharmac to decide which drugs should be subsidised

Mr Parker said he wanted New Zealanders to understand what had been agreed before anything was signed.

MPs would scrutinise the agreement and consider law changes to implement it.

Still a risk from state dispute settlements - Shaw

Green Party leader and Climate Change Minister James Shaw said he was waiting to hear the detail before the Green Party would decide whether to support the revamped Trans-Pacific trade deal.

Investor state dispute settlement (ISDS) provisions - the mechanism allowing foreign firms to sue governments - had been watered down but some were still in place, he said.

"Although the United States isn't in this and that's where a lot of the risk occurs ... there are still a number of those arrangements in place and that carries with it some risk.

"The risk with having a single country is that a large multinational could use its operations in that country to then sue a government."

Mr Parker said it was "not a perfect outcome" on the ISDS, but the terms had been narrowed, and there were other one-on-one agreements to exclude the effects.

He said in theory an international company could complain to a tribunal, but wouldn't succeed.