Kia ora David,
Congratulations on your new Ministerial roles and for taking a decisive approach to protecting housing from overseas speculators in case the TPPA-11 comes into effect.
I would like to raise with you some of my concerns that the current approach to the TPPA does not adequately reflect the direction outlined in Labour’s excellent Trade Policy related to the rights of civil society and New Zealand’s regulatory sovereignty. Discovering that the new Labour government has been misled by the outgoing government as to the relationship between current trade agreements and the housing issue makes a rush to finalise the TPPA especially risky.
I’ve kept up to date with the TPPA issue as a lay-person including making a submission in response to the Select Committee discussion of the National Interest Analysis (NIA) and as a result am concerned that there are many more issues than housing (and even removing ISDS from the agreement) which NZ would need to be protected from. In my submission I identified the lack of a realistic assessment of the supposed benefits of the TPPA and the single pro-trade viewpoint (with no balancing information about the changes that would apply to citizens) as limitations of the NIA.
Related to the impacts of ISDS I’ve worked through an example related to the situation with bottled water where it is far from clear that the proposed royalty on bottled water would not also require special legislation prior to the TPPA-11 coming into force in order to avoid risk. (Bottled water is specifically excluded from the reserved legislation protecting water and yet that important information was not included in the National Interest Analysis). That I have found an issue so easily that was not part of the information supplied to the Foreign Affairs and Trade Select Committee, leads me to wonder whether the government’s entire legislative programme should not be subject to an audit to ensure that the required legislation is in place in case the treaty comes into force. In particular & related to climate change I can see a future where we need to constrain fossil fuel exploration, exploitation and use. Compensating the overseas companies involved in minerals exploitation and use could cost far more than the previous government had proposed to waste to buy overseas carbon credits making carbon neutrality much more expensive than it should be.
In my submission I identified that the rules about prior notification of changes to legislation, rules and policies as problematic. It is my view that these new requirements could effectively hobble an incoming government from taking democratic actions for months or even years following an election as they try to accurately pre-notify companies in TPPA trading partner countries about the impacts of proposed changes.
I am also concerned that the so called ‘ratchet’ mechanism for legislation would prevent a future Labour government from reinstating rules that a future government, like the one we have just had, might have lowered or removed. A further concern I have is that the areas of reserved legislation relate only to current conditions and issues. This could make it difficult to legislate effectively in novel areas such as artificial intelligence and novel biology. New legislation would have to be introduced using the constraints contained in TPPA language (where formulations like for a legitimate public purpose, to the minimum extent required) may impact the desired intent. This has happened I believe because the drafters have taken a corporate enablement, rather than a constitutional view of the impact of the Treaty.
There are self-confessed new (and therefore untested) approaches in the TPPA. For the first time in a trade agreement the TPPA allows ISDS claims to be made related to all stages an investment from the initial planning stages including the period before an actual investment is made. The appearance of so called ISDS shopping where opportunist companies aim to entrap governments into paying compensation even without this provision is concerning and it is a practice which these provisions could exacerbate. For the first time Pharmac services delivering pharmaceuticals and medical devices are included at the very time when new generations of personalised drugs should be being brought on stream. Even aside from the intellectual property changes related to pharmaceuticals the new requirements, increased costs and ‘transparency provisions’ could impact Pharmac’s negotiating ability and therefore effectiveness.
Finally the TPPA as a regulatory edifice takes the view that corporations, rather than governments, are the drivers and creators of wealth and that minimising regulatory frameworks and maximising corporate freedom is the legitimate route to economic wealth and well-being. In my view this is counter-intuitive and fundamentally wrong. It contrasts strongly with the view of the Finance Minister and others such as the noted economists Mariana Mazzucato and Ha Joon Chang who have identified that government settings, legislative framework, research coordination, interventions and creating the ability to innovate and take risks are fundamental to national wealth and well-being.
The Labour Party’s Trade Policy is careful, well-crafted and fit for purpose. In my opinion it needs to be the guiding document for the on-going work on the TPPA and it is not obvious that this is happening from the media coverage to date. An approach that does accurately and explicitly honour the policy will do a great deal to reassure all those who voted for a change.
Finally I will be aiming to publish this letter as I think it contains information that is not currently part of the public debate about the trade agreement.
Ngā mihi nui