Statement to the Foreign Affairs, Defence and Trade Select Committee, 7 April 2016
Malcolm Bailey, Chairman, New Zealand International Business Forum
Stephen Jacobi, Executive Director, New Zealand International Business Forum
Mr Chairman, Honourable members.
Thank you for the opportunity to speak to our submission.
My name is Malcolm Bailey and as Chairman of the New Zealand International Business Forum I am speaking on behalf of the business leaders from a range of sectors which make up the Forum’s membership. The organisations they represent are among New Zealand’s largest internationally oriented businesses and peak business associations.
I am pleased to be joined by our Executive Director Stephen Jacobi and by Fiona Cooper Clarke who is Executive Director of the NZ US Council, which is an allied organisation and whose submission we also support.
I gather we will be followed by another allied organisation, the APEC Business Advisory Council (ABAC): we subscribe also to their separate submission to you which focuses on the regional importance of TPP.
Mr Chairman, Honourable Members
As the NZ International Business Forum we are particularly interested in the way New Zealand enterprises and our economy as a whole are able to integrate with the global economy. From this perspective the TPP agreement is a very welcome development and one, which we support strongly.
The thrust of our submission is that TPP conveys a number of significant trade and investment advantages to New Zealand across all sectors of our economy, in both goods as well as services, which we believe will lead to job creation and sustainable economic growth.
Our submission also notes that these gains are achieved without the requirement for significant policy change or adjustment in New Zealand. Such changes that are contemplated, including in respect of intellectual property, are in our view marginal in terms of their impact.
Our submission concludes that not only is ratification of TPP strongly in New Zealand’s interest but failure to ratify would represent a significant disadvantage to New Zealand in terms of our ability to connect with key markets under rules we have had a direct hand in making. Failure to ratify would also leave New Zealand out of the anticipated expansion of TPP and leave New Zealand in a strategically weak position for other pending and future trade deals.
The New Zealand International Business Forum therefore urges you to recommend ratification of TPP.
Mr Chairman, Honourable Members I would like to invite Stephen Jacobi and Fiona Cooper Clarke to comment on particular aspects of their organisations’ submissions.
Stephen Jacobi: Thank you Malcolm.
Mr Chairman, Honourable Members
I would like to draw attention to two matters highlighted at some length in the annexes to our submission.
The first relates to sovereignty.
TPP has been criticised by some because it provides our trading partners with the right to express their views on proposed regulations and legislation in New Zealand.
Our submission explains that these same rights are already largely accorded by agreements such as the WTO and FTAs signed by New Zealand.
They represent good regulatory practice back home and offshore they provide the right for New Zealand organisations to be heard on proposed regulation affecting them.
It should be noted of course that while trading partners have the right to be heard, the final decisions rest with the sovereign government.
The second issue relates to foreign direct investment, on which we have been advised by investment expert Daniel Kalderimis of Chapman Tripp.
TPP provides additional protections for investors about a minimum standard of treatment, which should contribute to improving the investment climate in the TPP economies.
That is important for New Zealand: in our view New Zealand needs more, not less, foreign investment to expand the capacity of our domestic industries to develop world class enterprises of scale and to move up the value chain.
Those same enterprises also to need to invest more overseas to get closer to their customers and to connect to global value chains and networks.
Importantly however TPP does not weaken the Government’s ability to continue to regulate on matters of national interest including in respect to public health, the environment, the Treaty of Waitangi and other important public policy measures.
As the annex to our submission explains in greater depth, TPP improves on past practice with investor state dispute settlement by raising the threshold for taking ISDS cases, creating a clear set of exemptions for public policy and increasing the transparency of the process.
In our view New Zealand much to gain from TPP’s investment provisions, which have been poorly understood and woefully miscast by many of those opposed to this agreement.
Mr Chairman, I would now like to pass the baton to my colleague Fiona Cooper Clarke of the NZ US Council.