The wildest speculation and misinformation is being spread about by those opposed to the Trans Pacific Partnership (TPP).
It is claimed TPP is not a trade agreement. TPP is about trade – and investment and jobs and everything else that impacts on the way business is done. The final agreement will have a market access schedule setting out reductions in tariffs for all members and a set of negotiated rules to govern a range of other issues.
It is claimed TPP will allow multinational companies to sue governments for loss of profits. The recently leaked text includes a process for investor state dispute settlement but shows that governments will retain the right to regulate by placing their reservations in an annex to the investment chapter. Other exceptions in the final agreement may (or may not) apply to the investment chapter. The leaked text shows that compensation will be required not when profits are threatened but when property rights are confiscated. Proving the latter is a higher threshold than simple policy change. Such provisions already exist in New Zealand’s FTAs with China, ASEAN and Korea – and for good reason. They protect New Zealand investors abroad. Governments can act against investors as Portugal has done recently to the NZ Super Fund.
It is claimed TPP will prevent the Government from regulating in the national interest. The Government has already said there will be safeguards to enable it to promote public health, the environment and the Treaty of Waitangi. TPP seeks to promote best practice when it comes to setting regulations. New Zealand has a strong record in this regard.
It is claimed TPP will undermine environmental and labour standards. Unlike most FTAs TPP is likely to contain specific undertakings on these issues. The United States is pushing hard to make these binding and enforceable. WWF and Oceana have come out this week in support of TPP leading to new commitments to end fishing subsidies and to protect threatened wildlife and natural resources.
It is claimed TPP will result in higher prices for medicine. The Government is already on record as ruling out major changes to Pharmac. The Government has a strong fiscal incentive to be very wary about costs. In the United States there are some federal and state programmes (although not Medicare) that operate in similar ways to Pharmac.
It is claimed TPP will undermine New Zealand’s intellectual property legislation. There are some risks to New Zealand policy settings but earlier leaks of text show our negotiators are leading the charge against any massive increase in rights for IP holders. Any change to New Zealand’s legislation in respect of patents or internet file downloading has to be done by Act of Parliament.
It would be beneficial if there was more background information made available by the Government about TPP – if only to end this wild speculation.
This post has been prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum (www.nzibf.co.nz). It is based on an article published by NBR On Line.