TPP – Fact and Fiction

by | Apr 11, 2015 | Uncategorized | 0 comments

Remove

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.

0 Comments

REGISTER WITH TRADE WORKS

Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.

 

Remove

 

Latest News

LAMENTATION DAY

When President Trump spoke in the White House Rose Garden to launch his wrecking-ball “fair and reciprocal tariffs”, there were some in the audience wearing hard hats.  While this was doubtless to show support for the move amongst hard-working Americans, maybe...

BUSINESS FORUM WELCOMES INDIA FTA NEGOTIATIONS

Media release, 17 March 2025 The NZ International Business Forum (NZIBF) welcomes the launch of free trade negotiations with India, announced in Delhi, and is particularly pleased that these will proceed on a comprehensive basis. “There is enormous value to be gained...

Playing the long trade game with India

Prime Minister Luxon is at last making his visit to India with a large business and community delegation.  We wish them well in expanding and deepening the relationship with India.  The reasons for doing so we have explained previously. Our Government’s...

SUBMISSION TO THE MINISTRY OF FOREIGN AFFAIRS AND TRADE

PROPOSED GREEN ECONOMY JOINT WORKING GROUP WITH CHILE AND SINGAPORE MARCH 2025 Introduction This submission is made on behalf of the New Zealand International Business Forum (NZIBF), whose members are listed at Annex A[1]. NZIBF is a forum of senior business leaders...

SOUTHERN LINK REVISITED SEMINAR, SEPT 2024

On 24 September 2024 a stakeholders seminar was held in Auckland to reassess the Southern Link concept, five years after a large conference kickstarted focused discussion of the idea (before Covid intervened).   This report of the seminar discussions...

T Day has come

STOP PRESS – NOT SO FAST.  This post deals with the tariffs President Trump announced on 1 February he would impose on Canada, Mexico and China.  By 4 February he announced imposition of tariffs on Canada and Mexico would be suspended for 30 days (until 5 March). ...

Back to the future?

The end of 2024 has trade advocates reaching back to their 2016 taking points as an Administration of a depressingly protectionist hue prepares to take office in the United States, once the global champion for trade liberalisation.  We do not know for now what,...