TPPA Feature: Critics Slam NZ Government Over TPPA ‘Betrayal’ While US-Australia-IMF Celebrate Deal

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UPDATED: TPPA Special Feature by Evening Report. Click here for the latest raw news reaction to the TPP deal.

Professor Jane Kelsey.
Professor Jane Kelsey.

Outspoken critic of the Trans Pacific Partnership, Professor Jane Kelsey, has lambasted the New Zealand Government for ignoring its citizens. She said it is an insult to all New Zealanders and that the Trans Pacific Partnership deal is “a travesty of democracy”.

Negotiators of the 12 nations of the Trans-Pacific Partnership this week concluded talks in Atlanta, USA, settling on a proposed agreement that the New Zealand Government said will be worth $2.7 billion for New Zealand by 2030.

The proposed agreement will require ratification by the twelve governments. They are: the USA, Australia, Canada, New Zealand, Chile, Peru, Mexico, Japan, Singapore, Malaysia, Vietnam, Brunei.

Professor Kelsey said today: “Minister Groser has misled New Zealanders. He always knew he was on a hiding to nothing on dairy. I have predicted many times that he would not do as he said and walk away from a lousy deal, but would make claim that there were some intangible future gains from being in the club.  That’s exactly what’s happened.”

She urged New Zealanders to ask a simple question:”who gave the Prime Minister and Trade Minister the right to sacrifice our rights to affordable medicine, to regulate foreign investment, to decide our own copyright laws, to set up new SOEs, and whatever else they have agreed to in this secret deal and present it to us as a fait accompli?”

Professor Kelsey said last major sticking point was monopoly rights for Big Pharma over life saving medicines, showing the TPPA is anything but a ‘free  trade’ deal.

“The compromise language on biologic medicines agreed between the US and Australia is apparently so vague the US can and will insist that its intepretation prevails. Giving Big Pharma another three years monopoly over the data, on top of other changes to patents and more leverage over decisions, will undermine the “fundamentals” of Pharmac and blow out the medicines bill.”

She said while Australia was fighting US demands on medicines, the New Zealand Government “seemed to be lost in action and obsessed with selling more dairy”.

“Not only is a “dairy for medicines” deal unconscionable – it is a total sellout. That’s even before we factor in the handcuffs on future governments in investment, SOEs, financial services, government procurement, and so much more,” Professor Kelsey said.

Dairy CowsMeanwhile dairy export giant Fonterra stated this morning the TPP was a “small but significant step forward” for the dairy sector. (ref. ForeignAffairs.co.nz)

Fonterra Co-operative Group Limited Chairman John Wilson said Dairy has been very hard to resolve and New Zealand has managed to get some progress against the odds.

“Our team has done well to lift the deal from where it stood at the Ministerial meeting in Maui,” Wilson said.

He believed “entrenched protectionism” demonstrated by the US dairy industry in particular had ensured that the deal on dairy failed to reach its potential.

Wilson added: “While I am very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the US, Canada and Japan. Greater benefits will be seen in future years as tariffs on some product lines are eliminated.”

But Professor Kelsey said: “I suspect any new dairy access is largely smoke and mirrors, with quotas on carefully selected products and subject to safeguards should increased New Zealand imports impact on America’s domestic agriculture. The problem is we can’t see the details to assess that.”

Under the US Fast Track law, President Obama needs to give 90 days notice to Congress before he can sign, and release the text 30 days into that period.

“The government is bound to spin the benefits like crazy, knowing that we won’t get to see the real deal for another month. The Minister needs to release the full details immediately,” Professor Kelsey said.

Members of the US Congress and the corporate lobbyists who are ‘cleared advisers’ will get to see the deal.

Professor Kelsey predicts: “they will be all over it, and seeking to remove what they still don’t like and add their demands. That will be the first of many opportunities to rewrite the deal as the US moves into an election year. The immediate responses from the US show it will be a dog fight in Congress with almost all the Democrat members opposing the  deal and Republicans abandoning Obama in droves.”

She said the TPP deal is far from concluded.

“There are three months before the TPPA can be signed. The government’s “trust us” promises were a sham and New Zealanders have been sold down the river.

“It is time for Opposition parties and ordinary New Zealanders to force the government to step away, and make it clear to National that failing to do so will carry the ultimate electoral penalty,” Professor Kelsey said.

Prime Minister John Key.
Prime Minister John Key.

New Zealand Prime Minister John Key has welcomed the conclusion of negotiations – stating that the TPP is New Zealand’s biggest free trade agreement. (ref. ForeignAffairs.co.nz)

“This agreement will give our exporters much better access to a market of more than 800 million customers in 11 countries across Asia and the Pacific, and help Kiwi firms do business overseas,” Mr Key said.

“In particular, TPP represents New Zealand’s first FTA relationship with the largest and third-largest economies in the world – the United States and Japan. Successive New Zealand governments have been working to achieve this for 25 years.”

TPP has been a significant focus for the National-led Government, as part of its wider plan to diversify the economy by building strong trade, investment and economic ties around the world.

“As a country, we won’t get rich selling things to ourselves. Instead, we need to sell more of our products and services to customers around the world, and TPP helps makes that happen,” Mr Key said.

TPP will eliminate tariffs on 93 per cent of New Zealand’s exports to our new FTA partners, the United States, Japan, Canada, Mexico, and Peru.

Dairy exporters will have access to these markets through newly created quotas, in addition to tariff elimination on a number of products.

Tariffs on all other New Zealand exports to TPP countries will be eliminated, with the exception of beef exports to Japan, where tariffs will reduce significantly.

Trade Minister Tim Groser.
Trade Minister Tim Groser.

Trade Minister Tim Groser said the most significant change is an extension of New Zealand’s copyright period from 50 years to 70 years. (ref. ForeignAffairs.co.nz)

According to Groser, the cost of this to consumers and businesses will be small to begin with and increases gradually over a 20-year period.

“Other potentially far-reaching or costly proposals raised earlier in the negotiations were not included in the final agreement,” Mr Groser said.

“Consumers will not pay more for subsidised medicines as a result of TPP and few additional costs are expected for the Government in the area of pharmaceuticals. There will also be no change to the PHARMAC model.

“Regarding data protection for biologic medicines, New Zealand’s existing policy settings and practices will be adequate to meet the provisions we have finally agreed on,” Groser said.

IMF managing director Christine Lagarde.
IMF managing director Christine Lagarde.

The International Monetary Fund’s managing director, Christine Lagarde, confirmed in a statement today that the IMF has called for a policy upgrade “to avoid a new mediocre in the global economy”. (ref. ForeignAffairs.co.nz)

Lagarde said, rekindling trade is an essential component of this agenda: “The agreement is not only important because of the size, as the signatories countries account for about 40 percent of global GDP; it also pushes the frontier of trade and investment in goods and services to new areas where gains can be significant.

“We would need to review all the details before offering a comprehensive assessment, including the transitional effects and spillovers, but I expect that the TPP can pave the way to a new generation of deep trade integration efforts. I encourage other countries to renew their efforts to complete ongoing negotiations and the broader international community to reignite multilateral trade initiatives to ensure a cohesive global trading system,” Lagarde said.

White House.
White House.

In a statement issued by the White House, the USA’s Obama Administration said the TPP levels the playing field for American workers and American businesses by eliminating over 18,000 taxes that various countries impose on Made in America exports, providing unprecedented access to vital new markets in the Asia-Pacific region for U.S. workers, businesses, farmers, and ranchers. (ref. ForeignAffairs.co.nz)

The White House stated the TPP puts American workers first by establishing the highest labor standards of any trade agreement in history, requiring all countries to meet core, enforceable labor standards as stated in the International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work.

“The fully-enforceable labor standards we have won in TPP include the freedom to form unions and bargain collectively; prohibitions against child labor and forced labor; requirements for acceptable conditions of work such as minimum wage, hours of work, and safe workplace conditions; and protections against employment discrimination. These enforceable requirements will help our workers compete fairly and reverse a status quo that disadvantages our workers through a race to the bottom on international labor standards,” the Whitehouse stated.

President Barack Obama - Official White House Photo by Pete Souza.
President Barack Obama – Official White House Photo by Pete Souza.

US President Barack Obama said today: “When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.” (ref. ForeignAffairs.co.nz)

He added: “Once negotiators have finalized the text of this partnership, Congress and the American people will have months to read every word before I sign it. I look forward to working with lawmakers from both parties as they consider this agreement. If we can get this agreement to my desk, then we can help our businesses sell more Made in America goods and services around the world, and we can help more American workers compete and win.”

Australian Coat of ArmsThe Australian Federal Government stated today: “Australia and the Asia-Pacific region are undergoing significant economic transformation. The TPP allows us to harness the enormous opportunities this presents as we look to build a modern Australian economy that can face the challenges of the 21st century.

“The TPP writes regional trade rules which will drive Australia’s integration in the region and underpin our prosperity.   It builds on Australia’s successes in concluding trade agreements with China, Japan and Korea and delivers more again.  As a regional trade agreement, the TPP creates benefits for consumers and businesses beyond those that can be achieved under bilateral FTAs – helping to create jobs and a stronger Australian economy.” (ref. ForeignAffairs.co.nz)

China thumbs upThe People’s Republic of China’s Ministry of Commerce (MOC) was encouraging of the TPP.

It stated Tuesday, that China is open to any mechanism that follows rules of the World Trade Organization and can boost the economic integration of the Asia-Pacific, said a statement on the MOC website.

China hopes the TPP pact and other free trade arrangements in the region can boost each other and contribute to the Asia-Pacific’s trade, investment and economic growth, it said. (ref. ForeignAffairs.co.nz)

Greenpeace's Emma Gibson.
Greenpeace’s Emma Gibson.

From Sydney, Emma Gibson, Head of Program for Greenpeace Australia Pacific said Greenpeace is not opposed to freeing up international trade, but harbours concerns that without proper transparency, the TPP may lead to worse social and environmental outcomes. (ref. ForeignAffairs.co.nz)

“We are calling on the government to make public the text of the agreement, so we can properly assess its impact on Australia.

“From what little detail has been leaked, we are concerned over a provision allowing multinational corporations to challenge domestic regulations and court rulings before special tribunals.

“This could mean, for example, that if an Australian court decided that a mining project was environmentally hazardous and therefore should not be approved, a multinational backer could seek to overturn that decision in a special tribunal.

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Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.

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