16 FEBRUARY 2011: The fifth round of TPP talks began in Santiago this week, with US pushes for more aggressive IP reform in the text expected to be a major source of debate and commentator discussion.
New Zealand, along with one another country, is understood to have submitted a draft text on IP, described as 'relatively progressive' compared to the IP provisions contained in most modern US FTAs.
As covered previously on TPPDigest, NZ negotiatiors have expressed concerns at the US's more aggressive demands on IP in the talks, which were understood to expand on IP provisions in the US-Australia FTA and make up for ground conceded in the current version of the Anti-Counterfeiting Trade Agreement (ACTA). The US reportedly submitted its own draft text to negotiators at the same time as NZ.
As with the Auckland talks last December, public statements on the progress of the talks are expected to limited to brief press conferences with stakeholders and the media.
However, delegates will be presented with signed open letters and petitions from civil society groups in Australia, Malaysia, Chile, NZ and the US asking that negotiations be made public and transparent. Negotiators will also be presented with a paper authored by Professor Jane Kelsey and Third World Network's Sanya Reid Smith, linking the agreement to continued international financial instability and offering a mock draft text.
Professor Kelsey says the current negotiations fail to recognise that the 2008 global financial crisis was the product of excessive liberalisation and deregulation, and that rather than rethinking an unsuccessful model, the TPPA negotiations appear to be bolting the door closed on the options for governments to re-regulate the financial sector and impose controls on speculative capital flows in ways that meet the needs of their people”.
The mock text is intended to approximate the actual text, still under negotiations conducted in secret. It is based on existing FTAs between the US and Singapore, Australia, Chile and Peru.
The authors recommend that financial services, financial investment and movement of currency are all excluded from the TPPA. Failing this, the agreement must provide allowances for national governments to continue to regulate the financial sector and financial transactions so as to prevent another crisis in the future.
8 FEBRUARY 2011: Prime Minister John Key has come in for heavy criticism from some trade commentators and activists, following a statement by Assistant US Trade Representative Barbara Wiesel that a statement of his on the inclusion of investor-state dispute mechanisms in TPP had been retracted.
Last November, Key said that the possibility of investor-state clauses that allowed foreign firms to sue New Zealand in TPP was 'far-fetched'.
Now, Radio New Zealand says Wiesel has stated in a 31 January Washington civil society briefing that NZ's negotiators will now agree to the clause.
Green Party leader Dr Russel Norman immediately seized on the contradiction, saying that Key would have to explain why his previous statements could no longer be relied upon. He went on to warn that the inclusion of the provisions could affect NZ's ability to enact anti-smoking legislation, place restrictions on foreign ownership, and and Pharmac's independent purchasing choices.
Dr Norman also added that this highlighted the need for the text to be publicly released rather than negotiated in secrecy.
Professor Jane Kelsey has speculated that Key's response indicated that he "did not know what his negotiators were proposing to do when he described investor-state enforcement as 'far-fetched'; or he was lying to the New Zealand public; or he buckled to pressure from the US...to agree." She added that Key needed to be upfront about his exact intentions before the fifth round of negotiations commenced on 14 February in Chile.
Key subsequently said he had never retracted his comments, and that they applied to the possibility of civil suits rather than the inclusion of the provision itself.
The Radio NZ story can be heard here.
10 JANUARY 2011: Shortly before Christmas, seven House Democrats, including six members of the House Ways and Means Committee, wrote an open letter to Barack Obama calling for significant reform to trade investment provisions in the TPP's final text.
Inside US Trade reports that their letter asks that that US exclude an investor-state disputes mechanism from the agreement, or at least attach conditions to the use of such a mechanism by investors.
Those conditions may include:
an 'exhaustion requirement' (firms need to have exhausted local administrative and judicial remedies before pursuing their claim);
an 'authentic investment' requirement (firms who have actively created jobs or made a material contribution to the economy in question may seek protection);
narrower definitions of both 'investment' and 'investor'.
In pushing for an end or a relaxation of investor-dispute mechanisms in US FTAs, the lawmakers point out that neither the US-Australia FTA or the original (pre-NAFTA) US-Canada FTA included them. Additionally, they point to the extraordinary rights such mechanisms grant foreign investors over domestic firms, the risk that existing domestic courts are bypassed and undermined, and the ability of governments to pass health and safety legislation in the public interest.
The letter was signed by Reps Linda Sanchez (D-CA), Lloyd Doggett (D-TX), John Lewis (D-GA), Bill Pascrell (D-NJ), Pete Stark (D-CA), Danny K. Davis (D-IL) and Henry Waxman (D-CA).
21 DECEMBER 2010: Australian fair-trade activism network AFTINET has neatly extracted and summarised the Australian Productivity Commission's findings on the shortcomings of current free-trade agreements (for reading here), while the findings have raised waves in neighbouring New Zealand.
Dr Russel Norman, co-leader of the Greens, says that the compounded effect of the recent Wikileaks showing official doubt of the benefits to NZ of any negotiated agreement and the APC report show that both the current National government and the preceding Labour government have 'over-hyped' their free-trade acheivements and back the Greens' previous stance that the TPP should contain no investor-state dispute provisions.
Speaking to Radio New Zealand's Morning Report about Norman's comments, Trade Minister Tim Groser said the Australian body's report was of no relevance to New Zealand, although he admitted that analyses of some previous FTAs, such as NZ-Singapore, would have shown fewer economic benefits.
He also defended the notion of having investor remedies against governments in trade partnerships:
TG: "A lot of New Zealand investors are always worried about...if we put our money into China, or...India. or into Brazil, what protections have we got around arbitrary law changes?...Investor disputes are very important to New Zealand...we have what we call in trade negotiations an offensive interest."
"I think it's perfectly plain that all New Zealand needs to know is that New Zealand has suffered from an inability to crack open markets, and any trade agreement that moves us in the right direction is worth doing, and frankly, whether it's a benefit of half a billion, or three-quarters of a billion, doesn't alter my judgment on that underlying issue one bit."
15 DECEMBER 2010: Australia's Productivity Commission has released its final version of a report on the benefits and drawbacks of free trade agreements, after releasing a draft for consultation in July.
The 392-page report says that "businesses have provided little evidence that Australia's bilateral and regional trade agreements have generated commercial benefits".
Specific criticisms of existing models have been that:
- Selection of prospective partner countries is not prioritised or co-ordinated strategically;
- Other options were not adequately assessed before bilateral trade agreements were entered into;
- Modelling results pre-negotiation were used to oversell the benefits of the agreements;
- Consultation once negotiations had started were inadequate;
- Parliament is often poorly placed to handle the outcome of talks.
Furthermore, the Commission recommended that agreements should not guarantee foreign investors special provisions 'over and above those already provided by the Australian legal system', should not contain IP provisions as a matter of course, and that the government should be cautious about including labour standards and exclusions on cultural grounds.
It has also recommended that bilateral deals be subject to independent analysis after they are completed and before they are signed, a suggestion which has attracted the ire of some other negotiating partners who believe this could undermine Australia's negotiating position in future talks.
The full report can be read here. Canadian IP law expert Michael Geist has summarised the relevant areas of the Commission's report relating to intellectual property provisions on his blog, while Aftinet has issued a press release heralding the report. The transcript of an ABC news report about the Productivity Commission's findings appears below.
9 DECEMBER 2010: Media scrutiny and discussion of TPP negotiations has continued in earnest this week, even as much of the debate turns around how much of those negotiations the media and the public can see.
A number of activist groups have called for the negotiating text, rumoured to be being assembled for the first time at Auckland talks, to be made open, with the NZ national union body's economist saying some of the items being negotiated were 'more important than legislation'. The call has been backed by some business groups as well, with small businesses especially worried that the TPP could see them shut out of government contracts in favour of foreign firms.
BusinessDay reported CTU chief economist Bill Rosenberg warned that trade simple was a 'very small part' of the envisaged agreement, compared to the potential foreign investment regulations and IP reforms a TPP may contain. However, Stephen Jacobi of the US-NZ Business Council lobby has warned that any early release of sensitive information akin to what the CTU is demanding would 'undermine negotiations', saying that if the final agreement is not in NZ's national interest, "(it) doesn't have to sign it".
Meanwhile, former Waikato University vice-chancellor Bryan Gould has written an editorial for the Herald warning against the 'potentially-far-reaching consequences' of TPP, and Tim Watkin of Pundit has criticised NZ MP Heather Roy for claiming that the country's nuclear-free stance will prevent any chance of a TPP agreement with the United States while also warning about the agreement's trade-offs.
26 NOVEMBER 2010:
The Green Party, currently in opposition in New Zealand’s parliament, have strengthened their statements on the TPP ahead of the Auckland Round.
Co-leader Dr Russel Norman has questioned Trade Minister Tim Groser on his claims that fears that investors may be able to sue governments for breaches of trade agreements such as TPP are ‘far-fetched’, particularly in relation to what potential provision exists in the current NZ-China agreement. When Norman asked whether Prime Minister John Key would rule out NZ’s TPP membership if it includes investor-state mechanisms that allow investors to sue governments, Groser indicated that negotiators would ‘look carefully’ at the provisions and give an ‘unqualified assurance’ to the NZ public that they would “carefully safeguard the sovereignty of New Zealand to entertain good public policy in accordance with the principles of open government.”
The full transcript from NZ’s Parliamentary Debates may be read below. Dr. Norman has also given his impression as to Tim Groser’s responses on the Green Party’s official blog.
7 SEPTEMBER 2010: Actions by activists and civil society groups, unprecedented amounts of local coverage, and a major newspaper ad by New Zealand TPP opponents marked the beginning of the Auckland round of talks yesterday.
The NZ Herald ran an advertisement from a mixture of fourteen New Zealand celebrities, politicians, trade unionists, and academics - encouraging the reader to become the fifteenth 'reason to challenge the Trans-Pacific Partnership Agreement'.
A crowd of over 30 protesters gathered for an early-morning demonstration outside the CBD SkyCity Convention Centre, where talks are being held, while the co-leader of at least one NZ political party expressing concern about the final outcome of the agreement.
Greens co-leader Russel Norman told state broadcaster TVNZ that NZ's overseas investment regime may be targeted if the agreement is successful, while also drawing attention to his fears about investor-state dispute mechanisms. Norman called for PM John Key and Trade Minister Tim Groser to publicly undertake that no 'NAFTA-style' mechanisms would be included in TPP.
The Dominion Post ran an article with more optimistic predictions on the TPP from Groser and New Zealand-US Business Council executive director Stephen Jacobi, although neither dwelled on possible changes to existing investment frameworks.
Speaking in Parliament on Groser's behalf today, Acting Trade Minister Murray McCully said he could offer no guarantees that existing NZ policies would not be changed as a consequence of TPP, but indicated that NZ negotiators would take an 'interest-based' approach at talks.
Photos of the Monday demonstration follow below.
4 DECEMBER 2010:
Ahead of the commencement of the fourth round of TPP talks at Auckland’s SkyCity convention centre, Australian and New Zealand civil society groups have issued a press release urging Prime Ministers Julia Gillard and John Key to adopt a progressive and balanced approach to foreign investment during the talks.
A joint letter signed by 43 organisations urges Australian and NZ negotiators to reject anticipated US demands for the sort of investor-state enforcement mechanisms included in previous US FTAs.
Australia previously refused to incorporate such agreements in its 2005 FTA with the US. Professor Jane Kelsey, who coordinated the open letter on New Zealand’s side, has applauded the steps already taken to dismiss the idea of such provisions by both governments, but suggests that Australia and NZ go further by negotiating an agreement that “that rebalances investor rights with enforceable responsibilities and restores the primacy of national sovereignty and democratic control over investment-related decisions”.
The letter can be read here. A press release covering the rationales behind the letter appears below.
12 OCTOBER 2010: Both the Wall Street Journal and Bloomberg have reported on Malaysia's inclusion in the third round of talks, bringing the ranks of partners to nine.
The WSJ notes both the likely long duration of talks, as well as the uncertainty as to whether a final agreement would even be assured passage in congress without any form of fast-track authority for members. On the other commentators note the strategic value of the US's increasing engagement in the area (particularly as against China), and that Malaysia's inclusion as the US's 16th-largest trading partner gives the TPP some much needed momentum.
Speaking to Bloomberg, Australian trade academic John Ravenhill was more pessimistic about the relative insignificance of many of the partners so far, but noted that the inclusion of Japan and South Korea could make it the broadest-ranging US FTA since NAFTA. For Malaysia's part, it notes that the announcement and deal may attract foreign investment to the South-East Asian nation again, after it had been flagging in recent years.
Both articles follow below.
29 SEPTEMBER 2010: Reforms to New Zealand's Overseas Investment Act have been criticised as being 'vague' and 'weak' by political opponents and lobby groups for greater economic sovereignty.
Deputy Prime Minister Bill English unveiled changes to the Act on Monday 27th of September, aimed at introducing 'extra flexibility' to consider contentious issues such as large-scale farm sales. Ministers of parliament will be given a right of veto over transactions where NZ's economic interests are believed to be threatened. The detail on how these applications are to be considered are to be fleshed out before the end of the year.
Newly organised group Save The Farms said there was little clarity around the rules and that the veto option was simply politically expedient, while the Green Party expressed concern that the suggested reform would become overtly politicised. Independent business commentators have also criticised the change. The new rules will not take effect until December, but will affect a large Chinese firm's bid for a major chain of New Zealand dairy farms in what was intended to be the first step in securing an NZD$11.5 billion dairy business. It is presently not clear whether or how these changes would affect NZ's continued TPP negotiations.
15 SEPTEMBER 2010: Following its recent general election, Australia's Labor government has reshuffled its Cabinet, replacing Simon Crean as Minister of Trade with Dr. Craig Emerson. Dr. Emerson, who previously worked as an economic adviser to the United Nations, and served as the Minister for Competition and Consumer Affairs in Kevin Rudd's government, has previously strongly criticised the Howard-era system of bilateral trade-agreements, especially the Australia-US FTA, as "a paperwork nightmare for exporting and importing businesses". He has also advocated continued multilateral negotiations through the WTO system, saying that "trade policy should revert to the principle of non-discrimination that formed the cornerstone of the world trading system before the rise of preferential deals".
Speaking to Sydney's 2GB radio station on September 14, Dr. Emerson indicated that Labor policy would not re-erect any of the tariff barriers removed on imports since Bob Hawke's 1980s government, and indicated continued strong support for foreign investment into Australia:
“We live in a global economy, and we do need foreign investment…we want Australia to remain an attractive place for foreign investment. We still get a lot of benefit out of big projects and enterprises that are partly or even wholly foreign-owned in this country… Of course there are some areas, Ross, in the economy, where people are more sensitive about foreign investment, that’s natural, but I think as a general presumption, we should be in favour of foreign investment, not against it.”
2 SEPTEMBER 2010: Academics from 24 universities across nine countries have signed their names to a Public Statement on the International Investment Regime, calling for the protection of investors to be treated as a means rather than an end in itself, for access for all investors to an open and independent judicial system, for governments to encourage beneficial investment while discouraging harmful investment, and for states to retain the right in international investment agreements to regulate and legislate on the behalf of the public good.
The document, spearheaded by York University's Gus Van Harten and the University of Toronto's David Schneiderman, recommends that states review their existing investment treaties, that international organisations and the international business community refrain from promoting such treaties, and that civil society continue to take steps to inform its constituents and society at large of the the threats posed by the current international investment regime. The declaration, with contact details, is provided here.
17 JULY 2010: The NZ Herald has recently run a number of op-ed pieces, of varying rigor, about the matter of foreign investment in New Zealand following a Chinese-based company's bid to buy 16 large dairy farms presently in receivership. The matter has split commentators and lobby groups, with the normally pro-free trade Federated Farmers association saying the farms should only be sold to countries that allow New Zealanders to purchase their land in kind.
In the July 15th edition of the Herald, Council of Trade Unions economist Bill Rosenberg argues that a review of overseas investment legislation is overdue and that much stronger controls are needed, especially as the relevant sectors are deregulated by a succession of FTAs, including those presently under negotiation such as the TPP.
The full article runs below.
17 JUNE 2010 - The Christchurch Press in New Zealand has run an op-ed by Council of Trade Unions policy director Bill Rosenberg, which highlights what he sees as the potentially risky areas of the TPP negotiations. He argues that for any final negotiated agreement to be truly '21st century', it must tightly regulate financial services and control the international flow of currency, especially subsequent to the credit crunch. Additionally, he argues that negotiations need to respect the independence of NZ's Pharmac agency as well as its current overseas investment rules. The full article follows below the break.
12 JUNE 2010 - Issue 123 of Foreign Control Watchdog
is now up on Converge's website
. It focuses heavily on the current TPP talks as well as other pertinent issues in NZ at the moment (overseas investment, infrastructure privatisation).
Contributors include CAFCA's Murray Horton, Global Peace and Justice Aotearoa's John Minto, and economist Bill Rosenberg. Links to the new TPP-specific pieces can be found on under 'Unions & NGOs' section of this site's main menu.
22 MAY 2010: American academic and blogger Simon Lester was among those who posed questions in USTR's online chat on Friday 21 May. He has parsed their answer to his question about the inclusion of a investor-state dispute mechanism in the TPP agreement on the International Economic Law and Policy Blog:
"Things that suggest inclusion:
-- it was a "priority" in prior FTAs
-- it provides "critical protection" for U.S. investors abroad
Things that suggest it won't be included:
-- its inclusion in prior FTAs was related to trade negotiating objectives from 2002, which have since been modified, and apparently have not yet been determined for the TPP
-- they are still looking for input, which suggests that the status quo (inclusion of investor-state) is not set in stone
-- there is no mention of the impact of investor-state on domestic regulations, which many people view as a negative aspect of investor-state (or does not mentioning this point suggest they want to downplay it in order to justify the inclusion of investor-state?)"
21 MAY 2010 - Last week was deemed 'World Trade Week' in the United States by the Obama Administration, and saw US Trade Representative Ron Kirk has been work to encourage buy-in for support of the TPP from both the US Chamber of Commerce and members of the public.
On 18 May, Kirk spoke to the US Chamber of Commerce's 'Next Steps on World Trade' conference, with a focus on his administration's 'high-standard, 21st century, Asia-Pacfic regional trade agreement'. He again confirmed that San Francisco would be the site of negotiations on the week of June 14. With regards to market access arrangements, he said that any agreement would need to be 'forward looking' while also possessing 'enough flexibility to accomodate sensitivities'.
Kirk also indicated that the second round of negotiations would focus on 'value-added' benefits of a regional agreement, such as greater regulatory cooperation on issues such as food safety.
On 21 May, the USTR held an "online chat" session in which it answered submitted questions about various aspects of the TPP. The chat indicated that the USTR is focused on obtaining an investor-state dispute mechanism for the TPP, that it intends to 'consult closely with stakeholders' over the possible changes to rules of origin in the US textile industry that the TPP would require, and that the US will seek 'high-standard' IP enforcement rights. A transcript of the chat follows below.
16 APRIL 2010: Washington Trade Daily reports that Malaysia is taking a 'close look' at joining the TPP negotiations. Prime Minister Najib Tun Razak spoke at a forum sponsored by the Center for Strategic and International Studies, noting the 'unfortunate' lack of progress in Malaysia's bilateral negotiations with the US and touting his recently announced 'New Economic Model' of trade and investment liberalisation. The Assistant US Trade Representative for Southeast Asia and the Pacific, Barbara Weisel, noted that Malaysia will need to convince prospective TPP partners that it will have room to move on sectors such as services and government procurement, both of which caused impasses in the US-Malaysia bilateral negotiations. The article follows below the break.
MARCH 30 2010 - The announcement that Natural Dairy (NZ) Holdings, a Cayman Islands registered, Hong Kong-based company - has proposed a buyout of up to $1.5 billion in NZ dairy assets, including the substantiial North Island dairy operations held by the receivers of Crafar's farms, has raised a response from the Productive Economy Council and the Campaign Against Foreign Control of Aotearoa cautioning against national asset sales of large portions of agricultural land. Given the current tension between the NZ dairy industry and its US counterpart, there may yet be further debate about Chinese businesses holding stakes in NZ dairy in any further TPP negotiations.
The March 30 edition of the Otago Daily Times looks at the phenomenon of foreign investors considering NZ farms and primary processing plants. It is likely that any future FTA with TPP parties will raise these same considerations for NZ. The article follows below the break.
MARCH 15, 2010: Trade unions from across the Pacfic have called for a fairer trade agreement network today, fearing the possible outcomes of an 'everything on the table' agreement. New Zealand's Council of Trade Unions has been keeping counsel with its counterparts in the US and Australia. The joint declaration of the combined TPP unions (Australia, NZ, Singapore, USA) can be read here. The individual unions, including CTU have issued their own statements.
MARCH 15, 2010: Barack Obama is due to meet with his Australian counterpart, Kevin Rudd, on March 26. The whirlwind stop in Canberra is likely to cover the by-then complete negotiation rounds in Melbourne for the TPP agreement. While Obama is quick to hail the 'model alliance' between the US and Australia, serious doubts are rising in Rudd's capital about the lack of consultation and analysis going ahead into the negotiations, as an excellently-argued Canberra Times op-ed by Professor Thomas Faunce expresses today...
MARCH 14, 2010 - With TPP Negotiations set to commence in Melbourne on March 15, over 30 community and union groups have combined to make an appeal to the Australian government and Trade Minister. They ask that any completed agreement safeguard the Pharmaceutical Benefits Scheme, Australian local content in media, regulation of GE food, regulation of foreign investment and industry policies that support local employment. The joint statement follows below the break.