Ardern’s dilemma, TPP-11 or TPP-0

One of the biggest tests for new Prime Minister Jacinda Ardern and her Labour led Government is dealing with the Trans Pacific Partnership that, renegotiated after the withdrawal of the US, is referred to as TPP-11.

Labour have long insisted changes needed to be made before they would support the TPP, but the reality of trying to secure a major trade agreement that includes Japan makes it a tricky situation.

Japan has threatened that if New Zealand tries to restart negotioations then TPP-0 is likely.

RNZ report:

Ms Ardern also said the government would try to find a solution on foreign home buyers before she left for the APEC meetings next week.

She said if the government was able to find the right mechanism, it could legislate against purchases of existing properties by non-residents before the TPP trade deal is ratified.

Ms Ardern told Morning Report that would remove one of the government’s main stumbling blocks to signing the TPP, and that would then allow the government to focus on dispute settlement provisions in the trade deal.

Also:  Labour softening on TPP clauses, says critic

A critic of the Trans Pacific Partnership says Labour has softened on a provision to allow foreign investors to sue governments even though its coalition partners have spoken out about it.

New Zealand First and the Greens have questioned the controversial investor-state dispute settlement (ISDS) schedule in the original TPP and the updated TPP-11 which excludes the United States.

The settlement provisions allow a corporation to take legal action against a foreign government for introducing legislation that harms their investment or profits.

But the government was missing a crucial opportunity ahead of APEC next week, said Auckland University law professor Jane Kelsey.

It was disappointing that Labour stepped back from the criticism it had that the economics of the agreement did not stack up, Professor Kelsey said.

“[The government] seems willing to proceed now with the agreement largely unchanged and indeed possibly unchanged at all if they can get through their ban on foreign investment in residential housing under the existing wording,” she said.

Kelsey has always strongly opposed the TPP.

NZH: David Parker targets trade deal and bar on house sales to overseas buyers

New Trade Minister David Parker is considering advice that an explicit ban on house sales to offshore speculators could be acceptable under the TPP trade deal if it is passed into New Zealand law before the trade deal comes into force.

TPP negotiators from 11 countries, including New Zealand, are meeting in Tokyo today to try to finalise preparations for the TPP leaders’ summit in mid November, which Jacinda Ardern will attend.

With President Donald Trump having withdrawn the US from the deal in January, the entry-into-force provision has to be changed.

Parker would not comment on whether that should be a simple majority of TPP11 countries or whether it must also include Japan – which has taken over leadership of TPP since the US withdrawal.

“We must find a solution to allow us to ban overseas buyers of existing New Zealand homes for us to proceed with TPP11,” Parker said. “We are open-minded as to where that solution sits, whether it sits within TPP or outside of TPP.”

Parker said New Zealand officials in Tokyo were also raising the issue of the Government’s opposition to Investor-State Dispute Settlement [ISDS] clauses, although his language around expectations of success on that issue was soft.

“We don’t want the ISD provisions applying to us and so we will be instructing our negotiators to use their best endeavours to fix that.”

It is clear that the issue on which there will be no compromise is the ban on house sales.

“I want to leave Apec assured that we are not trading away the right of New Zealanders to ban foreign buyers of our homes.”

“There are undoubted trade benefits in TPP11. They are obviously not nearly as significant as they were when the US was part of the deal but nonetheless a residue is still important, particularly into Japan.

“But if I was forced to trade between the principle of protecting New Zealanders’ rights to have control over who owns our houses and TPP, which I hope we will not be forced to choose between, then our promise in respect of who buys New Zealand homes will prevail,” he said.

“I am reasonably confident that we can avoid that binary choice.”

Nikkei Asian Review:  ‘TPP 11’ faces new challenges as clock ticks down

New Zealand’s demand for renegotiation could obliterate tenuous agreement

Chief negotiators from the 11 remaining TPP nations are preparing to meet outside Tokyo starting Monday, hoping to hammer out a general agreement early next month in Vietnam on the sidelines of the Asia-Pacific Economic Cooperation summit.

But New Zealand, a leading proponent of the “TPP 11” effort, suddenly seems to be wavering. Prime Minister Jacinda Ardern, who took office Thursday, has pledged to renegotiate the trade deal, seeking restrictions on foreign real estate investment.

…if Ardern holds to her demand for a renegotiation, momentum toward an agreement could crumble. The 11 nations already agreed not to alter the original terms of the pact, and “if exceptions are made for New Zealand alone, the whole thing will fall apart,” said an official at Japan’s trade ministry.

Some in Tokyo advocate simply removing New Zealand from the group, a solution that would reduce the amount of milk Japan imports under the deal. But such a step would be difficult given that New Zealand is a founding member of the TPP.

“The only option is to convince them not to renegotiate,” said an official in Japan’s Cabinet Secretariat.

Ardern and Parker seem to be trying to find a way to enforce the one thing they are left trying to insist on, a ban of foreign ownership, without sinking the whole agreement.

TPP-11, TPP-10 (minus NZ), or TPP-0?

33 Comments

  1. Blazer

     /  October 31, 2017

    As if Japan can present ultimatums.If any country absolutely relies on trade ,its Japan.Changes would never have had to be made,if a competent negotiator had put the NZ case in the first instance.The Govt needs to walk away from this shitty deal if variation is not forthcoming.Real trade agreements,bi-lateral ones, work with less complexities and retain the sovereignty of nations at the expense of kissing multi national arse.

    • David

       /  October 31, 2017

      Japan has one of the most protectionist stances of any developed country and always has yet has been an exporting powerhouse. It works for them as they are ultra efficient, they gain little from the TPP except upsetting their very vocal farming lobby who thanks to their voting system have a disproportionate influence in who governs the country.

      • Blazer

         /  October 31, 2017

        If what you say is true why are they so adamant and in such a hurry to see the deal done with no changes?

        • PDB

           /  October 31, 2017

          Blazer: “The Govt needs to walk away from this shitty deal if variation is not forthcoming”

          Yes, we shouldn’t have signed the NZ-China deal as well….

          StatsNZ 2016: “New Zealand’s trade relationship with China has nearly tripled over the past decade, with two-way trade rising from $8.2 billion in the year ended June 2007 to $23 billion in the June 2016 year. Annual exports to China have quadrupled and annual imports from China have doubled since the June 2007 year.”

          • Blazer

             /  October 31, 2017

            that is what is called a bi-lateral TRADE deal,struck by Labour ,learn to understand the difference between it and this shitty deal,where National swallowed rat after rat to please corporations.

            • PDB

               /  October 31, 2017

              The same China-NZ deal that National recently upgraded and that Labour ensured had a “most favoured nation” clause for the Chinese that can be applied to any of our other trade deals and that provides the new govt with many problems in trying to renegotiate existing trade deals?

        • David

           /  October 31, 2017

          Because we gain disproportionatly because we have an average of 5% duty on imports and Japan has some that effect our main exports that are 400%. NZ has proven time and again if we have access we are absolutely awesome at learning that market, adapting and then growing it exponentially.
          Dropping 5% duty on a Toyota is great for the NZ consumer, costs no jobs as we dont build cars here and we get to sell them lots of quality beef which they will pay good money for.

    • Japan were pointing out a reality, if the NZ Government demand more negotiations then it puts the TPP at risk, because if NZ get more negotiations then almost certainly others of the 11 countries involved will want a fresh shot at things.

      • Blazer

         /  October 31, 2017

        Strange rationale.Surely the signatories want a viable,lasting agreement that has benefits for all.Whats the hurry?

        • No, time changes a lot. The idea of treaty is that agreements are made that should be able to be sustained by regime changes. Labour should just pull out, they cannot expect special treatment.

          • Gezza

             /  October 31, 2017

            Not necessarily. New regime, being taken seriously. May as well give it a bash.

        • David

           /  October 31, 2017

          The deal is done after 10 odd years and loads of internal objections from those exposed so to think NZ can rock up and tell someone from Vietnam they cant buy a house in here is just beyond bloody stupid.
          The meeting is to sign the deal not negotiate it. NZ was the architect and driver of the TPP and we get some of the best results from it so why would we torpedo it just because there is a perception that too many Chinese, who arnt even in the TPP, are buying a few houses here.

  2. David

     /  October 31, 2017

    Ardern said she had experience with international negotiations so it should be a doddle for her to re negotiate the TPP then take in the sights and be a star on the diplomatic circuit wowing those foreign leaders…you know the ones who actually are leaders because they won the most votes.

    • Blazer

       /  October 31, 2017

      Which leaders that won the most votes are you referring to?

      • David

         /  October 31, 2017

        Every leader aside from Brunei who are signing the TPP won either individually and or through their party more votes than anyone else in their respective countries..aside from Ardern so dont be surprised if she has her mandate questioned.
        They may not be as impressed with our shiny new thing as our local media are.

        • Blazer

           /  October 31, 2017

          Too many ‘asides ‘..

        • Gezza

           /  October 31, 2017

          The fact is David she’s got a government made up of MP’s voted for by more people than those who voted for National to be the government. MMP finally delivered a government something closer to what was probably originally intended. God knows how it’s going to end up as the term progresses, given the parties and memberships involved, but Jacinda is already being correctly treated as the duly elected Prime Minister of New Zealand.

          She has shown considerable skill in negotiating the coalition deal with NZF’s only real policymaker, in getting the Greens brought into line & given a sniff at something better next time if they behave themselves & don’t try to screw Labour again. And she, in my opinion is not dumb – so I’m waiting to see whether she has the brains & the steel to adjust Labour policies when & if it’s clear any of them are truly unwise or detrimental.

          (I’d also love to be a fly on the wall when she meets Julie Bishop.)

  3. Some interesting comments on this at The Standard: https://thestandard.org.nz/deary-me/

    • Blazer

       /  October 31, 2017

      I can see they will all be..easily pleased.

      • Labour need to walk the walk or they’ll be taken to the cleaners by detractors and TPP advocates.

        This is fundamental to their election platform fgs.

  4. It’s simple, Labour voted against ratification of the TPPA in the Parliament, saying the economic case did not stack up. Many in their number were vehemently opposed to TPPA. Many of them marched and bleated with the Kelseyites of NZ.

    Let them put their money where their considerably loud mouths were and make a call.

    It’ll be a capitulation too far if they don’t – just do it.

    • PDB

       /  October 31, 2017

      I thought this govt wanted to grow our exports….

      • Yes, they do – people export and brain drain.

        • Blazer

           /  October 31, 2017

          Exporting drain brains is a capital. .idea!

          • I’m not sure of your age or employment status Blazer, but heading to Oz now seems like aa very good idea. Our dollar won’t be going up in a hurry, Oz’s economy on the up and NZ will tank

    • @blazer “Good luck. .bon voyage”

      I’m staying here to make sure Taxcinda keeps her promises to the great unwashed

      • Blazer

         /  October 31, 2017

        I expect you will bring up. ..showerheads. .soon.