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?