Ardern: legislate foreign investor ban before renegotiating Korean free trade deal
By Pattrick Smellie
Sept. 12 (BusinessDesk) - Labour Party leader Jacinda Ardern is confident the government of South Korea will change its free-trade agreement with New Zealand to allow a ban on foreign buyers of existing homes, which a Labour-led government would pass into law by Christmas.
At her daily stand-up press conference on the campaign trail, at a film studio in West Auckland, Ardern said: "We don't anticipate it will be a major problem because, of course, it already exists on the Korean side of the ledger. We think it should be pertaining to New Zealand."
Asked whether Labour expected to renegotiate the two-year-old pact, Ardern said: "Yes, because the government did not negotiate to allow the New Zealand government to stop foreign purchasing of existing homes within New Zealand. They've retained that right for themselves and when Australia negotiated with Korea for their agreement they did the same.
"I don't believe it will put this deal at risk."
She was sure that Korea would "be very understanding of the rationale for why we would want the same" treatment.
"The government didn't negotiate for that carve-out. It should have. We will," she said.
She anticipated an "open, fair and reasonable discussion on that, given they asked for the same thing".
"I do know the importance of that deal to New Zealand, but I also know the importance of retaining our right to try and cool the housing market and allow New Zealanders to purchase existing homes."
The National Party issued a statement from Trade Minister Todd McClay accusing Labour of risking the Korea FTA with ill-prepared policy.
“Labour even seems to think it could renegotiate this deal by Christmas. That’s just not credible," he said. "Where is the detail on how they would do it? And what concessions would they be prepared to give away in return?"
Of its self-imposed Christmas deadline for legislation enabling the ban, Labour is signalling legislation would be passed, but with the implementation date tied to a date dictated by the timing of the renegotiation's conclusion.
"We can certainly draft that legislation and have it passed in Parliament," said Ardern.
The issue is complicated by Labour's desire to achieve the same carve-out in the so-called 'TPP-11' negotiations, which seek to revive the Trans-Pacific Partnership Agreement without US participation, at the APEC leaders' summit in Vietnam, in November.
Ardern said there were examples of "other countries in the TPPA being able to make those provisions. Our government never asked.
"So those who anticipate that it will be difficult, it's very hard for us to know because no one's ever asked."
The New Zealand Institute of Economic Research is also suggesting a change to the provisions of the Korean FTA would flow through to the China FTA, which is in live upgrade negotiation at present and underpins the emergence of China as New Zealand's largest trade partner in the last decade.