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Govt defends modest gains as TPP limps back to life

Govt defends modest gains as TPP limps back to life

By Pattrick Smellie in Da Nang

Nov. 12 (BusinessDesk) - The government is defending its support for an amended version of the TPP Pacific Rim trade and investment pact, saying it has achieved substantial progress on all five of the areas that Labour campaigned on changing.

Most significantly, it emerged that New Zealand will now be able to amend its foreign investment rules without fear of triggering dispute clauses. That detail came in a statement issued by the 11 leaders of countries still involved in the renamed Comprehensive and Progressive Trans-Pacific Partnership (CPTPP)

Prime Minister Jacinda Ardern also predicted that a three year review provision built into the new agreement would eventually see contentious Investor State Dispute Settlement (ISDS) clauses further eroded or abandoned.

“It will be another chance to challenge their existence. My take from these negotiations is that this is the dying days of ISDS,” she said. The new government has said it will not sign future trade deals that include ISDS clauses, which are losing support globally.

However, the agreement itself did not advance as far as its strongest advocates had hoped in the meetings that coincided with the annual Asia-Pacific Economic Cooperation (APEC) summit, in Da Nang, Viet Nam.

Expectations that leaders would sign a revised TPP deal on Friday were dashed when Canadian Prime Minister Justin Trudeau failed to show for a meeting with his 10 TPP counterparts, briefly throwing into doubt whether there would be progress at all.

By Saturday morning, a “settled text” had been agreed, but that included four areas of ongoing contention that will need to be resolved before signing can occur and the agreement can proceed to “enter into force” on a date that has yet to be agreed.

It appears a trade ministers’ meeting is likely in Japan before the end of the year to try to progress the four areas: carve-outs for subsidies to sustain local culture, labour standards and state-owned enterprises and coal production. The issues are important to CPTPP members Canada, Viet Nam, Malaysia, and Brunei respectively.

The latest agreement does suspend clauses that were inserted at the US’s insistence, before Donald Trump withdrew the country from the agreement in January. Some suspensions at least temporarily strengthen protections for New Zealand interests. In particular, suspending new restrictions on pharmaceutical and biologic patents will further bolster protections in the original TPP agreement for the drug-buying agency Pharmac, and US attempts to extend copyright to 70 years beyond death are on hold.

Even if the US wanted to rejoin the grouping, which all other signatories hope will happen, it would have to negotiate for return of the suspended clauses, said Ardern.

In a statement, Trade Minister David Parker said the government had protected the five things Labour had campaigned on as requirements before supporting TPP.

These were:

meaningful market access for New Zealand agricultural exports, with new preferential access to the Japanese, Canadian, Mexican and Peruvian markets;
upholding the unique status of the Treaty of Waitangi;
preserving better rights to regulate in the public interest than the original TPP deal;
bolstering Pharmac protections; and
maintaining the ability to control the sale of New Zealand homes to non-resident investors.
Anticipating a backlash from parts of its political base that opposed the TPP completely, and particularly over ISDS, Ardern said: "This is not a perfect agreement but it is a damn sight better than what we had when we started.”

She confirmed the revised CPTPP agreement would require fresh legislation. The National Party promised last week to support Labour in the passage of any law required by a new agreement, guaranteeing it a large parliamentary majority even if Labour's partners in government, the New Zealand First and Green parties, were to oppose it.

(BusinessDesk)

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