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Singapore FTA decision: local government not bound

23rd October 2000

Green Party Co-Leader Rod Donald says the Foreign Affairs select committee's conclusion that the Singapore Free Trade Agreement can't bind local bodies is good news for councils.

The select committee's conclusion was based on a special report it commissioned from Legislative Counsel Allan Bracegirdle.

The key finding of the Bracegirdle report is that local and regional bodies in New Zealand are under no legal obligation to apply Article 67 (of the agreement) unless the government has measures available to it under New Zealand law, or legislates new measures, to compel their compliance with the agreement.

Local Government New Zealand and several councils had lodged submissions concerned that the 'government' procurement provisions of the Singapore agreement would force them to open up all their contracts over $125,000 to Singaporean companies instead of being able to favour local firms.

However Mr Donald warns councils, and non-government bodies funded by central government, to remain vigilant.

"The Labour-Alliance government has so much at stake over this treaty that they could still try to undermine council efforts to foster regional development and job creation by threatening local bodies, including using financial leverage, or even legislating, to make them conform.

"After all, the treaty requires them to 'take such reasonable measures as may be available to it to ensure their observance by regional and local government' and the treaty disputes procedure specifically says it may be invoked by the Singaporean government if councils in New Zealand don't comply."

Mr Donald said it seemed that neither Cabinet nor the Select Committee is clear about who is affected by what in treaties.

"The solution to these problems clearly lies in taking treaty making away from the government and putting it in the hands of parliament. Keith Locke's bill, currently before the foreign affairs select committee, does exactly that," he said

"The Labour-Alliance government has touted the Singapore agreement as a big step towards free trade with the whole of Asia but we now know it's shot full of holes," said Mr Donald.

Rod Donald MP: 00 61 401 109 418

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