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Dialogue: Trade Treaty Dilutes Our Sovereignty

New Zealand Herald 20/09/00

Imagine the Government has announced a law that would prohibit any future government from ever reintroducing tariffs on anything, while it concedes that more factories will close and workers, mainly Maori and Pacific Island women, will lose their jobs as a result.

The same law plans to stop any New Zealand Government from ever again requiring a foreign investor to seek approval for an investment of less than $50 million, except for large or sensitive areas of land and fishing quotas.

It would also prevent central Government and local authorities from ever deciding to Buy New Zealand for purchases over $125,000, so that local businesses and workers might gain a preferential benefit from the money which is collected from them and other citizens through rates and taxation.

Nor could they prefer local companies in tenders for providing environmental services such as waste disposal.

And, despite the Government's concern that regional economies are struggling and the gaps between the rich and the poor are widening, the new law would ban the future use of subsidies to support those communities, and instead promises a foreign country that it will treat their products, services and investors at least as well, if not better, than it treats our own.

Imagine, too, that this proposed law with its detailed schedules is 190 pages long. Copies are made available only on the Government's website. It's too bad if you can't afford a computer, or live in a rural area without reliable links to the internet.



The Government has referred the law to a select committee. It is not due to come into effect until January 2001, so there's plenty of time to call for and hear submissions and reflect on the views expressed. But the cabinet has decided it must be reported back within 15 sitting days. So the committee gives the public nine days to penetrate the trade jargon and legalese and post in their submissions.

The tight time-frame means those who make submissions have no guarantee of being heard. That may not matter much, because the committee has no power to amend the proposed law anyway.

When the committee reports back to the House, the report will be debated and the law voted on in resolutions that are carefully worded to ensure a Government majority on each motion.

Even then, the vote won't bind the cabinet. It has reserved the exclusive right to make the law binding, and parts of it enforceable by international tribunals of trade experts that sit overseas.

This may sound outrageous. Yet that, and more, is the story of the proposed free trade and investment agreement with Singapore. Reported to the House on September 11, the lengthy document is now the subject of a farcical select committee process, the precursor to Parliament's debate on resolutions which the major parties have pre-scripted to their mutual satisfaction. The cabinet retains the executive authority to sign.

The Government defends the timing and process by claiming there has been extensive and unprecedented consultation on the deal, and those with an interest will have no problem meeting the deadline.

But the text was secret until it was tabled in Parliament. The only public information was a minimal and self-serving cost-benefit analysis prepared by officials, which formed the basis of the Government's vaunted consultation, followed by an updated summary of some of its content.

The Government claims it has opened the process more than ever before (in fact, the National Government was forced to release more information on the Multilateral Agreement on Investment in 1997 and 1998).

Trade officials have met a wider range of groups this time. But those with concerns about the agreement, ranging from local manufacturers, to exporters, to unions, overwhelmingly reported that they were met with deaf ears.

Maori were consulted only through hand-picked focus groups. Those who dissented were ignored, as were their questions about the exclusion of the treaty partner from this negotiation process.

Others with concerns about specific aspects of the agreement, such as the rights granted to Singaporean investors and the enforcement of those guarantees, were reduced to shadow-boxing with the Government. Now the text is available, they are faced with a fait accompli. There is no genuine opportunity to make submissions, raise concerns and have the flaws in the agreement reconsidered.

This is deeply disappointing, and will do nothing to stem the tide of criticism, here and internationally, about the democratic deficit which agreements like this symbolise.

Subjecting treaties to a parliamentary vote is a major step forward, one which should be paralleled by recognising that this nation's first treaty guarantees Maori a central role in such negotiations.

But New Zealand remains well behind the 8-ball in opening the treaty-making process to scrutiny. Across the Tasman, the joint standing committee on treaties is conducting an extensive inquiry into the implications of the WTO agreements and any further negotiations.

People have had months to prepare submissions, and all will have the right to be heard.

Several years ago, in the wake of the MAI furore, New Zealand adopted a watered-down version of Australia's approach. New sessional orders provided for international agreements to be presented to the House, with an accompanying national interest analysis drafted by officials.

Both were then referred to the foreign affairs, defence and trade select committee, which had the option to call for submissions, then report back to the House. There might be a debate, but no vote.

That process was reviewed in late 1999 (without seeking public submissions) and incorporated into standing orders. This is the first major international economic agreement to come before the select committee under those rules. But the cabinet took a shortcut along the way.

The 1999 review said 15 sitting days should be a minimum for select committee examination. Where a treaty was controversial and the committee wanted to call for submissions, it should seek more time before the agreement was ratified. That is the Australian approach. There is no such provision in the new standing orders here.

Instead, a cabinet memorandum dated February 2000, obtained through an urgent Official Information Act request last week, requires the select committee to report within 15 days. There is no apparent reason, except to shut down an inconvenient and potentially embarrassing debate.

This is more than a matter of democratic process. Such agreements sign away the sovereignty of this country in pursuit of a free trade dogma which has dwindling credibility.

When even the Princes St branch of the Labour Party, the nursery of the present Labour Government's leadership, warns that Labour's commitment to trade liberalisation needs to be debated within the party before any agreement with Singapore is signed, the Government can no longer afford to turn a deaf ear.

*Professor Jane Kelsey teaches economics at Auckland University.


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