Open doors to foreign investors is irreversible

Media Release: Arena
Tuesday March 17 2009

Open doors to foreign investors is irreversible under FTAs

Any moves by the new government to further liberalise our overseas investment rules are likely to be locked in to future free trade agreements (FTAs) and leave a permanent open-door to foreign investors, New Zealand research and education network ARENA said today.

"Despite being branded as trade agreements, FTAs such as those New Zealand has signed with China, Thailand and Singapore in fact contain significant provisions around services and investment that promise that New Zealand won't ever tighten up its foreign investment rules," Arena spokesperson Dr Jane Kelsey said.

"In the Singapore NZ FTA the government introduced a 'ratchet' provision that automatically locks in any new openness, meaning we sign away the right to impose tighter restrictions on foreign investment in the future."

"Governments don't just give foreign investors free rein for decades ahead, they also give the investors the right to sue the government directly in a secret international court if they regulate in ways that reduce the invertors' profits."

When Government decides it isn't such as good idea they are told they can't restrict foreign investment because of an FTA, Jane Kelsey said.

"That's what the previous government found when it tried to block a Canadian pension fund's buy up of Auckland Airport. Treasury said the Government couldn't pass legislation to keep the airport in New Zealand hands. It had to use the farcical situation of claiming the strategic asset was 'sensitive rural land' so it could use a loophole in the Singapore-New Zealand FTA."

"At a time when stressed foreign firms are maximising their profits and taking them back home (or collapsing), and when New Zealand maintains a significant current account deficit driven largely by repatriation of profits to overseas interests, why on earth would we want to further open up our investment regime and lock the door on ever going back," Jane Kelsey said.

ENDS

About Arena:
Arena is an Aotearoa/New Zealand network of individuals and organizations committed to resist corporate 'globalization' in all its forms. Arena stands for an alternative development model based on self-determination, social justice, genuine people-centered development and environmental sustainability.