Key Glosses over Trans-Tasman Differences on Trans-Pacific Partnership Deal

“When Prime Minister John Key addressed the Australian Parliament yesterday he talked about Australia and New Zealand ‘joining forces at the negotiated table’ for a nine-country Trans-Pacific Partnership agreement (TPPA). But the two countries aren’t on the same negotiating page”, said Professor Jane Kelsey from Ho Chi Minh City, Vietnam where the seventh round of TPPA negotiations are underway.

“The Australian Government has made it clear that it won’t negotiate on a number of controversial demands from the US. The Key Government has said nothing is off the table,” Kelsey said.

The Australian Labor Government revised its trade policy in April this year following a highly critical report from the Australian Productivity Commission on the impact of bilateral and regional trade deals, including the Australia-US Free Trade Agreement (AUSFTA), on Australia’s economic performance.

Dr Patricia Ranald from the Australian Fair Trade and Investment Network outlined the lessons to be learnt from the AUSFTA and the main features of the new trade policy at Sunday’s TPPA stakeholder event in Ho Chi Minh City Jane Kelsey on TPPA.html.

The Productivity Commission concluded that the projected economic benefits of the AUSFTA were greatly exaggerated. Indeed, Australia’s trade deficit with the US had increased every year since the AUSFTA came into force.

Changes to Australian patent law to approximate US law had imposed net costs on the Australian economy and were likely to have a similar effect for other countries.

The report also recommended against giving investors the power to enforce aspects of the agreement directly against the government in an offshore tribunal, something Australia resisted in the AUSFTA.

Australia’s new trade policy adopted many of the Productivity Commission’s recommendations. Trade Minister Craig Emerson made it clear that Australia would not support investor-state disputes, negotiate further changes to the Pharmaceutical Benefits Scheme (Australia’s version of Pharmac) or restrict its right to introduce plain packaging of tobacco products.

By contrast, New Zealand’s Trade Minister Tim Groser said in a speech on the TPPA negotiations last week that “No professional negotiator of any quality ‘takes issues off the table’ at an early stage”, even Pharmac. New Zealand is also prepared to discuss an investor enforcement mechanism, despite John Key initially dismissing the idea as ‘far-fetched’.

“In this instance, New Zealand echoing the position of Australia has a great deal to recommend it”, said Professor Kelsey.

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