South Korea Free Trade Agreement
Renegotiate South Korea FTA if it gives foreign investors
the right to sue
‘Coverage of the free trade agreement just concluded with South Korea has been all about agriculture – which is being talked up without anyone being able to see the fine print’, according to Professor Jane Kelsey,
It appears the legal scrubbing of the text will take several more months. Until then New Zealanders will not get to see what the government has negotiated, again behind closed doors.
‘There may be a solid argument to support the dairy part of the agreement, although it sounds like New Zealand will have got less than trade competitors such as the US and Australia’, Jane Kelsey said.
‘But this agreement is not just about dairy or old-fashioned commodity trade. It will also impact on New Zealand’s regulatory sovereignty. That is the concern I have consistently raised about such treaties, Professor Kelsey explained.
‘The biggest concern here is the investment chapter, which is likely to include the controversial investor-state dispute settlement (ISDS) provisions. These provisions involve potentially major incursions on New Zealand governments’ right to regulate in the national interest.’
Professor Kelsey notes that New Zealand has far fewer investment dispute obligations than most other countries, a number of which are currently trying to find ways out of them.
‘Investor-state dispute settlement is hugely controversial in the Trans-Pacific Partnership Agreement. That is partly because US investors are involved, but also because the system of international investment arbitration is deeply flawed.
‘That was the view of many governments who spoke at a conference session on investment arbitration during the World Investment Forum in Geneva that I attended several weeks ago.’
‘We simply should not be signing up to any more agreements that lock us into this failed system’, Kelsey said.
Business New Zealand would seem to share some of Professor Kelsey’s concerns. Their submission in response to a survey by the OECD in 2012 said they saw no need for such provisions in agreements with developed countries that have sound legal systems like New Zealand’s. [i] That clearly includes South Korea.
‘At a time when there is a global backlash against investor-state dispute settlement in such agreements, and when New Zealand has limited exposure to date, we should be telling the government to go back to the table and take ISDS out of the agreement.’
‘Moreover the government should release the text now so New Zealanders can see what other issues that are not about real trade have been included.’