Government's credibility in tatters
Government's credibility in tatters: Key invites Labour to breach TPPA & be sued by foreign investors
‘The National government’s credibility in trying to sell the Trans-Pacific Partnership Agreement (TPPA) to an increasingly sceptical public is in tatters’, says Professor Jane Kelsey of Prime Minister John Key’s latest statements about foreign investment rules.
‘Last Monday, the Prime Minister fobbed off concerns about the controversial investor-state dispute settlement provisions in the TPPA, saying: “Well we've had [investor state dispute settlement] in four FTAs now, we've never ever been sued. New Zealand has never had a case taken against us in investor state.”’
‘Today, faced with Labour’s rejection of the handcuffs the TPPA would place on regulating foreign ownership in the residential property market, Key was inviting Labour to flout the rules and face being sued by investors’.
The Prime Minister said: ‘I'm just saying technically any government can flout any free trade agreement rules that they set, and there will be a process for arbitration of those if someone wants to take ... a case against them.’
Professor Kelsey notes that under international law states negotiate treaties in good faith with an intention of complying with them.
The government was fully aware of Labour’s concerns when it concluded a TPPA text that it admits will constrain future New Zealand government’s regulation of foreign ownership of residential property.
‘I’m sure it will astonish the other parties to the TPPA that the Prime Minister is effectively inviting future New Zealand governments to ignore their obligations - some of them might well feel emboldened to do the same,’ Professor Kelsey said.