The Nation: Lisa Owen interviews David Parker
On The Nation: Lisa Owen interviews David Parker
Trade Minister David Parker says the TPP definitely won’t be signed at the current APEC meeting and he doesn’t know if it can be revived. But he says “it’s not completely dead til it’s dead”.
Parker says New Zealand had made significant gains in a number of areas, and he would have preferred to have signed the deal than scrap it.
Despite Labour’s coalition agreement with New Zealand First calling for work towards a Free Trade Agreement with Russia, Belarus and Kazakhstan, Parker says a deal with the EU is his first priority.
Talks on the TPP trade agreement have broken down after Canada failed to turn up to a leaders meeting at the APEC Summit in Vietnam. Our trade minister David Parker says it’s not clear when negotiations will resume. I asked him why Canada had pulled out.
David Parker: They did have some earlier issues, none of which were especially huge and all of which seem to have been resolved to their satisfaction, so we're not sure what the underlying issue is now. The negotiation's been postponed. We're not clear whether that's for a short period or a long period. I suppose the point I would make is that New Zealand, we thought, negotiated some good improvements in TPP 11. We'd made progress on investor-state dispute clauses and some other advances that were in New Zealand's interests, and we thought that it would've been, on that basis, a good thing to conclude. Of course, it not having been, we left with the status quo before the meeting, and nothing changes.
Lisa Owen: Okay, well, before I move on to the concessions that you think you've gained, was Canada concerned over Labour exemptions for Vietnam?
Well, everyone was concerned if there was to be an ill-defined Labour concession with Vietnam. But that issue was resolved—
And is that what Vietnam was asking for, Minister?
At times they were, but that issue was resolved with a transitional period for them.
How long was the transitional period?
That would've been resolved by the time of the final signature of the agreement. But that is now a side issue; that's not why this agreement has been postponed.
So what do you think is going on with Canada?
We don't know. That's an issue you'll have to put to the Canadians, because they didn't come to the final meeting and explain their position.
Given that they are going to be talking to Donald Trump about the North American Trade Agreement, do you think that Mr Trump has put some pressure on Canada?
Unlikely. I don't think that is the likely answer. I suppose it's possible, but there's been no hint of that. And the other party to the North American Free Trade Agreement, Mexico, was in the room, so I think that's an unlikely reason.
So, are there issues around agriculture and dairy for Canada?
Look, we're really speculating here. None of us know, so there's not much point in speculating. We don't know.
Okay. So, does this mean this deal is dead in the water? The Prime Minister said that Canada had withdrawn. That was the words that she used — withdrawn. It's over, isn't it?
No, she didn't say they'd withdrawn from the negotiations; she said they had withdrawn on the day. So we really don't know. That'll become clear on the next little while. In effect, for New Zealand, the status quo remains. There are some disadvantages in that in that we don't have a free-trade agreement with Japan, whereas some other countries do, and some of our exporters to Japan suffer a disadvantage. But I don't want to overstate or catastrophise this. We're in the same position today as we were yesterday, a week ago, a year ago. In my view, the key to export growth and prosperity doesn't so much lie in free-trade agreements as it lies in investing more money in the export economy rather than in speculation in housing.
But you are there trying to do a deal. You're there trying to get a deal done, and this is where the momentum is now, and you have stalled. So what is the chance that you're actually going to get this over the line? Or is it over?
We don't know that. The prior government tried to get this across the line. We had some real problems. We fixed the problems in respective land sales; we made good progress on the investor-state dispute clauses; but because of the actions of another party to the agreement, it hasn't been concluded. Whether it will be resurrected, we don't yet know.
So, how much of a loss is it to be at this standstill? Are you disappointed?
Oh, I don't want to overstate it. Life goes on. We're in the position we were yesterday, last week, last year. As I said, I think the more important—
So are you happy that it's not been signed off?
No, we were ready to sign. We would prefer it to have been concluded today, but the point I'm making is that we have a number of quality free-trade agreements already in the world, and despite that, over the last 10 years of the last government, exports went down as a proportion of the economy. That proves that free-trade agreements aren't the be-all and end-all for exports. Important though they are, what is more important is that you invest your precious people, your human resources and financial capital in building points of competitive advantage to grow new exports of services and goods to the rest of the world. And what's happened today doesn't change that as being the greatest factor in the future progress of New Zealand's export economy.
So if you were ready to sign, what concessions did you get around the investor-state dispute clause?
We made progress in a number of areas — both as to the scope of the ISDS clause and also some arrangements that we had outside of the agreement. It's already been in the news that we had a carve-out of Australian investment into New Zealand from those ISDS clauses, which effectively meant that 80% of the foreign direct investment into New Zealand from TPP 11 countries would not have been covered by the ISDS clauses. We had some other things that I won't go into today, but we'd made substantial progress in the short period of time that we've had to renegotiate those things.
What about other areas of concern? Because that wasn't the only concern that you've expressed about this deal. I mean, Labour had a petition on its site asking people to sign up to ditch it. You raise concerns about this clause. You raise concerns about labour laws and enforcing labour laws. This wasn't just the only thing. So has everything been sorted for you?
We had five issues of concern, and I'll list them all if you like. The first was that the government had to be able to preserve land asset classes, like housing, without being forced to leave them open to overseas buyers. We've actually fixed that. Since we came to government, we found a solution to that. We wanted there to be fair market access into other countries, which is another way of saying we needed decent tariff reductions into the likes of Japan. We achieved that. We wanted the protection of Pharmac. The Pharmac model had been well protected by the prior government in their negotiations. We had made further improvements in respect of some of the patient provisions, which would've been beneficial to New Zealand, so that was acceptable—
Well, I'm not going to specify all of those today, because, of course, now the negotiation is live again, and so we have to tread this line between transparency—
But is it really live again, Mr Parker? Is it really live again?
Well, it's not completely dead until it's dead. It may not come alive again, but in case it does, we have to preserve New Zealand's negotiating position by not putting everything into the media.
Okay. And any others?
So we have made progress in... Well, what have I run through? Treaty clauses that was acceptable to the Waitangi Tribunal.
That was signed off. We'd protected land asset classes. We were making progress on tariffs. We thought, overall, we'd actually done a good job for New Zealand and that it was in our interests to proceed. But, of course, now the negotiation is postponed, whether it will come alive again, time will tell.
Well, what do you know about what happens next?
Well, we know that the officials from the different countries will meet again and have a discussion as to whether there is reasonable prospect for this agreement being resurrected or whether it is postponed indefinitely. So that will become clear over coming months.
If you do not have something signed up by the time you leave there, would you concede that there is virtually zero chance of getting this over the line?
There's no chance of anything being signed up before we leave here. That's off the table now. So what happens next, we don't know. It may be that other countries are no longer committed to it; it may be that negotiations continue at some later date.
Are you committed to it? If Canada withdraws, are you committed to a deal that just gets an ever-diminishing number of people who are involved?
Well, you know, already this agreement is much less significant for New Zealand than it was when America was to be part of it, because, of course, they're such a large economy. If different countries pull out, obviously it's a less significant agreement. There were some good points about this agreement, though. It had enforceable standards in respect of environmental and labour standards, which have never been agreed in any major agreement that New Zealand's a part of, and were better than has been seen in virtually any other agreement in the world, so the architecture of that was—
So you're not prepared to walk away from it?
Well, we're not prepared to say that we're walking away from it today, no.
Okay. Well if this doesn't go ahead, will that mean that you are free to put your efforts into pursuing a free-trade deal with Russia, Kazakhstan and Belarus?
We want to advance our trading relationships with that part of the world as well. The priority for me after this is the European Free Trade Agreement.
And you've got no issues with those countries' human rights record, with Russia annexing Crimea, with the labour conditions in those countries? You're all fine with that?
No, I didn't say that. And I said that my first priority is to proceed with a free-trade agreement with Europe if that can be attained. Europe is a country that is a high-wage economy, they are liberal democracies, they've got very similar views on environmental and labour standards, and so we think it's an important deal to try and land.
Transcript provided by Able. www.able.co.nz