New Zealand is overdue for an open and honest debate about 21st-century trade relations – Scoop.co.nz

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With more countries considering joining the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (CPTPP),
New Zealand urgently needs a real public debate on the
future of such trade and investment agreements.

In
February this year the UK formally
applied
to join as part of its quest for post-Brexit
free trade agreements. Reportedly, Thailand,
South
Korea
, the Philippines,
Taiwan
and even China
are to varying degrees considering
membership.

Coverage of these developments is often
overly simplistic, treating expansion as a notch in the belt
for those who see the CPTPP as shaping the 21st century’s
global trade rules.

Behind the headlines, the reality
is more complex. Given the CPTPP restricts governments’
ability to regulate their own economies in return for
notional benefits, it warrants closer scrutiny from all
sides.

But the secrecy surrounding possible new
memberships makes scrutiny difficult, just as it earlier
hindered independent assessments of the Trans-Pacific
Partnership Agreement (TPPA)
and subsequent CPTPP negotiations.

Blueprint for a
neoliberal trade agenda

The original TPPA was always
intended as a blueprint for future trade relations across
the Asia-Pacific region (with the now-abandoned
Transatlantic Trade and Investment Partnership proposing
similar rules for US-EU trade).

New Zealand was
primarily committed to the TPPA as an opportunity to secure
a free trade agreement (FTA) with the United States,
regardless of the costs.

Read more:
Australia
has a great chance to engage in trade diplomacy with China,
and it must take
it
 

Despite
vociferous public
protest
against its potential to erode national
sovereignty, which forced discussion out of the shadows, the
National government signed the TPPA anyway.

The
Labour, New Zealand First and Green parties all opposed its
ratification in the select committee, as did Māori in the
Waitangi Tribunal. National ignored them again, ratifying
the text in May 2017.

Singapore's Minister for Trade and Industry Lim Hng
Kiang shaking hands with New Zealand Prime Minister John
Key

Singapore’s Minister for
Trade and Industry Lim Hng Kiang with New Zealand Prime
Minister John Key after signing the Trans Pacific
Partnership in Auckland in 2016. GettyImages

Labour
does a U-turn

Before the 2017 election, with the
TPPA’s public support in tatters, the Labour Party was
keen to paint itself as part of the increasingly popular
movement against corporate-led globalisation.

Its
minority report to the select
committee
noted:

The Labour Party
wishes to protest in the strongest terms at the
government’s failure to effectively represent the
long-term interests of New Zealand in the Trans-Pacific
Partnership negotiations.

And yet when
the incoming Trump Administration stepped
back
from the TPPA in early 2017, Labour turned
cheerleader for a slightly modified CPTPP
agreement.

In government Labour argued the necessary
changes had been made to make the agreement acceptable, but
in reality hardly anything had
changed.

Read more: What
American farmers could gain by rejoining the Asia-Pacific
trade deal that Trump
spurned
 

A
few provisions, mainly on intellectual property rights, were
suspended
but not withdrawn, while a series of side letters of questionable
legal value
meant investors from Australia and Peru
could not challenge New Zealand laws or decisions directly
in dubious offshore tribunals.

But investors from
other parties to the CPTPP – Japan, Singapore, Brunei,
Malaysia, Chile, Canada and Vietnam – could still bring
controversial investor-state disputes.

What’s more,
the Labour government never withdrew ratification of the
TPPA, and rolled out the same economic
modelling
it had previously stridently criticised to
justify its new-look CPTPP.

Jacinda Ardern and Winston Peters at a cabinet meeting

On the same side: Prime
Minister Jacinda Ardern and deputy Winston Peters at a
cabinet meeting after forming a coalition government in
2017. GettyImages

What’s in it for New
Zealand?

Countries wanting to join the CPTPP need
agreement from existing parties, one by one. Each of the 11
member countries can extract a price beyond what is already
in the CPTPP.

That level of bargaining makes it
extremely difficult to secure new exemptions or concessions,
or even equivalent protections for regulation of
investments, services or government procurement contracts in
the agreement’s various schedules. In reality, countries
wanting to join will have to give a lot more.

New
Zealand, for example, has described a bilateral free trade
agreement as a “stepping stone” to the UK joining the
CPTPP. What price will New Zealand demand? More market
access
for agriculture (despite the recognised need to
diversify the economy and markets) and no investor-state
disputes.

The UK wants fewer
limits
on its financial and professional services firms,
stronger intellectual property rights for its
pharmaceutical, manufacturing and media industries, more
access to government procurement, inclusion of
investor-state dispute settlement or an equivalent, and
more.

Read more: Corporations
prepare to sue over action to save lives as pandemic reveals
trade
flaws
 

Why
would New Zealand make such a deal? Because of the
bipartisan belief that more free trade agreements are always
better, regardless of the evidence showing they compound the
risks to regulatory sovereignty.

Why would the UK put
itself through this? Partly because its political leaders
and trade officials are driven by the same ideology. Partly
because it needs to show it can replace EU membership with
other “special relationships”.

Ironically, Brexit
was sold as restoring UK sovereignty, whereas the CPTPP
would take even more of it away. But the familiar veil of
secrecy prevents scrutiny and an objective cost-benefit
analysis.

Another free trade
merry-go-round

What about the likes of Thailand, the
Philippines or South Korea? All three already have multiple
FTAs with most CPTPP parties.

New Zealand, for
example, has an FTA
with South Korea
, which is also a party to the Regional
Comprehensive Economic Partnership (RCEP)
just signed this year. The Philippines is a party to the New
Zealand-Australia FTA with ASEAN and the RCEP. New Zealand
has a bilateral FTA
with Thailand
as well.

It’s hard to imagine why
those countries would give New Zealand greater market access
than they were prepared to already, especially in the RCEP,
and accept the CPTPP’s more onerous restrictions on their
domestic policies and laws. Yet reports suggest they are
eager to engage in this Faustian bargain.

The CPTPP
risks becoming another merry-go-round in the largely
secretive circus of free trade agreements. Countries seem
willing to climb on board without prior public scrutiny or
any compelling rationale.

It’s time to pull back the
curtains and have an open and honest debate about the kind
of trade relations New Zealand and other nations really need
for the 21st
century.

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