The TPPA is...
a proposal to extend an existing agreement New Zealand has with
Brunei, Singapore and Chile. And... but the negotiations also include Australia, Malaysia, Vietnam, Peru,
the United States [and Japan]. And of course having
the United States up there makes it huge.
The negotiations are held in secret, we don't see the
drafts of the text of the agreement, so what I'm telling you
is partly from leaks, partly from media speculation,
partly from what we know from other agreements these
countries have signed. It's not mainly about trade at all.
Most of the tariffs amongst these countries have gone.
The goods, the restrictions on goods trade most of them
have gone. They've been negotiated away in other areas
such as the World Trade Organisation. The chief
New Zealand negotiator made this statement in private.
He said "There is a public perception a United States
Free Trade Agreement would be an el dorado to
New Zealand's commercial sector but the reality is different and
New Zealand must manage expectations about the benefits
of such an agreement. So if we're gaining dairy access
or whatever we will have to pay for it in other ways, and
there's a whole list of other parts of the agreement which
have nothing to do with goods trade. So the first I want to
talk about, and this is quite recent, it's on State... it's a whole chapter
on State Owned Enterprises. State Owned Enterprises are
things like [hydro] electricity companies, Solid Energy, Air New Zealand.
But more than that it can be things like ACC, it could be... it could be
anything owned by the Government and run by the Government.
The United States wants provisions on these in the agreement.
They want to force State Owned Enterprises, and
think Electrocorp, think ACC, think possibly even CRIs (Crown Research Institutes),
whatever you like... to act solely in accordance with
commercial considerations. Right. So they should have
no non-commercial goals, like public-interests goals for example.
For example [protecting rivers is] inconsistent with this agreement.
[It prevents] Electricity SOEs from helping technology startups, which
is one of the ideas the Greens and Labour had.
Prevents them prefering 'locally built', for example the railways for New Zealand Rail.
Prevent them favouring local suppliers, prevent them having
relatively low profit requirements, so the rest of the country can benefit
from low electricty prices for example.
And prevent them for example from giving incentives for sustainable energy.
It would ban low cost funding, so when the Government
started up Kiwibank for example it puts the capital in to start it up.
That would be seen as a subsidy, if you like, to that... to Kiwibank.
And they don't want that to happen. They would require
Government to reduce its asset ownership. So progressively,
sell off its assets. This is a requirement of Singapore in the Singapore - US
Free Trade Agreement. It could apply to a whole range of State Owned Entities,
including ACC, Pharmac, Zespri, Public Broadcasting, Postal Services,
and many other Government services, anything that could conceiveably be in competition
with a US transnational wanting to do business in New Zealand
The United States has its usual... how shall I say? hypocritical opinion.
Thankyou I was looking for that phrase. [It] will be requiring
exemptions for its own SOEs. And this is not my imagination,
so basically [it] wants to say this applies to you but not to me.
But most importantly it wants to impose a provision for
"Investor - State Dispute Resolution" which is particularly tricky.
What that does is it allows investors to directly sue the Government,
if their profits [and] value [of their] assets [are not paramount].
There's going to be fierce resistance from Vietnam and Malaysia,
who have large and many and very important SOEs, and
Singapore will be pretty unhappy too although it's already tied up.
The ultimate target as I said is actually... seems to be China.
And for that reason, China has said "We're not happy with this
Agreement, we seem to be on the outer on this, we're not
we haven't been consulted over it." But quite fundamentally
China would not enter an agreement like this. And so
it's being seen more and more as actually anti-China... line-up if you like.
So it is giving a foreign policy dimension if you like that will... that threatens
to increase tensions in the Pacific region rather than be "kind of"
a partnership as it's called.