0:00:05.947,0:00:08.139
The TPPA is...

0:00:08.139,0:00:12.330
a proposal to extend an existing agreement New Zealand has with

0:00:12.330,0:00:22.291
Brunei, Singapore and Chile. And... but the negotiations also include Australia, Malaysia, Vietnam, Peru,

0:00:22.291,0:00:26.169
the United States [and Japan]. And of course having

0:00:26.169,0:00:28.491
the United States up there makes it huge.

0:00:28.491,0:00:31.138
The negotiations are held in secret, we don't see the

0:00:31.138,0:00:33.924
drafts of the text of the agreement, so what I'm telling you

0:00:33.924,0:00:37.407
is partly from leaks, partly from media speculation,

0:00:37.407,0:00:40.937
partly from what we know from other agreements these

0:00:40.937,0:00:44.629
countries have signed. It's not mainly about trade at all.

0:00:44.629,0:00:47.763
Most of the tariffs amongst these countries have gone.

0:00:47.763,0:00:50.945
The goods, the restrictions on goods trade most of them

0:00:50.945,0:00:53.336
have gone. They've been negotiated away in other areas

0:00:53.336,0:00:56.587
such as the World Trade Organisation. The chief

0:00:56.587,0:01:00.488
New Zealand negotiator made this statement in private.

0:01:00.488,0:01:05.016
He said "There is a public perception a United States

0:01:05.016,0:01:07.872
Free Trade Agreement would be an el dorado to

0:01:07.872,0:01:10.124
New Zealand's commercial sector but the reality is different and

0:01:10.124,0:01:13.839
New Zealand must manage expectations about the benefits

0:01:13.839,0:01:19.771
of such an agreement. So if we're gaining dairy access

0:01:19.771,0:01:22.782
or whatever we will have to pay for it in other ways, and

0:01:22.782,0:01:25.753
there's a whole list of other parts of the agreement which

0:01:25.753,0:01:29.169
have nothing to do with goods trade. So the first I want to

0:01:29.169,0:01:32.886
talk about, and this is quite recent, it's on State... it's a whole chapter

0:01:32.886,0:01:36.804
on State Owned Enterprises. State Owned Enterprises are

0:01:36.804,0:01:42.028
things like [hydro] electricity companies, Solid Energy, Air New Zealand.

0:01:42.028,0:01:48.298
But more than that it can be things like ACC, it could be... it could be

0:01:48.298,0:01:51.479
anything owned by the Government and run by the Government.

0:01:51.479,0:01:57.354
The United States wants provisions on these in the agreement.

0:01:57.354,0:02:02.926
They want to force State Owned Enterprises, and

0:02:02.926,0:02:08.592
think Electrocorp, think ACC, think possibly even CRIs (Crown Research Institutes),

0:02:08.592,0:02:14.351
whatever you like... to act solely in accordance with

0:02:14.351,0:02:17.555
commercial considerations. Right. So they should have

0:02:17.555,0:02:22.988
no non-commercial goals, like public-interests goals for example.

0:02:22.988,0:02:28.306
For example [protecting rivers is] inconsistent with this agreement.

0:02:28.306,0:02:33.948
[It prevents] Electricity SOEs from helping technology startups, which

0:02:33.948,0:02:37.037
is one of the ideas the Greens and Labour had.

0:02:37.037,0:02:42.888
Prevents them prefering 'locally built', for example the railways for New Zealand Rail.

0:02:42.888,0:02:46.812
Prevent them favouring local suppliers, prevent them having

0:02:46.812,0:02:50.342
relatively low profit requirements, so the rest of the country can benefit

0:02:50.342,0:02:53.964
from low electricty prices for example.

0:02:53.964,0:03:00.140
And prevent them for example from giving incentives for sustainable energy.

0:03:00.140,0:03:06.735
It would ban low cost funding, so when the Government

0:03:06.735,0:03:11.170
started up Kiwibank for example it puts the capital in to start it up.

0:03:11.170,0:03:17.509
That would be seen as a subsidy, if you like, to that... to Kiwibank.

0:03:17.509,0:03:21.317
And they don't want that to happen. They would require

0:03:21.317,0:03:24.498
Government to reduce its asset ownership. So progressively,

0:03:24.498,0:03:30.001
sell off its assets. This is a requirement of Singapore in the Singapore - US

0:03:30.001,0:03:34.367
Free Trade Agreement. It could apply to a whole range of State Owned Entities,

0:03:34.367,0:03:40.566
including ACC, Pharmac, Zespri, Public Broadcasting, Postal Services,

0:03:40.566,0:03:45.348
and many other Government services, anything that could conceiveably be in competition

0:03:45.348,0:03:51.108
with a US transnational wanting to do business in New Zealand

0:03:51.108,0:03:59.514
The United States has its usual... how shall I say? hypocritical opinion.

0:03:59.514,0:04:05.806
Thankyou I was looking for that phrase. [It] will be requiring

0:04:05.806,0:04:10.636
exemptions for its own SOEs. And this is not my imagination,

0:04:10.636,0:04:15.350
so basically [it] wants to say this applies to you but not to me.

0:04:15.350,0:04:21.039
But most importantly it wants to impose a provision for

0:04:21.039,0:04:26.797
"Investor - State Dispute Resolution" which is particularly tricky.

0:04:26.797,0:04:31.952
What that does is it allows investors to directly sue the Government,

0:04:31.952,0:04:37.943
if their profits [and] value [of their] assets [are not paramount].

0:04:37.943,0:04:42.680
There's going to be fierce resistance from Vietnam and Malaysia,

0:04:42.680,0:04:47.068
who have large and many and very important SOEs, and

0:04:47.068,0:04:50.389
Singapore will be pretty unhappy too although it's already tied up.

0:04:50.389,0:04:54.708
The ultimate target as I said is actually... seems to be China.

0:04:54.708,0:05:05.110
And for that reason, China has said "We're not happy with this

0:05:05.110,0:05:09.661
Agreement, we seem to be on the outer on this, we're not

0:05:09.661,0:05:14.189
we haven't been consulted over it." But quite fundamentally

0:05:14.189,0:05:19.646
China would not enter an agreement like this. And so

0:05:19.646,0:05:25.497
it's being seen more and more as actually anti-China... line-up if you like.

0:05:25.497,0:05:32.115
So it is giving a foreign policy dimension if you like that will... that threatens

0:05:32.115,0:05:36.759
to increase tensions in the Pacific region rather than be "kind of"

0:05:36.759,0:05:38.590
a partnership as it's called.