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The TPPA is...

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a proposal to extend an existing agreement New Zealand has with

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Brunei, Singapore and Chile. And... but the negotiations also include Australia, Malaysia, Vietnam, Peru,

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the United States [and Japan]. And of course having

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the United States up there makes it huge.

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The negotiations are held in secret, we don't see the

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drafts of the text of the agreement, so what I'm telling you

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is partly from leaks, partly from media speculation,

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partly from what we know from other agreements these

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countries have signed. It's not mainly about trade at all.

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Most of the tariffs amongst these countries have gone.

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The goods, the restrictions on goods trade most of them

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have gone. They've been negotiated away in other areas

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such as the World Trade Organisation. The chief

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New Zealand negotiator made this statement in private.

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He said "There is a public perception a United States

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Free Trade Agreement would be an el dorado to

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New Zealand's commercial sector but the reality is different and

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New Zealand must manage expectations about the benefits

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of such an agreement. So if we're gaining dairy access

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or whatever we will have to pay for it in other ways, and

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there's a whole list of other parts of the agreement which

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have nothing to do with goods trade. So the first I want to

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talk about, and this is quite recent, it's on State... it's a whole chapter

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on State Owned Enterprises. State Owned Enterprises are

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things like [hydro] electricity companies, Solid Energy, Air New Zealand.

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But more than that it can be things like ACC, it could be... it could be

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anything owned by the Government and run by the Government.

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The United States wants provisions on these in the agreement.

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They want to force State Owned Enterprises, and

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think Electrocorp, think ACC, think possibly even CRIs (Crown Research Institutes),

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whatever you like... to act solely in accordance with

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commercial considerations. Right. So they should have

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no non-commercial goals, like public-interests goals for example.

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For example [protecting rivers is] inconsistent with this agreement.

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[It prevents] Electricity SOEs from helping technology startups, which

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is one of the ideas the Greens and Labour had.

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Prevents them prefering 'locally built', for example the railways for New Zealand Rail.

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Prevent them favouring local suppliers, prevent them having

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relatively low profit requirements, so the rest of the country can benefit

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from low electricty prices for example.

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And prevent them for example from giving incentives for sustainable energy.

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It would ban low cost funding, so when the Government

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started up Kiwibank for example it puts the capital in to start it up.

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That would be seen as a subsidy, if you like, to that... to Kiwibank.

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And they don't want that to happen. They would require

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Government to reduce its asset ownership. So progressively,

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sell off its assets. This is a requirement of Singapore in the Singapore - US

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Free Trade Agreement. It could apply to a whole range of State Owned Entities,

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including ACC, Pharmac, Zespri, Public Broadcasting, Postal Services,

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and many other Government services, anything that could conceiveably be in competition

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with a US transnational wanting to do business in New Zealand

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The United States has its usual... how shall I say? hypocritical opinion.

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Thankyou I was looking for that phrase. [It] will be requiring

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exemptions for its own SOEs. And this is not my imagination,

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so basically [it] wants to say this applies to you but not to me.

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But most importantly it wants to impose a provision for

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"Investor - State Dispute Resolution" which is particularly tricky.

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What that does is it allows investors to directly sue the Government,

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if their profits [and] value [of their] assets [are not paramount].

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There's going to be fierce resistance from Vietnam and Malaysia,

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who have large and many and very important SOEs, and

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Singapore will be pretty unhappy too although it's already tied up.

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The ultimate target as I said is actually... seems to be China.

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And for that reason, China has said "We're not happy with this

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Agreement, we seem to be on the outer on this, we're not

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we haven't been consulted over it." But quite fundamentally

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China would not enter an agreement like this. And so

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it's being seen more and more as actually anti-China... line-up if you like.

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So it is giving a foreign policy dimension if you like that will... that threatens

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to increase tensions in the Pacific region rather than be "kind of"

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a partnership as it's called.