WEBVTT 00:00:05.947 --> 00:00:08.139 The TPPA is... 00:00:08.139 --> 00:00:12.330 a proposal to extend an existing agreement New Zealand has with 00:00:12.330 --> 00:00:22.291 Brunei, Singapore and Chile. And... but the negotiations also include Australia, Malaysia, Vietnam, Peru, 00:00:22.291 --> 00:00:26.169 the United States [and Japan]. And of course having 00:00:26.169 --> 00:00:28.491 the United States up there makes it huge. 00:00:28.491 --> 00:00:31.138 The negotiations are held in secret, we don't see the 00:00:31.138 --> 00:00:33.924 drafts of the text of the agreement, so what I'm telling you 00:00:33.924 --> 00:00:37.407 is partly from leaks, partly from media speculation, 00:00:37.407 --> 00:00:40.937 partly from what we know from other agreements these 00:00:40.937 --> 00:00:44.629 countries have signed. It's not mainly about trade at all. 00:00:44.629 --> 00:00:47.763 Most of the tariffs amongst these countries have gone. 00:00:47.763 --> 00:00:50.945 The goods, the restrictions on goods trade most of them 00:00:50.945 --> 00:00:53.336 have gone. They've been negotiated away in other areas 00:00:53.336 --> 00:00:56.587 such as the World Trade Organisation. The chief NOTE Paragraph 00:00:56.587 --> 00:01:00.488 New Zealand negotiator made this statement in private. 00:01:00.488 --> 00:01:05.016 He said "There is a public perception a United States 00:01:05.016 --> 00:01:07.872 Free Trade Agreement would be an el dorado to 00:01:07.872 --> 00:01:10.124 New Zealand's commercial sector but the reality is different and 00:01:10.124 --> 00:01:13.839 New Zealand must manage expectations about the benefits 00:01:13.839 --> 00:01:19.771 of such an agreement. So if we're gaining dairy access 00:01:19.771 --> 00:01:22.782 or whatever we will have to pay for it in other ways, and 00:01:22.782 --> 00:01:25.753 there's a whole list of other parts of the agreement which 00:01:25.753 --> 00:01:29.169 have nothing to do with goods trade. So the first I want to 00:01:29.169 --> 00:01:32.886 talk about, and this is quite recent, it's on State... it's a whole chapter 00:01:32.886 --> 00:01:36.804 on State Owned Enterprises. State Owned Enterprises are 00:01:36.804 --> 00:01:42.028 things like [hydro] electricity companies, Solid Energy, Air New Zealand. 00:01:42.028 --> 00:01:48.298 But more than that it can be things like ACC, it could be... it could be 00:01:48.298 --> 00:01:51.479 anything owned by the Government and run by the Government. 00:01:51.479 --> 00:01:57.354 The United States wants provisions on these in the agreement. 00:01:57.354 --> 00:02:02.926 They want to force State Owned Enterprises, and 00:02:02.926 --> 00:02:08.592 think Electrocorp, think ACC, think possibly even CRIs (Crown Research Institutes), 00:02:08.592 --> 00:02:14.351 whatever you like... to act solely in accordance with 00:02:14.351 --> 00:02:17.555 commercial considerations. Right. So they should have 00:02:17.555 --> 00:02:22.988 no non-commercial goals, like public-interests goals for example. 00:02:22.988 --> 00:02:28.306 For example [protecting rivers is] inconsistent with this agreement. 00:02:28.306 --> 00:02:33.948 [It prevents] Electricity SOEs from helping technology startups, which 00:02:33.948 --> 00:02:37.037 is one of the ideas the Greens and Labour had. 00:02:37.037 --> 00:02:42.888 Prevents them prefering 'locally built', for example the railways for New Zealand Rail. 00:02:42.888 --> 00:02:46.812 Prevent them favouring local suppliers, prevent them having 00:02:46.812 --> 00:02:50.342 relatively low profit requirements, so the rest of the country can benefit 00:02:50.342 --> 00:02:53.964 from low electricty prices for example. 00:02:53.964 --> 00:03:00.140 And prevent them for example from giving incentives for sustainable energy. 00:03:00.140 --> 00:03:06.735 It would ban low cost funding, so when the Government 00:03:06.735 --> 00:03:11.170 started up Kiwibank for example it puts the capital in to start it up. 00:03:11.170 --> 00:03:17.509 That would be seen as a subsidy, if you like, to that... to Kiwibank. 00:03:17.509 --> 00:03:21.317 And they don't want that to happen. They would require 00:03:21.317 --> 00:03:24.498 Government to reduce its asset ownership. So progressively, 00:03:24.498 --> 00:03:30.001 sell off its assets. This is a requirement of Singapore in the Singapore - US 00:03:30.001 --> 00:03:34.367 Free Trade Agreement. It could apply to a whole range of State Owned Entities, 00:03:34.367 --> 00:03:40.566 including ACC, Pharmac, Zespri, Public Broadcasting, Postal Services, 00:03:40.566 --> 00:03:45.348 and many other Government services, anything that could conceiveably be in competition 00:03:45.348 --> 00:03:51.108 with a US transnational wanting to do business in New Zealand 00:03:51.108 --> 00:03:59.514 The United States has its usual... how shall I say? hypocritical opinion. 00:03:59.514 --> 00:04:05.806 Thankyou I was looking for that phrase. [It] will be requiring 00:04:05.806 --> 00:04:10.636 exemptions for its own SOEs. And this is not my imagination, 00:04:10.636 --> 00:04:15.350 so basically [it] wants to say this applies to you but not to me. 00:04:15.350 --> 00:04:21.039 But most importantly it wants to impose a provision for 00:04:21.039 --> 00:04:26.797 "Investor - State Dispute Resolution" which is particularly tricky. 00:04:26.797 --> 00:04:31.952 What that does is it allows investors to directly sue the Government, 00:04:31.952 --> 00:04:37.943 if their profits [and] value [of their] assets [are not paramount]. 00:04:37.943 --> 00:04:42.680 There's going to be fierce resistance from Vietnam and Malaysia, 00:04:42.680 --> 00:04:47.068 who have large and many and very important SOEs, and 00:04:47.068 --> 00:04:50.389 Singapore will be pretty unhappy too although it's already tied up. 00:04:50.389 --> 00:04:54.708 The ultimate target as I said is actually... seems to be China. 00:04:54.708 --> 00:05:05.110 And for that reason, China has said "We're not happy with this 00:05:05.110 --> 00:05:09.661 Agreement, we seem to be on the outer on this, we're not 00:05:09.661 --> 00:05:14.189 we haven't been consulted over it." But quite fundamentally 00:05:14.189 --> 00:05:19.646 China would not enter an agreement like this. And so 00:05:19.646 --> 00:05:25.497 it's being seen more and more as actually anti-China... line-up if you like. 00:05:25.497 --> 00:05:32.115 So it is giving a foreign policy dimension if you like that will... that threatens 00:05:32.115 --> 00:05:36.759 to increase tensions in the Pacific region rather than be "kind of" 00:05:36.759 --> 00:05:38.590 a partnership as it's called.