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Ratifying the TPPA makes no sense

The recent high-fiving between the government and agricultural exporters over ratification of the TPPA (Trans-Pacific Partnership Agreement) is empty gesture politics in an election year. Ratification by New Zealand means nothing. New Zealand law changes are not implemented unless the agreement ‘comes into force’ and this can’t happen unless the United States (US) ratifies. President Trump is unpredictable, but this is not a serious possibility.

Efforts to have a more limited agreement without the US are mainly about trying to get an agreement with Japan. But the benefits of such a deal would be far smaller than the already tiny benefits of the full TPPA.  Exaggerated benefits by MFAT came up with less than 1% GDP increase that would happen 15 years into the future. And this came at a cost. The US insisted on benefits for their multinationals, loading costs onto New Zealand and restrictions on what our government can and can’t do for our SMEs, people, and the environment. Without the US, we would be getting even fewer benefits but still bearing the high costs.

Garment factory workers near Hanoi, Vietnam. Imagine credit: Reuters.

The National government is flailing around in its futile attempts to revive the TPPA. There have also been repeated announcements about trade deals far into the future, a big increase in spending on trade deals and endless PR spin. In reality, this is a response to the abject failure of the government’s attempt to increase exports. Far from moving towards their target of exports equal to 40% of GDP, exports as a proportion of GDP is falling. More intrusive and onerous trade agreements are not the right answer. The government’s strategy is flawed.

As a survey of business by the Chartered Accountants of Australia and New Zealand showed, most businesses see these trade agreements as irrelevant. 72% of those surveyed said they could foresee no benefits. There are far more important measures that the government should be taking to enhance our credibility with the growing numbers of ethical consumers and to support local businesses.

This is reflected in the data. Average worldwide tariffs are 2.5% and there are few benefits available from trade agreements. Peak tariffs are in agricultural commodities, and as shown with the TPPA, only small gains in that area come from trade agreements. The TPPA also ignored the main threats to our agricultural exporters, which are from domestic subsidies in countries like the US, Japan, and Canada.

Most importantly, tariffs and traditional trade measures are a small part of these agreements. There would not have been a rejection of the TPPA by over half of the New Zealand public if it was just about tariffs. The devil is in the detail that comprises most of its 7000 pages.

Green Party MP Barry Coates

Green Party trade spokesperson Barry Coates

Research shows that the TPPA would allow foreign multinationals to sue our government, restrict our government’s right to regulate in the public interest, give pharmaceutical corporations stronger patent rights, extend copyright to 70 years after the lifetime of the creator, and open up government procurement to foreign companies. There are other dangerous and costly provisions.

The Green Party has repeatedly rejected the TPPA and we continue to do so. In government, we will push for a fundamental change in our approach to trade agreements to re-balance trade agreements, away from excessive rights for global companies and towards supporting local business and SMEs. This would include rejecting the rights of multinationals to sue our government in an international tribunal – the controversial Investor-State Dispute Settlement (ISDS) provisions.

We would also re-balance trade agreements away from the dominance of economic growth at all costs towards stronger protection for the environment, greater equality and benefits for workers, and respect for human rights and te Tiriti.

We need trade to work for all, not just a few.