Fair and sustainable trade: A Green Party vision for New Zealand’s trading relationships

Trade is a cornerstone of the New Zealand economy. It provides us with the things we want and need, and enables us to pay for those with exports that generate business opportunities and jobs. However, it should be recognised that increasing trade is not an end in itself, but rather a means to achieve improved living standards and a better quality of life, consistent with enhanced equity and sustainability.

Trade treaties are no longer just about tariffs and quotas. They include issues that are central to the domestic economy and society, including issues such as patents, copyright, government procurement, education, health care, water supply and the internet. Their rules restrict the rights of governments to regulate the economy in the public interest, and allow foreign investors to sue governments and demand compensation.

Treaties like the Trans-Pacific Partnership Agreement (TPPA) have ignited opposition from a New Zealand and global movement. The groups opposing the TPPA weren’t against trade, but against the loss of sovereignty, the privatisation of services, rights for foreign corporations, and threats to the environment, human rights and te Tiriti o Waitangi.

These are valid concerns. Ignoring them risks a backlash against trade, and a retreat into a cycle of protectionism. Reform is needed to make trade rules fit for the 21st Century.
The Green Party is calling for a new framework for trade and investment, built around the following principles:
1. Fair trade and equitable sharing of benefits – Trade and other agreements should regulate multinationals, protect workers and vulnerable groups, and ensure fair competition for SMEs. Ecological limits and sustainability.
2. Ecological limits and sustainability – Trade agreements must recognise ecological limits and support environmental agreements, including the Paris Agreement on climate change.
3. Protection of human rights – Trade agreements should uphold and promote a variety of human rights, including access to essential services, worker’s rights and rights under Te Tiriti o Waitangi.
4. Respect for democracy – Trade negotiations should be transparent and accountable, and subject to Parliamentary scrutiny and approval; and agreements should not include the right for investors to sue governments, and agreements must uphold the rights of governments to regulate in the public interest.

Fair Trade and Equitable Sharing of benefits
Barriers to trade have been lowered over recent decades, so that the average tariff worldwide is only 2.5%, but the remaining tariff peaks are focused on low wage goods such as textiles and clothing, and on agriculture which disadvantages New Zealand’s traditional exports. Trade treaties that lower tariffs can be beneficial to all countries, and the Green Party supports trade that provides benefits for New Zealand’s exporters within an agreed framework.

However, there are justifiable reasons why countries retain tariffs, such as India’s concern over the impact of cheap food imports on the livelihoods of 450 million impoverished peasant farmers. The Green Party would ensure trade agreements respect the rights of poorer countries to prioritise poverty reduction, and would promote initiatives such as fair trade that provide opportunities for small and disadvantaged producers.

Trade agreements typically benefit foreign companies, and the costs fall heaviest on displaced workers or vulnerable groups in society. Most governments, including past New Zealand governments, have failed to put programmes in place to retrain displaced workers and support communities faced with production closures. The Green Party would provide transitional support for businesses and workers adversely impacted by trade agreements, and ensure vulnerable groups in our society are protected from adverse impacts.

There are significant gaps in rules on the global economy. Trade agreements restrict governments, but there are few regulations on global corporations. This means that some multinationals avoid paying taxes, or are allowed to compete unfairly, or use the threat of suing governments to gain advantages over domestic competitors. They also benefit from economies of scale through their size and economies of scope in being able to operate across different markets.

As a result, small and medium enterprises (SMEs) are often disadvantaged compared to their far larger competitors. The Green Party would ensue that trade agreements allow the flexibility to recognise the important benefits that SMEs provide to local communities and the economy, including in procurement rules.
Trade treaties can have adverse effects on vulnerable groups in society, particularly from rules that apply a commercial framework to public services, such as health care, education and water supply. The Green Party would ensure that social aims are not undermined by trade treaties.

Ecological Limits and Sustainability
As tariffs have fallen, trade negotiators have turned their sights on reducing so called “non-tariff barriers”. But there has been confusion over what a barrier is and what is legitimate government regulation for purposes such as biosecurity or environmental protection or for animal welfare.
Trade agreements require governments to justify their regulations if they are seen to be impeding trade or investment, and allow governments or companies (under Investor State Dispute Settlement – ISDS) to challenge and overturn regulations, even if they are in the public interest.

Around two-thirds of the ISDS cases brought by corporates against governments are challenges to environmental regulations. The Green Party would uphold the rights of states to protect their environment and respect ecological limits to the expansion of trade and economic activity.
Trade agreements can also undermine action on climate change, our most serious strategic global threat. The Paris Climate Agreement is an important starting point towards the deep greenhouse gas emissions that will be required, and it should be supported by trade agreements. This is especially important since trade agreements have strong enforcement mechanisms but the Paris Agreement is largely voluntary. Currently some trade agreements undermine Paris Climate Agreement commitments, for example by preventing the Indian government from supporting the development of a local solar energy industry or proposals that would prevent governments from prioritising clean energy over fossil fuels.

The Green Party would ensure that trade agreements support climate action and do not undermine it. The Greens will also work with progressive countries on ways to protect our producers from unfair competition by countries that are not implementing their Paris commitments.

Protection of Human Rights
Trade agreements in areas such as health, education and water supply focus on access by multinationals to markets and removal of impediments to investment. However, these services and other public goods are also human rights that should be accessible and affordable for all, not governed by commercial considerations. The Green Party would remove public services and trade rules affecting human rights from trade agreements.

Similarly, rights for foreign companies to access resources or to claim intellectual property rights are potentially in conflict with the rights of Maori under te Tiriti o Waitangi. The potential conflicts extend far beyond the narrow exceptions in New Zealand’s current trade agreements. The Green Party would engage with iwi to review the provisions of trade agreements in relation to te Tiriti rights.

Trade agreements between countries should respect human rights. For example, most consumers expect that the goods they buy are not made with child labour or come from factories that do not uphold core labour rights that have been agreed by all countries. Trade agreements should therefore include provisions that ensure there are systems for ensuring that human rights are upheld. The Green Party would negotiate for trade agreements to include provisions for verifying that human rights in trade are implemented.

Respect for Democracy
Governments have a responsibility to involve their citizens in trade negotiations in an open and transparent manner. Currently trade negotiations are the exception from treaties negotiated in the United Nations, on the basis that they are about trade-offs of commercial interests. But this is not acceptable for agreements that have implications across all of society. The current system for negotiating and signing trade deals in New Zealand needs to be reformed. The Green Party commits to:
• Providing public updates following each round of negotiations, including releasing draft texts
• Thorough public consultation processes throughout the negotiations
• Release of New Zealand’s negotiating proposals to enable accountability
• Scrutiny by Parliamentary Select Committees, including on the mandate for negotiations
• Tabling the final agreement text in Parliament, to be voted on, before it is signed

Trade agreements must allow governments to retain the ability to regulate in a democratic manner that reflects their citizens’ best interests. Investor-state dispute settlement (ISDS) provisions are not appropriate and not in the best interests of citizens. The European Union will not sign any new trade agreements with ISDS, and countries such as India and South Africa are renegotiating their past agreements that have ISDS provisions.

The Green Party will not sign New Zealand up to any new trade agreements that include ISDS provisions. Alternatives are available, including using domestic courts and political risk insurance. Where possible, we will seek to renegotiate existing agreements that contain ISDS.