30 January 2016

Do your homework Export NZ: The TPPA is the China FTA on Steroids!

‘Claims by Export NZ that the Trans-Pacific Partnership Agreement (TPPA) is basically no different from the NZ-China FTA shows appalling ignorance of both agreements’, says University of Auckland law professor Jane Kelsey.

‘Presumably the corporate lobbies are trying to discredit the Labour Party, which negotiated the China FTA and has now come out against the TPPA because of its impacts on regulatory sovereignty. Anyone familiar with the agreements knows that Export NZ is plain wrong.’

Professor Kelsey notes that the China agreement does include many non-trade rules that extend the constraints on governments that were introduced when the World Trade Organisation was created in 1995.

‘I was highly critical of those developments for that reason, but the TPPA makes the China deal pale into relative insignificance’.

The starkest example is the intellectual property chapter. The China FTA simply affirms both countries’ obligations under the WTO. The TPPA contains unprecedented new rules on marketing exclusivity for biologic medicines, extends copyright for 20 years, imposes new rules on patents, restricts technology protection measures, and much more.

The investment chapter confers China-plus rights on the 1608 US corporations operating in New Zealand, plus those from Japan, Singapore, Canada and elsewhere. These include:
· Access to use the TPPA’s investor-state disputes mechanism to deal with contractual disputes over mining and resource concessions, PPP contracts, and contracts for public services like power, water and telecoms, even when the investor is not alleging a breach of TPPA rules.
· The (weak) general exception provision does not apply to the investment chapter.
· Non-discrimination rules in the China agreement only apply after the investment is established, whereas the TPPA covers pre-establishment.
· The Annex that interprets expropriation is more pro-investor than the China FTA, although that was itself more pro-investor than the Australia New Zealand ASEAN FTA.

Professor Kelsey points out that China’s investors will now enjoy many of the benefits that the TPPA countries and their corporations gain through the TPPA under the most-favoured-nation rule. This entitles China, and most other countries with which New Zealand has FTAs, to any better rules provided to investors in subsequent agreements.

The TPPA also contains completely novel chapters on state-owned enterprises, e-commerce and regulatory coherence that constrain future government’s regulatory sovereignty, and more extensive rules that for China in other chapters, such as financial services and government procurement.

ENDS

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