Ardern takes another step towards the TPP
By Richard Harman (author)
Prime Minister Jacinda Ardern was playing her TPP cards close to her chest yesterday after her meeting with Australian counterpart, Malcolm Turnbull.
But even so, she is sounding more and more like she is headed towards TPP11 signing and ratification.
Turnbull himself appeared genuinely pleased with his meeting with Ardern which went well over its expected two-hour duration.
He was positively gushing when the pair emerged to front a large Australian and New Zealand media contingent.
“We’ve had a great meeting; a great discussion,” he said.
“We hit it off the first time we spoke.
“:That friendship has developed as I knew it would.
“We’ve had some good discussions.
“We’ve covered a lot of ground.”
Turnbull then listed the topics and he put TPP at the top.
“We went through the TPP.
“We share a strong commitment to free trade and open markets.”
That was a theme Ardern would pick up later in a separate briefing with New Zealand media.
And she revealed what appears to be Labour's plan to deal with the International State Dispute Settlements (ISDS) clauses which would allow businesses to use independent tribunals to prosecute trade disputes with member countries.
Labour – and NZ First and the Greens --- all oppose the inclusion of the clauses in the TPP.
The Nikkei Asian Review reporting on last week’s meeting in Japan of TPP negotiators said a number of other TPP states also had questions about the clauses.
“We discussed a signed letter on the ISDS clauses which we see as being mutually beneficial," she said.
“That acknowledges our positions on ISDS – at least between each other.”
The letter appears to confirm that neither country will use the ISDS procedures against each other but will instead relay on each other’s domestic court system to prosecute any trade disputes.
It acknowledges the situation that rules under the Closer Economic relationship with Australia.
Given that Australia is the largest TPP11 investor in New Zealand, the Government is likely to promote this as a significant step towards moderating the threat of the ISDS procedures.
Trade Minister David Parker has said there should be no need for the clauses to exist between countries which have first world judicial and court systems.
That suggests that the priority for an exchange of letters similar to that with Australia would be with Canada, Japan and Singapore.
They are also likely to the most significant investors in New Zealand after Australia.
But Ardern would not confirm what the strategy ahead might be.
"There are a number of mechanisms we might use, but I am leaving them for the negotiating table.”
Even so the ISDS clauses remain the focus of the Government’s negotiations over the TPP.
“We’ve made it clear that ISDS remains our focus,” she said.
“We’ve also made it clear it will be difficult.
“We are coming in at a late stage.
“We are frustrated that we have been left with an agreement that we don’t believe that the previous Government had adequately pursued New Zealand’s interests when it comes to ISDS clauses.
“That's an area that we always said we would pursue alongside the foreign buyer ban.
“We’ve found a way to resolve that; now ISDS is the last frontier for us.
So are the ISDS clause still an obstacle top signing?
“We have said it is one of the things we want to see changes around.
“I won’t undermine New Zealand’s negotiating position by pre-determining what that will mean for the outcome."
And she confirmed ISDS clauses were discussed in her phone call with, Canadian Prime Minister, Justin Trudeau.
“We had a discussion around ISDS more broadly," she said.
“I don’t want to give away too much of that conversation.
“It’s fair to say a number of states at various points have taken issue with ISDS clauses.
“We are not alone in wanting to pursue New Zealand’s best interests and our right to regulate in the best interests of New Zealanders."
She said she wouldn’t predetermine what support New Zealand might get; that was all for negotiation.
“We are coming in very late in the piece.
“It will be very difficult.”
That sounds like what may be the ultimate outcome.
New Zealand might get some --- but probably not all TPP states --- to agree to the exchange of letters disavowing the usage of the ISDS clauses.
Much will depend on which states agree. If they are the big investors, then Labour will probably regard that as sufficient to allow them to sign the agreement.
On other delicate matters in the relationship with Australia Ardern, for what was her first formal foreign leader encounter, was showing a deft command of diplomacy.
She emphasised that any decision on extending the mandate for the troops in Iraq could not be made till next November by which stage she would have more information.
Labour has previously opposed extending that mandate, but Australia would like it to continue because the operation there is a joint training operation.
And on the sensitive question of the Manus island refugees, Turnbull repeatedly emphasised that Australia wopuld not allow "the people smugglers" to determine who got into Australia.
In off the record briefings for Australian journalists, officials there said that Australia wasn't keen on the New Zealand offer to take 150 refugees because it could be seen to reward the people smugglers and provide an impression that the offer could be repeated if more boats began to arrive.
Ardern was aware of this and deftly navigated between the Australian position and the pressure she is under, particularly from the left and the Greens, to take more Manus island refugees.
"In New Zealand, we of course do not have the circumstances that Australia operating under, but we can also cannot ignore the human face of what Australia is dealing with as well," she said.
The offer remains on the table while Australia waits for the US to take the 1250 it agreed to take when Obama was President.
But Turnbull did get a subtle dig into New Zealand's refugee policy after Ardern said New Zealand was already increasing its refugee quota to 1000 next year.
"In the last year, Australia has taken through its humanitarian programme over 20,000 refugees to Australia," he said.
"We have one of the largest rates of refugee acceptance through UN programs on a per capita basis, of any country in the world.
"So Australia is a very generous nation when it comes to refugees."
And on her claim during the TV3 Leaders’ Debate during the campaign that she would retaliate against Australian students studying in New Zealand if Australia went ahead with its Budget proposal to raise fees for New Zealanders in Australia studying at Universities, she was guarded.
“Our view is that if we have a situation which is inequitable, Australia would absolutely understand if we responded.
“If we see a diminishing and rights of access to our students we would make sure we didn’t have an uneven access to tertiary education in New Zealand particularly given the generous policy in education we are about to implement.”
That sounded very like saying that if Australia goes ahead with its proposal --- which is currently stalled --- then New Zealand might not allow Australian students to access the one-year free tertiary education that it has announced it will introduce in 2018.
But if that all sounded like formal tense international negotiations, it was clear there was more to the meeting than that.
Ardern mentioned they had had talked about something they had in common --- Hamilton.
Ardern was born there, and Turnbull spent time with his mother there after his parents separated and she moved to New Zealand.
“We were having a chat about my childhood memories of Mount Pirongia, clambering over Maori pas and eating a very large quantity of feijoas," said Turnbull.
That comment surprised Australian journalists at the media conference who said he rarely talks about what was obviously a painful time for him when his parents separated.
And maybe that was an indication that he felt a level of comfort with the new New Zealand Prime Minister.
Meanwhile, she has promised to take him fishing when he comes to New Zealand for the annual Prime Ministerial talks next March.