Labour Party on side with new TPP - so far
By Richard Harman (author)
The Prime Minister, Jacinda Ardern, undoubtedly conscious of the widespread concern within the Labour party about the TPP, has been keeping Party President, Nigel Haworth, briefed through the weekend as the negotiations over a new agreement have unfolded at APEC in Viet Nam.
Ardern will need the party on side if she is going to progress the agreement that was eventually reached in Da Nang.
Trade Minister David Parker confirmed over the weekend that the new agreement would require legislation; that will require the approval of the Labour Party and Labour's caucus.
There are still four outstanding matters to be resolved but these do not involve New Zealand, and Trade Minister David Parker said “New Zealand would now be focused on working together with its partner countries toward signature."
An indication of how sensitive the issue is for the left came with a statement on Friday from Combined Trade Unions Secretary, Sam Huggard.
"The CTU has never supported the TPPA," he said.
"It is an agreement that is structurally biased towards commercial interests.
"The needs of commerce come first, and other vital matters that concern our community come second: among them the needs for health, safety, human rights including democratic and labour rights, the environment, cultural values and economic development."
The big issue for the party will have been the Investor-State Disputes Settlement (ISDS) clauses, and Trade Minister David Parker has made some gains over them during the negotiations.
Parker said in a statement that the agreement preserved New Zealand’s right to regulate in the public interest
Noting last weekend’s agreement with Australia for the two countries not to use ISDS clauses with each other he said: “ We continue to seek similar agreements with the other countries in this new Agreement. In addition, the scope to make ISDS claims has also been narrowed.”
Already TPP critics like Professor Jane Kelsey have questioned just how much of a gain this is.
Writing on "The Daily Blog" yesterday she said: “A provision that would allow foreign investors to use the TPPA’s ISDS mechanism to enforce contracts for infrastructure or natural resources has been suspended, as has the ability to challenge measures affecting certain financial investments. But investors can still use ISDS to enforce their special rights under the investment chapter, and the delegitimised ISDS process remains intact.”
Her view will be particularly important for the Labour Party as many on the left who have been opposed to the TPP will take their cue from her.
But Haworth was full of praise for the way Ardern has been keeping the party in the loop.
“The team in Viet Nam, particularly David (Parker) and Jacinda )Ardern) have kept the party completely in the loop on the discussions," he told POLITIK last night.
“Jacinda has been engaging with the party closely on this because she knows that the party holds strong views about trade and the TPP.
“It’s a good way of working with the party in these circumstances, and I'm really pleased with the leadership she is showing.”
Haworth said there would be consultations between the Government and the party over the detail of the agreement reached in Viet Nam.
The deal being discussed over the weekend has been changed from what was agreed last year largely because the United States has withdrawn.
Their absence has produced some gains for New Zealand with the suspension of the chapter on intellectual property and the consequences of that for biologic drugs and Pharmac.
The original TPP called for an eight-year "exclusivity” period on biologic drugs (like the anti cancer drug, keytrua) during which Pharmac would have to purchase brand-name drugs rather than cheaper generics.
New Zealand had found a workaround which limited that exclusivity period to five years but the US pharmaceutical industry was highly critical of the way Pharmac proposed to do things.
None of that matters now because the US has withdrawn and the Chapter has been withdrawn which means the status quo rules at Pharmac.
But if New Zealand has made gains there because of the withdrawal of the US, overall the agreement without the US is a big loss to New Zealand.
The authoritative Peterson Institute for International Economics estimates that the gains to New Zealand exporters from TPP12 would have been $9 billion in 2030 but only $5 billion from the agreement currently being considered.
However many observers believe the TPP – or as it is now called, the Comprehensive and Progressive Agreement for the Trans Pacific Partnership (CPTPP) --- is about more than trade.
It is being seen as an example of multi lateralism on the part of East Asian and Pacific countries which does not involve either the US or China.
But there are risks in that situation.
The Professor of Strategic Studies at the Victoria University of Wellington, Robert Ayson, believes that the Trump administration has left a vacuum in Asia which Japan is now trying to fill.
“With the US gone there is less of a concern about US-China competition but with Japan taking leadership of the TPP in a defacto sense and also Japan's idea of a four-country Indo Pacific initiative (Japan, the US, Australia and India) there is a risk that if New Zealand doesn't navigate the shoals carefully there is a risk that New Zealand could get dragged into Japan-China competition,”he told POLITIK.
“so what New Zealand is looking for now, if you can’t rely on the US and if you don; 't want to rely too much on China, you want to build your other relationships, and that includes Japan.
“So New Zealand will continue to want to do things as multilaterally as possible and to sell the TPP as that kind of across the region approach.”
That argument, that the CPTPP is a move towards independence by the region, may prove to be useful with the Labour Party.
The spotlight will now turn on to the party, the Labour caucus and Labour's coalition partner NZ First and support party, the Greens, all of whom, one way or another have at best-expressed reservations about the TPP and at worst downright opposed it.
This is going to be real test of Jacinda Ardern’s political management skills.