Remember when Labour used to hate the TPP? — now they love its successor

Trade Minister David Parker sounded like his National Government predecessors as he enthused over the new Comprehensive Progressive  Trans Pacific Partnership.

The Government released the National Interest Assessment and text of the new agreement yesterday.

Parker told a press conference that officials had estimated that the tariff benefits to New Zealand exporters from the new agreement would exceed those predicted for the China Free Trade Agreement.

“The predicted benefits for the China Free Tade Agreement were $115 million per anum, and for this, it is $222 million,” he said.

“This is actually a pretty big deal for New Zealand.”

He said it meant New Zealand effectively had n four new trade agreements with countries it had not had agreements with previously: Japan, Canada, Mexico and Peru.

“The National Interest Assessment shows that this increases the size of the New Zealand economy by one percent of GDP and that there is an economic contraction of the New Zealand economy if we don’t join.”

But because the US is not any longer in the agreement some of the original benefits have been eroded and the total tariff savings on exports per anum is now $22 million down from $274 million in the original TPP.

The biggest loser is dairy which is down $96 million a year but still makes a saving of $89 million a year.

In Opposition, Labour MPs frequently quoted a Tufts University study which suggested the benefits to New Zealand would be less than the MFAT estimates, but Parker yesterday was avoiding talk like that.

“I think the groundswell of opposition to free trade agreements in the world is actually grounded in things outside of trade sometimes.

“I’m quite happy to criticise multi-national tax avoidance, this enormous concentration of wealth that is accruing to a very small fraction of one per cent of the population around the world.

“I think people are anti-trade because they feel vulnerable because of some of the technological disruption that is changing jobs.

“I know from my analysis that not all of those things can be controlled through trade agreements, but I am willing to express them.

“And I think one of the reasons why I hope we are having a good debate about trade now is that we are willing to say that there are some excesses of global capitalism in the world and we are willing to address them as a Government, and it’s not always through trade agreements.

“But people are right to be concerned about those issues.”

And there will be opposition. The perennial anti-TPP campaigner, Jane Kelsey, is getting up a petition to protest this agreement and already meetings to oppose the new agreement shave been taking place around New Zealand.

A taste of that came on left-wing “Standard” website last night with the headline “Complete U-Turn by Labour and NZ First on TPP.”

Ultimately Labour has really only gained the right to bar foreign home buyers as a new addition to the agreement.

That will not apply to Australians and whether it will apply to Singaporean investors is still unclear.

“That’s still in flux,” Parker said yesterday.

“The one prior agreement that we have that is complicated by our house buyer ban is the Closer Economic Partnership that we have with Singapore.

“They are a valued and longstanding and very close partner of New Zealand, and we are trying to resolve those issues.”

There are some changes to the Investor States Disputes Settlement criteria, but the overall ISDS procedures remain.

However, Parker said New Zealand had narrowed the number of countries that could bring ISDS cases against New Zealand “through bilateral agreements on the side, which have Treaty status.”

At this stage, only Australia has formally undertaken not to use the procedures against New Zealand.

“But we’ve got some other side letters on the boil, at least some of which we expect to come to fruition on the eighth of March.”
He said they couldn’t be announced before then because of New Zealand’s obligations to the other countries.

The Government is planning to send the new agreement to a Select Committee though how it will progress through the House beyond that is still unclear.

Parker said he was confident that he had enough votes though he conceded he hadn’t spoken to National but assumed they would support it because of their public statements.

The full text of the CPTPP is available online at https://www.mfat.govt.nz/en/about-us/who-we-are/treaties/cptpp 

The National Interest Analysis is available online at https://www.mfat.govt.nz/cptpp. It will be updated next month with more details of side letters that will be signed along with the agreement.