Trade Minister Tim Groser is thought to have tried and failed to get concessions into the TPP agreement to allow future New Zealand Governments to legislate to restrict foreign ownership of land.
Instead the TPP has increased the threshold at which overseas buyers must seek Overseas Investment Office approval from $100 to $200 million.
Under so-called “most favoured nation” clauses this provision will now flow through into the China and Korean Free Trade Agreements.
Of the major oversea s land buyers in New Zealand, this will now mean that only citizens from EU countries like Britain and Germany will need to apply for approval at the old $100 million limit.
Mr Groser was keen to get the restriction on land sales into the agreement because the Labour Party had nominated it as one of their bottom line conditions to allow them to support the agreement.
Talking to POLITIK yesterday morning he would only say that he wanted to talk to Labour about the restriction.
The big questions about Mr Groser’s negotiating though will be about dairy access.
Both he and the Prime Minister have been warning for some time that New Zealand might not get all it wanted on dairy.
New Zealand may have ended up having to fight the dairy battle on its own with Australia placing its priorities on biologic medicines and sugar access.
If that was the case, and Mr Groser has hinted that Australia was placing less emphasis on dairy than New Zealand, then our negotiators were going to be up against it.
Consequently there will be questions as to whether the big victory on biologic drugs in any way impacted adversely on dairy access.
Both biologics and dairy were among the last items to be negotiated and it would not be surprising if the United States forced a trade-off between the two.
Something has been given up for the Pharmac deal though.
“We had to spend a lot of capital on it,” said Mr Groser.
“We might have got something more somewhere else if we hadn’t put so much emphasis on it.
“That’s the way negotiations work.”
In a statement President Obama underlined the political importance of the agreement for the United States.
“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” he said.
“We should write those rules.”
He called the TPP an agreement that reflected America’s values and gave its workers “the fair shot at success they deserve. “
But the overt politicization of the TPP by the United States may have opened a window for New Zealand which has been very careful to keep open its lines of communication to China.
Mr. Groser has previously commented to POLITIK that if the TPP were to have failed, then that would change the geo-political architecture of East Asia, shorthand for saying that China would become the predominant influence in the region.
Asked then if he had had to play a political card to get the deal he got, Mr. Groser said “Oh yes! Absolutely!”
“But it’s not something that I can talk about.
“But the Prime Minister and I in New York not playing political cards?
“You’d have to ask what last shower did you come down in!”
Labour Leader Andrew Little is away at present so Labour’s reaction was handled by deputy-Leader Annette King.
Though Finance spokesperson Grant Robertson also responded with a statement saying the agreement had failed Labour’s bottom line tests on dairy and foreign land sales, Ms. King offered a statement that sounded more like a holding position.
“The devil is definitely in the detail in these agreements,” she said.
“New Zealanders must be told whether the government has traded away our right to further restrict foreign ownership of housing or farm land and what agreements have been made to allow foreign corporations to sue New Zealand for regulating in the public interest.
“The Canadian and US Governments are planning long and open debates in their parliaments over the details of the deal.
“New Zealand’s Government must commit to the same – an open consultation with public and a full parliamentary debate including the complete text of the agreement.
“Labour supports free trade, but the TPPA is more than just a trade agreement.
“We have been very clear that we will not support it if it does not meet our bottom lines including meaningful gains for farmers, the ability to restrict house and land sales, protecting Pharmac and the ability to govern in the interests of New Zealanders.”
It looks as though it is going to be the foreign land sales issue which will be the sticking point.
Trade spokesperson, David Parker who is sympathetic to the TPP, has been strong on rejecting any final agreement which bound future New Zealand Parliament’s’ ability to legislate on restricting foreign purchases.
It may prove to be very difficult for Labour to support this agreement.