US firms to control NZ legislation?

21:42, May 08 2012

Fears that American companies could gain control over New Zealand's lawmaking process have provoked a strong response from dozens of the country's legal minds.

More than 60 New Zealanders, including retired judges, practising lawyers, sitting members of Parliament and university academics, have issued an open letter to the lead negotiators of each country attending the latest round of Trans-Pacific Partnership talks beginning in Dallas, Texas, today.

The letter, signed by more than 100 international law experts, calls upon all governments engaged in TPP talks to reject the "investor-state dispute settlement" mechanism, which essentially gives private companies the ability to take civil action against foreign governments.

The Australian Government has taken the lead on excluding these provisions from any agreement that it signs, including its current free-trade agreement with the United States and South Korea also has concerns about its free-trade agreement with the US.

TPP proponents have said it will boost trade between the nine signatory countries by $1.1 trillion, although critics have said that that is an overestimation.

In return for access to lucrative American markets, US business interests are pushing for the inclusion of provisions which go further than the traditional tariff and subsidy scope of trade agreements, such as the "investor-state" provisions.


The New Zealand Government's plan to force tobacco companies to use plain, unmarked packaging for selling cigarettes here could be subject to such a foreign legal challenge, as it has been in the US.

Tobacco companies' arguments that the US Government's proposal to display graphic health warnings on cigarette packets abridges their freedom of speech are being fought in the US courts and are likely to reach the Supreme Court soon.

A principal signatory to the letter, Professor Bryan Gould – a former vice-chancellor of Waikato University and a former British Labour MP – said he was not hostile to free trade itself but believed the TPP had many more far-reaching implications.

"This agreement, although it's presented as a free-trade agreement, is much more than that: it's allowing major foreign corporations to have a disproportionate influence over our power to make our own decisions," Gould said.

"There's little point in going through the whole democratic process and electing governments and all the rest of it if, in the end, those governments are subject to the power exercised by people well beyond our shores."

Stephen Jacobi, executive director of the New Zealand-United States Council, said trade provisions generally respected a sovereign government's right to regulate on public health and environmental issues, and in New Zealand's case, took the Treaty of Waitangi into account.