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'Sell out' accusations follow leaked paper

Last updated 05:00 15/06/2012

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A reportedly leaked trade negotiation document set the cat among the pigeons yesterday, with minor parties and trade activists citing it as proof New Zealand is being sold out to corporates, a charge the Government and Labour Party deny.

The document is said to relate to the Trans Pacific Partnership agreement being negotiated between New Zealand, Australia, Brunei, Chile, Japan, Malaysia, Peru, Singapore, the US, and Vietnam.

It contains a framework whereby a foreign firm can sue a sovereign state for a loss of earnings relating to legislation, as well as terms for other investor protections.

On the face of it those protections are said to guard against events like government nationalisation of private assets, but activists such as legal academic and trade expert Jane Kelsey maintain they have the potential to severely limit how a country passes laws that affect foreign businesses for fear of racking up millions in legal and compensation costs.

The protections have been labelled "anti-democratic" by Green Party co-leader Russel Norman. NZ First leader Winston Peters called for a halt to the talks pending a select committee inquiry into the TPP.

Protagonists claim worst-case scenarios include tobacco companies being able to sue over plain-packaging rules because they violated a trademark, or oil exploration firms arguing against tighter environmental laws that affected their bottom lines.

Trade Minister Tim Groser was quick to rubbish the examples, saying he would never sign an agreement that resulted in such scenarios.

Surprisingly, Groser's stance was backed by Labour's trade spokesman, Clayton Cosgrove.

New Zealand has already agreed to similar investor protection clauses under its free-trade agreement with China, which was signed in April 2008 when Labour was in power.

Cosgrove maintains those protections contained "exclusions and exemptions to regulation and legislation in the public good", protections he is confident Groser will include in the TPP.

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