TPP deadline spurs both sides to action

TRACY WATKINS
Last updated 10:45 01/12/2012
Barack Obama
REUTERS
When it comes to the Trans-Pacific Partnership talks, US President Barack Obama is a very big fish in a very small pond.

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Tracy Watkins

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OPINION: When it comes to the Trans-Pacific Partnership, or TPP, only one man's word counts.

That was why Barack Obama's move to light a fire under the trade talks on the fringes of the East Asia Summit buoyed our Trade Minister Tim Groser and Prime Minister John Key.

President Obama geed up the negotiators by setting an informal deadline of October 2013 to seal the deal.

Since he is by far the biggest fish in what, without the United States, would look like a very small pond - TPP countries include New Zealand, Chile, Singapore, Brunei, Australia and Vietnam - his deadline will give the TPP some real impetus.

But that's about as far as the cork-popping should go. In the carefully calibrated language of international trade negotiations, October is what they call an ambitious deadline. The decade-old Doha trade round - not to be confused with that other diplomatic cocktail circuit perennial, the climate change round, the latest of which is also named for Doha - is now so close to dead some people want to scrap the whole thing and start again.

The TPP negotiators have managed to squeeze in 14 rounds of talks in various cities around the world so far but that still makes it just a toddler in international conference land.

Mr Key is already talking up the prospects of a "summit" next year to push the deal over the line. But what he can't push over the line is a potentially hostile US Congress.

In a weak economy, Mr Obama is facing domestic headwinds against trade liberalisation. A large group of US senators and members of the House of Representatives have already written to US Trade Representative Ron Kirk opposing any moves to open US dairy markets to New Zealand. We know from bitter experience the strength of the US lobby against increased agricultural access.

Anti-TPP activists, including the likes of academic Jane Kelsey, are galvanised by the October deadline. They're banking on the likelihood the New Zealand Government will face similarly strong domestic headwinds given the potential timing of an agreement heading into an election campaign.

Their PR offensive against the deal so far has been highly effective, helped along by the secrecy surrounding the talks, which not only breeds suspicion, it makes it difficult for the Government to challenge any claims.

But the anti-TPP lobby has also been helped along by a growing list of credible voices here and internationally who are equally alarmed by the secrecy, and question the reach of a concluded TPP.

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This week, Dr Kelsey and the Green Party assembled a group of international anti-TPP activists for a series of media seminars ahead of the arrival of up to 500 TPP officials who are due to launch the 15th round of talks on Monday.

Their concerns cover the breadth of issues thought to be on the table in the TPP - commerce, intellectual property, state-owned enterprises and dispute settlement, to name a few - which, as they point out, make it clear it's not just any old free-trade agreement.

As an example of just how far it could reach into daily life, our librarians have joined groups questioning the deal, because of concerns changes to copyright law will push up the cost of books.

There is widespread concern, meanwhile, both in the business and web communities, about intellectual property clauses.

Governments tinker in that area at their peril. Think back to widespread protests against section 92 copyright law changes that would have seen users have their internet connections cut for taking free downloads of music and movies. The Government was eventually forced to rewrite the law.

Opponents say the TPP could reach even further into our daily lives by forcing up the price of drugs, and giving overseas corporations a greater ability to challenge or participate in the law-making process, potentially frustrating a government's ability to pass laws providing health or environmental protections.

The Greens argue foreign investors will have even greater rights than domestic investors and a company like Shanghai Pengxin, which is behind the contentious Crafar farms purchase, would be able to sue if the Government impinged on their operations by moving to regulate or legislate to clean up water pollution.

That's their spin.

The Government spin, backed by Labour, is that such a clause is nothing new and is, in fact, included in the China Free Trade Agreement. It is also, as Trade Minister Tim Groser reminds opponents, protection for New Zealand companies overseas from having the plug arbitrarily pulled out from under them. But you have to sift carefully through the pro-TPP spin as well.

The Government insists, for instance, that it will play hardball on any proposal to scrap Pharmac, a bulk purchasing agency which has proven its ability to drive a hard bargain and make some tough decisions on which drugs to subsidise.

It has been in the sights of the US drug companies and US Government for years and is a target in the TPP.

Mr Key and Mr Groser have both been talking tough and say Pharmac won't be sacrificed for a deal. But no-one is suggesting the US will demand anything as crude as scrapping Pharmac. It will instead seek the ability for either the drug companies or consumer groups to challenge and appeal its decisions.

A leaked 2004 Wikileaks cable, written by then-US Embassy deputy chief of mission Dave Burnett, notes that "after trying in vain for years to persuade the New Zealand government to change its restrictive pricing policies on pharmaceuticals, the drug industry is taking another tack: reaching out to patient groups with information designed to bolster their demands for cutting-edge drugs".

You only have to look at the successful "grassroots" campaign to extend funding for the breast cancer drug Herceptin to see how effective such tactics might be.

Our Government, however, seems to be largely focused on agriculture liberalisation; understandably since liberalised access to the US has been New Zealand's holy grail for more than a decade. We have to hope they won't be blinded by that.

Mr Key reiterated this week that New Zealand would rather walk away than accept a weakened TPP on agriculture. But if that's our bottom line then it means we will have to give way on something else; for a small country with not much negotiating clout we haven't got the luxury of going into the talks with a fistful of bottom lines.

The Government's answer to that is ''trust us, we know what we are doing''. Since they are refusing to throw open the doors to the negotiations we don't seem to have any choice.

- © Fairfax NZ News

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