What is the TPPA?

The Trans Pacific Partnership Agreement (TPPA) is a Free Trade Agreement (FTA) that could have much wider implications than dairy tariffs for the countries signing it, such as New Zealand and the U.S. It could even make the State Owned Enterprises (SOEs) subservient to the interests of certain multi-national corporations under the Mixed Ownership Model (MOM).

Bill Rosenberg, NZ Council of Trade Unions (CTU) economist, explains the potential impacts of this agreement.

Uploaded on the 1st of March 2012

http://union.org.nz/staff_details

The TPPA is...

a proposal to extend an existing agreement New Zealand has with

Brunei, Singapore and Chile. And... but the negotiations also include Australia, Malaysia, Vietnam, Peru,

the United States [and Japan]. And of course having

the United States up there makes it huge.

The negotiations are held in secret, we don't see the

drafts of the text of the agreement, so what I'm telling you

is partly from leaks, partly from media speculation,

partly from what we know from other agreements these

countries have signed. It's not mainly about trade at all.

Most of the tariffs amongst these countries have gone.

The goods, the restrictions on goods trade most of them

have gone. They've been negotiated away in other areas

such as the World Trade Organisation. The chief

New Zealand negotiator made this statement in private.

He said "There is a public perception a United States

Free Trade Agreement would be an el dorado to

New Zealand's commercial sector but the reality is different and

New Zealand must manage expectations about the benefits

of such an agreement. So if we're gaining dairy access

or whatever we will have to pay for it in other ways, and

there's a whole list of other parts of the agreement which

have nothing to do with goods trade. So the first I want to

talk about, and this is quite recent, it's on State... it's a whole chapter

on State Owned Enterprises. State Owned Enterprises are

things like [hydro] electricity companies, Solid Energy, Air New Zealand.

But more than that it can be things like ACC, it could be... it could be

anything owned by the Government and run by the Government.

The United States wants provisions on these in the agreement.

They want to force State Owned Enterprises, and

think Electrocorp, think ACC, think possibly even CRIs (Crown Research Institutes),

whatever you like... to act solely in accordance with

commercial considerations. Right. So they should have

no non-commercial goals, like public-interests goals for example.

For example [protecting rivers is] inconsistent with this agreement.

[It prevents] Electricity SOEs from helping technology startups, which

is one of the ideas the Greens and Labour had.

Prevents them prefering 'locally built', for example the railways for New Zealand Rail.

Prevent them favouring local suppliers, prevent them having

relatively low profit requirements, so the rest of the country can benefit

from low electricty prices for example.

And prevent them for example from giving incentives for sustainable energy.

It would ban low cost funding, so when the Government

started up Kiwibank for example it puts the capital in to start it up.

That would be seen as a subsidy, if you like, to that... to Kiwibank.

And they don't want that to happen. They would require

Government to reduce its asset ownership. So progressively,

sell off its assets. This is a requirement of Singapore in the Singapore - US

Free Trade Agreement. It could apply to a whole range of State Owned Entities,

including ACC, Pharmac, Zespri, Public Broadcasting, Postal Services,

and many other Government services, anything that could conceiveably be in competition

with a US transnational wanting to do business in New Zealand

The United States has its usual... how shall I say? hypocritical opinion.

Thankyou I was looking for that phrase. [It] will be requiring

exemptions for its own SOEs. And this is not my imagination,

so basically [it] wants to say this applies to you but not to me.

But most importantly it wants to impose a provision for

"Investor - State Dispute Resolution" which is particularly tricky.

What that does is it allows investors to directly sue the Government,

if their profits [and] value [of their] assets [are not paramount].

There's going to be fierce resistance from Vietnam and Malaysia,

who have large and many and very important SOEs, and

Singapore will be pretty unhappy too although it's already tied up.

The ultimate target as I said is actually... seems to be China.

And for that reason, China has said "We're not happy with this

Agreement, we seem to be on the outer on this, we're not

we haven't been consulted over it." But quite fundamentally

China would not enter an agreement like this. And so

it's being seen more and more as actually anti-China... line-up if you like.

So it is giving a foreign policy dimension if you like that will... that threatens

to increase tensions in the Pacific region rather than be "kind of"

a partnership as it's called.