Why all the Fuss?
The Trans-Pacific Partnership
Agreement
Professor Jane Kelsey, School of Law, The University
of Auckland
Focus of this presentation
The big picture
The scope of the negotiations
The secrecy issue
‘Behind the border’
Specific issues
What is the Trans Pacific Partnership?
 ‘Agreement for 21st century’ - aims to reach
further behind the border than any other FTA
 11 countries: Australia, Brunei, Chile, Malaysia,
New Zealand, Peru, Singapore, US, Vietnam, plus
Canada & Mexico from Dec
 Effectively US + 10 countries as any deal must
be approved by US Congress, ie US has a veto
NZ’s rationale for a TPPA
1. Commercial gains
- claim $1.7 billion welfare gains by 2025, discredited methodology
- reality check, US Congress will never agree to market access
2. Closer relationship to US
- US sees TPP as counter to China in region
- Groser said NZ would walk away from TPP if anti-China
3. Free Trade Area of Asia Pacific
- US-led FTA model consistently rejected
- ASEAN+6 (China,Korea,Japan,Aust,NZ,India) launched August 2012
Scope of a 21st century agreement
 29 working groups
 market access: most current parties are already
highly liberalised & have many FTAs.
 Stricter rules than WTO/FTAs for goods,
agriculture, non-tariff barriers, services, investment,
intellectual property
 Rules go further behind the border than any
previous agreement
The Secrecy Issue
No documents released unless all parties agree
They have agreed that:
No text will be released until the final text is signed
No background documents or draft text will be
released until 4 years after TPPA comes into force
Countries can apply their domestic consultative
process, ie US advisory committees
Acceding countries can’t see draft texts until they join
TPPA Targets ‘Behind the Border’
This is not about ‘trade’.
TPP aims to reach further behind the border than
any previous free trade and investment treaty
through enforceable constraints on the
(a) content; and
(b) processes
of domestic law and policy.
But draft texts & proposals are secret until signed
What does ‘behind the border’
mean?
Leaked texts, existing FTAs, info from (non-NZ)
negotiators show potential constraints on domestic
policy and regulation in chapters on:
Investment
Government procurement
Intellectual property
State enterprises
Cross border services
Supply chains
Regulatory coherence
Transparency
Investment, eg.
• Pressure to remove restrictions on foreign
ownership of strategic assets (eg privatisations)
• Not make new regulations that significantly
impact on a foreign investment (eg tobacco,
alcohol, gambling policies, zoning, building
code)
• Investor right to enforce directly in private
offshore tribunal (ISDS), ave $8m cost, duration
4 years, aims to chill policy decisions
Government procurement, eg.
No local preferences or offsets (threshold unclear)
Complex bidding & review processes
Contracts become protected investments, eg
• IT and technology infrastructure
• PPP roads, sports facilities, sewage plants
• Water concessions
• Local government bonds
Enforceable by foreign investors through ISDS
Intellectual Property, eg
US demands on copyright term extension, temporary
copies, circumvention of TPMs will mean:
• adverse impact on R&D and innovation;
• massive cost increase for libraries, education
institutions, museums, etc;
• restrict compatibility of IT systems & software;
• parallel imports are illegal;
• major cost increases for businesses.
State enterprises
US-promoted chapter, all governments are worried
Not just SOEs and Crown companies, but scope of
definition is unclear
Disciplines would apply if state entity receives any
perceived benefits, incl
• implied government guarantees,
• use of public land or facilities,
• monopoly rights,
• access to subsidies, grants, financing.
Regulatory coherence & transparency
Skews decision making process in favour of
commercial interests & criteria, through
• specified procedures, disclosures, notifications;
• preferential rights of affected economic interests to
participate in decisions;
• publishing reasons, assessment of evidence,
responses to submissions, with appeal/review;
• requiring flawed RIS cost-benefit analysis & criteria.
Process & documentation feeds into chilling effect &
use in investor-state disputes
In summary
• Secret treaty making and politically motivated tradeoffs are
anti-democratic;
• There is no balance of social, economic, Treaty,
environmental, cultural interests;
• Rights are vested in foreign interests that can hold elected
councils to ransom;
• The result is bad law that is almost impossible to undo.
For more information see
www.itsourfuture.org.nz and www.fairdeal.net.nz