TPPA Investment leak: Jacobi misleads about protections for NZ

On Radio NZ’s Morning Report Stephen Jacobi said New Zealand would have protections from obligations in the investment chapter of the Trans-Pacific Partnership Agreement (TPPA) that were not part of the text posted by Wikileaks yesterday. 

‘That is misleading’, according to Professor Jane Kelsey who specialises in international investment agreements.

‘It is true that the leak did not include annexes of so-called non-conforming measures, so we don’t know what New Zealand has proposed, what has been accepted and what is still under discussion.’

‘But even if we assume hypothetically that the other eleven parties, including the US, allow New Zealand to include everything the government does, now and in the future, through these annexes (which they will not), that won’t protect us.’

Professor Kelsey points out that these annexes only apply to some of the rules in the chapter. They do not apply to the rules that foreign investors rely most on to sue governments, for example in current investment disputes over Australia’s plain packaging of cigarettes, Quebec’s moratorium on fracking, or the Canadian courts’ denial of a patent for a medicine.

Stephen Jacobi’s second argument is that these agreements have general exceptions in another chapter that would protect areas like public health and environment. 

‘Mr Jacobi must know that the US has never agreed that the general exception provision should apply to the investment chapter in its previous agreements’, Kelsey said. 

 ‘Having followed the negotiations closely for the past five years I can see nothing to suggest that position has changed.’

‘Any concessions the US did make in this area would be in the investment chapter itself. But what we see in the leaked text is a cut-down version of the standard general exception that applies to only to aspects of the rule on performance requirements.’

There is also a circular provision that the chapter shall not be constructed to prevent the government taking any measure that is otherwise consistent with the chapter.

Several other very specific exceptions exclude decisions made by the Overseas Investment Office and a weak annex on expropriation.

Clearly, Australia considers its equivalent of Pharmac is vulnerable to the investment rules, because it has proposed a specific Annex to protect decisions by those various agencies.

‘These errors reinforce the need for the government formally to release the text now so we can have a properly informed debate, including expert analysis, that allows New Zealanders to assess the real implications of this for themselves’, Kelsey said.

New TPPA Investment Leak Confirms NZ Surrender to US

The controversial investment chapter of the Trans-Pacific Partnership Agreement (TPPA) has just been posted by Wikileaks, along with an analysis by Washington-based Public Citizen. Dated 20 January 2015, at the start of the negotiating round in New York, it clearly shows the governments has capitulated to US demands.

‘We haven’t seen a text since 2012’, said Auckland University law professor Jane Kelsey. ‘Today’s leaked text confirms all our worst fears.’ 

‘As anticipated, the deal gives foreign investors from the TPPA countries special rights, and the power to sue the government in private offshore tribunals for massive damages if new laws, or even court decisions, significantly affected their bottom line’.

‘Prime Minister John Key once described the idea of investor-state dispute settlement (ISDS) as “far-fetched”.’

‘After he was briefed about the TPPA he changed tack, promising there would be effective safeguards. But the leaked text shows very little has not been agreed. That means the New Zealand government has accepted virtually everything the US has proposed with absolutely no effective safeguards.’ 

Professor Kelsey recalls how ‘we were assured the flaws that have made these investment agreements so toxic internationally would be sorted and new rules would prevent the investment tribunals going rogue.’ 

‘The leaked text shows nothing has been done to rein them in. There is no code of conduct, no appeals, no accountability of the private individuals who pass judgement on crucial matters of public policy, and no effective exceptions to protect the right of the government to regulate in the national interest’. 

There are high risks for local governments as well. 

‘Just last week, as protestors rallied against an extension of the port into the Auckland harbour, an investment tribunal upheld a case against Canada because an environment review panel refused to grant a US firm a permit for a quarry and marine terminal, saying it violated community values and there was inadequate consultation. The investor wants $300 million compensation. The local council is likely to be made to pay the bill.’

The dissenting judge, who was the Canadian government’s appointee on the tribunal, warned this meant the validity of local decisions would end being decided by foreign private arbitrators. The finding would also chill environmental review panels from rejecting proposals in the future. 

Kelsey said the virtually concluded text shows the TPPA parties have completely ignored the tide of international sentiment that is rejecting these special rights for foreign investors. 

The French and German governments have said they won’t accept ISDS in the parallel deal being negotiated between the US and EU. 

Last year the chief justices of Australia and New Zealand expressed concerns about the potential of these investment tribunals to bypass or override decisions of our domestic courts. 

Even Business New Zealand told the OECD during a consultation that they don't see the need for such powers where countries have quality judicial systems.

‘We need to ask why the government is opening us further to these risks, especially when US investors are responsible for more ISDS cases than any other country.’

 ‘The leak also shows the futility of the few positive changes secured in the investment chapters of the latest Korea agreement. Anything better in the TPPA would be available to Korea’s investors under the most-favoured nation rule.  It beggars belief that New Zealand’s negotiators weren’t aware of that reality. Maybe they are just hoping the TPPA well never come into being?’
Jane Kelsey media release 

Also See

The situation is serious







The situation is serious.
TPPA Ministers are due to meet from 13-15 March 2015 - somewhere!
The officials met in New York in late January to prepare the ground.
The only things that can stop them are –
no deal between the US and Japan on agriculture or US!

More Information 

Jane Kelsey: TPP compromised by Obama deadline

Secrecy surrounding partnership negotiations perceived as an assault to fundamental democratic values

Time is running out for the controversial Trans-Pacific Partnership agreement (TPP). Negotiators in New York last week were under intense pressure to finalise the list of unresolved matters for ministers to decide in March.

The United States has a serious deadline. If the TPP is to form part of President Barack Obama's legacy, it must be concluded in the next three months. The text and a cost-benefit analysis by the International Trade Commission needs to reach Congress by around August. Once that window is past, Obama is likely to lose interest in spending political capital on pushing it through, knowing his successor would gain any kudos.

Whether the parties can achieve that is a political question. The technical work is largely over. One major obstacle to the political endgame is the reassertion of core democratic principles, evidenced by two recent developments.

First, the politicians still seem to believe they can get away with signing a deal of this magnitude while keeping it secret. New Zealand Trade Minister Groser and his colleagues insist that it's impossible to negotiate such deals under public and democratic scrutiny.

Yet the European Commission has released a series of legal texts it has tabled in the parallel Transatlantic Trade and Investment Partnership (TTIP) negotiations with the US. In early January, the commission announced it would publish the whole text once negotiations are concluded, well in advance of its signature and ratification.

The commission was responding to trenchant criticisms from European Union Ombudsman Emily O'Reilly in an inquiry into the secrecy surrounding TTIP. She found the significant potential impact of TTIP on the lives of citizens meant that key documents had to be published. US resistance to publishing those documents was not in itself sufficient to keep them from the European public. The same reasoning applies to the TPP.

Pressure is mounting. US Senator Elizabeth Warren is demanding release of draft texts that might affect re-regulation of Wall Street, while Senator Bernie Sanders has threatened a bill to require disclosure that allows proper analysis and advice.

A week ago Japanese lawyers launched a constitutional challenge to the TPP, as usurping their Parliament's supreme law-making authority, threatening the separation of powers and violating human rights.

Expect renewed demands for release of draft chapters before the crucial decisions at the mid-March ministerial, and legal moves in several countries to force publication of the text to enable debate before it is signed.

The second backlash involves the US certification process, which is little less than blackmail.

Forget the rhetoric about Japan being recalcitrant. The US is just as protectionist. Both are playing a high stakes game. Obama's urgent need for a deal strengthens Japan's hand. But Japan also knows the US Congress will seek to impose its will unilaterally on the other TPP governments. A final deal is never final until Congress is satisfied.

Body counts in the House of Representatives suggest Obama can't get Fast Track negotiating authority, which would limit Congress' ability to pick apart a final deal, at least in time to give other parties any reassurance the deal won't be undone.

The biggest threat hanging over Japan is the US conditions for certifying Japan has complied with its obligations.

There is a head of steam in Congress to use the TPP to punish currency manipulation, which it claims is making US exports uncompetitive. Those rules could unleash a series of challenges, backed by crippling sanctions, and spell the end for the monetary arrow of Abenomics.

The issue has not been raised in the negotiations. Japan knows the US is likely to play the currency card in the certification end game.

The latest story on certification should make New Zealand as nervous as Japan. Australia passed a law in 2004 to implement its free trade deal with the US. The US said that wasn't enough and demanded further legislation that tightened the copyright laws beyond what was required in the agreement. Otherwise the US would not bring the agreement into force.

An Australian Parliament select committee was given 24 hours to consider, hear submissions and report on the new bill.

The Parliamentary Library's Bills Digest suggested "Parliament might note with concern the process that has preceded this bill" and observed the correspondence between US and Australian ministers "has effectively created new obligations for Australia".

Whether and how these assaults on fundamental democratic values and processes are addressed will prove as significant to the endgame politics of the TPP as the substantive concerns, such as the price of medicines, foreign investors' powers to sue governments, privacy and decent livelihoods.

Originally punished in the NZH Feb 6th 2015

TPPA ~ Mobilise for March 7th

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Palmerston North Facebook event page 

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More to come!

Free Trade, Or trading freedom

New Scientist unpick the Transatlantic Trade and Investment Partnership (TTIP) the other half of the worlds TPPA equivalent. 

  • How the world's largest trade deal affects you (here)
  • Beware the treaty's empty economic promises (here)
  • Healthy profits, but what about people? (here)

These, and related articles, appeared in the New Scientist  November 1 issue#2993
(Image: Andrzej Krauze)

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