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House of Representatives
4 December 2012
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4. Trans-Pacific Partnership—Investor-State Dispute Provisions

[Sitting date: 04 December 2012. Volume:686;Page:6996. Text is incorporated into the Bound Volume.]

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement regarding investor state disputes procedures proposed in the Trans-Pacific Partnership agreement that “An exclusion solely for Australia and not for everybody else is unlikely to be something we would support”; if so, why?

Rt Hon JOHN KEY (Prime Minister) : Yes. This statement simply reflects the reality that an international trade negotiation is a reciprocal process with give and take on all parts. Negotiating parties, including New Zealand, are unlikely to agree that special treatment, such as an exclusion from investor-State dispute settlement procedures, applies to one party but not to the other parties. I would also note that trade agreements are about finding a balance of benefits for everyone, and the benefits New Zealand could gain from a successful Trans-Pacific Partnership negotiation will be very significant indeed.

Metiria Turei: Will New Zealand open itself up to litigation from firms based in the Trans-Pacific Partnership countries should we sign up to the investor-State dispute settlement procedures, which Australia has rejected?

Rt Hon JOHN KEY: Well for a start-off, I do not think it is actually correct to say that Australia has rejected them. What is true to say is that there are different countries bringing different perspectives to the negotiation, but when a final Trans-Pacific Partnership agreement is agreed, all parties are likely to sign up. In terms of the first point, no, I do not think that is of concern because investor-State dispute settlement procedures allow a safeguard for New Zealand. New Zealand has already signed two free-trade agreements that include investor-State dispute settlement procedures. They were done under a Labour Government. They were the China free-trade agreement and the ASEAN-Australia-New Zealand Free Trade Agreement. They include the very safeguards that would protect New Zealand under those provisions. They also, I might add, protect New Zealand companies when they invest overseas. That is the very purpose of the investor-State dispute settlement procedure requirements.

Metiria Turei: Can the Prime Minister guarantee that there will be no chilling effect on New Zealand’s environmental policy from these procedures, given that in Germany that Government was forced to water down environmental controls on coal-fired power stations or face being sued for more than US$2 billion for breach of investor-State provisions?

Rt Hon JOHN KEY: As I said, I think that is unlikely. As I have said in regard to my earlier answer, fundamentally New Zealand does make sure that, and has ensured in the past, there are safeguards when it comes to investor-State dispute settlement provisions.

Metiria Turei: How does the Prime Minister propose to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Peru the Government is being sued for $800 million because it regulated to stop the severe lead poisoning of children by Renco Group’s metal smelter?

Rt Hon JOHN KEY: I am simply not aware of the provisions in Peru, but I can tell you the way that New Zealand legislates and goes about these free-trade agreements, and it is very careful to give itself the safeguards that we would think make sense. I think if one goes and has a look overall and takes a step back, then the purpose of New Zealand engaging in the Trans-Pacific Partnership is to sign an agreement that would lift economic growth and provide jobs and opportunities for New Zealanders. On the best forecasting that we have so far seen off a basic prediction out to 2025, that is worth about US$2.9 billion to the New Zealand economy. I think that is a prize worth going after, and I think New Zealand should continue down the negotiations. The same kinds of fears that the Green Party and New Zealand First want to raise in the House are the very same ones that were argued against the China free-trade agreement. I suspect they would have been the same kinds of arguments made against CER. They were the same kinds of arguments put against the ASEAN-Australia-New Zealand Free Trade Agreement. Is anyone in this House, other than the Minister of Finance in waiting, seriously saying that we should rip up our China free-trade agreement and everything else?

Metiria Turei: How exactly does the Prime Minister intend to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Ecuador Chevron Oil has used investor-State procedures to stop that Government from taking action to recover clean-up costs for the dumping of 16 billion gallons of toxic waste into the drinking water of 30,000 people?

Rt Hon JOHN KEY: It has finally, after a few months now, all come clear to me: the reason that the Green Party wants to follow the policies of Argentina in printing money is it clearly gets all of its ideas from Latin America.

Metiria Turei: I raise a point of order, Mr Speaker. The question was a straight question, and asked for—[Interruption]

Mr SPEAKER: Order! A point of order is being heard.

Metiria Turei: I asked the Prime Minister how he intended to guarantee against a chilling effect on New Zealand policy, and gave an example—

Mr SPEAKER: I will let the member repeat her question.

Metiria Turei: How does the Prime Minister intend to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Ecuador Chevron Oil used investor-State procedures to stop the Government taking action to recover clean-up costs for the dumping of 16 billion gallons of toxic waste into the drinking water of 30,000 people?

Rt Hon JOHN KEY: As I have said in numerous answers to numerous questions from the member, there will be safeguards in the New Zealand law.

Metiria Turei: Does the Prime Minister have any concerns that Philip Morris could use the investor-State procedures in the Trans-Pacific Partnership to sue New Zealand, given its actions in Australia and the veiled threats made by its spokesperson in New Zealand, Chris Bishop; if not, why not?

Rt Hon JOHN KEY: Firstly, you cannot stop anybody suing you, but because someone sues you, it does not mean that they will win. There are plenty of examples in this House of that. Secondly, as I said earlier, we are looking at and will ensure that if investor-State dispute settlement takes place as part of the Trans-Pacific Partnership negotiations, there will be safeguards, so that will allow us to do that. I go back to my earlier point that, in the end, the Trans-Pacific Partnership will be a free-trade agreement that binds the same rules on all 11 countries. The member will be aware that Australia as of 1 December went into its programme of plain packaging. It is not in any way concerned about doing that and continuing to be part of the officials group and continuing to negotiate as part of the Trans-Pacific Partnership. That tells you that it must believe that the two policies are compatible. If it did not, it would not have introduced plain packaging or it would not be sitting around the table at the Trans-Pacific Partnership, which just shows you that the member, like Jane Kelsey, spends a whole lot of time fearmongering, and is fundamentally wrong.

Metiria Turei: Why is the Prime Minister willing for New Zealand to sign up to the parts of the Trans-Pacific Partnership that our closest and largest trading partner is completely unwilling to sign up to, because that Government wants to protect its rights to legislate for public health and the environment?

Rt Hon JOHN KEY: As I said in numerous answers to numerous questions, the Trans-Pacific Partnership would have the same rules applying to all parties. So in the end, if agreement cannot be reached amongst those 11 parties in relation to investor-State dispute settlement rules, which apply to every country—that includes Australia, New Zealand, Mexico, Canada, the United States, Peru, and others like Singapore, Brunei, you name them—then we will not have those provisions in there. But I take a step back and say, yes, of course there will be a bit of give and take on all these different rules. New Zealand will make sure it safeguards its provisions. I think we should actually congratulate the Ministry of Foreign Affairs and Trade, because in my opinion it has a world-class negotiating team, which has done a first-class job for this country on numerous examples in the past, and it will continue to do so in the future. And the overall prize of all of this is more jobs. I go back to what I said on TV on Monday morning—when I picked up the New Zealand Herald on Monday morning the first thing I saw was yet another Green MP, Catherine Delahunty, opposed to jobs, and opposed to growth, and that is why Russel Normal wants to be the Minister of Finance.

Dr Russel Norman: I raise a point of order, Mr Speaker. We have repeatedly had to put up with the Prime Minister answering very simple, straight questions with attacks on the Green Party. He should just answer the question. [Interruption]

Mr SPEAKER: Order! Which National member is volunteering to leave, if they keep up that noise when I am on my feet? That is enough. The member’s complaint is not unreasonable. The Prime Minister should not have put that last bit in. We do not want to carry on down that track any further.

Metiria Turei: I seek leave to table an Official Information Act response from the office of Tim Groser, setting out the talking points in relation to Australia’s refusal to engage in the investor-State dispute resolution process for the Trans-Pacific Partnership.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

  • Document, by leave, laid on the Table of the House.