I write in response to your open letter of 12 May 2014 addressed to the Prime Minister regarding the Trans-Pacific Partnership (TPP) negotiations published in the Dominion Post. New Zealand’s goal in TPP remains to reduce the barriers our exporters face and improve their competitiveness in the Asia-Pacific region. Such an outcome will contribute to stronger economic performance in New Zealand that will generate more jobs and higher incomes for New Zealanders. The provisions under discussion are intended to reduce costs for traders, develop more seamless trade and investment networks across the TPP region, further facilitate the participation of small and medium-sized enterprises in international trade, and promote economic growth and higher living standards. At the same time, negotiators are looking to ensure that the rules agreed in TPP to address regulatory and administrative practices that can act to impede trade and investment do not constrain New Zealand’s ability to regulate for legitimate public policy purposes, including in the health sector. Overall, the potential economic gains from a successfully concluded high quality, comprehensive TPP agreement are substantial.
In your letter you raise concerns about the potential inclusion of an investor-state dispute settlement (ISDS) mechanism in TPP. The Government recognises these concerns and takes them seriously. However, I do not agree with a number of conclusions which you draw.
The first point I would note is that ISDS is not new. Successive New Zealand governments have agreed to reciprocal investment provisions governing the treatment and protection of investors, including ISDS, in international agreements with China and the ASEAN membership. Some of these agreements have been in force for a number of years. The protection that they establish is valued by New Zealanders investing abroad and provide a secure and independent process for the resolution of disputes, particularly in countries where there may be a concern about the fairness or transparency of the legal system.
Secondly, such provisions have only been agreed by New Zealand governments where they have been accompanied by robust safeguards. These include carefully crafted investment obligations, clear exceptions and reservations that protect important areas of regulation such as public health, and procedures that provide for the resolution of disputes which deter frivolous claims and prohibit punitive damages from being awarded.
Thirdly, negotiators in TPP are discussing possible elements that would supplement these safeguards. For example, an important objective for New Zealand and other Parties in TPP is ensuring greater transparency in the administration and operation of ISDS proceedings. Other substantive safeguards are also under discussion.
This carefully calibrated approach to ISDS is further supplemented in our existing treaties by agreement-wide exceptions that make it clear that legitimate government regulation to protect the environment, public health and other public welfare interests are not going to be the subject of successful challenges by foreign investors. These safeguards are also under discussion in TPP. New Zealand views them as a core element to any agreement.
In sum, I will simply not conclude an agreement that opens New Zealand up to successful lawsuits when the government is simply running the country in line with good public policy principles.
Minister Ryall recently wrote about his perspectives as Minister of Health on the TPP negotiations (nzdoctor.co.nz). I would urge practitioners in the New Zealand medical community to read that article closely. It reaffirms the strong health focus we bring to areas like investment, intellectual property and Pharmac issues in the negotiation. The Ministry of Health, a core part of New Zealand’s negotiating team, works closely with my negotiators to ensure our health policy priorities are protected in TPP. On countless occasions, both in New Zealand and abroad, I have said that we will not negotiate on the fundamentals of the public health system, including Pharmac.
I do of course recognise the strong interest that many New Zealanders have in TPP. We continue to strive to strike a balance. New Zealand will not release TPP negotiating documents. That would jeopardise our ability to secure the best deal for New Zealand, as well as breach the understandings on confidentiality which all TPP governments have agreed. But the Government has been active in engaging with a wide spectrum of stakeholders. The consultation processes for TPP are among the most extensive a New Zealand government has ever undertaken for a trade negotiation.
The Ministry of Foreign Affairs and Trade first sought public comment on TPP in 2008, with a second invitation for submissions and feedback issued in 2011 when Canada, Mexico and Japan expressed interest in joining the negotiation. Negotiators have also met regularly with business groups, local councils, health sector representatives, unions, other NGOs, academics and other individuals to seek input on TPP and to help ensure a high quality outcome to negotiations that advances the national interest. Public and stakeholder interest has also been welcomed via the Ministry’s dedicated TPP portals (tpp@mfat.govt.nz and the ‘TPP Talk’ website).
The process will continue once we reach an agreement. All free trade agreements (FTAs), once signed, must go through the Parliamentary treaty examination process. As part of this process the final text of the agreement is presented to Parliament and referred to the Foreign Affairs, Defence and Trade Select Committee for examination. During this time, the public will almost certainly be invited to make submissions as part of the consultation process. The Select Committee considers those submissions and reports back to the House. It may at this time make recommendations regarding ratification of the agreement as presented. After that process, any legislative changes required in order to implement the agreement would go through normal Parliamentary procedures which include select committee scrutiny, public submissions and a series of votes in Parliament. Only once any necessary legislation is passed can FTAs like TPP enter into force for New Zealand.
I encourage all members of the medical community to visit the Ministry of Foreign Affairs and Trade website (www.mfat.govt.nz/tpptalk) to find out more about the issues under negotiation, including investment, pharmaceuticals and intellectual property.
Yours sincerely
Yours sincerely
Source: mfat.govt.nz
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