Editorial: undue influence

by The Listener / 28 November, 2013
The biggest issue in the Trans-Pacific Partnership negotiations is how much lobby groups are controlling the US position.
The real cliffhanger in these closing phases of the Trans-Pacific Partnership (TPP) negotiations is not whether New Zealand will fold, but whether the United States will.


Recently leaked documents from the talks suggest the US is the country on the spot, trying to defend special treatment for its pharmaceutical, agricultural, entertainment and other sectors.

Domestic critics of the 11-country free-trade deal would have us believe the Government is in thrall to the US and is, for instance, considering neutering our world-leading drug-buying agency Pharmac as part of the price for getting this deal done.

The reality, however, appears to be that the US Government is in thrall to the pharmaceutical and other lobbies. Few, if any, of the other countries wish to make sovereignty-denting and budget-busting concessions to those lobbies. It is very possible the TPP will fail precisely because the US cannot bring itself to rein in its powerful business-sector friends.

Our Government will calculate the electoral peril of making New Zealanders pay needlessly high prices for such important commodities as medicines in order to protect foreign corporates that are effectively on welfare from their own government. The US spends vastly more per capita on health than other countries, and its citizens more on everyday drugs and procedures, yet its medical outcomes are poorer and life expectancy is lower. Aside from the equity issues, making us pay more is the exact opposite to the desired goal of free trade.

However cogently it argues that the export receipts enabled by the TPP – chiefly agricultural – would galvanise our economy, the Government would be electorally foolhardy to do the deal “at any price”. It might remember that public outrage forced the previous Government to put aside its plan to “harmonise” our therapeutic products sector with Australia’s. People saw through the rhetoric. What was afoot was a handover of sovereignty to Australia.

Ministers privately admit that rather than concluding successfully by the TPP’s Christmas deadline, negotiations could well fail altogether. They could still form a useful basis for bilateral or other free-trade deals. The US could still forge bilaterals with individual countries willing to make the trade-offs we are not. But it’s in a weak position.

Writ large, the US’s approach to the TPP has been an attempt to “grandfather” free trade, applying new rules to new deals at the same time as being allowed to preserve its favourite dinosaurs in aspic while they figure out how to evolve.

Perversely, however, our Government may have weakened domestic support for the TPP through its high-handed approach to divulging information. Unlike other countries’ negotiating ministers, ours refuse to give New Zealanders a clear idea of their parameters.

The treaty’s ideologically motivated opponents are likely to be revelling in the cone of silence, as it allows them to create the impression that all manner of unthinkable trade-offs are being agreed to, without coherent contradiction. The Labour Party has wisely decided to defer fixing its position, despite its strong pro-free-trade history, until it knows what’s in the deal. The Government expects the rest of us to take it on trust.

As well as reassuring vulnerable industries, the Government should now be reminding people how much sovereignty we have lost from the tariffs and subsidies imposed by other countries to protect their own sectors.

The Government’s only clear public position is the rhetorical default setting: that effective free trade in agriculture – a sector in which we are vastly more efficient than most others – is a bottom line. But on the increasingly important information technology front, National’s recent history gives cause for concern. Until recently, it was wedded to introducing patent law that would have stymied IT development in this country; it passed hugely controversial intellectual property law that favoured copyright holders; and troubling questions remain about its willingness to help the US authorities lasso software buccaneer Kim Dotcom, so as to better oblige that country’s powerful entertainment lobby.

It’s of concern that the same Government may soon bind us to an agreement with 10 other countries also in varying stages of grappling with the frighteningly complex issues involved.

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