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The Trans-Pacific Partnership Agreement

What is policy issue arising?

The Government is seeking to enact legislation to enter into a Trans-Pacific Partnership (TPP) trade agreement. Numerous Māori organisations, including iwi groups and the New Zealand Māori Council have expressed concerns with this. These have been matched with protests from Māori. An outcome of the protests has been the lodging of Treaty of Waitangi claims against the TPP with the Waitangi Tribunal.

 

What is background context?

By way of background, the TPP aims to create a regional ‘free trade’ agreement involving twelve Asia-Pacific countries.1  According to the Ministry of Foreign Affairs and Trade this would “give New Zealand better access to globally significant markets.” (In particular we note it includes better exporting access to the United States and Japan, the world’s 1st and 3rd largest economies, with whom New Zealand does not presently have trade agreements.) There is, however, strong political opposition to the TPP. Opponents are concerned that the agreement will create economic, environmental and health risks; as well as weaken New Zealand’s sovereign independence, by requiring future parliaments to comply with the agreement.  For example, there is concern it will reduce employment rights in New Zealand, or that manufacturing in New Zealand may become uncompetitive due to much cheaper labour in other TPP countries.

In this political context, in 2015 nine Waitangi Tribunal claims were lodged against the TPP. The claims varied, although two had more prominence. From a socio-economic perspective, WAI 2522 (filed by Papaarangi Reid, Moana Jackson, Angeline Greensill, Hone Harawira, Rikirangi Gage and Moana Maniapoto) allege that the Crown has failed its duty to consult with Māori on the TPP and thus “actively attempted to displace the tino rangatiratanga of Ngā Rangatira o Ngā Hapū katoa o Aotearoa”. From a group-rights perspective, The New Zealand Māori Council claim, WAI 2532, alleges that if the Government enters into a TPP, then that would “prejudicially affect Māori”, and that this is against the principle of active protection.  This claim also refers to potential Treaty breaches relating to natural resources, such as Māori proprietary interests in freshwater and geothermal energy.

The claimant groups sought an urgent Tribunal hearing in 2015, which was initially declined, and then heard in March 2016,2 the main arguments being that:

  • Māori should not be forced to rely on a clause within the trade agreement to ensure the Treaty of Waitangi is upheld;
  • the trade agreement was introduced without due consultation;
  • the Crown had no right to commit Māori to the trade agreement;
  • the Treaty of Waitangi provision within the document is fully reliant on the Crown, but the Crown cannot be trusted in Treaty of Waitangi matters; and
  • the Treaty of Waitangi provision within the trade document can be easily circumvented.

At this time (February 2016), although the Iwi Chairs’ Forum was not a party to the claim, they also issued a statement indicating that until the Government consulted and worked fully with them on this matter, they would oppose the TPP (Pānui 3/2016 refers).

 

Our Summary Policy Assessment

Our analysis within Pānui has been that the Treaty of Waitangi protection clause within the TPP is useful and positive – despite its clunky wording – and consistent with existing New Zealand trade agreements (Pānui 1/2016 refers). However, we advised that what matters more is understandings of the extent of Treaty of Waitangi rights and protections, as these are still being explored by Māori and Government. (For example water rights, flora & fauna ownership/guardianship, along with social and economic well-being protections). That is, if the Treaty is interpreted as a high-level constitutional type agreement, then its referencing within the TPP probably has limited impact on any trade matters – i.e. the Government can still settle historic Treaty claims, and work through contemporary claims as they arise, with no impact on international trade. However if the Treaty is interpreted more broadly to guarantee Māori authority over certain natural resources (such as freshwater), and also to provide for active protection including in areas such as employment, then potentially the TPP could be said to have a direct impact.

In our briefings we also noted that the TPP would likely be positive for Māori export businesses, but that the Government had not produced any information as to whether it would be beneficial for Māori household wellbeing. This is still the case, and when the full socio-economic situation of Māori is considered – lower employment, less household earnings, potentially one-third in poverty – then the social anxiety that the TPP appears to have invoked within Māoridom is understandable.3 That is, the TPP perhaps represents a fear of increased hardship for Māori, which is a rational concern given current socio-economic disparities, and a broader history of mistrust on such matters.

 

Tribunal Findings

For this report the Tribunal has focused on the Treaty of Waitangi clause within the TPP document, specifically whether it is “effective protection of Māori interests”, and secondly on what engagement with Māori is now required to ratify the TPPA.

The Tribunal’s view is the current Treaty of Waitangi clause within the TPP offers sufficient protections to Māori. It is on this basis that the claims are not upheld. Moreover, the Tribunal praises the Crown for ensuring this type of Treaty of Waitangi clause has been maintained in a series of trade agreements (notwithstanding their observation that it was first developed for a different type of trade agreement).

The Tribunal, however, does note that the TPP has the potential to create future Treaty of Waitangi risks, given its provisions for foreign investors. Therefore, in accordance with most other Tribunal reports, further engagement between the Crown and Māori is recommended.
We consider the Tribunal’s main viewpoints on the TPP are well captured within its cover letter to respective Ministers. Therefore we have provided an extended extract from this letter below.

“We conclude that the [Treaty of Waitangi] exception clause will be likely to operate in the TPPA substantially as intended and therefore can be said to offer a reasonable degree of protection to Māori interests.

We have come to this view even though the clause as drafted only applies to measures that the Crown deems necessary to accord more favourable treatment to Māori.

This raises a question about the scope of the clause. From the evidence before us, it seems the most likely source of risk to Māori under the TPPA will be investor–state claims in respect of domestic measures which place Māori at a relative advantage in comparison to a foreign investor. In these instances we think the exception clause should operate to provide a reasonable degree of protection.

The development of the Treaty exception clause, and its successful incorporation in the Singapore free trade agreement and every free trade agreement since (including the TPPA), demonstrates leadership and is to the credit of successive New Zealand Governments. We acknowledge that, in the context of the TPPA, it is an achievement to have maintained the clause given the number and diversity of participating states. We believe the Crown was right to argue for the inclusion of such a clause because of the significance of the Treaty of Waitangi in New Zealand’s constitutional arrangements.

We therefore do not find a breach of the principles of the Treaty of Waitangi arising from the inclusion of the Treaty exception clause in the TPPA in its current form.

Despite this finding, we do have concerns. The protections and rights given to foreign investors under the TPPA are extensive. The rights foreign investors have to bring claims against the New Zealand Government in our view raise a serious question about the extent to which those claims, or the threat or apprehension of them, may have a chilling effect on the Crown’s willingness or ability to meet its Treaty obligations or to adopt otherwise Treaty-consistent measures. This issue and the appropriate text for a Treaty exception clause for future free trade agreements are matters about which there should, in our view, be further dialogue between Māori and the Crown.” (Page x).

https://forms.justice.govt.nz/search/Documents/WT/wt_DOC_104833137/Report%20on%20the%20TPPA%20W.pdf

  1.  Australia, Brunei Darussalam, Chile, Japan, Malaysia, Peru, Singapore, the United States, Vietnam, Mexico, Canada and New Zealand
  2. The Tribunal declined a hearing in 2015 because the actual text of the TPP was not available then (secrecy was also a source of grievance); and because there was insufficient time for a hearing before the proposed TPP signing in November 2015. However the TPP was eventually made public and signed in February 2016, allowing for a hearing in March 2016.
  3. Refer to Pānui 10/2016 for details on these socio-economic matters.