"the government’s right to regulate in the public interest remains uncertain"
The first two in a series of expert peer-reviewed papers analysing the Trans-Pacific Partnership Agreement from a New Zealand perspective were released today.
The series has been supported by a grant from the New Zealand Law Foundation and the research papers will be posted on the here as they are completed.
University of Auckland investment law expert Amokura Kawharu, co-author of Williams and Kawharu on Arbitration, has written the paper on chapter 9: Investment.
She concludes that the chapter provides an overall greater level of protection for foreign investors and their investments as compared with New Zealand’s existing trade and investment treaties.
While there are some exceptions, for example on the screening mechanism for foreign investment, they are generally narrowly drawn.
Investors can also take claims to arbitration on the basis of alleged breaches of certain types of government contracts, something that New Zealand has never agreed to before.
‘While the text includes novel safeguards which are aimed at clarifying the purpose of the rules and preserving policy space, some issues are not addressed, and the scope of the rules and the exceptions (and therefore the government’s right to regulate in the public interest) remains uncertain,’ said Ms Kawharu.
The second paper by University of Auckland law professor Jane Kelsey outlines various process aspects of the TPPA, including the steps to be taken in New Zealand and the United States for ratification of the agreement, the pre-requisites to the agreement coming into force, and the internal machinery for operation and enforcement of the agreement.
Professor Kelsey observes that the 30-chapter agreement constrains domestic law and policy at central government level, and in places by local government and SOEs, in diverse areas beyond traditional aspects of international trade.
Analysis of the US process suggests there is a significant chance there will be no vote in the US Congress before a new administration takes office in 2017, which may seek to renegotiate the agreement, add new side-letters or withhold certification of compliance by other countries until further changes are made.
The TPP Commission’s powers, chapter-specific committees and inbuilt renegotiations will supervise compliance and could extend the initial TPPA obligations. Professor Kelsey warned that the cumulative opportunities for foreign states and corporations to influence domestic decisions may be burdensome and intrusive.