By KASEY McDONNELL.
It’s sparked mass protests around New Zealand, more than once. Journalists have written many opinion pieces about the pros and cons of the TPPA, and it’s only stoked the passionate debate on whether New Zealand should or shouldn’t be involved.
It’s hard to understand what’s up with the TPPA, because it requires a lot of background knowledge. Without that understanding, it’s difficult to know exactly why people support or oppose it.
Here is a guide to understanding what’s going on with the TPPA, so you can make up your own mind.
What is the TPPA?
The TPPA is a free trade agreement between twelve countries around the Pacific. The countries that have currently reached an agreement on the TPPA are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Discussions about the wide-ranging agreement have been going on since 2006, with New Zealand being one of the main negotiators.
Free trade agreements (FTAs), like the TPPA, are legal agreements between countries that remove or reduce the barriers on moving goods across borders. These can be include quotas, taxes on goods or other policies by governments.
Without an FTA, governments can place taxes on any products coming into their country, be it food, gadgets or clothing. These taxes are called tariffs, and they can be placed on goods coming in from outside of New Zealand, if there aren’t agreements in place.
When a free trade agreement is signed, these tariffs are reduced or removed entirely. The reason why countries like New Zealand look to sign FTAs with other nations is because it allows for producers of goods like dairy or meat to make better profits from international markets.
Another big trade barrier between countries is quotas. Quotas on imports are basically limits on how many things you can import from a certain country. For example, without free trade agreements, there could be a quota made on cars to limit the number entering New Zealand from foreign producers.
Without tariffs and quotas on the goods that are being sold from New Zealand abroad, business owners are able to make more profit off the goods they already sell. For example, New Zealand’s free trade agreement with China allows businesses like Fonterra to sell their products in China without having to pay to get it into the country, which means more money coming into New Zealand off our exports.
Support the TPPA?
The main reason the TPPA is supported by the New Zealand government is because of the markets that are opened up for New Zealand exports. According to John Key and the National Government, 93% of New Zealand produced products will be tariff-free in TPPA nations. Big industries like dairy didn’t get tariffs removed like the government wanted, however. The government has said that the deal on dairy wasn’t what they were aiming for, but they still believe that the TPPA is worth it.
The countries involved make up about 40% of the world’s economy, which means that without the tariffs on New Zealand exports to those nations, there is a lot of opportunity for more access to big markets, like the US. There is an estimated reduction of $259 million in tariffs as a result of the TPPA, according to John Key; a predicted GDP growth of US$2 billion over the next 10 years, gains in exports estimated at $4.1 billion by 2025 and better access to goods and services for consumers.
Essentially, all of this means that with the TPPA comes the opportunity for more access to goods and services from abroad. As well as this, it increases the profits for New Zealand businesses entering into the markets of big nations like the US. Like most FTAs, the supporters of the TPPA believe that it is good for business in New Zealand and will add value to the economy.
Protest the TPPA?
Protests against the TPPA have been happening regularly over the last few years, gaining traction as the TPPA has come closer to being signed and written into law. The reasons masses of people have marched in their cities or to Parliament are mostly to do with what could be possible under the TPPA that doesn’t relate to trade.
Until November 2015, the entirety of the TPP agreement was shrouded in secrecy, which meant that nobody other than the negotiators knew what New Zealand was being signed onto. Other than leaks of some chapters of the TPPA on WikiLeaks, the entire document was kept secret. According to Jane Kelsey, leader in protesting the TPPA and University of Auckland Law Professor, there’s “nothing in this text that makes me think that it’s any less toxic than we thought it was”. The concerns that Kelsey and organisations in New Zealand have about the TPPA are wide-ranging, including environmental threats, more corporate influence and undermining of our sovereignty.
According to It’s Our Future, an organisation that manages protests and legal battles against the TPPA, under the agreement there will be the ability to sue governments for laws that harm predicted future profits of corporations. This can be, they say, as simple as raising tax on tobacco to discourage smoking, or not allowing deep sea oil drilling to protect our environment. Laws that are passed in the public interest will face challenges in court which, as It’s Our Future argues, “can be extremely costly, and [be a waste of] state resources.”
There are also lots of other concerns to do with core parts of New Zealand society, like the effect it will have on medicine prices and healthcare. There are fears that the TPPA will give more control to corporations over New Zealand’s buyer of medicines, PHARMAC, which would make medicine more expensive for ordinary Kiwis.
For citizens against the agreement, the benefits that come with the TPPA are not worth the potential costs in medicine, corporate influence and our ability to make laws.
What happens next?
Currently the TPPA has been finalised, but not signed into law. At this stage, each country needs to sign the agreement and make it law. For New Zealand, that means debating and passing the TPPA through Parliament. For both the supporters and protesters of the TPPA, the next step is to see whether the agreement succeeds in becoming law.