[asia-apec 1583] New Zealand Herald oped 20 Sept 2000 - Jane Kelsey on Singapore FTA

[APEC Monitoring Group]

NZ Herald 20.09.00
Dialogue: Trade treaty dilutes our sovereignty

20.09.2000 - By JANE KELSEY*
Imagine the Government has announced a law that would prohibit any future
government from ever reintroducing tariffs on anything, while it concedes
that more factories will close and workers, mainly Maori and Pacific Island
women, will lose their jobs as a result.

The same law plans to stop any New Zealand Government from ever again
requiring a foreign investor to seek approval for an investment of less than
$50 million, except for large or sensitive areas of land and fishing quotas.

It would also prevent central Government and local authorities from ever
deciding to Buy New Zealand for purchases over $125,000, so that local
businesses and workers might gain a preferential benefit from the money
which is collected from them and other citizens through rates and taxation.

Nor could they prefer local companies in tenders for providing environmental
services such as waste disposal.

And, despite the Government's concern that regional economies are struggling
and the gaps between the rich and the poor are widening, the new law would
ban the future use of subsidies to support those communities, and instead
promises a foreign country that it will treat their products, services and
investors at least as well, if not better, than it treats our own.

Imagine, too, that this proposed law with its detailed schedules is 190
pages long. Copies are made available only on the Government's website. It's
too bad if you can't afford a computer, or live in a rural area without
reliable links to the internet.

The Government has referred the law to a select committee. It is not due to
come into effect until January 2001, so there's plenty of time to call for
and hear submissions and reflect on the views expressed. But the cabinet has
decided it must be reported back within 15 sitting days. So the committee
gives the public nine days to penetrate the trade jargon and legalese and
post in their submissions.

The tight time-frame means those who make submissions have no guarantee of
being heard. That may not matter much, because the committee has no power to
amend the proposed law anyway.

When the committee reports back to the House, the report will be debated and
the law voted on in resolutions that are carefully worded to ensure a
Government majority on each motion.

Even then, the vote won't bind the cabinet. It has reserved the exclusive
right to make the law binding, and parts of it enforceable by international
tribunals of trade experts that sit overseas.

This may sound outrageous. Yet that, and more, is the story of the proposed
free trade and investment agreement with Singapore. Reported to the House on
September 11, the lengthy document is now the subject of a farcical select
committee process, the precursor to Parliament's debate on resolutions which
the major parties have pre-scripted to their mutual satisfaction. The
cabinet retains the executive authority to sign.

The Government defends the timing and process by claiming there has been
extensive and unprecedented consultation on the deal, and those with an
interest will have no problem meeting the deadline.

But the text was secret until it was tabled in Parliament. The only public
information was a minimal and self-serving cost-benefit analysis prepared by
officials, which formed the basis of the Government's vaunted consultation,
followed by an updated summary of some of its content.

The Government claims it has opened the process more than ever before (in
fact, the National Government was forced to release more information on the
Multilateral Agreement on Investment in 1997 and 1998).

Trade officials have met a wider range of groups this time. But those with
concerns about the agreement, ranging from local manufacturers, to
exporters, to unions, overwhelmingly reported that they were met with deaf
ears.

Maori were consulted only through hand-picked focus groups. Those who
dissented were ignored, as were their questions about the exclusion of the
treaty partner from this negotiation process.

Others with concerns about specific aspects of the agreement, such as the
rights granted to Singaporean investors and the enforcement of those
guarantees, were reduced to shadow-boxing with the Government. Now the text
is available, they are faced with a fait accompli. There is no genuine
opportunity to make submissions, raise concerns and have the flaws in the
agreement reconsidered.

This is deeply disappointing, and will do nothing to stem the tide of
criticism, here and internationally, about the democratic deficit which
agreements like this symbolise.

Subjecting treaties to a parliamentary vote is a major step forward, one
which should be paralleled by recognising that this nation's first treaty
guarantees Maori a central role in such negotiations.

But New Zealand remains well behind the 8-ball in opening the treaty-making
process to scrutiny. Across the Tasman, the joint standing committee on
treaties is conducting an extensive inquiry into the implications of the WTO
agreements and any further negotiations.

People have had months to prepare submissions, and all will have the right
to be heard.

Several years ago, in the wake of the MAI furore, New Zealand adopted a
watered-down version of Australia's approach. New sessional orders provided
for international agreements to be presented to the House, with an
accompanying national interest analysis drafted by officials.

Both were then referred to the foreign affairs, defence and trade select
committee, which had the option to call for submissions, then report back to
the House. There might be a debate, but no vote.

That process was reviewed in late 1999 (without seeking public submissions)
and incorporated into standing orders. This is the first major international
economic agreement to come before the select committee under those rules.
But the cabinet took a shortcut along the way.

The 1999 review said 15 sitting days should be a minimum for select
committee examination. Where a treaty was controversial and the committee
wanted to call for submissions, it should seek more time before the
agreement was ratified. That is the Australian approach. There is no such
provision in the new standing orders here.

Instead, a cabinet memorandum dated February 2000, obtained through an
urgent Official Information Act request last week, requires the select
committee to report within 15 days. There is no apparent reason, except to
shut down an inconvenient and potentially embarrassing debate.

This is more than a matter of democratic process. Such agreements sign away
the sovereignty of this country in pursuit of a free trade dogma which has
dwindling credibility.

When even the Princes St branch of the Labour Party, the nursery of the
present Labour Government's leadership, warns that Labour's commitment to
trade liberalisation needs to be debated within the party before any
agreement with Singapore is signed, the Government can no longer afford to
turn a deaf ear.

*Professor Jane Kelsey teaches economics at Auckland University.