NZ-Korea agreement weak on trade, strong on rights for overseas investors

Workers are questioning what the benefits will be of the recently confirmed free trade agreement with South Korea.

“The free trade agreement with South Korea is weak on trade benefits, but deals New Zealand into giving another set of overseas investors the right to sue the government if their profits are threatened,” says CTU Economist Bill Rosenberg.

“Trade Minister Tim Groser admits that the agreement is far below what New Zealand usually seeks on access for New Zealand’s agricultural goods. Tariffs will remain on milk powder, one of New Zealand’s largest exports. Many tariffs, including on wood and beef, will be phased out over long periods of ten to fifteen years. The truth is that the Government signed this lame deal because others such as Australia had done lame deals too,” Rosenberg says.

“But great dangers lie in the investment part of the agreement. By giving overseas investors the right to sue the government if their profits are threatened, it puts them in a privileged position over New Zealand citizens and businesses. These cases are heard by private offshore tribunals which can over-ride a country’s legal system and its systems for resolving environmental conflicts with investment proposals. Recent examples of such decisions in New Zealand include those of the Environment Protection Authority on sea-bed iron sand mining off the Taranaki coast, and on under-sea mining of rock phosphate from the Chatham Rise.

“A decision against Canada, announced in the last week, over-rode a decision by a Canadian environmental review panel to give priority to the concerns that the local community had strongly expressed. Canada could face an award against it of hundreds of millions of dollars, despite following its own laws and the investors having rights to a review of the decision under its legal system. A dissenting tribunal member said: ‘Once again, a chill will be imposed on environmental review panels which will be concerned not to give too much weight to socio-economic considerations or other considerations of the human environment in case the result is a claim for damages under [these kinds of treaty provisions]. In this respect, the decision of the majority will be seen as a remarkable step backwards in environmental protection.’"

Human rights, labour rights, and privatisations gone wrong have also come before these tribunals. Awards have ranged from tens of millions to billions of dollars.

“This is a case of small, short term gains in exchange for long-term loss of New Zealand’s sovereignty to develop its society in the interests of all New Zealanders,” Rosenberg says.

ENDS

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