Thursday, 30 July 2015

What's at stake for Australia in the TPP

This is what is at stake for Australia and what others can look forward to.  I looked in vain for coverage of the negotiations in the Australian media.

Australia faces $50m legal bill in cigarette plain packaging fight with Philip Morris

Australia's plain packaging laws have become a major test case for global tobacco companies in their fight against restrictions on sale of cigarettes.

28 July, 2015

Australia's legal bill for defending its cigarette plain packaging legislation is set to hit $50 million as it battles to contain a case brought by tobacco giant Philip Morris before a tribunal in Singapore.

And that is just for the first stage. If in September the three-person extraterritorial tribunal decides Australia has a case to answer, the hearing will move on to substantive matters and the bills will become far bigger.

The West Australian newspaper revealed on Tuesday that former treasurer Wayne Swan was called to Singapore in February to give evidence for Australia in a secret hearing.

Among the witnesses called by Philip Morris has been former High Court judge Ian Callinan, who was quizzed about administrative law.

Australia has succeeded in getting the case split into two. The first part will decide whether Philip Morris Asia has a right to bring the case.

Philip Morris Asia bought Philip Morris Australia Limited in early 2011 as the plain packaging legislation was being prepared. Australia is arguing this means it can't claim that the law hurt it, because it bought the company "in full knowledge" of Australia's intentions.

If Australia fails in September it will continue to fight the case, calling former health minister Nicola Roxon and her then departmental secretary Jane Halton as witnesses.

Philip Morris has been able to bring the case despite losing an appeal against Australia's laws in the High Court because of a so-called investor-state dispute settlement clause in an obscure Hong Kong Australia investment agreement.

Such clauses have been included in two of Australia's recently concluded free trade agreements, with Korea and China. They allow foreign corporations (but not local corporations) to sue for expropriation.

Such cases were rare until the early 1990s, but the Productivity Commission says there were 42 worldwide last year.

Speaking from Hawaii on the sidelines of talks expected to wrap up the Trans Pacific Partnership agreement with Australia and 11 other Pacific-facing nations, La Trobe University public health specialist Deborah Gleeson said she feared Australia would be unable to carve out sufficient exemptions.

Australia has asked to exempt the Pharmaceutical Benefits Scheme, Medicare, the Therapeutic Goods Administration and the Office of the Gene Technology Regulator from investor-state dispute settlement procedures.

"There is likely to be a lot of unhappiness among other countries about specific Australian programs being carved out, because that begs the question of what happens to their programs," she said.

The United States has secured an investor-state dispute settlement in each of its agreements apart from the 2005 Australia-US agreement, in which the Howard government refused to give way.

Trade Minister Andrew Robb said from Hawaii that Australia was party to investor-state dispute settlement provisions in 29 agreements and "the sun has still come up".

The talks continue until Friday.

The Trans-Pacific Partnership - 07/29/2015

I have little deal that (as Jane Kelsey pointed out at a talk I went to) that this deal will be signed by New Zealand with little or nothing to show for in it in terms of trade concessions.

America has a history of forcing small nations to compl with its wishes and this government is not going to do anything to upset its boss.

Sure as sunrise, New Zealand will sign up to the TPP if a deal is on offer
Vernon Small

Foreign buying of Auckland houses is a key point of difference between National and Labour over the Trans Tasman Partnership free trade deal.

30 July, 2015

OPINION: Based on previous observations the sun will more than likely come up tomorrow and New Zealand will sign the Trans-Pacific Partnership (TPP) trade deal if, as appears likely, it is finalised this week.

Actually it will sign it whatever week it is finalised. The Government has far too much skin in the game to walk away.

When ministers say they would reject the TPP if it is not in New Zealand's best interests, unless there is a good deal on dairy, unless, unless, unless ... there is only really one response. Yeah, right.

It is inconceivable it would walk away from a 12-nation free-trade deal that includes Japan and the United States - the holy grail for free-trade negotiators since before this country's anti- nuclear policy turned it into a pawn of trade diplomacy.

When Key made it clear a few weeks ago that the TPP would deliver a net benefit to New Zealand if the clock stopped on talks now - even though the dairy deal was not as good as hoped - the game was up. At that point there was no more bluffing - we were signing.

Against that background - and in the absence of the necessary detail to form a view on where the talks are going - Labour has come under pressure to take a stand against the TPP. And in the past week it has... though not without some very fuzzy edges.

Labour's angst goes back to its 2013 annual conference in Christchurch where internal divisions were "kicked down the road".

One group, led by Phil Goff was strongly in favour of TPP, believing it would bring broad benefits. Another group argued it surrendered too much sovereignty.

To paper over the cracks, Labour built a halfway house: Withhold support until the text was released and it was clearly shown to be in the broad national interest to sign up.

Last week's statement was a step away from that - while being loose enough to keep the cracks firmly under wraps.

It set five non-negotiable bottom lines for Labour's support.

They were that the centralised drug agency Pharmac must be protected, corporations would not be able to "successfully" sue the Government for regulating in the public interest, meaningful gains were made for farmers on tariff reductions and market access, the Treaty must be upheld and - the biggie - New Zealand must retain the right to restrict sales of farm land and housing to non-resident foreign buyers.

In doing so it brought together two strands; public unease over the TPP (contrasted with the radical opposition to free trade that would never be satisfied with Labour short of a complete rejection of the TPP) and the party's "wedge" argument against foreign house purchases.

The link to its campaign against foreign (Chinese) resident buyers of Auckland houses is complex, given China is not yet part of the TPP.

The argument runs that through the "most favoured nation" clauses in the China FTA, negotiated by Labour, China must be offered the same investment rights as other subsequent trade deals.

So while the pre-existing Closer Economic Realtions (CER) deal with Australia would not trigger that clause, the TPP would.

But it gets more complex still.

When it signed up to the recent trade deal with South Korean the Government failed to secure the right to add new categories of land - such as residential houses - to existing restrictions. That now flows backwards to the China deal.

(It says a lot for John Key's chutzpah that he is prepared to blame Labour's free-trade deal with China, with its most favoured nation clause, for the fact that the current deal with Korea will flow back into the China deal. But that's politics, folks.)

A similar approach to the TPP only exacerbates the problem. Fast forward to some future time when Labour is in Government and tries to tries to renegotiate the TPP to allow a ban on foreign house buyers.

It is unlikely Japan and the United States would be overly concerned, but the principle of a renegotiation would be a major hurdle.

And if a future Labour Government was successful then the new TPP would be out of step with the South Korean deal.

Yet there may not be an actual - as opposed to theoretical or in-principle - problem here anyway.

If New Zealand did restrict foreign buyers in future and it was in breach of a free-trade deal, then a lawsuit would be extremely unlikely, given the cost to a property investor and the difficulty of proving loss.

If, at this point, your head hurts you are not alone.

But, the simple point is that Labour wants to highlight what it sees as the Government's failure to preserve "New Zealand for New Zealanders".

It is by far the most politically potent of Labour's "bottom line" non-negotiable positions, despite the furore around Pharmac this week.

Key's admission that the TPP would likely extend patent protection for medicines, pushing up the cost to New Zealand and Pharmac, drew a quick response from Little.

Labour, he said, had pledged to oppose the TPP if Pharmac, and its model of purchasing, were not protected.

"Extending the patents does not protect Pharmac's purchasing model."

That sounded unequivocal enough, though arguable.

But it also risks pulling the wallpaper off one of the deepest fissures in the caucus, where some see an extension of patents as inevitable... and quite acceptable.

TPP talks stumbling on dairy hurdle

Dairy is a big hurdle of TPP discussions, with New Zealand seen as a threat to other dairy-producing countries.
29 July, 2015

Dairy is proving to be a difficult hurdle at Trans-Pacific Partnership (TPP) discussions in Hawaii this week, with some countries cautious about New Zealand's competitive dairy industry.

Reuters has reported a major sticking point in the talks is dairy, with Mexico under pressure to give Australia and New Zealand more access to its markets. However, Canada was resisting demands to open up its protected local industry.

ASB rural economist Nathan Penny said based on information about the TPP talks, it seemed the United States, Canada and Japan were all resistant to opening up their agricultural sectors to foreign competition.

He said Japan's dairy industry does not produce enough for the country's needs, but they have yet to reduce barriers to trade.

From New Zealand's point of view, Japan would be a good market due to its size, lack of competition, the older farming population and the shortage in some dairy products, Penny said.

"We are much more efficient than Japanese producers. It would be a huge opportunity for us, hence Japanese producers in part are heavily lobbying their own government to ensure that protection remains in place. Their industry would go through a structural change if opened up to competition," he said.

New Zealand Trade Minister Tim Groser told TV3's The Nation that he was looking for "commercially meaningful access" for New Zealand's dairy industry into other markets.

"I'm not going to be dogmatic about how to define that, but there's nothing on the table yet that allows me to recommend to the cabinet that we should sign this deal at this point," he said.

The Canadian dairy industry was also highly protected - the Business News Network in Canada reported dairy was protected from foreign competition by tariffs that can run as high as 246 per cent.

Without a quid pro quo from Canada, the US was also unlikely to open up, Penny said.

"We're reliant on two deals to get one."

Without knowing the details of the agreement, Penny said it was difficult to determine how much the New Zealand dairy industry would affect those of other countries.

"For us, from an opportunity point of view, dairy is a big one. If we don't get a good deal on agriculture, then it's not really doing the job for us."

A better dairy deal was essential for New Zealand dairy industry representatives, with chairmen of the Dairy Companies Association of New Zealand (DCANZ) and DairyNZ urging TPP governments to give dairy as good an outcome as that of other goods.

DairyNZ chairman Hon John Luxton said there was no good reason for dairy to be left behind.

"I urge ministers to remember that this is an agreement to grow trade and support economic prosperity. Not one to maintain protection and distortion," he said.

"We are a small country, of four million people, where dairy is very important to our economic wellbeing. But we are not asking for a handout, our farmers are not subsidised, we do not protect our market. We just want a level playing field."

The "Saudi Arabia of milk"

The Wall Street Journal dubbed New Zealand the "Saudi Arabia of milk" in 2008, likening its dairy industry to the oil industry in Saudi Arabia, and it is a title that has stuck.

New Zealand is a giant in the dairy industry, with Fonterra the world's largest global milk processor and dairy exporter.

New Zealand's exports of milk powder, butter and cheese were worth about $12 billion in the 12 months to June 30, down 24 per cent on the previous June year.

Penny said New Zealand was still the one producer of dairy products that could influence global prices.

"The world prices of milk powders in particular, we're probably the dominant exporter in that sense. Where our production goes prices do tend to follow," he said.

Jane Kelsey was interviewed on Radio NZ this morning, She's about the only spokeperson talking sense. Winston Peters is another.

AUDIO: More bad news to come on the TPPA - opponent

Listen to Jane Kelsey on Radio Live HERE

Here is the latest from Wikileaks

Secret Trans-Pacific Partnership Agreement (TPP) Treaty: State-Owned Enterprises (SOE) Issues for Ministerial Guidance

Today, 29 July 2015, WikiLeaks releases a secret letter from the Trans-Pacific Partnership Agreement (TPP or TPPA) Ministerial Meeting in December 2013, along with a comprehensive expert analysis of the document.

The letter indicates a wide-ranging privatisation and globalisation strategy within the Agreement which aims to severely restrict "state-owned enterprises" (SOEs). Even an SOE that exists to fulfil a public function neglected by the market or which is a natural monopoly would nevertheless be forced to act "on the basis of commercial considerations" and would be prohibited from discriminating in favour of local businesses in purchases and sales. Foreign companies would be given standing to sue SOEs in domestic courts for perceived departures from the strictures of the TPP, and countries could even be sued by other TPP countries, or by private companies from those countries. Developing countries such as Vietnam, which employs a large number of SOEs as part of its economic infrastructure, would be affected most. SOEs continue to fulfil vital public functions in even the most privatised countries, such as Canada and Australia.
The TPP is the world's largest economic trade agreement and will, if it comes into force, encompass more than 40 per cent of the world's GDP. Despite its wide-ranging effects on the global population, the TPP is currently being negotiated in total secrecy by 12 countries. Few people, even within the negotiating countries' governments, have access to the full text of the draft agreement, and the public – who it will affect most – none at all. Large corporations, however, are able to see portions of the text, generating a powerful lobby to effect changes on behalf of these groups and bringing developing countries reduced force, while the public at large gets no say.
The TPP is part of the TPP-TISA-TTIP mega-treaty package, which together proposes to encompass more than two-thirds of global GDP.
WikiLeaks' editor, Julian Assange, said: "The TPP erects a 'one size fits all' economic system designed to advantage the largest transnational corporations. In this leak we see the radical effects the TPP will have, not only on developing countries, but on states very close to the centre of the Western system. If we are to restructure our societies into an ultra-neoliberal legal and economic block that will last for the next 50 years then this should be said openly and debated."

Wednesday, 29 July 2015

New Zealand: Cameron Slater being sued

I would support even Colin Craig against the toxic Cameron Slater 

Colin Craig to take legal action

Former Conservative Party leader Colin Craig says he has been the victim of a co-ordinated political attack and is taking legal action.

Colin Craig during the press conference announcing his resignation as leader of the Conservative Party (19 June).Colin Craig - pictured at a news conference earlier in 2015. Photo: RNZ / Kim Baker Wilson

28 July, 2015

He has announced he is suing blogger Cameron Slater and a former party board member for what he calls a campaign of lies from the "dirty politics brigade".

Mr Craig stepped down as party leader last month amid allegations of inappropriate conduct with his former press secretary, Rachel MacGregor.

He and his wife, Helen Craig, said today they wanted to expose what they said were false and absurd allegations about him.

Mr Craig has published a booklet, which he said contained correspondence between Mr Slater and one of the party's former board members, John Stringer.
The couple are also suing Jordan Williams, who they describe as Mr Slater's apprentice.

Mr Craig told Checkpoint he was suing the trio for defamation to protect his political credщbility.

"Going to the court and have the court rule on whether these guys are telling the truth or whether I'm telling the truth does matter," he said.

"That's what political credibility is about. Who's telling the truth? Am I honest or are they honest? We can't both be right. The public do need to know."

Mr Craig said he was willing to return to politics if the public wanted him to.

Listen to Colin Craig on Checkpoint ( 5 min 22 esc )

AUDIO: Colin Craig a 'ratbag' and threat to sue 'laughable' - Cameron Slater

Listen to audio HERE

John Key and Tim Groser are selling this country down the drain.  Winston Peters calls him (correctly) a 'double agent'

TPP: Key lobbying for dairy concessions

Prime Minister John Key. Photo / Mark Mitchell

29 July, 2015

Prime Minister John Key says he has been personally calling other Pacific Rim countries' leaders to lobby for dairy concessions in the Trans Pacific Partnership.

As the 12-nation trade deal negotiations enter the final stretch, Mr Key said New Zealand was gaining some support on its demands for the dairy industry.

"I'm in the process of making phone calls to leaders and others to encourage them to see it our way. Let's sort of see how it goes," he said.

The Prime Minister would not reveal who he was speaking to, but said he had personally called "a number of people".

"We're presenting the strongest case we possibly can on behalf of a very important sector for New Zealand."

More favourable market access and reduced trade tariffs for New Zealand's dairy industry are a key condition of New Zealand's support for the TPP.

Dairy Companies Association of New Zealand chairman Malcolm Bailey, who is at the TPP talks in Hawaii, said the industry was concerned about reports that some countries were pushing New Zealand to accept a substandard outcome for dairy access.

"There is no good reason for dairy to be left behind in this agreement," he said.

Mr Bailey said the TPP needed to set a high quality framework for others to join at a later date, including possibly China.

He said China had already entered agreements that included the complete elimination of tariffs with New Zealand, and "it would be very strange if TPP were to be less liberal than those agreements."

Mr Key was also asked about whether New Zealand would still be able to introduce plain packaging for cigarettes under the TPP without risk of being directly sued by tobacco companies.

Australia's legal bill for defending its plain packaging regime has so far cost around $50 million.

New Zealand has been closely watching the legal challenges across the Tasman because it expects to face similar multi-million dollar lawsuits if it introduces plain packs.

Mr Key said that if investor state dispute settlements provisions - which could allow corporates to sue governments for unfavourable policy - were included in the TPP, he was confident that they would be accompanied by safeguards.

Asked whether it would prevent New Zealand from introducing the anti-smoking policy, Mr Key said: "I don't think it will, but as you're aware we're not even signed up to TPP yet and we've been awaiting the outcome of the Australian case."

Australia's negotiators are also pushing to have medicine patents limited at five years, while the United States wants them to last for 12 years.

Mr Key would not reveal New Zealand's position, but hinted that it was similar to Australia's.

"One would assume we're going for the shorter period," he said. He would not comment on whether New Zealand would agree to a 12-year limit.

Some reportage from Radio New Zealand

Tim Groser says TPPA finish line is in sight

How Canada sees us

The ‘Saudi Arabia of milk’ pushes Canada to open its dairy market

Stephen Harper begins a second Pacific Rim trip this month in New Zealand, a natural ally on nearly every topic except for Canada’s heavily sheltered dairy industry, where the small country that’s been dubbed the “Saudi Arabia of milk” is hoping regional free-trade talks will pry open Canadian markets.

And from this morning, Canada is not happy. I looked in vain for any Canadian coverage of the TPP

Tim Groser a "double agent against our interests" - Winston Peters

Listen to Winston Peters talk to Sean Plunket HERE

Greek collapse - 07/28/2015

Greek Economy Faces Total Collapse As Doctors Flee, Retail Sales Plunge 70%

28 July, 2015

Back in May we outlined the cost to the Greek economy of each day without a deal between Athens and creditors.

At the time, a report from the Hellenic Confederation of Commerce and Enterprises showed that 60 businesses closed and 613 jobs were lost for each business day that the crisis persisted without a resolution. 

Since then, things have deteriorated further and indeed, with the imposition of capital controls, businesses found that supplier credit was difficult to come by, leading to the very real possibility that Greece would soon face a shortage of imported goods, something many Greeks clearly anticipated in the wake of the referendum call as evidenced by the lines at gas stations and empty shelves at grocery stores.

As a reminder, here’s what WSJ said earlier this month:

Wholesalers can’t pay for supplies. Importers’ foreign counterparts won’t trade. 
Greece’s cash crunch hit small merchants first. They are less able to get credit from their suppliers, especially those dealing in perishable products that are continually imported. Christos Georgiopoulos owns a gourmet supermarket in Plaka, a picturesque Athens neighborhood frequented by tourists. He sells Champagne and Russian crab legs. 
Nobody is buying. "I haven’t had a single customer in two days," he said Wednesday. He is shutting down his shop and says he doesn’t know when he will reopen. He gave some crab legs to his workers and is taking some home. "I haven’t paid my staff and don’t know if and when I will," he added.

And then there was this rather disconcerting commentary from AFP

Greece's dive into financial uncertainty is forcing struggling businesses to take unusual steps to survive, including hoarding euros in cash.
Businesses which import their raw materials have been the hardest hit, says Vassilis Korkidis, head of the National Confederation of Hellenic Commerce (ESEE).
As unease spreads, getting ones hands on cash has become a sort of national sport, with businesses from restaurants to car mechanics telling customers paying by card is no longer an option.

The inevitable result of the above is that banks’ already stratospheric NPLs are set to rise further meaning that with each passing day, the banking sector’s recapitalization needs grow as the economy sinks further into depression. 

Perhaps now that the "Quadriga" (the new moniker for Athens’ creditors which was ostensibly adopted to reflect the fact that there are now four institutions involved rather than three but which incidentally conjures images of the triumphant statue atop the Brandenburg Gate in Berlin) has touched down in Athens, creditors’ "technical teams" will get a good hard look at what happens when you force deep fiscal retrenchment on a country whose economy is collapsing and then rub salt in the wound by cutting off liquidity and enforcing capital controls. 

Here’s some color on just how dire the economic situation has become, via Kathimerini:

Turnover in retail commerce is posting an annual drop that in some cases amounts to 70 percent even though the market is in a sales period. Capital controls have prevented Greek consumers from shopping, while even foreign tourists appear reserved due to the increased uncertainty on developments in Greece.
An extraordinary meeting of the board of the Hellenic Confederation of Commerce and Entrepreneurship (ESEE) on Monday heard data from representatives of local associations that pointed to an annual drop of between 40 and 70 percent since the capital controls were imposed.
In Athens, the decline came to 40 percent, while in markets outside the city center it was even greater. Thessaloniki and Piraeus reported a 60 percent fall and Trikala, in central Greece, a 60-70 percent shrinking. Even tourism hotspots such as Rhodes had a 50 percent decline in turnover.

And a bit more from Greek Reporter:

The Athens Medical Association (ISA) warned about major shortages in medical staff over the next years, since an increasing number of Greek doctors, especially those working in highly specialized fields, and nurses are looking for jobs abroad and leaving the country.
According to the association’s figures, more than 7,500 doctors have migrated to other countries since 2010. It was reported that in the first six months of 2015, ISA issued 790 certificates of competence, an official document required for medical sector employees who wish to work abroad. However, the report also noted that up until 2009, on average, 550 doctor were taking jobs abroad each year.
"One of the biggest losses in the crisis has been that of great minds," ISA chief Giorgos Patoulis stated to Greek newspaper Kathimerini. "In a short time, the national healthcare system will have an aged personnel and will be unable to staff services."
Furthermore, the data showed that a total of 8,000 unemployed Greeks have been forced to look for job opportunities abroad. The Greek Nurses Union announced that it issued 349 certificates just last year, 357 in 2012 and 74 certificates in 2010.

And don't expect this situation to improve any time soon because despite the passage of two sets of prior bailout measures, still more austerity will need to be pushed through the Greek parliament if Athens hopes to activate bailout funds by August 20, in time to make a €3.2 billion payment to the ECB. Here's Reuters: 

"More reforms are expected from the Greek authorities to allow for a swift disbursement under the ESM. This is also what is being discussed right now," [and EU Commission spokesperson] said.
The banks have reopened after the ECB increased emergency funding but capital controls remain in place. Doubts persist about whether a severely weakened Greek economy can support another programme after a six-year slump that has cut output by a quarter and sent unemployment over 25 percent.
Among politically sensitive measures held back from the initial package were curbs on early retirement and changes in the taxation of farmers to close loopholes that are highly costly for the Greek state. A source close to the talks said these reforms were expected to be enacted by mid-August.
However, touching pensions is sensitive with Tsipras's left-wing Syriza party, which has already suffered a substantial revolt over the Brussels agreement, and the main opposition New Democracy party opposes ending tax breaks for farmers.

In other words, Tsipras is about to go back to parliament and attempt to pass a third set of prior actions that will further imperil Greeks' ability to spend, and he must do so quickly because if creditors aren't satisfied with the progress by August 18, then paying the ECB won't be possible and then it's either tap the remainder of the funds in the EFSM (which would require still more discussions with the UK and other decidedly unwilling non-euro states) or risk losing ELA which would trigger the complete collapse of not only the economy but the banking sector and then, in short order, the government.

And through it all, Tsipras is attempting to beat back a Syriza rebellion (which will only be exacerbated by the upcoming vote on the third set of measures) while convincing the opposition that he's not secretly backing the very same Syriza rebels in their attempts to forcibly take the country back to the drachma. 

The only real question at this point is whether Greece can possibly navigate the next several months without descending into outright chaos, politically, economically, and socially