New Zealand news - 08/11/2015

NZ Prime Minister John Key says TPP deal will be done

Talks between 12 nations to agree the Trans Pacific Partnership trade deal may have failed last week, but New Zealand's Prime Minister John Key has told the BBC that he is confident the pact will be signed by the end of the year.

BBC,

10 August, 2015

New Zealand was one of the original nations involved in the TPP, which if a deal is concluded will create a "mega regional" bloc with a combined GDP of $28 trillion.

Mr Key explains why he was optimistic that an agreement will be reached.

Auditor-General asked to probe $4m McCully Saudi deal

Stuff,

11 August, 2015

Labour has asked officials to investigate whether Foreign Affairs and Trade Minister Murray McCully and his ministry misled them over the Saudi sheep farm deal.

Export growth and trade spokesman David Parker said hundreds of pages of documents released last week showed Treasury and Auditor-General Lyn Provost had serious misgivings about payments totalling more than $11 million for an "agri-hub" in Saudi Arabia.

It was made up of $6m to research and develop the farm, $4m in cash and $1.5m to fly breeding stock to Saudi Arabia.

In letters to the two departments' heads, Parker also questioned whether the payments "when properly characterised" were within the rules.

"It's clear from last week's document dump that the auditor-general and Treasury had serious concerns about the Saudi sheep farm deal. It now appears they were also misled by Mr McCully who refused to have the $4 million facilitation payment called compensation so that 'lawyers and bureaucrats' wouldn't be involved," Parker said.

The farm, a joint venture with wealthy investor Hamood Al Ali Al Khalaf, was set up in part to clear the way for a free trade deal in the region.

The influential Al Khalaf had lobbied unsuccessfully to have the ban on live sheep exports for slaughter overturned, arguing his business had suffered losses because of it.

The Government instead proposed the farm as a way to ensure meat supplies to Saudi Arabia.

It paid for 900 breeding sheep to be flown to the farm. Exports for breeding are not banned.

Parker pointed to a March 5, 2012 meeting between Foreign Affairs and Trade Minister Murray McCully and the Al Khalaf companies.

The documents record McCully saying he did "not want any (financial) contributions to be treated as compensation as this would involve a plethora of lawyers and bureaucrats".

McCully would prefer an investment in a partnership to match what would be achieved by exporting sheep for slaughter, the papers showed.

Parker said the official documents showed "deliberate misrepresentations by (McCully) as to the true nature of the payments made to the Al Khalaf group".

He said the contract between the Ministry of Foreign Affairs and Trade (MFAT) and the Al Khalaf group in February 2013 "was drafted so as to pretend the $4 million cash payment was for good value for services and intellectual property. It was not".

But McCully said appropriate independent and internal legal advice was sought on the contract for services which MFAT entered into with the Al Khalaf group.

"I was very clear in all my dealings with Mr Al Khalaf that we were not prepared to enter negotiations on the basis of paying compensation. This is reflected in my reported comments at the meeting on March 5, 2012."

Prime Minister John Key said he was "totally comfortable" with the deal, which was in line with official advice received.

Key echoed his earlier position that the deal was "creative", and said "everyone accepts that".

McCully's statements reflected what he had been clear on, Key said.

"The deal wasn't compensation."

Key said he would "possibly" do a deal in the same way again.

Parker said McCully did not obtain Cabinet approval for the $4m payment and then hid it from the public for more than two years.

And there was no assessment of the value of the $4m payment "because there is no $4m value".

He said much if not all of the $11m appears to have been wasted.

"Had his Cabinet colleagues, the Treasury, or the Auditor General known the true nature of these payments, they would have been stopped, Parker said.

The Government has blamed Labour for souring relations with the Saudis by banning live exports for slaughter in 2003 and then continuing to negotiate over a possible waiver.

But the documents show National continued the talks after it took office in 2008 and then extended the ban in 2010.

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