Government’s TPPA analysis: 279 impenetrable pages.

This is an article about the suitability of the 279 Page TPP National Impact Analysis (NIA) as a document to inform New Zealanders about the detail of the agreement.

The TPPA is complex and multi-facetted but a well-structured, good faith approach would have provided a full report of its impacts intended for a wide public audience to understand and plan for the omnibus legislation and ultimately the impacts of the TPPA. Doubtless there is an argument by some to say that the NIA document is a summary of a trade agreement intended only for the government officials, exporters, lawyers and specialists. These people, they might argue, are its audience.  However the NIA, as written, is not an effective tool for understanding the Trade Agreement’s impacts even for an expert audience. Sad to say the government’s TPPA National Impact Analysis, released just days before the signing by Trade Ministers on 4 February, and a step on the way to ratification of the ‘trade agreement’ by Parliament is, frankly, a failure.

The NIA gives the impression of having been cut and pasted together by people who were close to the action and who feel that their only responsibility is to the National and ACT parties in order to fulfill the requirements of ratification rather than for the general public. It’s not difficult to understand why the independent peer reviewed work done with Law Foundation grants is proving a much more attractive resource for finding out about the TPPA.

The NIA has many faults. It is partisan, blinkered as to the differential effects in society of the TPP’s implementation, silent on the impact of reciprocal rights afforded to overseas corporates in New Zealand, poorly argued, misleading, missing important information about the process to be followed and lacking any analysis of well-founded information from detractors of the TPP. However the rest of this article is about its poor drafting and presentation that make it illogical and impossible to follow. It is a poor document on its own terms of being a National Interest Analysis for a major trade agreement.  Other countries appear to have done much better.

Taken separately the issues described in this report may seem small. The cumulative effect though means that the document effectively incomprehensible. It is impossible to piece together how the TPPA provisions would apply and how the parts inter-relate. For anyone who cannot spare the time to read the 6000 pages of the original it’s an unhelpful cludge of a document.

Punctuation

1. This is relatively trivial but there is no consistent way of using punctuation. Since the TPPA will apply to future governments (and it is clear that this is the context) then surely the correct form should be “governments’ ability to” not “government’s ability to”. However the latter is used most frequently but not consistently.
2. We are told about the special situation of New Zealand’s ice wine (variously also rendered as ‘ice wine’ and “ice wine”) and other terms are used both with and without quotation marks.

Proof-reading

3. It’s not been proofread. Whole sentences make no sense and give up their meaning only when you make your own adjustments.

EG Original – doesn’t make sense

4. 14 government procurement

1. Negotiations on sub-central coverage would be shaped by the fact a relatively low proportion of procurement in New Zealand that is undertaken at the local government level (approximately 20% of total procurement expenditure) compared to other countries.

Proofread – makes sense,    

1. Negotiations on sub-central coverage would be shaped by the fact a relatively low proportion of procurement in New Zealand is undertaken at the local government level (approximately 20% of total procurement expenditure) compared to other countries.

Problems with document navigation

4. There is no sign-posting section, as part of the executive summary, along the lines “how to use this document” which is often included in long technical documents to help orient the reader.
5. There is no summary of achievements outlining the positive outcomes for exporters, or analysis from the perspective of different groups in society (like small businesses or local authorities) as there is for the equivalent document for Australia where the benefits are outlined for each agriculture sector and for small businesses.
6. More detailed material is not separated out into appendices, as the Australian NIA has done with the result that we are waylaid with the specific situation for growers of so called ‘ice wines’ and other specific instances in material that purports to be scene setting.
7. Information related to complex structures and processes could have been clarified if diagrams, charts or maps were used. There are none. In fact information that is related is found in multiple locations for reasons that are unclear but which make it impossible to for even a close reading to map the inter-relationships, structures and processes described.

Content inconsistent with section headings

8. Often the content does not comply with the heading labels. In several instances the heading ‘disadvantages <of this chapter> simply continues to list what it is hard not to construe as further “advantages”. For example.

Section 4.14.2 Disadvantages to entering TPP, Government Procurement

• New Zealand would not be required to change its current procurement practice or regulatory framework on entering TPP, as the obligations for New Zealand are consistent with New Zealand’s Government Rules of Sourcing.
• New Zealand’s schedule does not include any additional commitments beyond those already made in other agreements, in particular the World Trade Organization Agreement on Government Procurement (GPA). In other words, New Zealand would simply extend the commitments that are already in place for many other countries, including a number of TPP Parties.
9. On other occasions the text says that there are no disadvantages before listing what surely is a disadvantage

Section 4.1.2 Disadvantages of entering TPP, Trade in Goods

• No disadvantages have been identified for New Zealand from entering TPP resulting from the tariff commitments that other TPP Parties would make to New Zealand. Where these tariff commitments have an effect, they would be beneficial (leading to improved competitiveness for New Zealand exporters).
• New Zealand’s tariff commitments under TPP, as for any trade agreement involving reciprocal tariff adjustments, have the potential to create adjustment effects for domestic producers as a result of increased exposure to foreign suppliers.

Duplication

10. Each TPPA chapter is addressed twice – first an overview with a list of advantages and disadvantages (section 4) and then a section with new obligations imposed by the treaty, reservations (exclusions) and the outline of dispute resolution mechanisms (section 5). Often almost identical information is repeated under each section – but not always – and sometimes it differs in for no clear reason.

Eg for SOEs under section 4

New Zealand has specific exceptions allowing government support for SOEs for the following:

• The supply of construction, operation, maintenance or repair services of physical infrastructure supporting communications between New Zealand and other TPP Parties.
• The supply of air transport services and maritime transport services to the extent that they provide a connection for New Zealand to the rest of the world, and for air services, where the assistance is provided in order to maintain ongoing operations, and does not cause a significant loss in a competitor’s market share or significantly undercut a competitor’s prices. (This exception is referred to in a separate side letter New Zealand agreed with Australia alongside TPP. See Sections 2 and 5.31 of this NIA.)
• To Solid Energy (to take into account a Crown indemnity for environmental remediation and any future assistance the Government may provide to Solid Energy).

And almost identical information for SOEs under section 5

New Zealand has country-specific exceptions preserving space for government assistance that causes adverse effects, if the assistance relates to:

• An SOE’s supply of construction, operation, maintenance or repair services of physical infrastructure supporting communications between New Zealand and other TPP Parties.
• An SOE’s supply of air transport services and maritime transport services to the extent that they provide a connection for New Zealand to the rest of the world. For air services, the exception applies if the assistance is provided to maintain an SOE’s ongoing operations and does not cause a significant increase in the SOE’s market share or significantly undercut the services of a competitor.
• Solid Energy.

Internal referencing

11. There is no glossary with definitions but many terms have TPPA specific or technical trade meanings. Examples are: certification, certificate of origin, cumulation, expropriation, validation, covered investment.
12. There is no bibliography of references which makes it hard to understand the substantive research base that underlies the thinking. (There are a few references to supporting documents made in the page they are referenced).
13. The document contains no cross referencing in the text eg from a word or phrase to its definition and related information is addressed in multiple parts of the document.
14. There is no index to help navigate the document or a separate list of figures and tables – a few are included in the table of contents but others eg 5.12 temporary entry for business persons is not included.
15. Links to and references from the NIA to the actual text of the TPPA, allowing people to make the connections between the summary and the full text, are only available in some chapters.
16. The layout of the document means that these new terms are met before they are defined. The word impartial is used 9 times to describe government obligations to businesses before its specific meaning is outlined on page 221.

Inconsistent use of terms

17. There is no consistency in the use of language and explanations where there are differences. It’s not clear whether the TPPA requiring something the same as it obliging something or not. Is cumulation (a technical term to do with where goods are sourced) the same as accumulation (used once but possibly a typo) or is it different? This difference is not clear from the text.
18. There are many other terms with meanings that differ from common usage: the term ‘mitigations’ is used to describe the protections from the potentially egregious impacts of investor state dispute tribunals. However it is but one of 5 terms meaning broadly the same thing. The other words to describe the ways in which we need to have no fear of the Investor State Disputes apparatus are introduced by saying “there are safeguards, reservations (non-conforming measures) and exceptions”. However later in the document these terms are used interchangeably indicating that they are not really separate concepts at all.
19. Discipline is not defined specifically but, in its TPPA context, appears to mean the impact of the TPPA provisions in preventing actions (often in favour of the public good) which would previously have been possible for governments to include in their democratic toolkit without fear of censure.
20. In relation to the enactment of ISDS provisions the NZ government is also referred to as ‘the party’, ‘the respondent’, part of government as ‘the foreign investment authority’ and finally a’ national authority’, the Government and NZ making the text exceedingly hard to read with efficiency.

Confusing terminology

21. The NIA uses unnecessary jargon which makes it harder to read and understand – ‘counterfactual scenario’ is used when a perfectly good alternative is usually ‘if’. The Latin accountancy term ‘ad valorem’ is used when ‘proportional tariff’ could have been employed instead.
22. Other problems with varied terminology are found throughout the document. They may be technically correct but obtuse and the language is tortuously complex in many places. This example describes who can take an ISDS claim. For example 9.1 Investor State Dispute Settlement (ISDS) says:
• “The investor may do so either on their own behalf, or on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly”.

It appears to mean that ‘an investor (or company) can make a claim in any TPP country for any business which they control whether by direct ownership, shareholding or as a subsidiary of another company. ‘<if they feel it has been disadvantaged> since the company shareholding language that equates a company to a person has been used.

Contradictory information

23. There is obfuscation about where ISDS mechanisms apply. For example on page 54
• The ISDS mechanism in TPP applies to the Investment Chapter (including provisions on investment agreements and investment authorisations), and limited aspects of the Financial Services Chapter which relates to investment in financial services.

And then

• ISDS only applies to the investment obligations in TPP – it cannot be used to challenge any other provisions in the Agreement.

However despite the earlier assurances that ISDS apply only under 2 headings – investment and finance under the environment chapter it says:

• 21.2 All obligations in the Chapter are subject to the TPP dispute settlement mechanism (see Section 4.28), however the Environment Chapter has specific procedures requiring consultation that must be used before the dispute settlement provisions of TPP are employed.

And in the government procurement chapter

• On page 73 “New Zealand procuring entities covered by the chapter would be subject to new challenge proceedings.”

And then under the Labour chapter

• 20.2 All obligations in the Chapter are subject to the TPP dispute settlement mechanism (see Section 4.28),

Vague language

24. Sometimes the difficulty of understanding where ISDS apply is compounded by the use of words like ‘economic disciplines’ and ‘requirements’ where it appears they have been used to mask the availability of the ISDS mechanism. It’s impossible to tell though because the text does not make it clear.
25. Often the meaning of the text is obscured by terms like “in certain cases” or “such as” where there is no explanation about the kinds of cases that apply and which are excluded.

In the Executive Summary it says

• TPP would require New Zealand to provide extensions to the patent term for pharmaceuticals for delays in regulatory approval processes in certain circumstances. If these circumstances arise, a patent term extension would delay entry to the market of cheaper generic versions of that pharmaceutical. Given the efficiency of New Zealand’s processing times, very few unreasonable delays are expected to occur in New Zealand, and only in exceptional circumstances. While the cost of any delays would depend on the case, the average cost is estimated at NZ$1 million a year.

This relates to the coverage of ISDS provisions

P54 Agreements relating to matters such as land, water or the delivery of correctional, healthcare or other social services.

 And this to the customs provisions

4.4 Customs

• The Customs Chapter of TPP builds on the commitments in the recently agreed World Trade Organization Agreement on Trade Facilitation and extends beyond these obligations in some areas.

 If the NIA were submitted as a piece of academic work it would be returned as a fail with comments about grammar, use of language, duplication, layout, structure and argumentation being inadequate. As a report submitted supposedly in good faith to support a democratic process this document is an embarrassment.

What are your thoughts about the NIA?