TPP Free Trade Deal Needs to Satisfy Referendum Test

A Mechanism to Exercise a Democratic Check on the TPP Negotiations

The proposed free trade deal with the US would limit New Zealand’s autonomy to regulate its economy in a way that goes far beyond any previous treaty.

In order to make sure that its policies and laws do not pose “unnecessary barriers to trade and investment”, the Trans Pacific Partnership (or TPP) is expected to require New Zealand to adopt constraints on law making that are framed with that concern at the forefront. The expected result is processes – and so outcomes – that privilege investors.

Committing to a TPP agreement at root means signing away a government’s ability to step outside a straightjacket set through the lens of investor expectations, and giving up a meaningful slice of the nation’s autonomy.

A constraint on future governments of this form should only become binding if its backers can persuade New Zealanders that its financial benefits outweigh the costs and they can obtain a mandate for committing the nation.

Just as the move to MMP and any change away from it involves gaining the support of a binding referendum, so the TPP should meet this test before ratification.

While the TPP talks have attracted rather little interest during the election campaign, the scope and depth of change it could impose mid way through the next term of government should make a commitment to such a referendum a priority topic during post election negotiations between the parties.

What the TPP will ultimately involve is only meant to become public once a final text is agreed as the negotiations are wrapped in secrecy.

That secrecy effectively frustrates any normal democratic process for iterative review – such as when a Bill is placed before a select committee, submissions are heard and amendments made, before Parliament debates the final form.

At the point the TPP text becomes public, it will have been signed (but not ratified) by the treaty partners, and it will be a take it or leave it deal that is impervious to open democratic amendment.

By the time it arrives before Parliament for inspection, the momentum behind it from Cabinet approvals already given during the negotiating process would ensure that insisting on a referendum just prior to ratification would be a hard ask. So the time to lock that commitment in is now.

Conventions set down by the New Zealand government for dealing with new treaties do indeed require the government of the day to undertake certain consultations through Parliament.

While Parliament does not have to vote on the adoption of a treaty, it would have the opportunity to review any TPP agreement before a select committee. More importantly, any legislative changes required by the agreement would need to be passed by the House before the treaty is ratified.

So it can be argued that the laws to be amended by the treaty will be altered through the same process that statutes are normally varied, and thus there is no reason to treat the TPP agreement differently.

The important difference with the TPP however is that in going “further behind the border” than any previous trade deal, the extent of straightjacketing that seems set to be involved would meaningfully redefine the New Zealand government’s autonomy over the economy.

The TPP is not just a series of provisions across a wide range of government functions: it is a mechanism for limiting the very ability of government to reshape those provisions and processes in future, and so the expected outcomes.

Long after the European Union was in place, new limitations on the autonomy of member states were the prompt for referendums across the union on those proposed changes.

New Zealanders similarly deserve the chance to vote on adoption or rejection of the TPP before it is ratified. Given the wide scope and unpredictable outcome of the TPP talks, one of the best things that a political party entering into post election negotiations could do is to secure agreement to such a referendum.

The TPP is frequently characterised as a “high quality twenty-first century trade agreement” by negotiators. The challenge is now to highlight the requirement that its development and public assessment satisfy twenty-first century democracy.