Coates BarryBARRY COATES (Green): I rise to speak on the Trans-Pacific Partnership Agreement Amendment Bill and I would like to address the amendments to the legislation through initially an economics perspective. I think we have heard some generalities about this agreement and some assurances that I think are sadly lacking in terms of any rigorous analysis. In particular I think the national interest assessment undertaken by the Ministry of Foreign Affairs and Trade (MFAT) was rather like giving the fox the keys to the hen house. Of course the Ministry of Foreign Affairs and Trade would attempt to undertake an analysis that justified its negotiating position and I think it is about time we started having some more objective analyses of these international treaties. The economics of the Trans-Pacific Partnership agreement (TPPA) primarily rest on some very dubious assumptions. Those assumptions have been critiqued by the US Government in its International Trade Commission report which directly criticised the modelling undertaken for the New Zealand analysis. They have been criticised by the Tufts report from Tufts University and by expert research in New Zealand published on the Trans-Pacific Partnership (TPP) legal website. The analysis by MFAT showed relatively modest economic benefits. The benefits were 0.9 percent of gross national product which would be increased by the year 2030. By then without the TPPA gross national product was projected to have risen by 47 percent. So we are talking about the difference between 47 percent and 47.9 percent which is a relatively small differential.It calls into question the analysis where on one side there were these relatively limited benefits and the other side there were completely unquantified costs and risks associated with many of the other obligations under the TPPA. But even that analysis of 0.9 percent by 2030 was grossly exaggerated. Only a quarter of that actually resulted from the tariff reductions that the Minister has just referred to. Those tariff reductions are real and there will be a benefit to some exporters but unfortunately the effects have been grossly exaggerated.Most of the benefits cited in the Government's figure of $2.7 billion relate to non-tariff barriers. Over 60 percent of the economic benefits are from non-tariff barriers and if we look at what these non-tariff barriers are it is not clear as to whether these non-tariff barriers are actually legitimate regulations or whether in fact they are illegal barriers to trade or barriers to trade that one would want to remove. There is no analysis between whether or not they are legitimate or otherwise. That is one of the reasons why the International Trade Commission—the US Government's report—excluded those benefits. However they were included in the New Zealand analysis and at over 60 percent of the benefits that was most of the economic benefit that was derived. So if we then look at the effects of the economic analysis. Colleagues have previously referred to the Tufts University report which showed that the modest amount of economic benefits would actually be associated with a drop in employment and a rise in inequality. These are accompanied also by additional costs that are the subject of the legislation—the amendments that we are talking about here tonight—costs of copyright patents and consumer costs from higher consumer prices. One of the things that the TPPA should have taught us by now is firstly the problems with 7 years of secrecy in negotiations where there was not adequate consultation during the negotiations on some of the important aspects that have come to light only afterwards. Secondly what the analysis has shown us is the importance of objective research to be able to inform negotiations particularly around areas of agriculture. Overall the export benefits for New Zealand in terms of additional exports to the countries that we export to—it is an average of a 2.2 percent increase. If we look at that 2.2 percent it is significantly less than average monthly movements in the New Zealand exchange rates. It is significantly less than many movements on the Global Dairy Trade index. So an increase in benefits to New Zealand farmers of 2.2 percent is not going to drive production behaviour especially in the face of many other uncertainties. Against this there are the costs to the New Zealand economy. As has been referred to the TPPA is not an agreement that is primarily about tariffs and quotas; it is an agreement primarily about the rights of Government to regulate in the internal economy. Significantly it gives rights to foreign investors in many areas that are prejudicial to competitors in New Zealand. The TPPA will particularly harm small to medium sized enterprises (SMEs) that are struggling to survive against their multinational competitors which often benefit from tax havens and which often benefit from a lack of international competition policy. The New Zealand SMEs that are struggling to compete internationally with a flood of imports in many of their products now face enhanced difficulties in their competitive challenge. One of those mechanisms is the investor-State dispute settlement (ISDS) mechanism which allows foreign investors to take cases against the New Zealand Government over regulatory measures that might adversely affect the profits of those investors. I shall come back and talk a little bit more about ISDS related to the regulation tonight. I want to talk a bit more about the agricultural trade implications. The TPPA has focused on reducing tariffs and if we look at the dairy sector this is not a gold-standard agreement. The aims for this agreement fell well short. In fact what happened was that because they fell well short we have locked in artificially high tariffs in the dairy sector which are way higher than the average tariffs for most goods traded internationally. The second thing that we have done is we have ignored the major trade distortions. The major trade distortions affecting agricultural trade are not tariffs; they are primarily the subsidies that large agricultural producers receive particularly in the United States the European Union and Canada. If we look at the level of agricultural subsidies in the United States for example the Congressional Budget Office estimates that the 2014 farm bill in the United States might account for US$1 trillion of subsidies over a 10-year period. Furthermore dairy producers in the United States will be able to receive subsidies of up to 40 percent of their production costs. At a time of volatility in dairy prices that vastly outweighs the measures that are addressed under the TPPA in terms of tariffs. What has the TPPA done about removing those agricultural subsidies? Absolutely nothing. The difficulty here is that the only way those agricultural subsidies are going to be removed is through multilateral negotiations in the World Trade Organization (WTO). So immediately after signing the TPPA the United States entered the WTO negotiations and said that it would like to end the negotiations within the WTO including on agriculture. This agreement is not in the strategic interests of the New Zealand dairy farmers. This agreement has many flaws in it and I will come back to talk a little bit more about the costs at a later date. Thank you.