Shaw James: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First ReadingText is incorporated into the Bound VolumeShaw James: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First Reading[Sitting date: 16 June 2015. Volume:706;Page:4413. Text is incorporated into the Bound Volume.]JAMES SHAW (Co-Leader—Green): I would also like to speak to the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill. I did want to start by acknowledging the hard work of the negotiating team over a number of years on this. Whether you are for or against it you cannot deny that the New Zealand civil servants who worked on this have done a terrific job and have worked very very hard for a number of years. I would also like to acknowledge Mark Mitchell for the way he chaired the Foreign Affairs Defence and Trade Committee. I came on to the select committee just for the process of the hearings and greatly appreciated being given a great deal of their time to air the concerns of the Green Party. Speaking on behalf of many public submitters Mr Mitchell chaired the select committee in such a way as to ensure that everyone did get a fair hearing and that the extensive concerns the public have about the provisions that are contained inside this treaty were heard so I do appreciate that.I also want to acknowledge that in reducing tariffs between South Korea and New Zealand there will be a benefit in particular to New Zealand exporters. So it will increase the volume of trade and make some New Zealand exporters more competitive than they had been prior to this agreement. A number of speakers have previously spoken and waxed lyrical about those dimensions of this bill so I will not spend any more time on that but I did want to acknowledge that.I would like to speak to some of the concerns of the Green Party and of a number of submitters that we felt were not sufficiently addressed. They were heard but not sufficiently responded to we felt. In particular these are concerns around the protocols to the agreement that are around human rights the environment labour standards and so on. None of the agreements that New Zealand has signed up until this point including this one contains enforceable and binding protocols to my knowledge. We have some questions about that. When the Government says that these agreements lift human rights standards lift labour standards and lift environmental standards my question is whether it can prove it. Can the Government prove for example that the environmental provisions contained in the ASEAN free-trade agreement have been met? Has there ever been any evidence of any of these protocols ever actually having been lived up to in any way?We have looked into it and we have been unable to find any agreements where they have been. So just the presence of human rights labour and environmental protocols in these agreements does not seem to result in any actual activity. Just because the language is there does not actually mean that there is any activity following up on that. So we do have concerns that although this agreement does contain human rights environmental and labour protocols they will not actually mean anything because they are non-binding and non-enforceable. For us to support agreements in the future we would like to see those kinds of provisions being made binding and enforceable on all parties.The main thing I would like to speak about—and a number of other speakers have referred to this previously—is the investor-State dispute settlement mechanisms that are contained inside this agreement. I do want to acknowledge Phil Goff who earlier said that this is kind of a stalking horse for the Trans-Pacific Partnership agreement. There is now widespread public concern about the nature of investor-State dispute settlement mechanisms out there in the public arena and that does not seem to be lessening. In fact that sense of public concern is increasing. I would just like to say a few things about that. Our history with investor-State dispute settlement mechanisms is fairly narrow and it is fairly recent. So if you take the New Zealand - China free-trade agreement for example which has been in place for half a dozen years or so you can say that no we have not yet been sued by a corporation under the investor-State dispute settlement mechanisms contained in the New Zealand - China free-trade agreement. But the past is not necessarily a guarantor of the future and the more countries with which we enter into agreements that contain these provisions the greater the risk we expose ourselves to.Although we have not yet had a case in New Zealand the thing is that some of our nearest neighbours such as Australia have been exposed to them. We say that we here in New Zealand have an excellent legal system; we have a pretty good system of government which means that these kinds of provisions are unlikely to be triggered. But so does Australia so does Canada and in fact so does the United States. It gets plenty of exercise that is for sure. The average cost around the world of even defending oneself is something like US$9 million. So it would be quite easy for a committed corporation to tie up a Government incurring costs even on claims that it knows are not going to come to anything.We also know that as part of the global system New Zealand is pretty small fry in the grand scheme of things but sometimes we are asked to take on responsibilities or we are exposed to situations not because people are necessarily concerned about what goes on here in New Zealand but because of the example that it shows for the rest of the world. So we know for example that large pharmaceutical companies are greatly concerned about Pharmac not because New Zealand has a particularly large market for pharmaceuticals but because the Pharmac model is world leading and there are other countries in the world that are looking at Pharmac and considering instituting a similar system in their own countries. So New Zealand can be exposed to a situation where because those companies are worried about the threat of those kinds of systems being instituted in say Viet Nam or Korea or China or other countries that have much larger markets available we may be subject to action kind of as a preventative measure in relation to other markets.We also know that there is a bit of a chilling effect on legislation. New Zealand has postponed the idea of plain pack cigarette laws because we are waiting to see how the investor-State dispute settlement case between Philip Morris and Australia pans out. We understand that it is unlikely to succeed—the courts are unlikely to find in favour of Philip Morris—but in the meantime with the number of years that that case is taking Philip Morris is able to continue to extract profits from the Australian market and also to suppress similar types of legislation appearing in other countries including here in New Zealand. So sometimes it is not so much about what we do here in New Zealand but about the fact that because we are part of the international system these kinds of mechanisms expose New Zealand to a great deal of risk. Those are some real practical concerns that we have. Given the recent and short history that we have in relation to investor-State dispute settlement mechanisms and given the global history of these kinds of mechanisms we think there is a great deal of risk in signing any agreement that includes them.There is also the matter of principle with this. There is the pragmatic question about what the risk is but also what the principleis here. Do we believe that private corporations should have the right to challenge laws passed by a democratic Government beyond what already exists in our domestic legal framework here in New Zealand? We have a pretty robust system—one of the best legal systems in the world. Surely if a company that invests here feels that it has been wronged by the actions of our Government it does actually have recourse to remedies for that within the New Zealand court system rather than bypassing the New Zealand legal system and going to an international arbitration court where there are many issues in terms of jurisprudence the quality of those decisions and so on.So for all of those reasons we do have real concerns about signing up to this particular agreement because it contains these kinds of provisions. We would like to see trade agreements that encompass the following things: respect for democracy and sovereignty and the promotion of good international governance; respect for human rights labour standards and the promotion of environmental standards and ecological sustainability; the promotion of just and sustainable development; and that those kinds of provisions in agreements would be binding and enforceable. Until our free-trade agreements do this we are not really in a position to be able to support such agreements and therefore we will be voting against this bill. Thank you.