McClay ToddHon TODD McCLAY (Minister of Trade): I thought I would take another call on the discussion and the debate so far. I want to start where I started in the first call so that actually New Zealanders will genuinely be enjoying this conversation and debate. Largely that is because quite a lot of the politics around the Trans-Pacific Partnership (TPP) that we have seen over the last year is not present in the Committee and I think that is a good thing when it comes to talking about trade and trade policy and the importance of trade for all New Zealanders. So I am grateful to all members on both sides of the Chamber for the way the discussion and debate have been conducted so far. I pledge to ensure that it is not me who changes that with my comments at the moment. I would say to Ms Genter that I largely agree with some of the sentiments she has made maybe not all of the detail but I do also agree with her that it is important that we find ways to make the case to New Zealanders. Certainly the process that we have seen—the treaty examination and also the legislation—in as far as the Foreign Affairs Defence and Trade Committee has been I think important. The committee has done a very good job. It did receive a lot of submissions and did its very best to allow submitters as much time as it was able to. Indeed in the first roadshow that I held around the TPP in Auckland where there was a very large turnout—it might have been the largest turnout of the 18-odd roadshows and hui that we did not the largest group that I spoke to as part of the 50-plus events I did around the country but of the formal roadshows and hui that would have been the largest one. Ms Kelsey from the floor raised her concern that she would not meet the deadline imposed by the committee for submissions. Indeed that would be a concern but it was not because the information—the document—had not been available. For the first time the Trans-Pacific Partnership agreement (TPPA) was released before the legal scrub has taken place soon after it was agreed and long in advance of the signature. Often with other agreements we have released it to the House after signature and indeed the rough text was released last year and then I released the scrubbed text before signature. But I said to Ms Kelsey at the time that she should get in touch with the chair. There was all of this year to have this conversation with New Zealanders and through the House—this is a place for scrutiny. We heard soon afterwards—it was a decision of the committee but it happily extended the period of time for her and some others to make submissions. So I want to compliment the committee for its approach to this. I think it has been mature and I think it has helped certainly in the sense of the debate here today. I want to touch on a couple of issues that members have raised and because this is one debate on all parts and sections and we are coming to a vote I will also speak about a couple of the Supplementary Order Papers (SOPs). I want to explain why I think some of them are not necessary but some of the things they are trying to achieve will already be achieved or there is another way. The first thing I would say is that Mr Tirikatene spoke earlier about Wai 262 and his concerns there. The Government shares his concerns and that is why under the TPP we are the only country that has an exclusion to be able to make decisions around Wai 262 or at least the International Union for the Protection of New Varieties of Plants (UPOV) agreement and implement that outside of TPP. So all other nations have made commitments and are bound by those—many of them have already signed up to UPOV or have implemented them—but in the case of New Zealand we have carved out space for that internal domestic dialogue to take place in many areas including with iwi before decisions are made. We have had to say with our partners that we will put things in place within 3 years. Actually to Mr Tirikatene I think that is probably a good thing because it does give emphasis and momentum to the necessity of having this conversation but it is also 3 years after entry into force. So—roughly three plus two—the Government has 5 years to work through this. That is an area as with the Treaty exemption where we carve out the right for the New Zealand Government the Crown to meet its obligations to iwi to Māori. That is something that we take seriously. In all agreements for a very long period of time—in fact there was a previous Labour Government quite some time ago that consulted widely on the Treaty of Waitangi exemption and it has been in all trade agreements since then. But I would say to members that it is not just accepted by countries overseas that we have a right in New Zealand and must therefore have a right in our agreements to meet our obligations to iwi—we have to go and explain this and negotiate it. We have been successful so far all of the time but we should not take for granted that all of those whom we negotiate with would merely accept that. We have to work very hard for it. I have had six meetings with the iwi leaders and their trade group this year to talk about the TPP and to talk about trade. I am committed to continuing that conversation with them as we go forward. I would say that the dialogue we are having again is working very well for both sides. Around investor-State dispute settlement (ISDS) I agree with the European trade commissioner as she wants to look for reforms to ISDS. TPP is one of those reforms. As far as ISDS is concerned it is the most advanced investor-State protection system that we have successfully negotiated. I accept that people have different views on this and will not all agree with me but this is the first one where we have openness we have transparency the public can see what happens and we have carve-outs for the Government. So the first area is that no tobacco company can take a case against New Zealand under ISDS. Secondly we reserve the right to pass law and regulation. Thirdly where two parties of countries disagree that an ISDS case—if they believe an ISDS case would go against the spirit of what has been negotiated those two countries can decide to not allow it to go forward to dismiss it. But it is very open it is very transparent and in future agreements I think we will continue to look for ways to make this more open more transparent and better for us as we can. But the reason we do this is not to allow others to come here to New Zealand take issue and seek legal redress in some way it is so that New Zealand investors overseas can have greater certainty. Not every country of the world respects its courts or its law in the same way that New Zealand does. It is important that our investors know that there is a framework they can work within. Finally just around the SOPs—and I will go through these fairly quickly because I do not want to take another call and deprive members of an opportunity. There are a number. The first is from Gareth Hughes SOP 240 on fair use. Some submitters requested that we introduce a fair-use exemption as part of the select committee's process of the bill and I think this is to do with copyright. As the departmental report said: TPPA does not require New Zealand to introduce a 'fair use' exception into the Copyright Act. The introduction of a fair use exception is best considered within the context of a wider review of the Copyright Act." If that review takes place and happens it would be allowed and it would actually impact upon TPP. So the place to do this—I have this conversation not as part of TPP just those 11 other countries—is in any wider review of the Copyright Act and we have the space there for if domestic legislation changes for that also to impact upon TPP. The second one from Barry Coates—this is SOP 241—would create a discrepancy between exceptions for copyright and exceptions for performers' rights in sound recordings. My view is that this would lead to confusion and additional compliance costs for people wanting to use the exception in this area. The final one SOP 242—also from Mr Coates—is around the overseas investment SOP. Clause 69 is the power that will enable the part of TPP relating to overseas investment to be implemented. New Zealand cannot be compliant with its TPP obligations unless regulations are made or a new bill is passed. So the regulation-making power under clause 69 is clear on its face as to the limits of the power and the purpose of that power. It is limited to the implementation of the obligations under the TPP. So to limit it to $200 million as a threshold for business assets acquisition it does not speak to sensitive purchases or sensitive land and so on. For this reason the Government does not consider that it is necessary—sorry we consider it is not inappropriate to delegate to the executive the power to make detailed regulations that we need to meet this obligation. But the draft regulations as proposed to be made under clause 69 are already open for consultation—that has been called for by the Minister—and it is intended to allow transparency input from the public. The regulations once decided would be subject to the usual scrutiny and the other powers of the Regulations Review Committee. As Miss Genter said earlier it does not allow the amount of that threshold to go up; that is set in the TPPA. It merely is around the rules of how to implement it. So it does not mean the Government can say "Let us double it or triple it." It is only to allow us to implement obligations under TPPA and that is at the rate of $200 million."