China FTA Upgrade w/ Dr Bill Rosenburg; 6 November 2019

Prime Minister Jacinda Ardern and Minister for Trade and Export Growth David Parker announced a conclusion to negotiations with China to upgrade our existing free trade agreement. The original agreement was entered in 2008 and included various improvements for trade between New Zealand and China, including elimination of tariffs, better access to high quality goods and a clearer process for investor state dispute settlements*. The upgrade should include a higher limit to Chinese investment, environmental protection measures and a preference for China over wood and paper for the next ten years. Some applaud the upgrade, like International Business Forum head Stephen Jacobi, who stated that such an agreement is “ideal” considering recent global trends towards heavier protectionism. There are some however that are worried about issues still present in the FTA as well as the government’s avoidance on releasing the official text containing the full details of the agreement. The New Zealand Council of Trade Unions released a statement regarding reduced oversight of Chinese investment, as the new limit would increase the likelihood of poor quality investments. They also expressed worry over the ability of China-based investors to sue the government via dispute settlements. William Boyd spoke with CTU Economist Dr Bill Rosenburg about the China FTA and their problems with the agreement. William started off by summarising the original 2008 FTA and asking him what where the initial issues with that agreement.

*an investor state dispute (or ISDS) is a mechanism included in many trade agreements that allows an investor of a state to make a claim against another state that is the host of the investment, if that state has breached the agreement. The investor-state dispute provision included in the TPPA was one of the major sources of controversy for that agreement.