What is the Value of the TPP to small and medium business?

Posted by Andrew on January 27, 2016

We generally try to avoid posting politically charged items in our blogs, but with the TPP about to be signed, it is worth looking to see what benefits exist for small and medium businesses from the TPP.

This deal was initially negotiated by Helen Clark and then finalised under the current Government. Economic modelling estimates that once fully in effect, TPP would result in New Zealand’s GDP being about one percent larger than if TPP had not existed, adding NZ$2.7 billion to New Zealand’s GDP (in 2007 dollars) by 2030.

New Zealand SMEs interested in exporting to new markets or participating in global supply chains would benefit from this Chapter in a number of ways. They are more likely to become aware of the opportunities created by the Agreement and would be able to access information on a Party’s domestic laws and regulations more easily and faster than at present. Note that any TPP members not yet making this information available are most likely to publicise it fully, so this informational benefit would accrue to New Zealand businesses regardless of whether or not New Zealand enters TPP. Entering TPP would allow New Zealand to influence the SME Committee’s sharing of knowledge and best practices in line with New Zealand’s interests. This would assist with the design and implementation of programmes in TPP economies which support the internationalisation of SMEs, including through better equipping them to effectively participate in global supply chains.

According to the National Interest Analysis released today, investor state dispute settlement (ISDS) by private tribunals is one of the most contentious aspects of the TPP. There is an increased risk of exposure to a claim under the TPP , but the report sets out mitigating elements negotiated into the agreement including:

  • The Government has preserved its right to regulate for public health, the environment and other regulatory objectives. So that protects Pharmac and allows us to make our own decisions around Oil and Gas exploration.
  • No investor can make a claim about investors being turned down under the Overseas Investment Act. So that protects kiwi landholding in the same status it is now.
  • Tribunal hearings will be public. 
  • Only actual losses, not punitive damages can be awarded.
  • There is a high threshold before investors could prove breaches of TPP obligations such as expropriation
  • Tobacco companies will be barred from taking cases under ISDS rules. They will have to go through the normal court system.
  • The TPP cannot be used to undermine the Treaty of Waitangi, as it is specifically excluded from the agreement.

So if these issues are protected, and of importance to Kiwis, then how does a Free Trade deal hurt a nation that relies on trade with foreign nations. We can't have it both ways......wanting to increase our standard of living while trying to barricade ourselves off from the world.

Yep its a long read.....but it makes some very interesting points....without the political bias currently in the argument.

https://assets.documentcloud.org/documents/2697841/Trans-Pacific-Partnership-National-Interest.pdf