What shape is the Trans-Pacific Partnership taking on and what impact will the election result have on whether or not New Zealand signs up?
For decades now National and Labour have had a cosy little arrangement when it comes to free trade. Both parties could count on each other to provide a solid bloc of votes in parliament to pass any bill implementing free trade agreements.
So any hyperventialting by the Greens, New Zealand First, the Maori Party or Mana counted for nothing. Jane Kelsey might get to write as many op-eds as she likes, but she has virtually no influence on the actual outcome of the free trade agenda. The solid National–Labour coalition ensures that the relevant legislation will pass.
But will this arrangement prevail after this election?
Clearly, if National is elected they will want to pass legislation implementing various aspects of TPP, in the event that the TPP treaty is finalised and signed between 2014 and 2017. Of course any such treaty will not be exactly as New Zealand wants since it will be a compromise between fourteen nations.
But the shape of the TPP treaty is starting to emerge. There will be a long drawn-out phase down of tariffs and quotas in agricultural products. The timing of the phase down will be dictated by Japan and the United States, and it will extend over many years, perhaps as many as twenty. Copyright terms will be extended to 70 years or more. State trading entities like Pharmac could lose at least some of their exclusive rights. There will be an international tribunal for major investment disputes.
For National this will be OK. Over time the US, Japanese and Canadian agricultural markets will open up. And provided the loss of the Pharmac monopoly is not too dramatic, it will be seen to be a good trade off.
So a National led government will want to pass any laws needed to implement TPP. They will be able to count on ACT and United Future if they are in Parliament. (How the Conservative Party might vote is unclear). But if National is dependent on the Maori Party, that could spell trouble. National may make supporting TPP an essential part of a coalition agreement with the Maori Party if they fear that the cosy arrangement with Labour no longer holds.
So will it hold?
This election could see Labour down in the low 30s as a percentage of the total vote. If a combination of Labour, the Greens, New Zealand First, the Maori Party and Internet Mana can form a government, Labour is only going to be 60% of the government, at most. All its likely partners have opposed every single free trade agreement over the last two decades. Collectively they could demand that Labour not support the TPP as a price of coalition. And could Labour resist such a demand?
What's more, if the Left (apologies to Winston who is not really left) do not have enough votes to form a government, would Labour still continue the cosy arrangement of supporting free trade agreements? Increasingly Labour activists, including their left leaning MP’s, oppose TPP. David Cunliffe, supported by Phil Goff and others, has positioned the party to be able to vote for TPP. But that is before the election. An election loss could well weaken the free trade faction in Labour.
Such a result would cause Labour to look deeply at it options, just as did with National when it lost in 2005. The Labour MPs will be looking at three terms in opposition. They will console themselves that this is the normal political cycle in New Zealand. But they will not be able to tolerate the thought of four terms in opposition. They will do whatever it takes to make themselves electable in 2017.
And in the event of an election loss, what will be the fate of Labour’s longstanding support of free trade when they weigh up what they will have to do for 2017?