TPP: Australia odd man out over disputes

Prime Minister John Key and the Australian Prime Minister Julia Gillard. Photo / NZ Herald

Prime Minister John Key says he would be unhappy if an Australian objection to the investor-state dispute procedure proposed in the Trans Pacific Partnership agreement survives through to the final deal.

"I would be very surprised," he said yesterday. "I think we're all in or all out."

Critics of the agreement say the disputes procedure, which bypasses domestic courts in favour of tribunals in other countries, could compromise a government's ability to legislate or regulate in the public good. A leaked document with a draft text of the latest investor-state dispute procedure shows that Australia is listed as the only opponent among the nine countries negotiating the deal.

"An exclusion solely for Australia and not for everybody else is unlikely to be something we would support," Mr Key said.

Greens co-leader Russel Norman said in Parliament that Australia objected to the investor-state dispute provisions because they would constrain its ability to make laws on social, environmental and economic matters.

Trade Negotiations Minister Tim Groser said the Government would sign an agreement that would "protect New Zealand from illegitimate use of such a clause".

Asked by Labour MP Clayton Cosgrove if that would include safeguard provisions to protect New Zealand's sovereignty, Mr Groser said: "Absolutely."

NZ-US Council executive director Stephen Jacobi said yesterday that investor-state provisions protected businesses operating in foreign countries from actions such as arbitrary nationalisation.

"Part of being an international citizen inevitably means we must accept limitations on Government actions."

New Zealand First leader Winston Peters said it would be "catastrophic" if the Government signed up to an agreement that gave litigious US firms power to sue over domestic legislation.