Kim Campbell
Chief Executive
Employers and Manufacturers Association


Dear Kim

This open letter is in response to your media statement of 5 February criticising the Sustainability Council’s analysis of a Peterson Institute report on the TPP. There you make a series of unsubstantiated allegations that the Council rejects, for reasons made clear in the following questions to you.

1. The focus of the Council’s analysis was to review the Peterson report’s use of an economic model to quantify TPP benefits. The Council’s assumptions about the scope and general form of the provisions the TPP will contain are no different to those that report used. As you labelled the Council’s findings “mere speculation, premature and wildly misleading”, why has the EMA not been equally critical of the Peterson report and the government’s repeated claims based on it?

2. In 2012, the NZ-US Council (in which you are active) commissioned NZIER to review an earlier version of the modelling published by the Peterson Institute, and NZIER gave it qualified approval. Do you support this NZ-US Council implicit promotion of the modelling’s conclusions when in your eye these must have been even more “premature” and speculative?

3. You say that the EMA “believes” the TPP will produce “extremely handsome trade gains”. What analysis, specifically, is the association relying on to justify this belief – especially given your position that “without the final agreement we can’t guess the extent of the benefits”?

4. The Sustainability Council says the TPP carries serious costs in the form of limitations on a government’s ability to regulate in the public interest – reducing national sovereignty and sidelining local courts. In response, the EMA says: “there is no evidence there will be any such clauses in the final agreement”.

a) Was the EMA not aware of the TPP’s key investment chapter having been leaked?

b) Is it unaware that trade journals have reported TPP partner governments are essentially agreed on the text for this investment chapter?

5. A key feature of the investment chapter is investor state dispute settlement (ISDS) rights that would allow foreign investors to file a suit against a government in an offshore tribunal if they believe that new regulations would diminish their expected future profits. Given that even the European Commission is calling for different ISDS rules than those under which companies have “exploited loopholes”, does the EMA support the ISDS terms in the draft TPP text?

6. A little over a year ago you said: “It is evident that in terms of the TPP, intellectual property is a complicated rat’s nest full of ambiguity and vested interests. Well-resourced groups have the capacity to subvert the TPP process if we are not most careful to ensure it is robust and enduring. … New Zealand business will be paying close attention to the details of this part of the agreement because tomorrow’s globally integrated business world will be driven by intellectual property”. So does the EMA agree with the Sustainability Council’s critique of the Peterson report for having modelled all intellectual property rule changes as gains?

7. What other costs to New Zealand from the TPP has the EMA identified? What research has the EMA undertaken to quantify those costs and what were the results of that research?

8. If you believe that “without the final agreement we can’t guess the extent of the benefits” from the TPP, would the EMA join many other groups in calling for the text to be released before New Zealand signs (not ratifies) any agreement?

The Council believes it is important to find out what the overall balance of benefits and costs is – as the TPP equation could well be negative. This is a critical question for the country’s future and the EMA’s members. We would welcome the EMA engaging with the detail and contributing on that level.

Yours sincerely

Simon Terry
Executive Director