Chalmers on TPP

Susan Chalmers writes at the NZ Herald on the TPP:

I’m not an economist, but I do understand what a net loss or a net gain is. Most people will be familiar with the concept – at the end of the day, are you better or worse off? To figure that one out you need to know what you’ve brought in, and what you’ve paid out.

We’ve recently heard what New Zealand could bring in under the Trans Pacific Partnership – US$2.9 billion by 2025. But that figure is based on a hypothetical situation involving 21 countries, not the 11 that are negotiating. Even so, the Prime Minister recently embraced and advanced this figure.

What’s missing? Our leaders haven’t told us what the costs will be.

The biggest cost that New Zealand could sustain under the TPP would be in the intellectual property, particularly copyright. This is because the most powerful party to the negotiations – the United States – is a net exporter of copyrighted goods (movies, books, TV shows, songs, games, etc) while all other TPP parties are net importers.

The interests that drive US trade policy in copyright are Hollywood and the recording industry. They want stronger and more powerful legal rights that would bring more money to them, often at the expense of many different sectors of society and business.

I’m all for the benefits of liberalising trade with other countries. That does provide benefits. But as Susan says, we also have to be aware of the costs to New Zealand, if the TPP includes US drafted changes to our copyright laws.

The Government has rightly said that any decision on TPP will be based on whether it is a net gain to New Zealand. But again, one can only calculate a net gain if you actually calculate the costs.

Now ideally NZ holds firm and doesn’t agree to any provisions that require changes to our IP laws.

Since the Government has not run its own analysis of potential costs, perhaps we can look elsewhere for guidance. Australia is a good place to start. Like New Zealand, Australia is a net importer of copyrighted goods and wants better access to the US agricultural markets – for sugar and beef exports in particular. …

A report from the Australian Productivity Commission – the Government’s independent research and advisory body – indicated that Australia suffered a net loss under AUSFTA as a whole because of accepting the US copyright demands.

Maybe the NZ Productivity Commission could look at the the benefits to the NZ economy of balanced IP laws?

So why has our political leadership not talked about the costs of accepting the US copyright demands? For instance, the cost of paying decades more in royalties to overseas companies, losing parallel imports, not to mention all the taxpayer money to support US copyright litigation here in New Zealand.

Trade agreements are meant to liberalise trade. Banning parallel imports is putting up barriers to trade.

Regardless of the reason for our leaders not acknowledging the potential costs, it is now time to run that analysis, as any normal business would. New Zealand’s copyright negotiators have been holding the line throughout 15 TPP rounds, working to stave off these costs for the country. Let’s encourage our elected officials not only to give them some support, but to explain exactly what the country is about to commit to. Shouldn’t we know?

We should.