BEFORE THE WAITANGI TRIBUNAL

WAI 2522
WAI 2523

IN THE MATTER OF

The Treaty of Waitangi Act 1975

AND
IN THE MATTER OF

The Trans-Pacific Partnership Agreement

(Reid and others) Claim

AFFIDAVIT OF MARTIN WILFRED HARVEY

Sworn on 7 July 2015

CROWN LAW
TE TAW TURE O TE KARAUNA

PO Box 2858
WELLINGTON 6140
Tel: 04 472 1719
Fax: 04 473 3482
Contact Person:
Mike Heron QC/Virginia Hardy
Email: Michael.Heron ~.DcroNvnlaw.govt.nz /Virginia.Hardy@crownlaw.govt.nz

Contents
INTRODUCTION

SUTYMIARY OF 1\IY EVIDENCE

BACKGROUND

GENERAL ROLE OF MFAT

ON'ERVIEW OF TRADE AGREEI\IENTS

REASONS FOR ENTERING INTO FTAS

STARTING THE NEGOTIATIONS

TRADE AGREEI\dENT PROCESS

ENGAGEI\'IENT WITH PARTIES NXqTH AN INTEREST IN F1'AS

10

THE NVA1262 RECOA- IWENDATIONS

12

MAORI SPECIFIC CONSULTATION/ENGAGEI\IENT

12

PRACTICES FOR DEALING NX7ITH INFORI\IATION IN TRADE NEGOTIATIONS

14

LEGAL OBLIGATIONS ACCEP YED BY NEw ZEALAND IN FTAS

16

GENERAL EXCEPTIONS: TREATY OF WAITANGI

16

NX71THDRANXIAL OR DENUNCIATION

19

THE TRANS-PACIFIC PARTNERSHIP

20

BACKGROUND

20

ENGAGEI\IENT/CONSULTATION

22

NEXT STEPS IN THE PROCESS

27

I, Martin Wilfred Harvey, of Wellington, civil servant, swear:

INTRODUCTION
1.

I have been employed as the Divisional Manager of the Trade Negotiations

Division of the Alinistq of Foreign Affairs and Trade ("MFAT" or "the

Ministry") since August 2012.

2.

I joined the Ministry- in 1984 and have worked extensively in the area of trade
police, including Closer Economic Relations ("CER") with Australia, the
General Agreement on Tariffs and Trade ("GATT") Uruguay Round of trade
negotiations, the World Trade Organisation ("WTO"), European Union
("EU") trade relations and most recently free trade agreement ("FTA")
negotiations with the Association of South-East Asian Nations ("ASEAN"),
Malaysia and the Gulf Cooperation Council ("GCC"). From 2012 to 2014, 1
led the concluding stages of the Korea-New Zealand FTA negotiations.

3.

I have had several spells outside MFAT: a one year secondment to the
Australian Department of Foreign Affairs in 1985; a one year secondment in
1986 to Victoria University's Institute of Policy Studies working -ith Sir Frank
Holmes on a study on the future development of CER; and in 2001-02, a
secondment to the Department of the Prime Minister and Cabinet to
coordinate officials' work on climate change issues, including New Zealand's
ratification of the Kyoto Protocol. I then worked as senior manager for pricebased measures in the New Zealand Climate Change Office of the Ministry- for
the Environment from 2003 to 2004. I was most recently posted as High
Commissioner to Singapore from 2008 to 2010. Earlier postings were to
Canberra from 1987 to 1990 and to Geneva from 1995 to 1998, where I was
Deputy- Permanent Representative to the WTO.

4.

In my current role, I have particular responsibility for managing the Ministry-'s

team of trade policy analysts and negotiators working on New Zealand's
engagement with the WTO and FTA negotiations, including the Trans Pacific
Partnership ("the TPP"). The TPP negotiations team includes negotiators
drawn from the Trade Negotiations Division, working closely with specialist
legal counsel in the Ministry-'s Legal Division. I have responsibility- for

3
ensuring that negotiation efforts are coordinated within the Ministry, including
with our various regional divisions, with Ministers and wid-i our partner
agencies, including die Ministry for Primate Industries, die Ministry of
Business, Innovation and Employment, New Zealand Customs SenTice,
Department of Health, Treasury, Minist y for the Environment and Te Puni
Kokiri. Within the 1\tinistry, the Trade Negotiations Division works with the
Economic Division and regional divisions on a programme of outreach with
stakeholders with an interest in negotiations and other trade and economic
issues important to New Zealand.

5.

Save where otherwise stated, the content of this affidavit is within my own
knowledge or has come to my attention during die course of my work.

SUMMARY OF MY EVIDENCE
6.

This affidavit is made to assist the Tribunal in addressing the claimants'

application for an urgent hearing before text is fmalised in the next month or

SO.
7.

In this affidavit, I respond to the principal process issues raised by the

claimants and parties seeking to be joined as meriting urgency. My evidence
addresses both FTAs generally as well as the TPP, covering the process of
decision as to New Zealand's participation, negotiations, how New Zealand
comes to approve and implement any FTA, and consultation that occurs.

BACKGROUND
General Role of MFAT
8.

MFAT is the Government's principal adviser and lead negotiator on foreign

and trade police issues.

9.

The Ministry's primary role is to recognise and understand international trends,

opportunities and risks that affect New Zealand and offer die Government
advice on how best to protect and advance New Zealand's well-being. In this
way it contributes to the Government's overall objective of transforming New
Zealand into a dynamic, knowledge-based economy and society, underpinned
by the values of fairness, opportunity and security for all.

`~5

//

10.

Contemporary= challenges are increasingly= trans-boundary= in nature, be they the

economic demands of globalisation; ideologically= driven terrorism; the
proliferation of weapons of mass destruction; pressures on global natural and
energy= resources; human rights abuses; extremes of poverty=; or regional threats
posed by failed or failing states. These trends are placing considerable pressure
on all countries, including New Zealand, to be more globally= active and
equipped for this rapidly= changing and less predictable world. Global
economic challenges remain, and the Ministry= contributes to the Government's
goal of "building a more competitive and productive economy=" by pursuing
improved market access and trade rules for New Zealand business, including
through negotiating and concluding high-quality= trade agreements.

11.

While the Ministry='s agenda is driven by the external environment and the
Government's foreign and trade priorities, it must also take domestic concerns
into account, including obligations under the principles of the Treaty= of
Waitangi ("the Treaty").

With international and trans-national issues

increasingly= impacting on domestic issues and obligations, the Ministry= works

in partnership with other departments to protect and secure New Zealand's
interests offshore.

12.

Domestic partners or stakeholders include Mdori, business organisations and

the private sector, academia, media, non-government organisations ("NGOs"),
and interest groups. Our engagement with this wider community= helps us to
understand the interests of domestic stakeholders, to meet obligations under
the Treaty= of Waitangi.

Overview of trade agreements

13.

Economic growth relies on New Zealand firms exporting and developing their
ability= to grow their business. A positive international regulatory= environment
is key= to supporting this growth. Therefore a fundamental objective of New
Zealand's trade policy= is to expand the opportunities available to New Zealand
exporters in overseas markets by removing barriers to trade, and to establish
sound frameworks under which trade and investment linkages can flourish.

14.

The Ministry actively looks for ways to protect and advance New Zealand's
trading interests. This includes pursuing high-quality and comprehensive
FTAs in line with New Zealand's current and future trade needs aimed at
strengthening economic links and obtaining improved access to overseas
markets. Moreover, the preferential nature of such agreements means New
Zealand exporters are likely to be disadvantaged in markets where other
countries have negotiated lower or zero tariffs and other commitments.

15.

New Zealand seeks comprehensive FTAs that are consistent with WTO rules,
open to others to join, and cover trade in goods, services and investment, as
well as a number of supporting areas. provisions for further consultation and
cooperation are typically included in FTAs to ensure that the agreement
strengthens and deepens the existing economic relationship.

15.1 For goods, New Zealand aims to bring trade as close as possible to
duty-free. Elimination of tariffs may be phased in over a period of
time. An FTA should also address applicable non-tariff measures on
goods trade.

15.2 For services, the objective is to ensure New Zealand service exporters
have greater access to the markets of other partner countries, and
greater certainty around the conditions for doing business in those
markets.

15.3 For investment, the aim is to remove or limit restrictions to

investments in foreign markets to ensure an unproved environment for
New Zealand investors.

15.4 An FTA will also address other issues such as rules of origin, trade
remedies, technical barriers to trade, sanitary and phytosanitaiy
measures, intellectual property, government procurement, competition,
consultation and dispute settlement cooperation and legal and
institutional issues.

15.5 New Zealand also seeks appropriate general exceptions that allow the
parties to adopt measures to protect interests that are of such
significance that the), outweigh normal trade commitments. All of New
Zealand's FTAs since 2001 include an exception in relation to the
Treaty of Waitangi.
15.6 In this contest, one of New Zealand's negotiating objectives is to
ensure that the Crown is able to meet its obligations under the
principles of the Treaty of Waitangi, including through the Treaty of
Waitangi exception clause, which I describe in detail below.

Reasons for entering into FTAs

16.

Specific reasons for New Zealand becoming partj, to FTAs include:

16.1 Market access for goods exporters. FTAs allow a greater proportion of
New Zealand products to enter the relevant market duty-free. This has
direct financial benefit for New Zealand exporters. In addition, as
tariffs are removed and New Zealand goods become more competitive,
companies will have the opportunity to increase existing exports and
develop new trade to partner countries in areas where high tariffs had
previously inhibited exports. Market access obligations for goods also
help to establish a level playing field for New Zealand exporters
competing with exporters from other countries which have FTAs with
the relevant country.

16.2 Improved market access for services exporters and conditions for
investors. FTAs ensure that New Zealand service exporters and
investors have greater access to the markets of other partner countries,
and greater certainty around the conditions that exist for doing
business in that market. This can be by, for example, improving the
ability to supply services to consumers in other countries online, being
able to invest in partner countries on the same basis as nationals or
investors from other countries, and providing additional protections
against arbitrarjT treatment of New Zealand investments.

16.3 Robust rules of origin to guard against goods from countries other
than the FTA partner obtaining unintended benefits in the New
Zealand market.

16.4 Adoption of measures designed to facilitate trade and improve the

regulatory environment governing the trade and economic relationship.
These include bilateral mechanisms for addressing barriers to trade in
the areas of standards, sanitary and phytosanitary measures, and
customs procedures. Access to government procurement markets,
intellectual property obligations, and provisions to promote
competition may also be included.

Starting the negotiations

17.

It is the Executive, through Cabinet, which decides whether New Zealand

should enter into FTA negotiations, and on what terms. These terms or
parameters of the negotiation are known as the mandate. Officials then
negotiate on the basis of Cabinet's mandate, and report regularly to the
Minister of Trade on progress and whether New Zealand's goals are likely to
be achieved. Cabinet regularly updates its mandate in light of the negotiations.

18.

The IVP process has followed this approach. Cabinet noted the expansion of
the Trans-Pacific Strategic Economic Partnership Agreement in March
2009. Negotiations towards the TPP, taking over from the P4 negotiations,
started later that month. A formal Cabinet mandate was confirmed in
September 2010.

Trade agreement process

19.

Like the conclusion of any international agreement, the conclusion of an FTA

whether multiparty or bilateral requires a number of steps, which may take
place over several years. The Ministry provides information about the treatymaking process on its website and published "International Treaty Making:
guidance for government agencies on practice and procedures for concluding
international treaties and arrangements" in September 2012.1 A true copy is
attached as Exhibit A. The Cabinet Office Manual and the Standing Orders of

The Ministry updated this guide in 2014, which will be published on its website in due course.

the House of Representatives also set out the procedure for Parliament's
examination of international agreements. True copies are attached as Exhibits
B and C. The necessary steps for concluding an FTA are:

19.1

Negotiation of the text with international partners. As part of that

process, New Zealand will have engaged with stakeholders in order to
take their views into account in developing its negotiating position.

19.2

Approval of the concluded text by Cabinet and authorisation of

signature.

20.

19.3

Signature.

19.4

Parliamentary treaty examination and legislative processes.

19.5

Entry into force/ratification.

Once the parties to an international agreement have concluded their

negotiations on the terms and the text of the agreement, substantive changes
to the text do not and cannot occur. A period of legal verification follows
during which technical drafting clarifications may be made to the text, but
these must not change the substance.

21.

The Executive then decides whether to sign the agreement. As with all Treaty
decisions, diis decision is taken by Cabinet. In making that decision, the
Executive will assess whether die agreement meets New Zealand's national
interests. It is important to emphasise that the signing of an FTA by the
Executive of itself is not legally binding; rather it signals an intention to be
bound at a later stage.

22.

An FTA will only become legally binding upon the culmination of domestic
approval processes, die passage of any necessary domestic legislative changes,
and by an action bringing it into force or ratification; i.e. the formal process by
which the parties signal their consent to be bound by the agreement.
Although the power to ratify an FTA rests with die Executive, Parliament has

a critical role to play as the Executive will not ratify the agreement without
Parliamentary consideration and passage of any necessary legislation. Again
this role is set out in the Cabinet Office Manual and the Standing Orders of the
House of Representatives.

23.

The Executive will only ratify an FTA after completion of the following two
Parliamentary steps:

23.1

First, Parliamentary treaty examination. All FTAs are presented to

Parliament for examination prior to ratification. The text of the FTA,
together with a National Interest Analysis ("NIA"), are presented to
Parliament and referred to the Foreign Affairs, Defence and Trade
Select Committee ("the Select Committee" or "FADTC"). The
Select Committee will invite the public to make submissions as part of
its consultation process. The text will usually be made public at the
time of presentation to Parliament. The Select Committee considers
public submissions made and reports back to Parliament. It may at
this time make recommendations regarding ratification of the FTA.
In addition, Parliament may wish further to consider the proposed
agreement, for example through Parliamentary debate.

23.2

As noted, the Executive will not take any action in relation to the
agreement until the Select Committee has reported or until 15 Sitting
Days have passed whichever is sooner (see Cabinet Manual: 7.119). If
the Select Committee report contains recommendations to the
Executive, the Executive must present its response to Parliament
within 60 days. The Executive is not bound, however, to follow
Select Committee recommendations.

23.3

Second, Parliament passes implementing domestic legislation.

Ratification of an FTA will not occur until the domestic legislative
changes necessary to ensure New Zealand's compliance with the
agreement are passed by Parliament. Such legislation must go
through normal Parliamentary procedures which include Select
Committee scrutiny and consideration by Parliament.

10

24.

Only once Parliament has completed the treaty examination process and
passed the domestic legislation required to implement the FTA, will the
Executive take "binding treaty action", ordinarily ratification, so that the FTA
can enter into force for New Zealand (i.e. the Executive will only implement
an international agreement once it is sure that New Zealand is compliant with
its international obligations under the agreement). Ratification occurs when
New Zealand notifies the other parties to the agreement that we have
completed our domestic legal procedures necessary to enable the agreement to
enter into force, as well as any other steps that may have been agreed by the
parties to the agreement. With regard to a multilateral agreement, ratification is
usually done by depositing the appropriate formal instrument with the treaty's
depository. In the case of a bilateral FTA, ratification may be by way of an
exchange of notes between the parties. Only after this point will an FTA enter
into force for New Zealand and have legal effect.

25.

After an international agreement is ratified, it is incumbent on the Executive to

ensure that it is implemented on an ongoing basis in a manner which ensures
compliance with its obligations, not only its international obligations in respect
of the international agreement, but also its obligations under the Treaty of
Waitangi.

Engagement with parties with an interest in FTAs

26.

Stakeholder engagement is a crucial part of negotiating an FTA and occurs

throughout the lifecycle of all FTA negotiations, including the ITP. The
objective is to provide the opportunity for stakeholders to seek information
and offer their views so that their interests are taken into account in the
negotiations and to ensure a high quality outcome that advances the national
interest. Stakeholder sessions provide a forum to share information about the
progress of negotiations and to seek stakeholder input on negotiating goals and
approaches.

27.

Given its importance to the outcome, the Ministry takes a proactive approach
to consultation and seeks feedback on the negotiating process from a wide

11

range of stakeholders, including business groups, Maori and the public.

Consultations on FTAs typically take a number of forms.

27.1

Inter-departmental consultation process: Negotiation of FTAs is

conducted by an inter-agency team led by the Ministry and usually
comprises officials from the Ministry for Primary Industries, Ministry
of Business, Innovation and Employment, Ministry for the
Environment, and the New Zealand Customs Service. Other relevant
departments are also consulted during the negotiations in the
preparation of New Zealand's negotiating position, including the
Treasury, Reserve Bank, Ministry of Health, and Te Puni Kokiri on
areas of specific interest to Mdori. Each department contributes
knowledge of their partners and sectoral interests.

27.2 Public consultation process: The Ministry, together with other

government agencies, organises and conducts a wide-ranging
consultation programme to raise public awareness of the negotiations
and to seek stakeholder views. Such programmes typically use printed,
emailed and website information, supported by extensive specific
discussions with key stakeholders. Participation of Maori interests in
these processes is outlined below.

27.3 Mdori consultation process: In developing its strategy for engagement

with Maori interests, the Ministry regularly consults Te Puni Kokiri in
order to ensure that the two agencies work together effectively in order
to support Maori business and exporting interests and for Mdori
generally.
27.4 Following the conclusion of negotiations, as explained above there is a
further process of public submissions as part of the Parliamentary
treaty examination and legislative processes.

28.

As I describe in more detail below, in addition to our more general

engagement, the Ministry has a strategy of proactive engagement with New
Zealand businesses, including Mdori business interests, which obviously have

12

an interest in FTAs. We have an annual business outreach programme, which

is focused on New Zealand's top 100 exporters, and attend export industry
conferences. Engagement with business focusses on how MFAT can help
New Zealand companies increase their exports. MFAT's role in negotiating
and implementing FTAs is an important part of this engagement, including in
relation to the I'PP. Through this process of outreach activides and
engagement, the Ministry has built up a list of stakeholders who have
developed, or who are working to develop, an export focus with whom we
engage more specifically on the negotiation and implementation of FTAs.

The Wai262 recommendations

29.

The Waitangi Tribunal ("the Tribunal") Wai 262 Inquii-y considered the
Crown's obligations under the Treaty of Waitangi and its policy and practice in
relation to developing international agreements. MFAT has considered the
Tribunal's findings and recommendations and found them helpful in our trade
negotiation practice.

29.1

MFAT acknowledges that Maori interests in traditional knowledge,

culture, economic deNTelopment, and the environment, among others,
are affected by international agreements that the Crown enters into.

29.2

The Tribunal accepted that the right to govern, which the Crown
acquired via Article 1 of the Treaty, included the right to represent
New Zealand abroad and to make foreign policy, subject to its
obligations to protect Maori interests to the extent that is reasonable
and practicable in the international circumstances.

29.3

The Tribunal recommended that lead agencies engage with Te Puni

Kokiti before coming to a View on the nature and extent of Maori
interests and engagement required prior to entering into negotiations
on an international agreement.

Maori specific consultationlengagement

30.

The Ministry has taken steps to ensure that Maori interests are considered
when international agreements, including FTAs, are negotiated. Guidance is

~S

13
provided in the "Strategy for Engagement with Maori on International
Treaties" 2001 (attached as Exhibit D). The purpose of this strategy is to help
with the identification of areas of developing international law of relevance to
Maori interests and the early identification of issues of relevance to Maori in
international agreements. The Ministry considers an agreement on a case by
case basis and undertakes engagement with Maori in proportion to the Maori
interest in the particular agreement under negotiation. The overall context in
which the particular agreement occurs, and the likely impact on Maori
interests, is among the factors taken into account in the implementation of the
strategy for engagement.

31.

To assist in this process, the Ministry distributes information regarding the

international agreements ("the international treaties list") that New Zealand has
either entered into or is in the process of negotiating to Maori stakeholders.
This information is drawn from the Ministry's on-line database ("New Zealand
Treaties Online"). It provides a description of those agreements, information
on the potential impact of the agreement on Maori, together with contact
details so that those interested can seek further information from the
negotiators. Since June 2014, the international treaties list has been provided
every six months to a list of approximately 143 groups representing Maori
interests, including iwi and their rohe, hapu, marae, and the organisations
whose mandates to represent these iwi/hapu have been recognised by the
New Zealand Government. This list of recipients is provided to the Ministry
by Te Puni Kokiti from their Te Kahui Mangai website which is updated every
six months. Prior to 2012, the international treaties list was distributed in hard
copy to Maori, academics, and government agencies as well as anyone who
specifically asked for it. However in order to disseminate information more
widely to the public, the Ministry sought to place the list on the intereet.
Between July 2012 and June 2014, while the New Zealand Treaties Online
website was under development, the international treaties list was not
distributed.

32.

As part of the business engagement strategy noted above, the MinistrT

proactively engages with Maori businesses especially those which have or who
are working to develop an export focus. Specifically, in 2014/15, the

~S

14

Ministry's Economic Division participated in the Federation of Maori

Authorities ("FOMA") Conference (Whanganui, September 2014) and the
Maori Fisheries Conference (Auckland, March 2015). Economic Division also
engaged with a number of Maori businesses and Maori export economy
representatives including: Miraka Dairy Limited, Sealord, Aotearoa Fisheries
Limited Waikato Milking Systems (which is two-thirds owned by Ngai Tahu
Holdings Corporation and Tainui Holdings Group Limited) and Te Ohu
Kaimoana (Maori Fisheries Trust). In 2013/14, Economic Division facilitated
the Ministry's engagement with the following Maori businesses and Maori
export economy representatives: Te Awanui Hukapak, Tainui Group Holdings
Limited, Ngai Tabu Holdings Corporation, Sealord, Te Runanga o Ngai Tahu
and Te Tumu Paeroa (the Maori Trustee). Again, this process of outreach
activities and engagement has enabled the Ministry to build up a list of
commercial stakeholders with whom it can engage on FTAs.

33.

As well as regular meetings with specific Maori businesses, the Ministry has
also attempted to adopt a more strategic approach to engagement with Maori
business interests. For example, it initiated a meeting with senior Maori leaders
in 2009 in order to stimulate a dialogue on trade policy and economic issues
with Maori. The Ministry also has regular discussions with Te Puni Kokiri's
Maori Business Facilitation Unit and has had a series of meetings during 2015
aimed at improving the way in which the two agencies jointly engage with and
support Maori business. Both agencies agree on the need for a deliberate,
systematic and forward looking engagement process between the Ministry and
Maori business interests. As part of this work, Te Puni Kokiri encourages
those who represent Maori business interests to attend the Ministry's FTA
seminars, including those on the TPP, and to promote the benefits of New
Zealand's FTAs to Maori business interests.

Practices for dealing with information in trade negotiations

34.

The claimants and parties seeking to be joined have raised concerns about the
confidentiality of the IVP negotiations. In this section of my evidence, I
respond to those concerns and explain why confidentiality is necessary.

15

35.

The Government's position with regard to the confidentiality, of the

negotiation of each trade agreement depends on the approach adopted by
other negotiating partners. In general, negotiating partners require that
negotiations take place in confidence. Parties will often disclose their highlevel objectives, but it would be impossible for our negotiators to secure the
best outcome for New Zealand if we publicly- declared our detailed mandates
to our negotiating partners in advance of negotiations. Furthermore, many
partners are simultaneously negotiating a number of different FTAs with
different countries. They therefore wish to ensure that their negotiating
position with one FTA partner remains confidential and is not released to
another negotiating partner as that would inhibit their ability to conclude
agreements with all countries and on favourable terms. For example,
New Zealand is also hoping to secure a FTA with India India is not a partyT
to the TPP. As a result of the factors above, the public availability- of
information on the negotiations, including parties' negotiating positions and
draft texts, is restricted. It must be emphasised, however, that the reasons why
confidentiality- of negotiations is so important have been widely publicised
(including on our website) and the fact of confidentiality does not mean that
members of the public cannot and do not become engaged through the
consultation process.

36.

At the start of the IVP process, the negotiating parties agreed that papers
would be treated in confidence in order to facilitate candid and productive
negotiations in line with normal negotiating practice. All 1'PP participants
have agreed to hold documents in confidence for four years after the
agreement enters into force, or if no agreement enters into force, for four years
after the last round of negotiations. TPP parties are currently negotiating with
other parties (such as the US and EU; New Zealand and India) and the
confidentiality undertakings ensure that the release of negotiating positions
does not compromise those negotiations.

37.

In this context, I observe that much of the claimants' assertions about the
alleged substantive effects of the TPP are based on leaked text that those
negotiating the ITP consider to be unreliable or out of date. Even if the
documents are reliable, accurate and/or current (which is not confirmed), any

16
text represents a view, and often only a partial view, of the positions of
negotiating parties at a particular point in time. It does not necessarily= capture
the negotiating dynamics, complex positioning of parties and expectations of
parties' final positions which might lie behind the words on the paper. No-one
should therefore jump to conclusions.

While the requirement for

confidentiality= means that the accurate state of play= cannot be disclosed, I am

confident that the claims in these respects are speculative both as to
negotiation outcomes and as to the domestic implementation of those
outcomes.

Legal obligations accepted by New Zealand in FTAs

38.

The following kinds of legal obligations for New Zealand generally= result from
FTAs:

38.1

Eliminating tariffs on goods originating in the relevant country=

(generally= some immediately= on entry= into force and some over a
phase-out period over several years).

38.2 Establishing rules and obligations regarding trade in sen ices and
investment, which may vary between the different FTAs due to vary=ing
interests of the other party=.

38.3 Working with the relevant country= to facilitate trade within existing
regulatory systems and under relevant WTO rules.

38.4 Cooperating across a range of other economic areas, including on

technical regulations, intellectual property, and competition policy.

General exceptions: Treaty of Waitangi

39.

FTAs typically include a number of general exceptions that allow the parties to
adopt measures to protect interests that are of such significance that they
outweigh normal trade commitments. All of New Zealand's FTAs provide for
exceptions in relation to measures to protect a Government's right to regulate
for public health and welfare. All of our FTAs (except the 1982 CER with
Australia) contain the Treat), of Waitangi exception, including multiparty=

~S

17

agreements like the ASEAN-Australia-New Zealand FTA. The relevant

provision in our FTAs reads:

"Provided that such measures are not used as a means of arbitrary or

unjustified discrimination against persons of the other Parties or as a
disguised restriction on trade in goods and seivices, nothing in this
Agreement shall preclude the adoption by New Zealand of measures it
deems necessary to accord more favourable treatment to Maori in respect
of matters covered by this Agreement including in fulfilment of its
obligations under the Treats of Waitangi."
40.

Other multi-parts agreements such as the WTO General Agreement on Trade

in Services and WTO Government Procurement Agreement also include
provisions that preserve the ability to implement policies which accord more
favourable treatment to Maori.

41.

As the founding document of New Zealand, which provides a framework for

the ongoing relationship between the Government and Maori, the Treats of
Waitangi exception in New Zealand's FTAs is a critical addition to the general
exceptions under the WTO agreements. The Treaty of Waitangi exception
aims to retain flexibility for successive governments to implement domestic
policies in relation to issues relevant to Maori, including in fulfilment of
obligations under the Treaty of Waitangi and in particular to implement
domestic policies that favour Maori without being obliged to offer equivalent
treatment to overseas entities.

42.

The Treaty of Waitangi exception has been criticised on the basis that it does
not sufficiently protect Maori interests because of the proviso in the chapeau
,vhich states "such measures are not used as a means of arbitrary or unjustified
discrimination against persons of the other Parties or as a disguised restriction
on trade in goods and services". The Ministry wishes to make the following
comments in response:

42.1

This qualification is essentially the same as that which appears in the

WTO exceptions clause.

18

42.2

It needs to be read in light of WTO jurisprudence which narrowly

construes the nature of unjustifiable discrimination to mean measures
where the discrimination cannot be reconciled with, or where there is
no rational connection to, the policy objective of the measure.'

42.3

Measures which are carefully designed to fulfil obligations to Mdori

are unlikely to be found to be an "unjustified discrimination" against
persons of a party to an FTA.

42.4

The qualification provides an important reassurance to our trading

partners that New Zealand will only seek to invoke this exception for
legitimate purposes related to Maori and the Treaty of Waitangi.

43.

New Zealand has not to date had to rely on the Treaty of Waitangi exception
in its FTAs. It has been able to meet its obligations to Mdori within the terms
of the various FTAs.

44.

We are confident that an arbitral panel established under the dispute settlement
provisions of an FTA and which may be called upon to consider measures
taken by New Zealand to accord more favourable treatment to Mdori pursuant
to its obligations under the Treaty of Waitangi, would uphold the right of
New Zealand to take such measures. Any concerns about the impartiality of
the members of an arbitral panel, if ever required to consider the Treaty of
Waitangi exception in one of New Zealand's FTAs, are in our view unfounded.
It is important to note that our FTAs contain procedural safeguards
concerning the composition of arbitral panels. For example, each party
appoints one arbitrator, with the third selected by common agreement. By way
of example a true copy of the dispute resolution chapter of the New Zealand
Republic of Korea FTA is attached as Exhibit F.

45.

Concerns have also been raised with respect to arbitral tribunals established to
hear claiins made by investors against a party to an FTA (Investor-State
Dispute Settlement - ISDS). ISDS claims may only be brought by an investor
in respect of an investment dispute under the provisions of the investment

Appellate Body Report, EC Seal Products [para 5.306.] A true copy of this report is attached as Exhibit E.

/5

19

chapter of an FTA. In any case, our FTAs contain safeguards concerning the
composition of arbitral tribunals where each parts= to the dispute appoints one
arbitrator, with the third selected by agreement, or an independent appointing
authority if agreement cannot be reached. Other safeguards are included
within the respective rules of the forum in which the arbitration is brought.
For example the ICSID Convention under which an ISDS claim may be
submitted sets out rules in respect of persons qualified to serge on ICSID
conciliation and arbitral panels (Section 4 of the ICSID Convention) and
provides procedures for the replacement and disqualification of conciliators
and arbitrators (ICSID Arbitration Rules). Where disputing parties appoint
arbitrators, Article 40(2) of the ICSID Convention requires that arbitrators
possess the qualities stated in Article 14(1, namely that they must be persons of
high moral character and recognised competence, particularly in the field of
law, who ma )T b-, relied u on to e excise independent judgment. True copies

AA~ f C.,c~~ ~~~ ~

of these rule as attached as Exhibit G and H.

46.

While there has been international analysis on the role of arbitrators, recent
empirical research indicates that arbitrators are motivated to be impartial by the
need to preserve their professional reputations, and may choose to increase
accuracy and to counter any real or perceived bias rather than to cater to any
particular interests.3 I refer also to the FADTC's 2015 report into the KoreaNew Zealand FTA, which commented in some detail on ISDS issues and the
appointment of arbitrators.'

Withdrawal or denunciation
47.

All New Zealand's FTAs provide for a parts= to withdraw from the agreement
following written notice. The notice period varies between 6 and 12 months.
This is an important protection for successive governments who may have
opposed the position taken by an earlier government in ratifying an
international agreement. Article 54 of the Vienna Convention on the Law of
Treaties 1961, which is regarded as customary international law, makes it clear

Daphne Kapeliuk "The Repeat Appointment Factor: Exploring Decision Patterns of Elite Investment
Arbitrators" (2010) 96 Cornell Law Review 47. A true copy of this article is attached as Exhibit I

a btgF:/hN,\v.parliamecit.nz/resource/enN%/51DBSCI I SC:R62982 1 /514ee77ec5f6ff977dd37c40679e53431 134ebaf at pages 5-7.

20

that a State may withdraw from an international agreement in accordance with

the provisions of the agreement.

THE TRANS-PACIFIC PARTNERSHIP

Background
48.

The TPP negotiations grew out of the original Trans-Pacific Strategic

Economic Partnership (P4) Agreement, which was concluded in 2005 and
entered into force in 2006. That agreement between New Zealand, Brunei
Darussalam, Chile and Singapore, was perceived as a forerunner to a wider
agreement spanning the Asia Pacific region. Through the expansion of the
negotiations to include the United States and others towards a ITP agreement,
the process became New Zealand's most significant negotiation on the
ehn-Lination of trade barriers other than the WTO.

49.

The TPP aims to create a regional FTA with 12 Asia Pacific countries:
Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru,
Singapore, the United States, and Viet Nam as well as New Zealand. The AsiaPacific region is a key driver of global economic growth. Roughly half of
international trade, and more than 70 per cent of New Zealand's trade and
investment, flows through the region. The Asia Pacific region is our home, and
our economic future depends on strong trading relationships with Asia-Pacific
countries. Collectively the 12 TPP economies represent more than US$27
trillion in GDP. Five of New Zealand's top 10 trading partners are included
in the TPP negotiations (Australia, US, Japan, Singapore, and Malaysia). The
1PP negotiating parties account for 45 per cent of New Zealand's total trade.

50.

The Government strongly believes that the 1'PP will be in the overall interests
of New Zealand. The agreement would deepen economic ties between its
diverse members by opening up trade in goods and services, boosting
investment flows, and promoting closer links across a range of economic
policy and regulatory issues. By negotiating the TPP, New Zealand ensures a
level playing field for our exporters in the region. As well as tangible benefits
for our exporters and consumers, the TPP would safeguard New Zealand's
longer term trading interests. The TPP is potentially a platform for wider,
regional economic integration. The negotiation gives New Zealand an

21

opportunitS, to shape future trade liberalisation in the Asia-Pacific region in line

with the high quality benchmarks set by the original Trans-Pacific Strategic
Economic Partnership (P4) Agreement.

51.

The 12 countries negotiating the ITP are all doing so because they see benefits
in a regional FTA. If we are not involved in FTAs involving key trading
partners, our exporters get left behind, and experience real economic
disadvantages operating in offshore markets.

52.

A study by economists connected to the Peterson Institute and East West

Center' indicated that the ITP could generate the following GDP and export
gains from lowering of trade barriers and associated regional integration
benefits:

52.1

estimated GDP gains for New Zealand of US$1.8 billion by 2025;

and

52.2

estimated increase to New Zealand exports of US$4.1 billion by 2025

(a 6.8% increase).

53.

Specific benefits for New Zealand businesses from TPP are likely to include:

53.1

Tariff elimination and reduced compliance costs for goods exporters;

53.2

More opportunities to access government procurement contracts in

other countries;

53.3

54.

Reduced barriers to services trade and investment.

These benefits will increase if an eventual ITP agreement expands, as is hoped,

to include other Asia Pacific countries. The agreement also has the potential to
act as a pathfinder for wider regional economic integration. A greater degree of

Peter A. Petri, Michael G. Plummer, and Fan Zhai "The Trans-Pacific Partnership and Asia-Pacific Integration: A
Quantitative Assessment. Adding Japan and Korea to the TPP" (TPP11, TPP12, TPP13, TPP16) in March
2013. Macroeconomic results base simulations at http://asiapacifictrade.org/page id=106. A true cop), of this
report is attached as Exhibit J.

~s

22

coherence in the regulations that govern global supply= chains would streamline
international trade, with benefits for businesses and consumers. Over time it
would remove unnecessary= duplication, reduce costs, and unleash greater
opportunities for small to medium sized businesses in particular.

Engagement/Consultation
55.

MFAT has been active in engaging with a wide spectrum of stakeholders on

the 1'PP. The objective of MFAT's ongoing consultations on the TPP is to
provide the opportunity= for stakeholders to seek information and offer their
\riews so that their interests are taken into account. Stakeholder sessions
provide a forum to share information about the progress of negotiations and
to seek stakeholder input on negotiating goals and approaches. This feedback
informs New Zealand's negotiation process and helps to ensure a high quality=
outcome that advances the national interest. Throughout the process of
negotiations, the Ministry= has made itself accessible to stakeholders and
signalled our willingness to consider the wide range of views and interests that
are expressed including from those critical of the agreement. Engagement and
consultation has not been limited by who the stakeholder is, what their views
are or might be, or indeed whether they have a business or economic focus. It
is true that most stakeholders who take an active approach to die Ministry='s
engagement operate in the business sector.

T1--Lis

is as true for Maori interests

as for non-Maori interests. The Ministry='s observation over the course of

engaging with FTAs generally=, and the TPP in particular, is that businesses,
particularly= export-driven businesses or business with die potential to expand
or develop their overseas markets, are the most proactive in seeking to be
informed and to make their views and concerns known. But any stakeholder
can be party= to such consultation.

56.

The Ministry= provided a full list of stakeholders who have been consulted on
the TPP negotiations to FADTC earlier this year. A true copy= of this list is
attached as Exhibit K.

57.

It is also important to note that the Ministry= does not begin negotiating an
FTA without being informed about the variety= of concerns to stakeholders.

FADTC only published the 2014 list in its report. The full list was provided to Als Ertel under the 01A.

23

As noted above, through the process of outreach activities and engagement

with the business community, including with Maori business interests, the
Ministry has built up a list of stakeholders, particularly those who have or who
are working towards an export focus, and has a good understanding of their
needs when it comes to FTAs. This is also true of matters of more specific
concern to Maori where the Ministry builds on the knowledge it has built up
through previous engagement with Maori on a range of issues.

58.

The Ministry invited initial public submissions in October 2008 on entering

into negotiations with the United States. These invitations were published on
the Ministry's website, sent by email to a list of stakeholders and disseminated
via business groups. The Ministry received 65 responses to the invitation,
including from Professor Jane Kelsey, which expressed a diverse range of
views on the 1'PP. Ngati Kahungunu Iwi Incorporated responded to the 2008
invitation indicating that Maori needed to be meaningfully involved throughout
the entire process and that they were concerned about inadequate protection
of traditional knowledge and taonga and that the cost of medicines may
increase for persons on low incomes. Similar concerns were raised by the
Council of Trade Unions and the Library and Information Advisory Service.
A response was also received from Ngati Ki Whangaroa Cooperative Society
Limited, which requested that the Treat , of Waitangi be referenced in the TPP
and raised concerns about taxation. True copies of a list of those who
responded and Ngati Kahungunu's reply are attached as Exhibit L and M

59.

A second invitation for public comment was made in 2011 following the
expressions of interest from other countries to join the TPP negotiations
(Canada, Japan Mexico). The Ministry received 15 responses to this invitation,
though no submissions specifically representing Maori interests were
submitted. True copies of the invitation and the responses received are
attached as Exhibit N and O.

60.

Hundreds of meetings have taken place, including with business groups, local
councils, health sector representatives, unions, NGOs and individuals to seek
input on the YPP and to help ensure a high quality outcome to negotiations
that advances the national interest. Invitations to various meetings have been

/5

24

advertised on the Ministry='s website, sent by email to a list of stakeholders or

disseminated via business groups. Most recently=, the Ministry= held meetings in
Auckland and Wellington on 6 and 11 May 2015 in order to provide an
opportunity= for stakeholders to meet with the Chief Negotiator, to receive an
update on the negotiation and to ask questions about their areas of interest.
The Ministry= discussed how best to include Maori businesses in these seminars
,with Te Puni Kokiri who agreed to inform their Maori business stakeholders
about the seminars. Similar meetings were also held in Hamilton on 18
October 2012, Tauranga on 26 October 2012 and Wellington on 16 November
2012;Wellington and Christchurch on 3, 5 and 4 July 2013'; in Nelson on 19
March 2014, in Dunedin on 16 April 2014 and in Christchurch on 11 June
2014. True copies of the invitations to the events in Auckland and Wellington
in 2015, Dunedin in 2013 and Auckland, Wellington and Christchurch in 2013
are attached as Exhibits P to R.
61.

Other government agencies undertook engagement in the areas for which they
have the policy lead:
61.1

The Ministry= of Economic Development (now the Ministry= of

Business, Innovation and Employment) informed Wai262 claimants
that the TPP negotiations were under way and offered to meet with
anyone who wished to have a more detailed discussion. Ngati
Kahungunu INvi Incorporated responded to this offer.

61.2

Officials from the Ministry= of Business, Innovation and Employment

met with representatives of Ngati Kahungunu Iwi Incorporated in
September 2010. One of the claimants, Moana Jackson, was present
at this meeting.

61.3

In November 2011 the Ministry= of Business, Innovation and

Employment updated its TPP intellectual property= stakeholders,
including Maori, to update them on the progress of the IVP
negotiations concerning intellectual property and encouraging them
to register as part of the ministry='s stakeholder programme.

A meeting was also planned for Aucldand at this time, but it was cancelled due to low numbers of registration.

25

61.4

The Ministry of Health, together with the Ministry and Ministry of

Business, Innovation and Employment, met with clinician groups,
including Te Ora (Maori Medical Practitioners Association), on health
policy-related issues in IVP in November 2012 and April 2015.

62.

In a new initiative that reflected the level of public interest in 'IPP, the Ministry
also made provision for stakeholder engagement with regard to the two TPP
negotiating rounds held in New Zealand. With regard to the round of
negotiations held in Auckland in December 2012, the Ministry organised a
stakeholder programme attended by 72 New Zealand participants as well as
other stakeholders from overseas. The programme included a briefing from
New Zealand's Chief Negotiator and other Chief Negotiators, and
presentations from other stakeholders on specific topics, including intellectual
property, labour, environment, market access, and investment. Those
stakeholder presentations were attended by both members of the negotiating
parries' delegations and other stakeholders. Again, the invitation to register for
this event was publicised on the Ministry's website, disseminated by email to a
Est of registered stakeholders and via business groups. Representatives from
Te Kupenga Hauora Maori, University of Auckland, and Te Wakaminenga
onga Hapu o NgaPuhi were registered for stakeholder engagement programme
as was Professor Jane Kelsey. Auckland also hosted a round of negotiations in
2010 and the Ministry ran a similar stakeholder outreach programme.

63.

Other countries have also organised stakeholder events at the rounds of

negotiations that they hosted which were open to participants from all
negotiating parties. A number of New Zealand-based individuals and
organisations took the opportunity to participate in these events, including
those offering a Maori perspective on the ITP. Notably, at the negotiations
held in Melbourne in March 2012 Sina-Brown Davis of Ngati Whatua Kaipara
descent gave a presentation entitled "An indigenous perspective on the
TPPA". A true copy of the list of stakeholder presentations at the Melbourne
round of negotiations is attached as Exhibit T. As noted in paragraph 6 of her
affidavit, Professor Jane Kelsey has given presentations at many of these
overseas stakeholder events. The Ministry publicised the opportunity to
participate in stakeholder events at negotiating rounds hosted by other ITP

26

countries particularly via its website. A true copy= of that invitation is attached
as Exhibit S.

64.

In recent weeks proactive public engagement has continued. As noted above,

New Zealand's Cluef Negotiator has held briefing sessions open to the public
in Auckland and Wellington most recently= in May 2015. The Ministry= has
updated Members of Parliament from a range of parties on the negotiation,
most recently= on 16 June 2015. All MPs were invited. Approximately 30 MPs
attended. Meetings have also been held with interested groups (such as
medical and clinician groups in April 2015, together with the Ministry= of
Health, Pharmac and the Ministry of Business, Innovation and Employ=ment).

65.

In addition to providing information to the public via its website, the Ministry
has also established an internet column, "ITP Talk", to encourage feedback on
1PP from the public. In seeking views on TPP, the Ministry has sought to
introduce a balanced perspective, for example, by including links to opposing
views on its website, including to Professor Jane Kelsey's website, in order to
encourage debate on the issues. Ministry= officials, including the Chief
Negotiator, have regularly= met with public opponents of the TPP including
Professor Kelsey= and have encouraged a dialogue to take into account their
concerns.

66.

The Ministry has engaged with Maori through a number of proactive

mechanisms. These included a series of hui in 2009 over the proposed
expansion of the P4 agreement to include a wider range of participants. The
Ministry has engaged with the Business Development Unit of Te Puri Kokiri
to engage Maori participation in the stakeholder consultations. The Ministry
has also reached out of F01\/1A to engage in consultation as well as to
individual Maori business enterprises and iwi, such as Ngai Tahi. The
stakeholder consultations with Maori on TPP include:

66.1

FOMA August 2010, November 2012, March 2014 and June 2014.

66.2

Te Ora Maori Medical Practitioners Association November 2012

and April 2015.

27

66.3

Te Wakaminenga o Nga Hapu o NgaPuhi - December 2012.

66.4

Te Kupenga Hauora Maori, University of Auckland - December

2012.

67.

As mentioned above, the Ministry specifically provides Maori with information

about international agreements under negotiation on a six monthly basis to iwi
and hapu contacts provided by Te Puni Kokiri. This includes information on
the IT P.

68.

In response to an Official Information Act request submitted by the lawyers

acting for the claimants, on 12 May 2015 the Ministry offered to meet with
their clients in order to discuss their concerns. No response to this invitation
was received. A true copy of that letter is attached as Exhibit U.

69.

While the Ministry actively seeks engagement with Maori over business
interests generally and FTAs specifically, notwithstanding the Ministry's clear
notification of the progress of negotiations and opportunities to engage, Maori
have in general not taken up these opportunities for direct engagement. Aside
from Official Information Act requests leading to the claimants' submissions
and the other instances mentioned above, there have been few attempts to
engage directly with Ministry negotiators over the TPP.

70.

I would also note that the Ministry's engagement with individuals and
organisations representing Maori interests has highlighted a diverse range of
views with regard to the TPP within Maoridom as there is across all of New
Zealand. For example, FOMA has publicly supported the TPP. A true copy
of an open letter to the Prime Minister is attached as Exhibit V.

Next steps in the process

71.

As noted above, New Zealand is one of 12 negotiating parties to the TPP. The
timetable for the negotiations is set, not by New Zealand, but the negotiating
parties. United States domestic political processes have an impact. In recent
developments the United States Congress and President have agreed to Trade

28

Promotion Authority: this means that the US Executive can now finalise the
negotiation of TPP without Congressional review of the text of any concluded
agreement. There is an impetus on the part of the United States and other
negotiating parties to conclude the negotiations prior to the US summer recess
in August 2015, after which US Presidential elections are likely to prevent
conclusion of an agreement for at least another 18 months.

72.

The 1'PP negotiations are therefore likely to conclude within the next month
or so i.e. by early August. It is possible, but unlikely, that they could continue
until early September. If the negotiations do not result in an agreement in this
timeframe, they are likely to be delayed for another 18 months. Between now
and reaching agreement, the negotiating parties are working towards resolution
of a number of discrete but important issues (including dairy which has already
been the subject of extensive negotiation but is not yet finalised). New
Zealand is not in a position to seek to delay negotiations at this point.

73.

The likely timing of the conclusion of negotiations and more recently the giant
of Trade Promotion Authority in the United States has been widely publicised;
for example, in articles published on the "Scoop" website entitled "111P talks
could be wrapped up in first-half 2015, Key says" on 27 January 2015 and
"1'PP negotiations set to accelerate after Obama gains fast-track powers,
Groser says" on 30 June 2015. True copies of those articles are attached as
Exhibits W and X.

74.

At this point, I wish to respond to the aspect of the relief that the claimants
seek, namely to postpone the negotiations. Officials consider that the other
negotiating parties have a strong desire to negotiate now to maximise the
opportunity to achieve agreement within the next month. Given the external
factors described above, we do not consider it likely that they would agree to
delay negotiations to allow the claim to be heard urgently. Not can
New Zealand require the parties to postpone negotiations. Ministers have
instructed officials to continue negotiating. If New Zealand suspended its
involvement in the negotiations at this point, New Zealand would lose the
opportunity to secure an agreement that best met Cabinet's mandate. Further,
suspension would be unlikely to constrain the other parties from reaching an

29

agreement. The chance of New Zealand being able to negotiate text after the
other parties have agreed is very low.

75.

As set out above, if negotiations conclude, the New Zealand Executive will
need to make a decision whether to sign the agreement. Following this, further
decisions will be required as a result of the Parliamentary treaty examination
process, and the legislative process. Only after these processes, which will
involve wide consultation, including with Maori, will the Executive be in a
position to ratify the agreement. Based on previous experience, these
processes will take between 18 and 24 months. The Ministry considers that
this timeframe, and the significant constitutional steps I have described,
provide adequate opportunity for the issues raised by these claims to be
considered. I also note that, as is the case with all international treaties which
New Zealand ratifies, that the TPP would permit New Zealand to withdraw.

76.

I think it is also important to note that New Zealand's TPP negotiating team,
which is not large, is already heavily involved in this process. Intensive
negotiations are likely to occur overseas in the next month. Those officials,
including senior officials, are the people with the most and best knowledge of
the substantive and process concerns raised by the claimants Within the
dmeframe which the claimants appear to be seeking resolution of their claims,
it will become very difficult to undertake those obligations as lawfully directed
by Ministers and at the same time instruct the If2inistry's internal and external
counsel, review documents, and prepare evidence as possible witnesses. My

30

view is that the claimants' proposed timetable places quite unrealistic

expectations on officials. These difficulties would not have been as
pronounced if the claim had been made earlier.

SWORN
at Wellington this

7th

day of

July 2015
before me:

A Solicitor/Deputy Registrar of the High Court of New Zealand

Jack Francis Steiner

Solicitor
Wellington