TPP prevents NZ from regulating foreign buyers

By Leith van Onselen

Thanks goodness Australia has already ‘banned’ foreign investment in established dwellings, because under the Trans-Pacific Partnership (TPP), introduction of such laws would be disallowed. New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) explains:

TPP protects investors from foreign governments acting in a grossly unfair or unjust way towards them, discriminating against them on the basis of nationality, or expropriating assets without compensation…

Existing regulations inconsistent with TPP obligations are carved out of the agreement. New Zealand will therefore continue to screen foreign purchases of sensitive land, including farmland, through the Overseas Investment Office and require that these meet a “benefit to New Zealand” test…

The non-discrimination provisions in TPP would prevent the Government banning TPP nationals from buying property in New Zealand. New Zealand retains the ability, however, to impose some types of new, discriminatory taxes on property.

So under the TPP, a future New Zealand Government would not be allowed to follow Australia’s lead and preclude foreign nationals from buying established homes, which is driving-up prices. In effect, New Zealand has traded-off control of its foreign investment framework, housing policy and sovereignty to govern in its own interests so that it can sell a few more farm goods to North America and Europe.

While Australia has dogged this bullet, it does suggest that it may be hamstrung in other areas. For example, a future Australian government would be unable to ban foreign investments in new developments (currently permitted), and would be precluded from liberalising copyright or patent terms to below the minimum thresholds agreed under the TPP (which happen to accord with Australia’s current arrangements).

In effect, the TPP has created a ‘ratcheting effect”, whereby rules governing all types of issues are locked into the treaty and cannot be changed without the agreement of all the national governments involved.  For example, in the case of intellectual property, there is no maximum level of protection, only a minimum that can never be reduced.

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Comments

  1. Yes, but they can still ban whole scale Chinese purchases! Its not the Americans that are buying Auckland or enormous parts of farmland!

  2. “.. so that it can sell a few more farm goods to North America and Europe.”
    Problem being that ‘it’, New Zealanders, will not longer own the companies that benefit from that selling. Those with the means will buy out whetever it is we have left that makes money, and they will reap the benefit of the TPPA. Well done Tim Groser……

      • Speaking to an old mate from Goondiwindi yesterday “The Chinese are buying ALL the best farms in all the best places” “City people don’t have a clue what is going on”

        We ought to stop frivolously signing away our national sovereignty be it to TPP like agreements or to the UN! This s..t makes me rethink my attitudes to those people who used to run around saying there’s a mob of morons trying to create a world government!
        As to anything that says a foreign corporation can sue our government for decisions it makes that affect them – strewth!!~!!! (being polite!)

        Why the belated cry here from MB about foreign investment and capital flows? UE MB has absolutely and totally refused (with you yourself the possible exception im a small way) to recognise in any way the effect, over 60 damned years, of this whole load of foreign investmwent crapola on the economy.

      • To flawse. That’s because city folk don’t understand that farms may be loss making but there’s a huge process chain which is profitable which depends on that farm being there. Selling the farm means that you own yet one less link in the chain.

  3. ErmingtonPlumbingMEMBER

    “under the TPP, a future New Zealand Government would not be allowed to follow Australia’s lead and preclude foreign nationals from buying established homes,”

    Well won’t our signing of the same deal, null and void our current laws prohibiting this?
    If so Kelly O’Dwyer’s ramblings have been nothing more than a PR stunt, never intended to change a thing.

    • In a word, no. Existing regimes will be a starting point. But, it may make it difficult for Australia to tighten its current rules.

      Having said that, the rules aren’t our problem – the enforcement of them is. That’s where the discretion lies – if governments were serious and threw serious resources in to enforcement, the current rules might be enough. Must go, just saw a pig fly past my window!

  4. “New Zealand retains the ability, however, to impose some types of new, discriminatory taxes on property.”

    Would NZ would be within its rights to impose a ridiculous land tax specifically on Foreign-owned property. That actually sounds like a plan. Let the foreigners buy all the property and tax the begeezus out of them until they sell it back to locals at a fraction of the price.

    • “TPP protects investors from foreign governments acting in a grossly unfair or unjust way towards them, discriminating against them on the basis of nationality, or expropriating assets without compensation”

      • so what is a nationality of a large multinational corporation?
        place of incorporation, nationality of owners, … ?

        will corporations be allowed to vote on elections as well?

      • They don’t effing need to. Anyone who still thinks that our parliament actually makes the important decisions in this country has their head stuck somewhere….

  5. TPP is a consentual occupation followed by a puppet government

    countries joining Axis powers had much better conditions imposed onto them by Hitler

    WWIII is just around the corner

  6. Free movement of capital without free movement of people might break a thing or two… whodathunkit?

  7. The non-discrimination provisions in TPP would prevent the Government banning TPP nationals from buying property in New Zealand.

    It says “TPP nationals”. Since China isn’t a signatory (thank dog for that!), Chinese nationals can still be banned.

    • I think this recent judgement in Australia just mirrors a similar judgement from 2013 in the U.S. For the past two years, we had this absurd situation where a U.S. patent could not be enforced in the U.S., but could potentially still be enforced in Austrslia. This latest move just brings the two countries into alignment.

      • And yet no one asks how can US allow patent registration on an identification/discovery of something that was designed and invented by someone/something else.
        Travesty became a norm.

    • You sure?

      Hitlery only said that she does not approve TPP based on available onfo at this time.

      Reminds me of a quote from a blockbuser Jerry Maguire “SHOW ME THE MONEEEEEEEEEEEEY!”
      (and I will support TPP)