There are fresh concerns that the government reined in efforts by its negotiators to get the best deal for dairy and meat exporters in its trade agreement with the European Union.
Several high-level sources have confirmed Labour ministers were concerned that pushing the EU too hard on better access to its markets for New Zealand’s dairy and meat exports might have jeopardised the government’s other objectives in the negotiations.
These included enhanced protections for Māori data following last year’s criticism from the Waitangi Tribunal of successive governments for failing to build sufficient protections for Māori data into their trade agreements.
Ministers were also adamant NZ should not bow to European demands for the extension of patents on imports of European pharmaceuticals and agricultural chemicals.
“We managed to hold the line but if we had pushed any harder on meat and dairy we would have had to give ground on [patent extensions] and that would have cost the NZ consumer hundreds of millions of dollars,” one insider and former negotiator said.
The source said officials leading the negotiations with the EU were grilled by Labour ministers on what the agreement would do to protect Māori interests and protections for Māori data in particular.
“It was certainly a big issue in the minds of Cabinet ministers … they got sufficient protections in the end but they were concerned if they had pushed further on meat and dairy they would not have been able to get those protections,” the source said.
Dairy and meat sector leaders were bitterly disappointed when four years of negotiations concluded in June with miniscule quotas created for NZ beef and dairy exports relative to the size of the EU’s market of 450 million consumers.
Previous governments have made reducing tariffs and other impediments to trade for exporters the overriding goal for NZ in its trade negotiations.
But under the current Labour-led government those market access objectives are increasingly coming into conflict with new objectives trade negotiators would previously have attached much less importance to if they had thought of them at all.
Gender equality, workers’ rights, environmental protections and protection of Māori rights all count as considerations for negotiators under the Labour Government’s Trade for All agenda.
“Officials were called in for every Cabinet paper on the FTA [free trade agreement] and given a hard time by ministers,” a source briefed on the Cabinet’s dealings with officials said.
“It was more on defensive interests. That officials were giving away too much … they were concerned [negotiators] were not doing enough to get a better deal for Māori and it was not sufficiently reflecting the Trade for All agenda.”
The National Party’s trade spokesperson, Todd McClay, worked on getting negotiations with the EU to the starting line as trade minister in the previous National government.
He said the insistence on special protections for Māori data late in the negotiations would have played into the hands of EU agricultural protectionists.
“I would imagine that in meeting after meeting our negotiators were having to raise data protection and the Europeans would have been sitting there thinking this is much better than talking about agricultural access or our protectionism.”
McClay said requiring EU companies to handle Māori data differently to that derived from the rest of the population would add to their costs of doing business in New Zealand.
Inevitably, he said, NZ would have been forced into a trade-off in the negotiations with the EU to achieve more protections for Māori data.
These could have come in the form of accepting less in other areas of the agreement such as agricultural market access or giving the Europeans more in areas of interest to them such as the exclusive use of European cheese names.
“Farmers will be rightly asking why is it that the government has chosen other priorities over the export of something that has always delivered for the NZ economy?”
Trade Minister Damien O’Connor dismissed the suggestion the government had not pushed for the best possible market access for NZ’s primary producers as “incorrect” and “politically motivated”.
He said trade agreements globally had evolved to cover many of the items included in the government’s Trade for All agenda.
“Be it data protection or ensuring there are opportunities for women and small and medium enterprises from our trade agreements … they are all part of our trade negotiations now alongside the traditional areas of meat and dairy and horticultural … we made progress on all of those.
“We were not trading off one for the other.
“And actually as countries struggle to maintain the social licence for trade many of them are asking us how we have maintained ours and are making inquiries about our Trade for All agenda.”
Government changed tactics
The Government changed its instructions to trade negotiators late last year following the second report of the Waitangi Tribunal in the long-running WAI 2522 case.
The case was brought by a group of Māori activists and academics in 2015 alleging successive governments had failed to consult sufficiently with Maoridom when negotiating trade deals.
It also claimed the Government failed to protect Maori data in the negotiation of the 11-country Comprehensive and Progressive TransPacific Partnership trade agreement predecessor agreement the TPP.
In its report back on the second claim last November the Tribunal assessed some Maori data as matauranga, or relating to Maori knowledge, and a taonga in need of special protection.
The Tribunal agreed the TPP didn’t sufficiently protect data deemed to be matauranga and the Government had breached the principles of the Treaty of Waitangi negotiating it without them.
According to one expert witness in the WAI 2522 case, Dr Karaitiana Taiuru, Maori data qualifying for special protection is exceedingly wide, including any information gathered about Maori in any medium.
No non-Māori should own such data, and it should not be stored outside NZ wherever possible.
Only Maori should be involved in its collection, management, governance, security and application.
While the Government is not legally bound to follow the Tribunal’s findings it did instruct negotiators to take them into account in the closing stages of their negotiations with the United Kingdom and the EU.
In the case of the UK FTA the Government kicked the can down the road. Agreement-in-principle had been reached the month before and both sides agreed to review the e-commerce chapter after two years.
The digital trade chapter of the EU agreement also provides for a review within three years, with special mention given to the WAI 2522 case and obligations on the Government to uphold the principles of the Treaty of Waitangi.
Trade experts are divided on whether market access outcomes would have been much different in the EU agreement had NZ not introduced its demands for protection of Maori data late in the talks.
One former trade negotiator said the protectionist mindset was hardwired into EU negotiators, meaning NZ was always going to get a poor outcome for its mainstays of meat and dairy no matter what other demands it made.
Another said the WAI 2522 reference in the agreement’s text went beyond carve-outs relied upon in previous FTAs.
So-called treaty exceptions have allowed NZ governments to take actions that may be prejudicial to foreign investors or trading partners to meet the Crown’s treaty obligations. These clauses were found to be insufficient by the Waitangi Tribunal in WAI 2522.
“This is different to what has been in other agreements making something that has been rather more general more specific.”
The former negotiator said by ramping up the language in its trade agreements in such a way NZ was going against the trend internationally to remove barriers to the free flow of data across borders and potentially undermining other demands it might make such as better access for agricultural exports.
“Every time you put something new on the agenda that you want you give an opportunity to the other side to take off the table something that they don’t want to give.”
