WELLINGTON (Reuters) - New Zealand’s trade minister said on Tuesday that it may be too late to make significant changes to the Trans-Pacific Partnership (TPP) after his new Labour-led government said last week it would seek to renegotiate the agreement.
The Labour Party, which took the helm last week, has taken issue with the fact that the deal is at odds with its plans to ban foreign ownership of existing houses, a key campaign promise.
The 11 TPP members had set a goal of reaching broad agreement on the pact on the sidelines of the Asia-Pacific Economic Cooperation meeting in Vietnam next week and some fear New Zealand’s renegotiation could unravel the agreement.
Trade Minister David Parker told Radio New Zealand that Labour still found the foreign ownership rules “abhorrent”, but that trade officials had told him not all changes would be possible given how late it was in negotiations.
“That doesn’t mean to say we won’t be able to change anything and it doesn’t mean to say that perhaps through mechanisms outside of the TPP we will perhaps be able to fix other things,” Parker said.
His comments suggested the government could instead focus on a change to domestic law to get around the TPP rules, which Parker had flagged as an option the previous day.
Parker added that he would release more details on the “mechanisms” to achieve the foreign housing ban later this week.
Trade experts told Reuters that New Zealand could include housing in the country’s domestic legislation regulating foreign investment, which overrides the TPP.
The TPP currently requires member states to give foreign investors equal treatment to locals unless there are specific exemptions.
The Labour party would like an exemption for existing homes, similar to Australia’s carve out.
New Zealand’s current exception allows it to add a tax to foreigners purchasing homes, but Prime Minister Jacinda Ardern has said that would not work and an outright ban was needed.
Ardern’s government campaigned to restrict foreign buyers to reduce demand as the country tackles what Labour says is a housing crisis left unresolved by the previous government.
Parker on Tuesday would not confirm whether New Zealand was willing to walk away from the TPP over the issue, saying that would undermine the country’s negotiating position.
“We’re pretty good at trade agreements...so we rate our ability work through these issues in the best interest of New Zealand,” he said.
Reporting by Charlotte Greenfield