Radio New Zealand has reported that business leaders are uneasy about trusting the domestic courts of some Trans Pacific Partnership countries to settle disputes.
New Zealand and ten other nations signed the revised TPP in Chile on Friday, NZ time.
The NZ Government also signed side letters with Australia, Malaysia, Peru, Vietnam and Brunei that exclude the use of the Investor-State Dispute Settlement, or ISDS, that allows foreign firms to sue governments.
Export New Zealand executive director Catherine Beard said firms should be careful when doing business in some of these countries if they were unable to rely on the ISDS.
“I looked at those countries where we have agreed not to have ISDS and I think it is a concern in some of these countries. We definitely have had exporters who have experienced problems in some parts of the world.”
She said, however, that overall the new TPP would lift incomes and create more jobs.
About the timing of the trade pact signing in Chile, Australia learned that its lobbying with the US Government may see it also exempted from the tariff barriers of 25% for steel and 15% for aluminium going into America.
President Donald Trump had earlier said he would consider exemptions for Mexico and Canada.
Assuming Australia is taken off the tariff barrier list, it should be a boost for the country’s biggest steelmaker BlueScope Steel Ltd (ASX: BSL) as the US is a major destination for steel it makes in Port Kembla, New South Wales.
Earlier, NZ Resources said BlueScope had a positive situation by its ownership of the North Star steelworks in Ohio, which should see price benefits from the tariff. However, BlueScope also owns New Zealand Steel which may well have some exposure to the trade tariff, unless it can somehow be linked to BlueScope Australia.
Lead business story in the Weekend Australia was by Andrew White who said the TPP signing may spur foreign takeover deals.
White wrote that the TPP should have an easier run at mounting cross-border takeovers in Australia, as the threshold for scrutiny is lifted fourfold to more than $A1 billion.
The threshold for Australia’s Foreign Investment Review Board to screen acquisitions has been lifted from $A261 million to $A1.13 B.
A pie chart in the newspaper showed that current Australian exports to TPP countries had Japan first at 44.6% (iron ore and coal would be prime commodities), New Zealand was second at 14%, Singapore third at 11.2% and then followed by Malaysia 8.3%, Vietnam 5.7% and Canada and others at 4%.
Sources: radionz.co.nz; theaustralian.com.au; skynews.com.au