By Dr Jane Kelsey

Law Professor

Auckland University

25 May 2001

Prime Minister

Parliament Buildings

Private Bag

WELLINGTON

Dear Prime Minister,

I am writing to you in response to the release by the Ministry of Foreign

Affairs and Trade (MFAT) of the document Hong Kong and New Zealand -

Initial Analysis of the Bilateral Trade and Economic relationship as

Background to a Possible ³Closer Economic Partnership² Agreement.

This document forms the basis of the initial consultation by MFAT on the proposed free trade and investment agreement between the New Zealand and Hong Kong governments. As the document makes clear, the Ministry is only interested in the views of those who are currently trading with Hong Kong.

This is not a genuine consultative exercise which seeks the views of workers, communities, consumers and others within specific sectors that will be adversely affected by the proposed agreement. Nor is it seeking broader input from tangata whenua as the Crown¹s Treaty partner¹ or from ordinary citizens concerned about the impacts of continued free trade and unrestricted investment on their lives - and about the long-term anti-democratic nature of such agreements.

Consistent with that bias, there is nothing in the document which assesses the potential domestic economic and social impact or the regulatory and policy ramifications of the proposed agreement - aside from a passing reference to the implications¹ for the textile, clothing and footwear industry and associated adjustment¹ costs. Nor is there any empirically based analysis to demonstrate the benefits which it alleges have already flowed, and will continue to flow, from such agreements generally, or this agreement in particular.

This one-sided consultation process is consistent with repeated statements from MFAT officials that their only responsibility in relation to such agreements is the promotion of exports and foreign investment. They insist that it is the responsibility of the government to promote a broader debate on the relative costs and benefits for the country, including the ramifications for domestic law and policy.

Hence, this response is directed to you as Prime Minister, not to the Ministry of Foreign Affairs and Trade. You will be aware of the detailed report recently prepared on the proposed Hong Kong New Zealand agreement by Dr Bill Rosenberg, a copy of which was sent to you last month. This careful analysis illustrates many of the potential costs associated with such an agreement, and of the Investment Protection and Promotion Agreement already in force with Hong Kong. Dr Rosenberg¹s report, along with my own submission to the Foreign Affairs Defence and Trade select committee on the Singapore free trade and investment agreement (copy enclosed), provide ample evidence of significant potential downsides to New Zealand from entering such an agreement.

I therefore urge you, as the responsible leader of a responsible government, to halt the current discussions with Hong Kong and promote an open, balanced, properly resourced public consultation process on the costs and benefits of this and other agreements which are designed to promote and embed free trade and unrestricted investment in New Zealand.

Yours sincerely,

Professor Jane Kelsey

cc. Hon Jim Anderton, Leader of the Alliance